Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 19, 2021 | Jun. 30, 2020 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report. | false | ||
Document Period End Date | Dec. 31, 2020 | ||
Entity File Number | 001-38290 | ||
Entity Registrant Name | Sterling Bancorp, Inc. | ||
Entity Incorporation, State or Country Code | MI | ||
Entity Tax Identification Number | 38-3163775 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 55.2 | ||
Entity Address, Address Line One | One Towne Square | ||
Entity Address, Address Line Two | Suite 1900 | ||
Entity Address, City or Town | Southfield | ||
Entity Address, State or Province | MI | ||
Entity Address, Postal Zip Code | 48076 | ||
City Area Code | 248 | ||
Local Phone Number | 355-2400 | ||
Title of 12(b) Security | Common Stock | ||
Trading Symbol | SBT | ||
Security Exchange Name | NASDAQ | ||
Entity Current Reporting Status | No | ||
Entity Interactive Data Current | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 50,004,490 | ||
Entity Central Index Key | 0001680379 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
ICFR Auditor Attestation Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and due from banks | $ 998,497 | $ 77,819 |
Interest-bearing time deposits with other banks | 7,021 | 1,025 |
Investment securities | 304,958 | 152,544 |
Loans, net of allowance for loan losses of $72,387 and $21,730 | 2,434,356 | 2,891,530 |
Accrued interest receivable | 10,990 | 13,718 |
Mortgage servicing rights, net | 5,688 | 9,765 |
Leasehold improvements and equipment, net | 8,512 | 9,198 |
Operating lease right-of-use assets | 19,232 | 18,715 |
Federal Home Loan Bank stock, at cost | 22,950 | 22,950 |
Cash surrender value of bank-owned life insurance | 32,495 | 31,917 |
Deferred tax asset, net | 24,326 | 12,095 |
Other assets | 22,736 | 2,271 |
Total assets | 3,914,045 | 3,244,884 |
Liabilities: | ||
Noninterest-bearing deposits | 58,458 | 77,563 |
Interest-bearing deposits | 3,040,508 | 2,417,877 |
Total deposits | 3,098,966 | 2,495,440 |
Federal Home Loan Bank borrowings | 318,000 | 229,000 |
Subordinated notes, net | 65,341 | 65,179 |
Operating lease liabilities | 20,497 | 19,868 |
Accrued expenses and other liabilities | 91,650 | 102,783 |
Total liabilities | 3,594,454 | 2,912,270 |
Commitments and contingencies (Note 19) | ||
Shareholders' equity: | ||
Preferred stock, authorized 10,000,000 shares; no shares issued and outstanding | ||
Common stock, no par value, authorized 500,000,000 shares; issued and outstanding 49,981,861 shares and 49,944,473 shares at December 31, 2020 and 2019, respectively | 80,807 | 80,889 |
Additional paid-in capital | 13,544 | 13,210 |
Retained earnings | 224,853 | 238,319 |
Accumulated other comprehensive income (loss) | 387 | 196 |
Total shareholders' equity | 319,591 | 332,614 |
Total liabilities and shareholders' equity | 3,914,045 | 3,244,884 |
Mortgage Loans | ||
Assets | ||
Mortgage loans held for sale | $ 22,284 | $ 1,337 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Allowance for loan losses | $ 72,387 | $ 21,730 |
Preferred stock, authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock | ||
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, issued (in shares) | 49,981,861 | 49,944,473 |
Common stock, outstanding (in shares) | 49,981,861 | 49,944,473 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Interest income | |||
Interest and fees on loans | $ 146,702 | $ 168,955 | $ 157,499 |
Interest and dividends on investment securities and restricted stock | 3,618 | 4,976 | 3,679 |
Other interest | 1,043 | 1,438 | 593 |
Total interest income | 151,363 | 175,369 | 161,771 |
Interest expense | |||
Interest on deposits | 37,482 | 45,693 | 32,031 |
Interest on Federal Home Loan Bank borrowings | 3,403 | 3,991 | 4,951 |
Interest on subordinated notes | 4,713 | 4,701 | 4,689 |
Total interest expense | 45,598 | 54,385 | 41,671 |
Net interest income | 105,765 | 120,984 | 120,100 |
Provision (recovery) for loan losses | 54,865 | (133) | 3,229 |
Net interest income after provision (recovery) for loan losses | 50,900 | 121,117 | 116,871 |
Non-interest income | |||
Gain on sale of investment securities | 179 | 6 | 86 |
Gain on sale of mortgage loans held for sale | 2,050 | 396 | 240 |
Gain on sale of portfolio loans | 5,970 | 16,433 | |
Unrealized gains (losses) on equity securities | 108 | 114 | (87) |
Net servicing (loss) income | (1,324) | 238 | 1,381 |
Income on cash surrender value of bank-owned life insurance | 1,160 | 1,275 | 1,193 |
Other | 613 | 1,427 | 377 |
Total non-interest income | 4,336 | 11,447 | 22,037 |
Non-interest expense | |||
Salaries and employee benefits | 30,655 | 29,503 | 28,438 |
Occupancy and equipment | 8,788 | 8,988 | 7,250 |
Professional fees | 32,646 | 5,984 | 3,118 |
Advertising and marketing | 529 | 1,364 | 1,640 |
FDIC assessments | 1,768 | 436 | 1,447 |
Data processing | 1,458 | 1,233 | 1,223 |
Provision for mortgage repurchase liability | 2,527 | 7,823 | |
Provision (recovery) for contingent losses, net | (10,000) | 25,000 | |
Other | 5,741 | 7,342 | 7,220 |
Total non-interest expense | 74,112 | 87,673 | 50,336 |
Income (loss) before income taxes | (18,876) | 44,891 | 88,572 |
Income tax (benefit) expense | (5,909) | 15,643 | 25,104 |
Net income (loss) | $ (12,967) | $ 29,248 | $ 63,468 |
Income (loss) per share, basic and diluted (in dollars per share) | $ (0.26) | $ 0.57 | $ 1.20 |
Weighted average common shares outstanding: | |||
Basic | 49,840,882 | 51,115,986 | 52,963,308 |
Diluted | 49,840,882 | 51,127,879 | 52,965,567 |
Service charges and fees | |||
Non-interest income | |||
Non-interest income | $ 426 | $ 444 | $ 379 |
Investment management and advisory fees | |||
Non-interest income | |||
Non-interest income | $ 1,124 | $ 1,577 | $ 2,035 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Consolidated Statements of Comprehensive Income (Loss) | |||
Net income (loss) | $ (12,967) | $ 29,248 | $ 63,468 |
Other comprehensive income, net of tax: | |||
Unrealized gains on investment securities, arising during the period, net of tax effect of $129, $56 and $48, respectively | 320 | 210 | 181 |
Reclassification adjustment for gains included in net income of $179, $6, and $86, respectively, included in gain on sale of investment securities, net of tax effect of $50, $1 and $18, respectively | (129) | (5) | (68) |
Total other comprehensive income | 191 | 205 | 113 |
Comprehensive income (loss) | $ (12,776) | $ 29,453 | $ 63,581 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Consolidated Statements of Comprehensive Income (Loss) | |||
Unrealized gains on investment securities, arising during the period, tax effect | $ 129 | $ 56 | $ 48 |
Reclassification adjustment for gains included in net income on sale of investment securities, before tax | 179 | 6 | 86 |
Reclassification adjustment for gains included in net income on sale of investment securities, tax effect | $ 50 | $ 1 | $ 18 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Common stock, votingCommon stock | Common stock | Additional Paid-in Capital | Retained EarningsCumulative effect adjustment | Retained Earnings | Accumulated Other Comprehensive Income (Loss)Cumulative effect adjustment | Accumulated Other Comprehensive Income (Loss) | Total |
Balance at beginning of the period at Dec. 31, 2017 | $ 111,238 | $ 12,416 | $ (50) | $ 149,816 | $ 50 | $ (172) | $ 273,298 | |
Balance at beginning of the period (in shares) at Dec. 31, 2017 | 52,963,308 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income (loss) | 63,468 | 63,468 | ||||||
Stock-based compensation | 297 | 297 | ||||||
Stock-based compensation (in shares) | 48,975 | |||||||
Other comprehensive income | 113 | 113 | ||||||
Dividends distributed | (2,119) | (2,119) | ||||||
Balance at end of the period at Dec. 31, 2018 | $ 111,238 | 12,713 | 211,115 | (9) | 335,057 | |||
Balance at end of the period (in shares) at Dec. 31, 2018 | 53,012,283 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income (loss) | 29,248 | 29,248 | ||||||
Repurchases of shares of common stock (Note 10) | $ (30,349) | $ (30,349) | (30,349) | |||||
Repurchases of shares of common stock (Note 10) (in shares) | (3,134,806) | (3,134,806) | ||||||
Stock-based compensation | 497 | 497 | ||||||
Stock-based compensation (in shares) | 66,996 | |||||||
Other comprehensive income | 205 | 205 | ||||||
Dividends distributed | (2,044) | (2,044) | ||||||
Balance at end of the period at Dec. 31, 2019 | $ 80,889 | 13,210 | 238,319 | 196 | 332,614 | |||
Balance at end of the period (in shares) at Dec. 31, 2019 | 49,944,473 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income (loss) | (12,967) | (12,967) | ||||||
Repurchases of shares of common stock (Note 10) | $ (82) | $ (82) | (82) | |||||
Repurchases of shares of common stock (Note 10) (in shares) | (10,912) | (10,912) | ||||||
Stock-based compensation | 334 | 334 | ||||||
Stock-based compensation (in shares) | 48,300 | |||||||
Other comprehensive income | 191 | 191 | ||||||
Dividends distributed | (499) | (499) | ||||||
Balance at end of the period at Dec. 31, 2020 | $ 80,807 | $ 13,544 | $ 224,853 | $ 387 | $ 319,591 | |||
Balance at end of the period (in shares) at Dec. 31, 2020 | 49,981,861 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Consolidated Statements of Changes in Shareholders' Equity | |||
Dividends paid per common share (in dollars per share) | $ 0.01 | $ 0.04 | $ 0.04 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash Flows From Operating Activities | |||
Net income (loss) | $ (12,967) | $ 29,248 | $ 63,468 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Provision (recovery) for loan losses | 54,865 | (133) | 3,229 |
Deferred income taxes | (12,305) | (6,052) | 696 |
Gain on sale of investment securities | (179) | (6) | (86) |
Unrealized (gains) losses on equity securities | (108) | (114) | 87 |
Amortization (accretion), net, on investment securities | 598 | (1,535) | (876) |
Depreciation and amortization on leasehold improvements and equipment | 1,608 | 1,621 | 1,399 |
Amortization of intangible asset | 450 | 450 | |
Origination, premium paid and purchase of loans, net of principal payments, mortgage loans held for sale | (174,700) | (96,418) | (47,778) |
Proceeds from sale of mortgage loans held for sale | 174,066 | 93,648 | 47,868 |
Gain on sale of mortgage loans held for sale | (2,050) | (396) | (240) |
Gain on sale of portfolio loans | (5,970) | (16,433) | |
Provision for mortgage repurchase liability | 2,527 | 7,823 | |
Provision for contingent losses | 2,500 | 25,000 | |
Recovery of contingent losses | (12,500) | ||
Increase in cash surrender value of bank-owned life insurance, net of premiums | (578) | (615) | (622) |
Valuation allowance adjustments and amortization of mortgage servicing rights | 4,790 | 3,831 | 1,915 |
Stock-based compensation | 334 | 497 | 297 |
Other | 162 | 163 | 140 |
Change in operating assets and liabilities: | |||
Accrued interest receivable | 2,728 | (189) | (2,036) |
Other assets | (8,946) | 5,032 | (1,245) |
Accrued expenses and other liabilities | (14,900) | 15,403 | 10,342 |
Net cash provided by operating activities | 4,945 | 71,288 | 60,575 |
Cash Flows From Investing Activities | |||
Maturities of interest-bearing time deposits with other banks | 2,710 | 1,100 | |
Purchases of interest-bearing time deposits with other banks | (8,706) | (1,025) | (1,100) |
Maturities and principal receipts of investment securities | 144,203 | 144,694 | 121,179 |
Sales of investment securities | 99,971 | 2,914 | 14,964 |
Purchases of investment securities | (396,634) | (149,317) | (157,174) |
Net decrease (increase) in loans | 452,631 | (162,775) | (658,322) |
Purchases of portfolio loans | (69,465) | ||
Proceeds from the sale of portfolio loans | 173,382 | 475,646 | |
Purchase of leasehold improvements and equipment | (922) | (1,330) | (3,845) |
Net cash provided by (used in) investing activities | 223,788 | 7,643 | (208,652) |
Cash Flows From Financing Activities | |||
Net increase in deposits | 603,526 | 42,755 | 207,575 |
Proceeds from advances from Federal Home Loan Bank | 100,000 | 2,476,000 | 6,222,000 |
Repayments of advances from Federal Home Loan Bank | (11,000) | (2,540,000) | (6,267,000) |
Repurchases of shares of common stock | (82) | (30,349) | |
Dividend paid to shareholders | (499) | (2,044) | (2,119) |
Net cash provided by (used in) financing activities | 691,945 | (53,638) | 160,456 |
Net change in cash and due from banks | 920,678 | 25,293 | 12,379 |
Cash and due from banks at beginning of period | 77,819 | 52,526 | 40,147 |
Cash and due from banks at end of period | 998,497 | 77,819 | 52,526 |
Cash paid for: | |||
Interest | 48,270 | 38,196 | 34,792 |
Income taxes | 13,906 | 21,246 | 26,055 |
Noncash investing and financing activities: | |||
Transfers of residential real estate loans to mortgage loans held for sale | 19,375 | 169,844 | 431,384 |
Transfers of residential real estate loans from mortgage loans held for sale | 399 | 2,546 | $ 77,887 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 4,405 | $ 740 |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 12 Months Ended |
Dec. 31, 2020 | |
Nature of Operations and Basis of Presentation | |
Nature of Operations and Basis of Presentation | Note 1—Nature of Operations and Basis of Presentation Nature of Operations Sterling Bancorp, Inc. (unless stated otherwise or the context otherwise requires, with its subsidiaries, the “Company”) is a unitary thrift holding company that was incorporated in 1989 and the parent company to its wholly-owned subsidiary, Sterling Bank and Trust, F.S.B. (the “Bank”). The Company’s business is conducted through the Bank, which was formed in 1984. The Bank originates residential and commercial real estate loans, construction loans, commercial lines of credit and other consumer loans and provides deposit products, consisting primarily of checking, savings and term certificate accounts. The Bank operates through a network of 30 branches of which 26 branches are located in San Francisco and Los Angeles, California with the remaining branches located in New York, New York, Southfield, Michigan and the greater Seattle market. The Company is headquartered in Southfield, Michigan, and its operations are in the financial services industry. Management evaluates the performance of the Company's business based on one reportable segment, community banking. The Company is subject to regulation, examination and supervision by the Board of Governors of the Federal Reserve System (the “FRB” or “Federal Reserve”). The Bank is a federally chartered stock savings bank that is subject to regulation, supervision and examination by the Office of the Comptroller of the Currency (“OCC”) of the U.S. Department of Treasury and the Federal Deposit Insurance Corporation (“FDIC”) and is a member of the Federal Home Loan Bank (“FHLB”) system. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2—Summary of Significant Accounting Policies Principles of Consolidation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“ U.S. GAAP”). The consolidated financial statements include the results of the Company and its wholly-owned subsidiaries. On October 14, 2020, QCM, LLC, doing business as Quantum Capital Management, a wholly-owned subsidiary of Quantum Fund, LLC and an indirect wholly-owned subsidiary of the Bank entered into an Asset Purchase Agreement to sell substantially all of its assets, which consisted primarily of client advisory agreements for aggregate consideration of $250 . The transaction closed on December 21, 2020. The Company recorded a gain on sale of $189 in 2020 that is recorded in other income within non-interest income in the consolidated statements of operations. The operations of Quantum Capital Management were not significant for all periods presented. All significant intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Due to the inherent uncertainty involved in making estimates, actual results reported in the future periods may be based upon amounts that could differ from those estimates. Fair Value Measurements The Bank utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine its fair value disclosures. The determination of fair values of financial instruments often requires the use of estimates. In cases where quoted market values in an active market are not readily available, the Bank uses present value techniques and other valuation methods, as disclosed in Note 15—Fair Values of Financial Instruments, to estimate the fair value of its financial instruments. These valuation methods require considerable judgment, and the resulting estimates of fair value can be significantly affected by the assumptions made and methods used. Debt securities available for sale and equity securities with readily determinable fair values are recorded at fair value on a recurring basis. Additionally, from time to time, the Bank may be required to record other assets and liabilities on a nonrecurring basis, such as impaired loans, other real estate owned, nonmarketable equity securities and certain other assets and liabilities. These nonrecurring fair value adjustments generally involve write-downs of individual assets or application of lower of amortized cost or fair value accounting. Cash and Due from Banks For the purposes of the accompanying consolidated statements of cash flows, cash includes cash and time deposits and other deposits held with other banks with original maturities of three months or less. Cash on hand or on deposit with the Federal Reserve was required to meet regulatory reserve and clearing requirements through March 26, 2020. After this date, the Federal Reserve eliminated such reserve and clearing requirements. Required cash on hand or on deposit with the Federal Reserve Bank was $23,969 at December 31, 2019. The Company presents the cash flows from customer loans, deposit transactions and short-term borrowings on a net basis in its consolidated statements of cash flows. Interest-bearing Deposits with Other Banks Interest-bearing deposits with other banks, consisting of certificates of deposit, have maturities greater than three months and are carried at cost. Each certificate of deposit is below the FDIC insurance limit of $250. Interest income is recorded when earned. Concentration of Credit Risk The loan portfolio consists primarily of residential real estate loans, which are collateralized by real estate. At December 31, 2020 and 2019, residential real estate loans accounted for 81% and 85%, respectively, of the loan portfolio. In addition, most of these residential loans and other commercial loans have been made to individuals and businesses in the state of California, which are dependent on the area economy for their livelihoods and servicing of their loan obligation. At December 31, 2020 and 2019, approximately 87% and 89%, respectively, of the loan portfolio was originated to customers in California. Starting December 9, 2019, the Bank suspended its Advantage Loan Program and announced that it permanently discontinued this program on March 6, 2020. Loans originated under this Program comprised a significant component of the Bank’s total loan originations. Advantage Loan Program loans (including nonaccrual residential real estate loans held for sale of Risks and Uncertainties – COVID-19 The coronavirus disease 2019 (“COVID-19”) pandemic, which was declared a national emergency in the United States in March 2020, continues to create extensive disruptions to United States and global economic conditions and financial markets and to businesses and the lives of individuals throughout the world. Federal and state governments have taken, and continue to take, unprecedented actions to contain the spread of the disease, including quarantines, travel bans, shelter-in-place orders, closures of businesses and schools, fiscal stimulus, and legislation designed to deliver monetary aid and other relief for businesses and individuals impacted by the pandemic. The Company’s primary market areas of California, the greater Seattle market, and New York City became part of several epicenters of the COVID-19 pandemic. Banking and financial services have been designated essential businesses, and the Bank’s operations are continuing, subject to certain modifications to business practices imposed to safeguard the health and wellness of the Bank’s customers and employees and to comply with applicable government directives. The COVID-19 pandemic, and related efforts to contain it, have caused significant disruptions in the functioning of the financial markets, resulted in an unprecedented slowdown in economic activity and a related increase in unemployment, and have increased economic and market uncertainty and volatility. In particular, COVID-19 has disrupted our normal course of providing services to our clients and adversely impacted our clients and could impair their ability to fulfill their obligations to the Bank. During the year ended December 31, 2020, the Bank experienced an increase in delinquent and nonaccrual loans, primarily in residential real estate loans, commercial real estate loans related to single-room occupancy hotels (“SROs”) and construction loans. A much higher provision for loan losses was recorded during 2020 reflecting, in part, the impact of the COVID-19 pandemic. The COVID-19 pandemic and the related adverse local and national economic consequences could have a material adverse effect on the Company’s business, financial condition, liquidity, results of operations, risk-weighted assets and regulatory capital. Currently, significant uncertainties exist concerning the magnitude of the impact and duration of the COVID-19 pandemic. Investment Securities Investment securities includes debt securities and equity securities. Debt Securities Debt securities are classified as either available for sale or held to maturity. Management determines the classification of the debt securities when they are purchased. Debt securities available for sale are stated at fair value, with unrealized gains and losses excluded from income and shown as a separate component of shareholders’ equity in accumulated other comprehensive income (loss), net of tax. Held to maturity securities are carried at amortized cost when management has the positive intent and ability to hold them to maturity. The amortized cost of debt securities classified as held to maturity or available for sale is adjusted for amortization of premiums (noncallable) and accretion of discounts over the contractual life of the investment security using the effective interest method or, in the case of asset-backed securities, over the estimated life of the investment security using the effective yield method. Interest income includes amortization or accretion of purchase premium or discount. Gains and losses on sales are recorded on the settlement date and determined using the specific identification method. Management evaluates debt securities for other-than-temporary impairment at least on a quarterly basis and more frequently when economic or market conditions warrant such an evaluation. In determining other-than-temporary impairment for debt securities, management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the Company has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. The assessment of whether a decline is other-than-temporary involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time. A charge is recognized against income for all or a portion of the impairment if the loss is determined to be other than temporary. If the Bank intends to sell the debt security or it is more likely than not that the Bank will be required to sell the debt security prior to the recovery of its amortized cost basis, the debt security is written down to fair value, and the full amount of any impairment charge is recorded as a loss in the consolidated statements of income. If the Bank does not intend to sell the debt security and it is more likely than not that the Bank will not be required to sell the debt security prior to recovery of its amortized cost basis, only the current period credit loss of any impairment of a debt security is recognized in the consolidated statements of income, with the remaining impairment recorded in other comprehensive income (loss). Equity Securities Equity securities with readily determinable fair values are stated at fair value with unrealized and realized gains and losses reported in income. Those equity securities without readily determinable fair values are recorded at cost, less any impairments, adjusted for subsequent observable price changes in orderly transactions for an identical or similar investment of the same issuer. Any changes in the carrying value of the equity investments are recognized in income. Management performs a qualitative assessment each reporting period to identify impairment of equity securities without readily determinable fair values. When a qualitative assessment indicates that an impairment exists, management determines the fair value of the investment and if the fair value is less than the investment's carrying value, an impairment charge is recorded in income equal to the difference between the fair value and the carrying amount of the investment. Mortgage Loans Held for Sale Residential real estate loans originated or purchased and intended for sale in the secondary market are carried at the lower of amortized cost or fair value on an individual loan basis as determined by outstanding commitments from investors. Net unrealized losses, if any, are recorded as a valuation allowance and charged to noninterest income in the consolidated statements of operations. Residential real estate loans originated as held for investment are periodically sold in order to manage liquidity, interest rate or concentration risk. Loans that are transferred into loans held for sale from loans held for investment, due to a change in intent, are recorded at the lower of amortized cost or fair value. Any changes in fair value attributable to credit deterioration are charged against the allowance for loan losses at the time of transfer. When loans originally classified as held for sale or as held for investment are reclassified due to a change in intent or ability to hold, cash flows associated with the loans are classified in the consolidated statements of cash flows by operating or investing activities, as appropriate, in accordance with the initial classification of the loans. Residential real estate loans held for sale are generally sold with servicing rights retained. Upon the sale of an originated loan, the mortgage servicing right asset is established and recorded at its estimated fair value, and a corresponding gain is recognized in gain on sale of mortgage loans held for sale or gain on sale of portfolio loans. Gains and losses on sales of residential real estate loans are based on the difference between the selling price and the carrying value of the related loans sold. Loans Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at the principal balance outstanding, net of unearned income, including unamortized loan fees and costs on originated loans, and allowances for loan losses. Loan origination fees, net of certain direct loan origination costs, are deferred and amortized over the contractual lives of the respective loans as a yield adjustment using the effective interest method. Other credit-related fees are recognized as fee income, as a component of noninterest income. Interest income on loans is accrued as earned using the interest method over the term of the loan. The accrual of interest income is discontinued at the time the loan is 90 days past due or earlier if conditions warrant (i.e. nonaccrual loan). In all cases, loans are placed on nonaccrual status at an earlier date if collection of principal or interest is considered doubtful. When a loan is placed on nonaccrual status, interest accrued and unpaid during prior periods is reversed. Any payments received on nonaccrual loans are applied to interest income on a cash basis if the loan is considered well secured. Otherwise, all payments received are applied first to outstanding loan principal amounts and then to the recovery of the charged off loan amounts. Any excess is treated as a recovery of interest and fees. Loans are returned to accrual status after all principal and interest amounts contractually due are made and future payments are reasonably assured. A loan is considered impaired when, based on current information and events, it is probable that Bank will be unable to collect all amounts due according to the contractual terms of the loan agreement. Loans that have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings, as defined below, and classified as impaired. Factors considered by management in determining if a loan is impaired include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Commercial real estate loans, construction loans and commercial lines of credit are individually evaluated for impairment. If a loan is impaired, a portion of the allowance for loan losses is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral or operations of collateral. Large groups of homogeneous loans, such as other consumer and residential real estate loans, are collectively evaluated for impairment and accordingly, are not separately identified for impairment disclosures. Troubled Debt Restructurings The Bank periodically grants concessions to its customers in an attempt to protect as much of its investment as possible and minimize risk of loss. Loans that have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings. To determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed as part of the credit underwriting process. Troubled debt restructurings are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a troubled debt restructuring is considered a collateral dependent loan, the loan is reported, net, at the fair value of the collateral. For loans that are considered troubled debt restructurings that subsequently go into default, the Bank determines the amount of the allowance for loan losses in accordance with the accounting policy for the allowance for loan losses on loans individually identified as impaired. Allowance for Loan Losses The allowance for loan losses is a valuation allowance for probable incurred credit losses, increased or decreased by the provision for loan losses and decreased by charge offs less recoveries. Loan losses are charged against the allowance for loan losses when a loan is considered partially or fully uncollectible, or has such little value that continuance as an asset is not warranted. Subsequent recoveries, if any, are credited to the allowance for loan losses. Management estimates the allowance for loan losses balance using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations, estimated collateral values, economic conditions and other factors. Allocations of the allowance for loan losses may be made for specific loans, but the entire allowance for loan losses is available for any loan that, in management’s judgment, should be charged off. The allowance for loan losses consists of specific and general components. The specific component relates to loans that are individually classified as impaired. The general component covers all other loans and is based on historical loss experience adjusted for general economic conditions and other qualitative factors by portfolio segment. The historical loss experience is determined by portfolio segment, discussed below, and is based on the actual loss history experienced over the most recent three-year period. This actual loss experience is supplemented with economic and other factors based on the risks present for each portfolio segment. These economic and other risk factors include consideration of the following: levels of and trends in delinquencies and impaired loans; levels of and trends in charge offs and recoveries; trends in portfolio volume; effects of any changes in underwriting standards; other changes in lending policies, procedures and practices; experience, ability and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations. The following portfolio segments have been identified: A) these loans. Weak economic trends indicate that the borrowers’ capacity to repay their obligations may be deteriorating. The classes in the residential real estate portfolio segment consist of residential first mortgages and residential second mortgages. B) C) D) E) Mortgage Servicing Rights, net Servicing assets (i.e. mortgage servicing rights) are recognized separately when residential real estate loans are sold with servicing rights retained by the Bank. Mortgage servicing rights are initially recorded at fair value, which is determined based on an internal valuation model that calculates the present value of estimated future net servicing income. The servicing assets are subsequently measured using the amortization method which requires servicing assets to be amortized into non-interest income in the consolidated statements of income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans. Servicing fee income is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal, or a fixed amount per loan, and are recognized as income when earned. The Bank also records late fees and ancillary fees related to loan servicing which were not material for the periods presented. On a quarterly basis, servicing assets are evaluated for impairment based upon the fair value of the mortgage servicing rights as compared to their carrying amount. Impairment is determined by stratifying rights into groupings based on predominant risk characteristics, such as interest rate, loan type and investor type. If the carrying amount of an individual grouping exceeds fair value, impairment is recorded on that grouping so that the servicing asset is carried at fair value. Impairment is recognized through a valuation allowance for an individual grouping. If it is later determined that all or a portion of the impairment no longer exists for a particular grouping, a reduction of the valuation allowance may be recorded as an increase to income. The fair values of servicing assets are subject to significant fluctuations due to changes in estimated and actual prepayment speeds and default rates and losses. Transfers of Financial Assets Transfers of financial assets are accounted for as sales when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. FHLB Stock The Bank is a member of the FHLB system. Members are required to own a certain amount of stock based on the level of FHLB borrowings and other factors and may invest additional amounts. The FHLB stock is carried at cost, classified as a restricted security and periodically evaluated for impairment based on ultimate recovery of par value. The FHLB stock does not have a readily determinable fair value and no quoted market value as the ownership is restricted to member institutions. Also, the FHLB stock is pledged as collateral on FHLB borrowings. Cash and stock dividends are reported as income in interest and dividends on investment securities and restricted stock in the consolidated statements of operations. Cash dividends received amounted to $847, $1,219 and $1,149 for the year ended December 31, 2020, 2019 and 2018, respectively. Cash Surrender Value of Bank-Owned Life Insurance The Bank has purchased life insurance policies on certain officers and employees; in addition, the Bank still owns policies on retired and former employees. Cash surrender value of bank-owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. Long-Lived Assets Long-lived assets, such as leasehold improvements and equipment, and definite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require long-lived assets or asset groups to be tested for possible impairment, the Company compares the undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment charge is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques, such as discounted cash flow models and third-party independent appraisals. Definite-lived intangible assets, consisting of customer-related intangibles, are amortized on a straight-line basis over their estimated useful lives of ten years. Amortization expense related to the customer-related intangibles was $450 for the year ended December 31, 2019 and 2018. Mortgage Repurchase Liability In connection with portfolio loans sold in the secondary market, the Company makes customary representations and warranties about certain characteristics of each loan. The Company establishes a liability which may result from breaches in such representations and warranties. The repurchase liability reflects management’s estimate of such losses based on a combination of factors. The Company’s estimation process requires management to make subjective and complex judgments about matters that are inherently uncertain, such as expectations of future repurchase demands, economic factors, and findings from the Internal Review discussed in Note 19 - Commitments and Contingencies. The actual loss on repurchases could vary significantly from the recorded repurchase liability, depending on the outcome of various factors. Legal Contingencies and Litigation Accruals The Company is involved in several material legal proceedings, as disclosed in Note 19—Commitments and Contingencies. On a quarterly basis, management assesses potential losses in relation to these and other pending or threatened legal matters. If a loss is considered probable and the amount can be reasonably estimated, the Company recognizes an expense for the estimated loss. Estimates of any such loss are subjective in nature and require the evaluation of numerous facts and assumptions as to future events, including the application of legal precedent that may be conflicting. To the extent these estimates are more or less than the actual liability resulting from the resolution of these matters, the Company’s net income (loss) will be increased or decreased accordingly. If the differences are material, the Company’s consolidated financial statements could be materially impacted. Revenue from Contracts with Customers In accordance with ASC 606, Revenue from Contracts with Customers The majority of the Company's revenues are from interest income and other sources, including loans and investment securities, as well as fees related to mortgage servicing activities, which are not within the scope of ASC 606 and are instead subject to other accounting guidance. The Company's services that are within the scope of ASC 606 are recorded within non-interest income, which includes investment management and advisory fees, service charges on deposit accounts, interchange income and other service charges and fees. Descriptions of these activities that are within the scope of ASC 606, which are presented in the consolidated statements of operations as components of non-interest income, are as follows: Service charges on deposit accounts Investment management and advisory fees Interchange fees: Other service charges and fees: Stock-based Compensation Compensation cost is recognized for stock options and restricted stock awards issued to employees and non-employee members of the Company's board of directors, based on the fair value of these awards at the date of grant. The fair value of stock options is estimated using a Black-Scholes option pricing model, and the fair value of restricted stock awards is based on the market price of the Company's common stock at the date of grant reduced by the present value of dividends per share expected to be paid during the period the shares are not vested. Compensation cost is recorded over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recorded on a straight-line basis over the requisite service period of the entire award. The Company's accounting policy is to record forfeitures in the period that they occur. Comprehensive Income Comprehensive income consists of net income and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized gains and losses on debt securities available for sale, net of income taxes, which is also recognized as a separate component of shareholders’ equity. The Company releases the income tax effects on unrealized gains and losses on debt securities available for sale that are reported in other comprehensive income (loss) on a security-by-security basis when debt securities are sold. Loan Commitments and Related Financial Instruments Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. Assets Held under Administration and Investment Management and Advisory Fees The Company does not include assets held in fiduciary or agency capacities in the consolidated balance sheets, as such assets held under administration are not assets of the Company. Fees from asset management activities are recorded on an accrual basis over the period in which the service is provided. Fees, as set forth in the underlying customer contract, are a function of the market value of assets administrated and managed. Effective December 21, 2020, the Bank no longer offers asset management services. Income Taxes Income taxes are provided for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period the change occurs. Deferred tax assets are reduced, through a valuation allowance, if necessary, by the amount of such benefits that are not expected to be realized based on current available evidence. A tax position is recognized as a benefit only if it is more likely than not that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the more likely than not test, no tax benefit is recorded. The Company recognizes interest and/or penalties related to income tax matters in income tax expense. Income (Loss) per Share, Basic and Diluted Basic income (loss) per share represents net income (loss) divided by the weighted average number of common shares outstanding during the period. In periods of income, diluted income per share represents net income divided by the weighted average number of common shares outstanding during the period, plus the effect of outstanding potential dilutive common shares. In periods of a loss, basic and diluted per share information are the same. Recently Issued Accounting Guidance Not Yet Adopted In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief. Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates . This update deferred the effective dates of Topic 326 to January 1, |
Investment Securities
Investment Securities | 12 Months Ended |
Dec. 31, 2020 | |
Investment Securities | |
Investment Securities | Note 3—Investment Securities Debt Securities The following tables summarize the amortized cost and fair value of debt securities available for sale at December 31, 2020 and 2019 and the corresponding amounts of gross unrealized gains and losses: December 31, 2020 Amortized Gross Fair Cost Gain Loss Value Available for sale: U.S. Treasury & Agency securities $ 138,742 $ 255 $ — $ 138,997 Mortgage-backed securities 33,743 72 (1) 33,814 Collateralized mortgage obligations 126,359 628 (391) 126,596 Collateralized debt obligations 214 — (27) 187 Total $ 299,058 $ 955 $ (419) $ 299,594 December 31, 2019 Amortized Gross Fair Cost Gain Loss Value Available for sale: U.S. Treasury securities $ 122,634 $ 170 $ (1) $ 122,803 Mortgage-backed securities 23,028 76 — 23,104 Collateralized mortgage obligations 1,138 45 — 1,183 Collateralized debt obligations 216 — (17) 199 Total $ 147,016 $ 291 $ (18) $ 147,289 Securities with a fair value of $73,792 were pledged as collateral on FHLB borrowings at December 31, 2020. All of the Company’s mortgage-backed securities , and a majority of the Company's collateralized mortgage obligations purchased during 2020, are issued and/or guaranteed by a U.S. government agency (Government National Mortgage Association) or a U.S. government-sponsored enterprise (Federal Home Loan Mortgage Corporation (“Freddie Mac”) or Federal National Mortgage Association (“Fannie Mae”)). The fair value of the private-label collateralized mortgage obligations was $816 and $1,183 at December 31, 2020 and 2019. No securities of any single issuer, other than debt securities issued by the U.S. government, government agency and government-sponsored enterprises, were in excess of 10% of total shareholders' equity as of December 31, 2020 and 2019. Information pertaining to sales of debt securities available for sale for the year ended December 31, 2020, 2019 and 2018 is as follows: 2020 2019 2018 Proceeds $ 99,971 $ 2,914 $ 14,964 Gross realized gains $ 337 $ 6 $ 89 Gross realized losses (158) — (3) Total net realized gains $ 179 $ 6 $ 86 The income tax expense related to the net realized gains was $50, $1 and $18 for the year ended December 31, 2020, 2019 and 2018, respectively. The amortized cost and fair value of U.S. Treasury and Agency securities at December 31, 2020 are shown by contractual maturity. Mortgage-backed securities, collateralized mortgage obligations and collateralized debt obligations are disclosed separately in the table below, as the expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Amortized Fair Cost Value U.S. Treasury & Agency securities Due less than one year $ 64,974 $ 65,205 Due after one year through five years 73,768 73,792 Mortgage-backed securities 33,743 33,814 Collateralized mortgage obligations 126,359 126,596 Collateralized debt obligations 214 187 Total $ 299,058 $ 299,594 The following table summarizes debt securities available for sale, at fair value, with unrealized losses at December 31, 2020 and 2019 aggregated by major security type and length of time the individual securities have been in a continuous unrealized loss position: December 31, 2020 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses Mortgage-backed securities $ 5,694 $ (1) $ — $ — $ 5,694 $ (1) Collateralized mortgage obligations 75,740 (391) — — 75,740 (391) Collateralized debt obligations — — 187 (27) 187 (27) Total $ 81,434 $ (392) $ 187 $ (27) $ 81,621 $ (419) December 31, 2019 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses U.S. Treasury securities $ 5,011 $ (1) $ — $ — $ 5,011 $ (1) Collateralized debt obligations — — 199 (17) 199 (17) Total $ 5,011 $ (1) $ 199 $ (17) $ 5,210 $ (18) As of December 31, 2020, the debt securities portfolio consisted of 23 debt securities, with eight debt securities in an unrealized loss position. For debt securities in an unrealized loss position, management has both the intent and ability to hold these investments until the recovery of the decline. The fair value is expected to increase as these securities approach their maturity date or repricing date or if market yields for such investments decline. Accordingly, as of December 31, 2020, the unrealized losses in these securities are due to non-credit-related factors, including changes in interest rates and other market conditions; thus, the impairment was determined to be temporary. All interest and dividends are considered taxable. A collateralized debt obligation with a carrying value of $187 and $199 at December 31, 2020 and 2019, respectively, was rated high quality at inception, but it was subsequently rated by Moody’s as Ba1, which is defined as speculative. The issuers of the underlying investments (the collateral) of the collateralized debt obligation are primarily banks. Management uses in-house and third-party other-than-temporary impairment evaluation models to compare the present value of expected cash flows to the previous estimate to ensure there are no adverse changes in cash flows during the period. The other-than-temporary impairment model considers the structure and term of the collateralized debt obligations and the financial condition of the underlying issuers. Assumptions used in the model include expected future default rates and prepayments. The collateralized debt obligation remained classified as available for sale and represented $27 and $17 of the unrealized losses reported at December 31, 2020 and 2019, respectively. Equity Securities Equity securities consist of an investment in a qualified community reinvestment act investment fund, which is a publicly-traded mutual fund and an investment in the common equity of Pacific Coast Banker's Bank, a thinly traded restricted stock. At December 31, 2020 and 2019, equity securities totaled $5,364 and $5,255, respectively. Equity securities with readily determinable fair values are stated at fair value with realized and unrealized gains and losses reported in income. At December 31, 2020 and 2019, equity securities with readily determinable fair values were $5,118 and $5,009, respectively. The following is a summary of unrealized and realized gains and losses recognized in the consolidated statements of operations: Year Ended December 31, 2020 2019 2018 Net gains (losses) recorded during the period on equity securities $ 108 $ 114 $ (87) Less: net gains (losses) recorded during the period on equity securities sold during the period — — — Unrealized gains (losses) recorded during the period on equity securities held at the reporting date $ 108 $ 114 $ (87) The Company has elected to account for its investment in a thinly traded restricted stock using the measurement alternative for equity securities without readily determinable fair values, resulting in the investment carried at cost based on no evidence of impairment or observable trading activity during 2020 and 2019. The investment was reported at $246 at December 31, 2020 and 2019. |
Loans
Loans | 12 Months Ended |
Dec. 31, 2020 | |
Loans | |
Loans | Note 4—Loans Major categories of loans were as follows: December 31, 2020 2019 Residential real estate $ 2,033,526 $ 2,476,866 Commercial real estate 259,958 240,081 Construction 206,581 178,376 Commercial lines of credit 6,671 17,903 Other consumer 7 34 Total loans 2,506,743 2,913,260 Less: allowance for loan losses (72,387) (21,730) Loans, net $ 2,434,356 $ 2,891,530 Loans totaling $630,197 and $933,747 were pledged as collateral on FHLB borrowings at December 31, 2020 and 2019, respectively. The following table presents the activity in the allowance for loan losses by portfolio segment for the year ended December 31, 2020, 2019 and 2018: Commercial Residential Commercial Lines of Other December 31, 2020 Real Estate Real Estate Construction Credit Consumer Unallocated Total Allowance for loan losses: Beginning balance $ 12,336 $ 5,243 $ 3,822 $ 328 $ 1 $ — $ 21,730 Provision (recovery) for loan losses 23,604 16,634 14,866 (237) (2) — 54,865 Charge offs (3,594) — (707) — — — (4,301) Recoveries 20 65 7 — 1 — 93 Total ending balance $ 32,366 $ 21,942 $ 17,988 $ 91 $ — $ — $ 72,387 Commercial Residential Commercial Lines of Other December 31, 2019 Real Estate Real Estate Construction Credit Consumer Unallocated Total Allowance for loan losses: Beginning balance $ 13,826 $ 2,573 $ 3,273 $ 1,058 $ 1 $ 1,119 $ 21,850 Provision (recovery) for loan losses (1,511) 2,509 542 (554) — (1,119) (133) Charge offs — — — (176) — — (176) Recoveries 21 161 7 — — — 189 Total ending balance $ 12,336 $ 5,243 $ 3,822 $ 328 $ 1 $ — $ 21,730 Commercial Residential Commercial Lines of Other December 31, 2018 Real Estate Real Estate Construction Credit Consumer Unallocated Total Allowance for loan losses: Beginning balance $ 12,279 $ 2,040 $ 2,218 $ 469 $ 1 $ 1,450 $ 18,457 Provision (recovery) for loan losses 1,533 398 1,040 589 — (331) 3,229 Charge offs (4) — — — — — (4) Recoveries 18 135 15 — — — 168 Total ending balance $ 13,826 $ 2,573 $ 3,273 $ 1,058 $ 1 $ 1,119 $ 21,850 The following tables present the balance in the allowance for loan losses and the recorded investment by portfolio segment and based on impairment evaluation method as of December 31, 2020 and 2019: Commercial Residential Commercial Lines of Other December 31, 2020 Real Estate Real Estate Construction Credit Consumer Unallocated Total Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 41 $ 287 $ 1,905 $ 4 $ — $ — $ 2,237 Collectively evaluated for impairment 32,325 21,655 16,083 87 — — 70,150 Total ending allowance balance $ 32,366 $ 21,942 $ 17,988 $ 91 $ — $ — $ 72,387 Loans: Loans individually evaluated for impairment $ 208 $ 20,974 $ 48,871 $ 3,981 $ — $ — $ 74,034 Loans collectively evaluated for impairment 2,033,318 238,984 157,710 2,690 7 — 2,432,709 Total ending loans balance $ 2,033,526 $ 259,958 $ 206,581 $ 6,671 $ 7 $ — $ 2,506,743 Commercial Residential Commercial Lines of Other December 31, 2019 Real Estate Real Estate Construction Credit Consumer Unallocated Total Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 43 $ — $ — $ 5 $ — $ — $ 48 Collectively evaluated for impairment 12,293 5,243 3,822 323 1 — 21,682 Total ending allowance balance $ 12,336 $ 5,243 $ 3,822 $ 328 $ 1 $ — $ 21,730 Loans: Loans individually evaluated for impairment $ 215 $ 1,100 $ 17,112 $ 1,377 $ — $ — $ 19,804 Loans collectively evaluated for impairment 2,476,651 238,981 161,264 16,526 34 — 2,893,456 Total ending loans balance $ 2,476,866 $ 240,081 $ 178,376 $ 17,903 $ 34 $ — $ 2,913,260 The following tables present information related to impaired loans by class of loans as of and for the periods indicated: At December 31, 2020 Year Ended December 31, 2020 Unpaid Average Interest Cash Basis Principal Recorded Allowance for Recorded Income Interest Balance Investment Loan Losses Investment Recognized Recognized With no related allowance for loan losses recorded: Residential real estate, first mortgage $ 116 $ 94 $ — $ 96 $ — $ — Commercial real estate: Retail 1,247 1,029 — 1,065 58 48 Multifamily — — — — — — Offices — — — — — — Hotels/SROs 11,428 11,419 — 5,221 — — Construction 42,669 41,951 — 29,395 964 744 Commercial lines of credit: Private banking — — — 1,505 42 35 C&I lending 3,857 3,857 — 1,184 — — Subtotal 59,317 58,350 — 38,466 1,064 827 With an allowance for loan losses recorded: Residential real estate, first mortgage 114 114 41 116 5 4 Commercial real estate: Hotels/SROs 8,645 8,526 287 3,858 — — Construction 6,920 6,920 1,905 6,189 255 226 Commercial lines of credit, private banking 124 124 4 128 7 6 Subtotal 15,803 15,684 2,237 10,291 267 236 Total $ 75,120 $ 74,034 $ 2,237 $ 48,757 $ 1,331 $ 1,063 At December 31, 2019 Year Ended December 31, 2019 Unpaid Average Interest Cash Basis Principal Recorded Allowance for Recorded Income Interest Balance Investment Loan Losses Investment Recognized Recognized With no related allowance for loan losses recorded: Residential real estate, first mortgage $ 125 $ 98 $ — $ 104 $ — $ — Commercial real estate: Retail 1,308 1,100 — 1,136 60 55 Multifamily — — — 449 12 12 Offices — — — 378 25 25 Construction 17,156 17,112 — 6,682 582 575 Commercial lines of credit: Private banking 1,245 1,245 — — — — C&I lending — — — 67 5 5 Subtotal 19,834 19,555 — 8,816 684 672 With an allowance for loan losses recorded: Residential real estate, first mortgage 116 117 43 118 5 5 Commercial lines of credit, private banking 132 132 5 136 7 7 Subtotal 248 249 48 254 12 12 Total $ 20,082 $ 19,804 $ 48 $ 9,070 $ 696 $ 684 At December 31, 2018 Year Ended December 31, 2018 Unpaid Average Interest Cash Basis Principal Recorded Allowance for Recorded Income Interest Balance Investment Loan Losses Investment Recognized Recognized With no related allowance for loan losses recorded: Construction $ 4,751 $ 4,751 $ — $ 3,563 $ 301 $ 230 Commercial real estate: Retail 1,370 1,174 — 1,210 64 58 Multifamily 1,088 1,083 — 812 37 33 Subtotal 7,209 7,008 — 5,585 402 321 With an allowance for loan losses recorded: Residential real estate, first mortgage 254 228 46 148 5 4 Construction 2,661 2,661 78 1,996 163 144 Commercial real estate, offices 1,530 1,522 30 1,538 88 80 Commercial lines of credit: Private banking 316 316 95 330 19 16 C&I lending 100 100 100 75 5 4 Subtotal 4,861 4,827 349 4,087 280 248 Total $ 12,070 $ 11,835 $ 349 $ 9,672 $ 682 $ 569 In the above tables, the unpaid principal balance is not reduced for partial charge offs. Also, the recorded investment excludes accrued interest receivable on loans, which was not significant. Also presented in the tables above is the average recorded investment of the impaired loans and the related amount of interest recognized during the time within the period that the impaired loans were impaired. When the ultimate collectability of the total principal of an impaired loan is in doubt and the loan is on nonaccrual status, all payments are applied to principal under the cost recovery method. When the ultimate collectability of the total principal of an impaired loan is not in doubt and the loan is on nonaccrual status, contractual interest is credited to interest income when received under the cash basis method. The average balances are calculated based on the month-end balances of the loans for the period reported. The following tables present the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans as of December 31, 2020 and 2019: At December 31, 2020 2019 Loans Past Loans Past Due Over 90 Due Over 90 Days Still Days Still Nonaccrual Accruing Nonaccrual Accruing Residential real estate: Residential first mortgage $ 20,043 $ 46 $ 14,482 $ 50 Residential second mortgage 686 — 210 — Commercial real estate: Retail 20 — 40 — Hotels/SROs 19,945 — — — Construction 41,873 — — — Commercial lines of credit Private banking 2,285 — — — C&I lending 1,572 — — — Total $ 86,424 $ 46 $ 14,732 $ 50 The following tables present the aging of the recorded investment in past due loans as of December 31, 2020 and 2019 by class of loans: 30 ‑ 59 60 ‑ 89 Greater than Days Days 89 Days Total Loans Not December 31, 2020 Past Due Past Due Past Due Past Due Past Due Total Residential real estate: Residential first mortgage $ 37,819 $ 14,524 $ 20,089 $ 72,432 $ 1,943,602 $ 2,016,034 Residential second mortgage 362 134 686 1,182 16,310 17,492 Commercial real estate: Retail 1,010 — 20 1,030 15,170 16,200 Multifamily 3,835 — — 3,835 75,374 79,209 Offices — — — — 27,061 27,061 Hotels/SROs — — 19,945 19,945 47,690 67,635 Industrial — — — — 13,186 13,186 Other — — — — 56,667 56,667 Construction 8,593 2,514 41,873 52,980 153,601 206,581 Commercial lines of credit: Private banking — — 2,285 2,285 124 2,409 C&I lending — — 1,572 1,572 2,690 4,262 Other consumer — — — — 7 7 Total $ 51,619 $ 17,172 $ 86,470 $ 155,261 $ 2,351,482 $ 2,506,743 30 ‑ 59 60 ‑ 89 Greater than Days Days 89 Days Total Loans Not December 31, 2019 Past Due Past Due Past Due Past Due Past Due Total Residential real estate: Residential first mortgage $ 36,112 $ 5,112 $ 14,532 $ 55,756 $ 2,396,800 $ 2,452,556 Residential second mortgage 97 295 210 602 23,708 24,310 Commercial real estate: Retail — — 40 40 6,089 6,129 Multifamily — — — — 64,873 64,873 Offices — — — — 28,048 28,048 Hotels/SROs 5,605 — — 5,605 76,165 81,770 Industrial — — — — 14,150 14,150 Other — — — — 45,111 45,111 Construction 15,008 — — 15,008 163,368 178,376 Commercial lines of credit: Private banking — — — — 11,914 11,914 C&I lending 1,249 — — 1,249 4,740 5,989 Other consumer — — — — 34 34 Total $ 58,071 $ 5,407 $ 14,782 $ 78,260 $ 2,835,000 $ 2,913,260 The aging of the loans in the above table as of December 31, 2020 has not been adjusted for customers granted a payment deferral in response to COVID-19. These loans remain in the aging category that was applicable at the time of payment deferral. Interest continues to accrue on these loans. Refer to the discussion of forbearance loans below. The Company considers the performance of the loan portfolio and its impact on the allowance for loan losses. For residential real estate and other consumer loans, the Company also evaluates credit quality based on the aging status of the loan, which is presented above, and by payment activity. The Company reviews the status of nonperforming loans, which include loans 90 days past due and still accruing and nonaccrual loans. Troubled Debt Restructurings At December 31, 2020 and 2019, the balance of outstanding loans identified as troubled debt restructurings , along with the allocated portion of the allowance for loan losses with respect to these loans, was as follows: At December 31, 2020 2019 Recorded Allowance for Recorded Allowance for Investment Loan Losses Investment Loan Losses Residential real estate, first mortgage $ 209 $ 41 $ 215 $ 43 Commercial real estate, retail 1,029 — 1,110 — Construction 26,985 1,906 12,261 — Commercial lines of credit, private banking 124 4 132 5 Total $ 28,347 $ 1,951 $ 13,718 $ 48 During the year ended December 31, 2020, the terms of three construction loans and one private banking loan were modified by providing for an extension of the maturity dates at the contract’s existing rate of interest, which is lower than the current market rate for new debt with similar risk. The outstanding recorded investment was $13,777 both before and after modification. During the year ended December 31, 2019, the terms of three construction loans were modified by providing for an extension of the maturity dates at the contract’s existing rate of interest, which is lower than the current market rate for new debt with similar risk. The outstanding recorded investment was $11,214 both before and after modification. The effect of these modifications on the allowance for loan losses was not significant. Five construction loans, totaling $19,987 as of December 31, 2020, identified as troubled debt restructurings subsequently defaulted. The effect of the defaults on the allowance for loan losses was not significant due to collateral coverage. The terms of certain other loans have been modified during 2020 and 2019 that did not meet the definition of a troubled debt restructuring. These other loans that were modified were not considered significant. Forbearance Loans As a response to the COVID-19 pandemic, the Company has offered forbearance under the CARES Act to customers facing COVID-19-related financial difficulties. The CARES Act created a forbearance program for impacted borrowers and imposed a temporary 60-day moratorium on foreclosures and foreclosure-related evictions related to federally backed mortgage loans, which include loans secured by a first or subordinate lien on residential one- to-four family real property that have been purchased by Fannie Mae or Freddie Mac, are insured by HUD or are insured or guaranteed by other listed agencies. Borrowers of such federally backed mortgage loans experiencing a financial hardship as a result of COVID-19 may request forbearance, regardless of delinquency status, for up to 360 days. Subsequently, the federal agencies as well as the state of California announced extensions of their moratoria on single-family foreclosures and evictions and Federal Housing Administration-insured loans, with the latest extensions through June 30, 2021. Certain provisions of the CARES Act encourage financial institutions to practice prudent efforts to work with borrowers impacted by COVID-19. Under these provisions, a modification deemed to be COVID-19-related would not be considered a troubled debt restructuring if the loan were not more than 30 days past due as of December 31, 2019 and the deferral was executed between March 1, 2020 and the earlier of 60 days after the date of termination of the COVID-19 national emergency or December 31, 2020. The banking regulators issued similar guidance, which also clarified that a COVID-19-related modification should not be considered a troubled debt restructuring if the borrower was current on payments at the time the underlying loan modification program was implemented and if the modification is considered to be short-term. In this context, the Company implemented a COVID-19 forbearance program that generally provided for principal and interest forbearance for 120 days to residential borrowers with extensions available to qualified borrowers available for up to a maximum deferral period of twelve months, and these loans were not considered troubled debt restructurings. Under the forbearance program, interest continues to accrue at the note rate. At the end of the forbearance period, the borrower’s accrued but unpaid interest will be added to their outstanding principal balance while keeping the principal and interest payment at the amount determined in accordance with the terms of the note, thus extending the loan’s maturity date. The terms of commercial loan forbearances are reviewed and determined on a case-by-case basis, and these loans were not considered troubled debt restructurings. Loans modified under the CARES program during the year ended December 31, 2020 totaled $132,830. As of December 31, 2020, the amount of loans that remain in payment deferral totaled $15,785 . Total accrued interest receivables on these loans were $146. Foreclosure Proceedings At December 31, 2020 and 2019, the recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process totaled $5,320 and $1,643, respectively. Credit Quality The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis includes homogeneous loans, such as residential real estate and other consumer loans, and non-homogeneous loans, such as commercial lines of credit, construction and commercial real estate loans. This analysis is performed at least quarterly. The Company uses the following definitions for risk ratings: Pass: Loans are of satisfactory quality. Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Company’s credit position at some future date. Substandard: Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, based on currently existing facts, conditions and values, highly questionable and improbable. At December 31, 2020 and 2019, the risk rating of loans by class of loans was as follows: Special December 31, 2020 Pass Mention Substandard Doubtful Total Residential real estate: Residential first mortgage $ 1,995,945 $ — $ 19,995 $ 94 $ 2,016,034 Residential second mortgage 16,806 — 686 — 17,492 Commercial real estate: Retail 13,599 1,572 1,029 — 16,200 Multifamily 55,772 14,238 9,199 — 79,209 Offices 12,014 1,623 13,424 — 27,061 Hotels/SROs 9,115 17,984 40,536 — 67,635 Industrial 5,867 — 7,319 — 13,186 Other 43,193 7,732 5,742 — 56,667 Construction 152,577 14,234 32,850 6,920 206,581 Commercial lines of credit: Private banking 124 2,285 — — 2,409 C&I lending 3,573 — 689 — 4,262 Other consumer 7 — — — 7 Total $ 2,308,592 $ 59,668 $ 131,469 $ 7,014 $ 2,506,743 Special December 31, 2019 Pass Mention Substandard Doubtful Total Residential real estate: Residential first mortgage $ 2,438,024 $ — $ 14,077 $ 455 $ 2,452,556 Residential second mortgage 24,100 — 210 — 24,310 Commercial real estate: Retail 4,195 834 1,100 — 6,129 Multifamily 56,164 7,150 1,559 — 64,873 Offices 24,484 645 2,919 — 28,048 Hotels/SROs 60,074 18,189 3,507 — 81,770 Industrial 5,894 8,256 — — 14,150 Other 37,693 920 6,498 — 45,111 Construction 156,339 7,008 15,029 — 178,376 Commercial lines of credit: Private banking 10,669 1,245 — — 11,914 C&I lending 4,013 — 1,976 — 5,989 Other consumer 34 — — — 34 Total $ 2,821,683 $ 44,247 $ 46,875 $ 455 $ 2,913,260 During the year ended December 31, 2019 and 2018, the Bank sold pools of residential real estate mortgages for $173,382 and $475,646, respectively, to third-party investors. The transactions resulted in full de-recognition of the mortgages (i.e. transferred assets) from the consolidated balance sheets and recognition of gain on sale of portfolio loans of $5,970 and $16,433 for the year ended December 31, 2019 and 2018, respectively. After the sales, the Bank’s only continuing involvement in the transferred assets is to act as servicer or subservicer of the mortgages. During the year ended December 31, 2020, the Bank negotiated the repurchases of pools of Advantage Loan Program loans with a total outstanding principal balance of $69,638 . The Company recognized a loss of $271 in other non-interest expense on these repurchases for the year ended December 31, 2020. For more information on the repurchases of mortgage loans, refer to Note 19 — During the year ended December 31, 2020, nonaccrual residential real estate loans were transferred from held for investment to held for sale since the Bank decided to sell the loans. On the date of transfer, the amortized cost exceeded the fair value of the loans due to credit deterioration. The Bank recorded a charge-off of $3,486 to the allowance for loan losses, which established a new aggregate cost basis for the loans of $19,375 on the date of transfer. |
Leasehold Improvements and Equi
Leasehold Improvements and Equipment, net | 12 Months Ended |
Dec. 31, 2020 | |
Leasehold Improvements and Equipment, net | |
Leasehold Improvements and Equipment, net | Note 5—Leasehold Improvements and Equipment, net Leasehold improvements and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are determined using the straight-line method. Leasehold improvements and equipment at December 31, 2020 and 2019 are as follows: Estimated Useful Life (in years) 2020 2019 Leasehold improvements * $ 11,259 $ 10,920 Furniture and equipment 3 ‑ 7 14,361 13,981 Total 25,620 24,901 Less: accumulated depreciation and amortization (17,108) (15,703) Leasehold improvements and equipment, net $ 8,512 $ 9,198 * Amortized over the shorter of the lease term or estimated useful life The amount charged to occupancy and equipment in the consolidated statements of operations for depreciation and amortization was $1,608, $1,621 and $1,399 for the year ended December 31, 2020, 2019 and 2018, respectively. |
Mortgage Servicing Rights, net
Mortgage Servicing Rights, net | 12 Months Ended |
Dec. 31, 2020 | |
Mortgage Servicing Rights, net | |
Mortgage Servicing Rights, net | Note 6—Mortgage Servicing Rights, net The Bank records servicing assets from the sale of residential real estate mortgage loans to the secondary market for which servicing has been retained. Residential real estate mortgage loans serviced for others are not included in the consolidated balance sheets. The principal balance of these loans at December 31, 2020 and 2019 are as follows: 2020 2019 Residential real estate mortgage loan portfolios serviced for: FNMA $ 171,553 $ 130,425 FHLB 64,661 86,778 Private investors 429,816 656,035 Total $ 666,030 $ 873,238 Custodial escrow balances maintained with these serviced loans were $6,051 and $7,688 at December 31, 2020 and 2019, respectively. Activity for mortgage servicing rights and the related valuation allowance are as follows: 2020 2019 2018 Mortgage servicing rights: Beginning of year $ 10,845 $ 10,733 $ 6,706 Additions 713 2,964 6,052 Amortization (3,705) (2,852) (2,025) End of year 7,853 10,845 10,733 Valuation allowance at beginning of year 1,080 100 210 Additions (recoveries) 1,085 980 (110) Valuation allowance at end of year 2,165 1,080 100 Mortgage servicing rights, net $ 5,688 $ 9,765 $ 10,633 Servicing fee income, net of amortization of servicing rights and changes in the valuation allowance, was $(1,324), $238 and $1,381 for the year ended December 31, 2020, 2019 and 2018, respectively. The fair value of mortgage servicing rights was $5,841 and $10,271 at December 31, 2020 and 2019, respectively. The fair value of mortgage servicing rights is highly sensitive to changes in underlying assumptions. Changes in prepayment speed assumptions have the most significant impact on the estimate of the fair value of mortgage servicing rights. The fair value at December 31, 2020 was determined using discount rates ranging from 9.5% to 12.0%, prepayment speeds with a weighted average of 22.5%, (depending on the stratification of the specific right), a weighted average life of the mortgage servicing right of 43 months and a weighted average default rate of 0.2%. The fair value at December 31, 2019 was determined using discount rates ranging from 9.5% to 12.0%, prepayment speeds with a weighted average of 20.1%, (depending on the stratification of the specific right), a weighted average life of the mortgage servicing right of 52 months and a weighted average default rate of 0.2%. Impairment is determined by stratifying the mortgage servicing rights into groupings based on predominant risk characteristics, such as interest rate, loan type and investor type. At December 31, 2020 and 2019, the carrying amount of certain individual groupings exceeded their fair value, resulting in write-downs to fair value. Refer to Note 15 - |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2020 | |
Deposits | |
Deposits | Note 7—Deposits Time deposits, included in interest-bearing deposits, were $1,646,523 and $1,154,076 at December 31, 2020 and 2019, respectively. Time deposits included brokered deposits of $42,751 and $25,000 at December 31, 2020 and 2019, respectively. Time deposits that meet or exceed the FDIC insurance limit of $250 were $487,340 and $283,457 at December 31, 2020 and 2019, respectively. At December 31, 2020, the scheduled maturities of time deposits, including brokered deposits, were as follows: 2021 $ 1,258,983 2022 297,971 2023 69,162 2024 9,126 2025 11,281 Total $ 1,646,523 |
FHLB Borrowings
FHLB Borrowings | 12 Months Ended |
Dec. 31, 2020 | |
FHLB Borrowings | |
FHLB Borrowings | Note 8—FHLB Borrowings FHLB borrowings at December 31, 2020 and 2019 consist of the following: 2020 Interest Rates 2019 Interest Rates Long-term fixed rate advances $ 318,000 0.43% -1.96 % $ 229,000 1.07% - 1.96% FHLB Advances The long-term fixed rate advances have maturity dates ranging from July 2021 to February 2030. Interest on these advances is payable monthly, and each advance is payable at its maturity date and may contain a prepayment penalty if paid before maturity. At December 31, 2020, advances totaling $307,000 were callable by the FHLB as follows: $100,000 in February 2021; $67,000 in September 2021; $90,000 in October 2021; and $50,000 in May 2024. At December 31, 2020, the Bank had additional borrowing capacity of $120,797 from the FHLB. The contractual annual maturities of FHLB advances at December 31, 2020 are as follows: 2021 $ 11,000 2022 — 2023 — 2024 — 2025 — Thereafter 307,000 $ 318,000 FHLB Overdraft Line of Credit The Bank has established an overdraft line of credit agreement with the FHLB providing maximum borrowings of $50,000 . The average amount outstanding during the year ended December 31, 2020 and 2019 was $18 and $2,008 , respectively. At December 31, 2020 and 2019, there were no outstanding borrowings under this agreement. Borrowings accrue interest based on a variable rate based on the FHLB’s overnight cost of funds rate, which was 0.46% and 1.99 % at December 31, 2020 and 2019, respectively. The agreement has a one-year term and terminates in October 2021. The FHLB advances and the overdraft line of credit are collateralized by pledged securities and loans. Refer to Note 3—Investment Securities for further information on securities pledged and Note 4—Loans for further information on loans pledged. Other Borrowings The Bank had available unsecured credit lines with other banks totaling $100,000 and $70,000 at December 31, 2020 and 2019 , respectively. There were no borrowings under these unsecured credit lines during the year ended December 31, 2020 or 2019. |
Subordinated Notes, net
Subordinated Notes, net | 12 Months Ended |
Dec. 31, 2020 | |
Subordinated Notes, net | |
Subordinated Notes, net | Note 9—Subordinated Notes, net The subordinated notes (the "Notes") were as follows: December 31, 2020 2019 7.0% fixed to floating rate subordinated notes $ 65,000 $ 65,000 Unamortized note premium 411 474 Unamortized debt issuance costs (70) (295) Total $ 65,341 $ 65,179 The Notes bear interest at 7% On or after April 14, 2021, the Company may redeem the Notes, in whole or in part, at an amount equal to 100% of the outstanding principal amount being redeemed plus accrued interest, in a principal amount with integral multiples of $1. The Notes are not redeemable by the Company prior to April 14, 2021 except in the event that (i) the Notes no longer qualify as Tier 2 Capital, (ii) the interest on the Notes is determined by law to be not deductible for Federal Income Tax reporting or (iii) the Company is considered an investment company pursuant to the Investment Company Act of 1940. The Notes are not subject to redemption by the noteholder. The Notes are unsecured obligations and are subordinated in right of payment to all existing and future indebtedness, deposits and other liabilities of the Company’s current and future subsidiaries, including the Bank’s deposits as well as the Company’s subsidiaries’ liabilities to general creditors and liabilities arising during the ordinary course of business. The Notes may be included in Tier 2 capital for the Company under current regulatory guidelines and interpretations. As long as the Notes are outstanding, the Company is permitted to pay dividends if prior to such dividends, the Bank is considered well capitalized, as defined by regulatory guidelines. The Company currently may not issue new debt without the prior approval of the FRB. |
Stock Repurchase Program
Stock Repurchase Program | 12 Months Ended |
Dec. 31, 2020 | |
Stock Repurchase Program | |
Stock Repurchase Program | Note 10-Stock Repurchase Program In late 2018, the board of directors approved the repurchase of up to $50,000 of the Company’s outstanding shares of common stock. The stock repurchase program permits the Company to purchase shares of its common stock from time to time in the open market or in privately negotiated transactions. The program does not have an expiration date. The Company received regulatory approval of its stock repurchase program and publicly announced the program in January 2019. Under this program, the Company is not obligated to repurchase shares of its common stock. The repurchased shares will be canceled and returned to authorized but unissued status. During the year ended December 31, 2020, the Company repurchased and cancelled 10,912 shares of its common stock for $82, including commissions and fees (average repurchase price of $7.57 per share). During the year ended December 31, 2019, the Company repurchased and cancelled 3,134,806 shares of its common stock for $30,349, including commissions and fees (average repurchase price of $9.68 per share). Such repurchases of common stock were funded through cash generated from operations. As of December 31, 2020, the Company had $19,568 of common stock purchases remaining that may be made under the program. The Company currently may not repurchase any common stock without the approval of the FRB. In March 2020, the Company suspended the stock repurchase program for at least the near term in connection with the issues giving rise to the internal review of the Advantage Loan Program (the "Internal Review"), which has been led by outside legal counsel under the direction of a special committee of independent directors (the "Special Committee"). The primary focus of the Internal Review has involved the origination of residential real estate loans under the Advantage Loan Program and related matters. Refer to Note 19─Commitments and Contingencies for further information regarding the Internal Review. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Shareholders' Equity | |
Shareholders' Equity | Note 11—Shareholders’ Equity Capital Stock The Company’s authorized capital stock consists of 10,000,000 shares of preferred stock and 500,000,000 shares of no par common stock. No Par Common Stock Holders of common stock are entitled to one vote per share on all matters submitted to shareholders and entitled to dividends at the sole direction of the board of directors. Dividends declared per common share were $0.01, $0.04 and $0.04, and dividends paid on common stock were $499, $2,044 and $2,119 , for the year ended December 31, 2020, 2019 and 2018, respectively. The holders have no preemptive, conversion or subscription rights, and there is no redemption or sinking fund provisions with respect to such shares. The common stock is subordinate to the series preferred stock as described below with respect to dividend rights or rights upon liquidation, winding up and dissolution of the Company. Preferred Stock The board of directors is authorized to issue preferred stock from time to time in one or more series, with such designations and such relative voting, dividend, liquidation and other rights, preferences and limitations as may be adopted by the board of directors. No shares of preferred stock are currently issued or outstanding. |
Stock-based Compensation
Stock-based Compensation | 12 Months Ended |
Dec. 31, 2020 | |
Stock-based Compensation | |
Stock-based Compensation | Note 12—Stock-based Compensation The board of directors established a 2017 Omnibus Equity Incentive Plan (the “2017 Plan”), which was approved by the shareholders. The 2017 Plan provides for the grant of up to 4,237,100 shares of common stock for stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards for issuance to employees, consultants and board of directors of the Company. The stock-based awards are issued at no less than the market price on the date the awards are granted. The board of directors established the 2020 Omnibus Equity Incentive Plan (the "2020 Plan"), which was approved by the shareholders in December 2020. The 2020 Plan provides for the grant of up to 3,979,661 shares of common stock for stock options, stock appreciation rights, restricted stock, restricted stock units, performance units and performance shares for issuance to employees, consultants and board of directors of the Company. The stock-based awards are issued at no less than the market price on the date the awards are granted. No grants under the 2020 Plan have been issued during the year ended December 31, 2020. Due to the adoption of the 2020 Plan, no further grants will be issued under the 2017 Plan. Stock Options Stock option awards are granted with an exercise price equal to the market price of the Company’s common stock on the date of grant. For stock option awards granted in 2020, the awards generally vest ratably over three years (one-third per year) after the date of grant while stock option awards granted prior to 2020 vests generally in installments of 50% in each of the third and fourth year after the date of grant. All stock option awards have a maximum term of ten years . The board of directors approved the issuance of options to purchase 67,361, 84,889 and 92,625 shares of common stock to certain key employees which are accounted for as equity awards during the year ended December 31, 2020, 2019 and 2018, respectively. On June 5, 2020, the Company granted its Chief Executive Officer ("CEO") options to purchase 300,000 shares of common stock with an exercise price of $4.00 per share. The stock options vest one-third on January 1, 2021, one-third on the first anniversary of the date of grant and one-third on January 1, 2022. The stock options vest immediately upon the CEO's termination due to death or disability and upon a change in control event, as defined in the CEO's employment agreement. In the event of termination other than for cause, the CEO's then vested stock options will remain exercisable for three years following termination, provided that the CEO remains in compliance with certain terms contained in his employment agreement. The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option pricing model that uses the assumptions noted below. Estimating the grant date fair values for employee stock options requires management to make assumptions regarding expected volatility of the value of those underlying shares, the risk-free rate over the expected life of the stock options and the date on which share-based payments will be settled. Expected volatilities are based on a weighted average of the Company's historic volatility and an implied volatility for a group of industry-relevant bank holding companies as of the measurement date. The expected term of options granted is calculated using the simplified method (the midpoint between the end of the vesting period and the end of the maximum term). The risk-free rate for the expected term of the option is based upon U.S. Treasury yield curve in effect at the time of grant. Expected dividend yield represents what the Company anticipates will be declared during the expected term of the options. The weighted average grant-date fair value of options issued in 2020, 2019 and 2018 was $1.29, $3.20 and $4.56, respectively. The grant-date fair value of each stock option award was estimated using the Black-Scholes option pricing model that uses the assumptions set forth in the following table: Year Ended December 31, 2020 2019 2018 Risk-free interest rate 0.49 % 2.66 % 2.80 % Expected term (in years) 5.61 6.75 6.75 Expected stock price volatility 33.91 % 26.26 % 23.70 % Dividend yield 0.10 % 0.40 % 0.29 % A summary of the Company's stock option activity as of and for the year ended December 31, 2020 is as follows: Weighted Weighted Average Average Remaining Aggregate Number Exercise Contractual Intrinsic of Shares Price Term Value (Years) Outstanding at January 1, 2020 142,477 $ 12.29 8.60 — Granted 367,361 4.57 Exercised — — Forfeited/expired (131,956) 9.93 Outstanding at December 31, 2020 377,882 $ 5.61 9.09 $ — The Company recorded stock-based compensation expense associated with stock options of $200, $137 and $82 for the year ended December 31, 2020, 2019 and 2018, respectively. At December 31, 2020, there was $237 of total unrecognized compensation cost related to nonvested stock options granted under the 2017 Plan. The unrecognized compensation cost related to nonvested stock options is expected to be recognized over a weighted-average period of 1.15 years. No options are exercisable at December 31, 2020. Restricted Stock Awards Restricted stock awards are issued to certain key employees and non-employee directors. The board of directors approved the issuance of 151,874 restricted stock awards to certain key employees during 2020 and 71,144 restricted stock awards to certain key employees and 10,460 restricted stock awards to non-employee directors during 2019. The restricted stock awards issued during 2020 vest ratably over three years (one-third per year). The restricted stock awards issued during 2019 vest in installments of 50% in each of the third and fourth year after the date of grant for key employee awards and vest on the first anniversary of the grant date for non-employee director awards. The value of a restricted stock award is based on the market value of the Company's common stock at the date of grant reduced by the present value of dividends per share expected to be paid during the period the shares are not vested. Upon a change in control, as defined in the 2017 Plan, the outstanding restricted stock awards will immediately vest. A summary of the restricted stock awards activity as of and for the year ended December 31, 2020 periods indicated is as follows: Weighted Average Number Grant Date of Shares Fair Value Nonvested at January 1, 2020 100,096 $ 11.02 Granted 151,874 6.91 Vested (10,460) 9.52 Forfeited (103,574) 9.12 Nonvested at December 31, 2020 137,936 $ 7.90 The fair value of the award is recorded as compensation expense on a straight-line basis over the vesting period. The Company recorded stock-based compensation expense associated with restricted stock awards of $134, $360 and $215 for the year ended December 31, 2020, 2019 and 2018, respectively. At December 31, 2020, there was $686 of total unrecognized compensation cost related to the nonvested stock granted under the 2017 Plan. The cost is expected to be recognized over a weighted-average period of 2.16 years. The total fair value of shares vested during the year ended December 31, 2020 and 2019 was $100 and $214, respectively. |
Income (Loss) Per Share
Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2020 | |
Income (Loss) Per Share | |
Income (Loss) Per Share | Note 13—Income (Loss) Per Share Basic income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted income per common share further includes any common shares available to be issued upon the exercise of outstanding stock options and restricted stock awards if such inclusions would be dilutive. The Company determines the potentially dilutive common shares using the treasury stock method. In periods of a net loss, basic and diluted per share information are the same. The following table presents the computation of income (loss) per share, basic and diluted: Year Ended December 31, 2020 2019 2018 Numerator: Net income (loss) $ (12,967) $ 29,248 $ 63,468 Denominator: Weighted average common shares outstanding, basic 49,840,882 51,115,986 52,963,308 Weighted average effect of potentially dilutive common shares: Stock options — — — Restricted stock — 11,893 2,259 Weighted average common shares outstanding, diluted 49,840,882 51,127,879 52,965,567 Income (loss) per share: Basic $ (0.26) $ 0.57 $ 1.20 Diluted $ (0.26) $ 0.57 $ 1.20 The weighted average effect of certain stock options and nonvested restricted stock that were excluded from the computation of weighted average diluted shares outstanding, as inclusion would be anti-dilutive, are summarized as follows: Year Ended December 31, 2020 2019 2018 Stock options 359,234 167,255 92,625 Restricted stock 166,621 28,676 — Total 525,855 195,931 92,625 |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2020 | |
Employee Benefit Plans | |
Employee Benefit Plans | Note 14—Employee Benefit Plans Defined Contribution Retirement Plan The Bank maintains a defined contribution plan under which it makes quarterly matching contributions in an amount equal to 100% of the lesser of the first 3% of the amount the employee contributed or deferred or 3% of the employee's base salary during such quarter. The employee must have been employed by the Bank on the date the matching contribution was made in order to have received it. In addition , the Bank also makes a contribution of up to 1% of the amount deferred or contributed, based on a tiered scale of its return on assets for the prior year. The matching contributions were made only up to the amount of the employee's deferrals or contributions for the plan. The Bank also has the discretion to make additional contributions. The Bank's contributions to the plan were $256, $758 and $773 for the year ended December 31, 2020, 2019 and 2018, respectively. Executive Incentive Retirement Plan Agreement The Bank entered into individual executive incentive retirement plan agreements with six employees. These agreements provided for payments, if payable in accordance with their respective terms and in accordance with applicable law, upon a separation from service or a "change of control" (as defined in such agreements ) if the individual has met specified vesting requirements. Each of these agreements provided for death benefits in the event of death in active service to the Bank. In 2020, an agreement for a former employee was forfeited in connection with the individual's termination of service. Under the terms of the remaining agreements, each of the employees was credited an additional amount to such employees' book-entry incentive award account under the applicable agreement in 2020 based on a monthly crediting formula. The employee may have made an election to receive payments under the employee’s agreement as a lump sum or as an installment. The aggregate liability accrued for potential payments under these agreements was $3,016 and $3,157 at December 31, 2020 and 2019, respectively. Periodic expense consisted of the Bank’s contribution which was made ratably over the build up period until retirement, adjusted for annual interest cost. The aggregate expense, net of forfeitures, for such agreements was $(141), $290 and $273 for the years ended December 31, 2020, 2019 and 2018, respectively. Spilt Dollar Life Insurance Agreement The Bank has entered into split dollar life insurance agreements with respect to its controlling shareholder and former CEO of the Bank. Pursuant to the agreements with the Bank, a portion of the death benefits arising from life insurance policies owned by the Bank would be paid to beneficiaries designated by the controlling shareholder. The estimated present value of the cost to the Company of providing these death benefits and the associated accrued liability by the Company was $4,347 and $4,340 at December 31, 2020 and 2019, respectively. Payments of $31 and $28 were made to the controlling shareholder and former CEO during 2019 and 2018, respectively, in accordance with the split dollar life insurance agreements. |
Fair Values of Financial Instru
Fair Values of Financial Instruments | 12 Months Ended |
Dec. 31, 2020 | |
Fair Values of Financial Instruments | |
Fair Values of Financial Instruments | Note 15—Fair Values of Financial Instruments Financial instruments include assets carried at fair value, as well as certain assets and liabilities carried at cost or amortized cost but disclosed at fair value in these consolidated financial statements. Fair value is defined as the exit price, the price that would be received for an asset or paid to transfer a liability in the most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date under current market conditions. The inputs to valuation techniques used to measure fair value are prioritized into a three-level hierarchy. The hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. The following methods and significant assumptions are used to estimate fair value: Investment Securities The fair values for investment securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar investment securities (Level 2). For investment securities where quoted prices or market prices of similar investment securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). Discounted cash flows are calculated using spread to LIBOR curves that are updated to incorporate loss severities, volatility, credit spread and optionality. During times when trading is more liquid, broker quotes are used (if available) to validate the analysis. Rating agency and industry research reports as well as defaults and deferrals on individual investment securities are reviewed and incorporated into the calculations. Impaired Loans The fair value of collateral-dependent impaired loans with specific allocations of the allowance for loan losses is generally based on recent real estate appraisals. These appraisals may utilize a single valuation approach, such as comparable sales or the income approach, or a combination of both. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Appraisals for collateral-dependent impaired loans are performed by certified general appraisers whose qualifications and licenses have been reviewed and verified by us. Once received, an appraisal compliance review is completed in accordance with regulatory guidelines. Mortgage Servicing Rights Fair value of mortgage servicing rights is initially determined at the individual grouping level based on an internal valuation model that calculates the present value of estimated future net servicing income. On a quarterly basis, mortgage servicing rights are evaluated for impairment based upon third-party valuations obtained. As disclosed in Note 6—Mortgage Servicing Rights, net, the valuation model utilizes interest rate, prepayment speed and default rate assumptions that market participants would use in estimating future net servicing income (Level 3). Assets Measured at Fair Value on a Recurring Basis The table below presents the assets measured at fair value on a recurring basis categorized by the level of inputs used in the valuation of each asset at December 31, 2020 and 2019: Fair Value Measurements at December 31, 2020 Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Financial Assets Available-for-sale debt securities: U.S. Treasury & Agency securities $ 138,997 $ 40,192 $ 98,805 $ — Mortgage-backed securities 33,814 — 33,814 — Collateralized mortgage obligations 126,596 — 126,596 — Collateralized debt obligations 187 — — 187 Equity securities 5,118 5,118 — — Fair Value Measurements at December 31, 2019 Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Financial Assets Available-for-sale debt securities: U.S. Treasury securities $ 122,803 $ 122,803 $ — $ — Mortgage-backed securities 23,104 — 23,104 — Collateralized mortgage obligations 1,183 — 1,183 — Collateralized debt obligations 199 — — 199 Equity securities 5,009 5,009 — — The table below presents a reconciliation for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2020 and 2019: Fair Value Unobservable Collateralized Debt Obligations 2020 2019 Balance of recurring Level 3 assets at beginning of period $ 199 $ 297 Total gains or losses (realized/unrealized): Included in income-realized — — Included in other comprehensive income (loss) (10) (6) Principal maturities/settlements (2) (92) Sales — — Transfers in and/or out of Level 3 — — Balance of recurring Level 3 assets at end of period $ 187 $ 199 Unrealized losses on Level 3 investments for collateralized debt obligations were $27 and $17 at December 31, 2020 and 2019, respectively. In addition to the amounts included in income as presented in the table above, interest income recorded on collateralized debt obligations was $7 and $13 for the year ended December 31, 2020 and 2019, respectively. The fair value of the collateralized debt obligations is obtained from third-party pricing information. It is determined by calculating discounted cash flows using LIBOR curves plus spreads that adjust for credit risk and illiquidity. The Company also performs an internal analysis that considers the structure and term of the collateralized debt obligations and the financial condition of the underlying issuers to corroborate the information used from the independent third party. Assets Measured at Fair Value on a Non-Recurring Basis From time to time, the Bank may be required to measure certain other assets at fair value on a nonrecurring basis in accordance with U.S. GAAP. These adjustments to fair value usually result from the application of lower of cost or fair value accounting or write-downs of individual assets. For assets measured at fair value on a nonrecurring basis that were recorded in the consolidated balance sheet at December 31, 2020 and 2019, the following table provides the level of valuation assumptions used to determine each adjustment and the related carrying value: Fair Value Measurements at December 31, 2020 Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Fair Assets Inputs Inputs Value (Level 1) (Level 2) (Level 3) Impaired loans: Commercial real estate $ 8,240 $ — $ — $ 8,240 Construction 5,015 — — 5,015 Mortgage loans held for sale 19,375 — 19,375 — Mortgage servicing rights 5,175 — — 5,175 Fair Value Measurements at December 31, 2019 Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) Mortgage servicing rights $ 7,949 $ — $ — $ 7,949 As discussed previously, the fair values of collateral-dependent impaired loans carried at fair value are determined by third-party appraisals. Management adjusts these appraised values based on the age of the appraisal and the type of the property. The following table presents quantitative information about Level 3 fair value measurements at December 31, 2020 and 2019: Quantitative Information about Level 3 Fair Value Measurements at December 31, 2020 Range Fair Value Valuation Technique Unobservable Inputs (Weighted Average) (1) Impaired loans: Commercial real estate $ 8,240 Sales comparison approach/Income capitalization approach Adjustments for differences between the comparable sales and income data for similar loans and collateral underlying such loans N/A (36%) Construction $ 5,015 Hybrid of sales comparison and income capitalization approaches Adjustments for differences between the comparable sales and income data for similar loans and collateral underlying such loans N/A (15%) Mortgage servicing rights $ 5,175 Discounted cash flow Discount rate 9.5% -12.0% (11.6)% Prepayment speed 10.5% -37.0% (23.7)% Default rate 0.1% -0.2% (0.2)% (1) The range and weighted average for an asset category consisting of a single investment represents the significant unobservable input used in the fair value of the investment. Quantitative Information about Level 3 Fair Value Measurements at December 31, 2019 Range Fair Value Valuation Technique Unobservable Inputs (Weighted Average) (1) Mortgage servicing rights $ 7,949 Discounted cash flow Discount rate 9.5% - Prepayment speed 7.2% - 47.1% (21.3)% Default rate 0.1% - 0.3% (0.2)% (1) The range and weighted average for an asset category consisting of a single investment represents the significant unobservable input used in the fair value of the investment. Fair Value of Financial Instruments The carrying amounts and estimated fair values of financial instruments not carried at fair value at December 31, 2020 and 2019, are as follows: Fair Value Measurements at December 31, 2020 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial Assets Cash and due from banks $ 998,497 $ 998,497 $ 998,497 $ — $ — Interest-bearing time deposits with other banks 7,021 7,021 7,021 — — Mortgage loans held for sale 2,909 3,052 — 3,052 — Loans, net 2,434,356 2,521,874 — — 2,521,874 Financial Liabilities Time deposits 1,646,523 1,658,020 — 1,658,020 — Federal Home Loan Bank borrowings 318,000 328,150 — 328,150 — Subordinated notes, net 65,341 65,753 — 65,753 — Fair Value Measurements at December 31, 2019 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial Assets Cash and due from banks $ 77,819 $ 77,819 $ 77,819 $ — $ — Interest-bearing time deposits with other banks 1,025 1,025 1,025 — — Mortgage loans held for sale 1,337 1,368 — 1,368 — Loans, net 2,891,530 2,978,846 — — 2,978,846 Financial Liabilities Time deposits 1,154,076 1,161,490 — 1,161,490 — Federal Home Loan Bank borrowings 229,000 227,333 — 227,333 — Subordinated notes, net 65,179 65,650 — 65,650 — |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Income Taxes | Note 16—Income Taxes The components of the income tax (benefit) expense are as follows: Year Ended December 31, 2020 2019 2018 Current: Federal $ 4,489 $ 15,341 $ 16,435 State 1,908 6,354 7,979 Total current expense 6,397 21,695 24,414 Deferred: Federal (8,373) (3,995) 478 State (3,933) (2,057) 212 Total deferred (benefit) expense (12,306) (6,052) 690 Total income tax (benefit) expense $ (5,909) $ 15,643 $ 25,104 The reconciliation of the U.S. federal statutory tax rate to the Company's effective tax rate is as follows: 2020 2019 2018 U.S. federal statutory rate 21.0 % 21.1 % 21.0 % Effect of: State taxes, net of federal benefit 8.5 % 4.0 % 7.1 % Non-deductible items — % 9.5 % — % Income on cash surrender value of bank-owned life insurance 0.6 % (0.2) % (0.2) % Other, net 1.2 % 0.4 % 0.4 % Effective tax rate 31.3 % 34.8 % 28.3 % The components of deferred tax assets and liabilities at December 31, 2020 and 2019 comprised the following: December 31, 2020 2019 Deferred tax assets: Allowance for loan losses $ 20,185 $ 6,144 Contingent losses — 2,834 Mortgage repurchase liability 2,705 2,217 Mark-to-market adjustments on mortgage loans held for sale 41 9 Supplemental retirement benefit plan 841 895 Deferred loan fee income 158 268 State franchise tax 503 1,455 Compensation plans 531 729 Operating lease liabilities 5,715 5,631 Other 1,258 633 Total deferred tax assets 31,937 20,815 Deferred tax liabilities: FHLB stock dividends (120) (122) Mortgage servicing rights (1,586) (2,768) Operating lease right-of-use asset (5,363) (5,305) Other (542) (525) Total deferred tax liabilities (7,611) (8,720) Deferred tax asset, net $ 24,326 $ 12,095 The Company incurred a capital loss of $1,815 during the year ended December 31, 2020 which it cannot utilize on its 2020 tax return. The loss can be carried forward for five years and utilized against capital gains during the carryforward period. The capital loss will expire if unused at December 31, 2025. Realization of deferred tax assets is dependent upon the generation of future taxable income. A valuation allowance is provided when it is more likely than not that some portion of the deferred tax asset will not be realized. Management evaluated the deferred tax assets for recoverability by considering negative and positive evidence. Based on the weight of all available evidence, the Company believes it is more likely than not that the deferred tax asset at December 31, 2020 will be realized through the future reversals of existing taxable temporary differences and projected future taxable income. The Company is subject to U.S. federal income tax as well as income taxes of the state of New York and California. The Company is not subject to examination by the Internal Revenue Service for the years before 2017. There were no unrecognized tax benefits at December 31, 2020, and the Company does not expect the total amount of unrecognized tax benefits to significantly increase in the next twelve months. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions | |
Related Party Transactions | Note 17—Related Party Transactions From time to time, the Company makes charitable contributions to a foundation for which certain members of the boards of directors of the Company and Bank, and who are also related to the Company’s controlling shareholders, serve as trustees. The Company paid $375, $900 and $900 to the foundation during the year ended December 31, 2020, 2019 and 2018 , respectively. The Bank provides monthly data processing and programming services to entities controlled by the Company’s controlling shareholders. In July 2020, the Bank terminated such data processing agreement, effective as of November 2020. Aggregate fees received by the Bank for such services amounted to $79, $105 and $105 during the year ended December 31, 2020, 2019 and 2018, respectively. The Company paid fees for transportation, totaling $12 during the year ended December 31, 2018, to an aviation company controlled by the Company's controlling shareholders. Related party leases are disclosed in Note 18 — |
Operating Leases
Operating Leases | 12 Months Ended |
Dec. 31, 2020 | |
Operating Leases | |
Operating Leases | Note 18—Operating Leases The Company has adopted ASU No. 2016-02, Leases (ASC 842) as of January 1, 2019. ASC 842 requires a lessee to recognize the following for all leases, except short-term leases, at the commencement date: (1) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. The Company adopted ASC 842 using the optional transition method. Therefore, the 2018 comparative financial information has not been restated and continues to be reported under ASC 840, Leases. The Company's operating leases are included in operating lease right-of-use assets and operating lease liabilities in the consolidated balance sheets at December 31, 2020 and 2019. The lessors' respective rates implicit in these operating leases and subsequent operating leases are generally not available and were not determinable from the terms of the lease. Therefore, the Company uses its incremental borrowing rate in determining the present value of the future lease payments when measuring the operating lease liabilities. The incremental borrowing rates are not observable, and therefore the rates are estimated primarily using observable borrowing rates on the Company's FHLB advances. The FHLB borrowing rates are generally for over-collateralized advances with varying lengths of maturities. Therefore, the risk-free U.S. government bond rate and high-credit quality unsecured corporate bond rates are also considered in estimating the incremental borrowing rates. The Company's incremental borrowing rates are developed considering its monthly payment amounts and the initial terms of its leases. The Company leases its corporate headquarters and branch offices through noncancelable operating lease contracts. Such noncancelable operating lease contracts have remaining terms ranging from 2021 to 2030 and generally have options to extend for one or two five-year periods. Beginning in 2019, the lease term may include options to extend the lease when it is reasonably certain that the option will be exercised based on the facts and circumstances at lease commencement. The lease agreements, most often, provide for rental payments that increase over the lease term based on a fixed percentage or based on a specified consumer price index. Any changes in the consumer price index after the lease commencement date are considered variable lease payments and recorded in the period when incurred. Additionally, the Company, in most cases, is required to pay insurance costs, real estate taxes and other operating expenses such as common area maintenance. The Company historically has leased certain storage and office space from entities owned by the Company’s controlling shareholders. The leases have been terminated as of December 31, 2020. Amounts paid under such leases totaled $203, $236 and $241 for the year ended December 31, 2020, 2019 and 2018, respectively. The Company also subleases certain office space to entities owned by the Company’s controlling shareholders. Amounts received under such subleases totaled $277, $274 and $269 for the year ended December 31, 2020, 2019 and 2018, respectively. Rent expense was $4,401 for the year ended December 31, 2018. The components of lease expense, which are recorded in noninterest expense – occupancy and equipment, in the consolidated statements of operations for the year ended December 31, 2020 and 2019 were as follows: Year Ended December 31, 2020 2019 Operating lease cost $ 4,554 $ 4,507 Variable lease cost 959 1,235 Total $ 5,513 $ 5,742 Maturities of lease liabilities, including reconciliation to the lease liabilities, based on required contractual payments, were as follows: Year Ended December 31, 2021 $ 4,186 2022 3,421 2023 3,180 2024 3,119 2025 2,884 Thereafter 5,942 Total lease payments 22,732 Less: future interest costs (1) (2,235) Present value of lease liabilities $ 20,497 (1) Computed using the estimated interest rate for each lease Other information related to the lease liabilities as of and for the year ended December 31, 2020 and 2019 was as follows: Year Ended December 31, Other Information 2020 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 4,478 $ 4,307 Weighted average remaining lease term 6.60 years 6.83 years Weighted average discount rate 3.16 % 3.54 % |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 19—Commitments and Contingencies Financial Instruments with Off-Balance Sheet Risk The Bank is a party to financial instruments with off- balance sheet risk in the normal course of business to meet the financial needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit, which are not reflected in the consolidated financial statements. Unfunded Commitments to Extend Credit A commitment to extend credit, such as a loan commitment, credit line and overdraft protection, is a legally binding agreement to lend funds to a customer, usually at a stated interest rate and for a specific purpose. Such commitments have fixed expiration dates and generally require a fee. The extension of a commitment gives rise to credit risk. The actual liquidity requirements or credit risk that the Bank will experience is expected to be lower than the contractual amount of commitments to extend credit because a significant portion of those commitments are expected to expire without being drawn upon. Certain commitments are subject to loan agreements containing covenants regarding the financial performance of the customer that must be met before the Bank is required to fund the commitment. The Bank uses the same credit policies in making commitments to extend credit as it does in making loans. The commitments outstanding to make loans include primarily residential real estate loans that are made for a period of 90 days or less. At December 31, 2020, outstanding commitments to make loans consisted of fixed rate loans of $12,292 with interest rates ranging from 2.50% to 4.375% and maturities ranging from 10 to 30 years and variable rate loans of $28,039 with varying interest rates (ranging from 3.125% to 4.625% at December 31, 2020) and maturities ranging from 25 to 30 years . Unused Lines of Credit The Bank also issues unused lines of credit to meet customer financing needs. At December 31, 2020, the unused lines of credit include residential second mortgages of $19,145, construction loans of $120,716, commercial lines of credit of $762 and consumer loans of $42. These unused lines of credit consisted of fixed rate loans of $43 with interest rates ranging from 5.50% to 18.00% and maturities ranging from 2 to 3 months and variable rate loans of $140,622 with varying interest rates (ranging from 3.25% to 7.75%) and maturities ranging from 1 month to 15 years . Standby Letters of Credit Standby letters of credit are issued on behalf of customers in connection with construction contracts between the customers and third parties. Under standby letters of credit, the Bank assures that the third parties will receive specified funds if customers fail to meet their contractual obligations. The credit risk to the Bank arises from its obligation to make payment in the event of a customer’s contractual default. The maximum amount of potential future payments guaranteed by the Bank is limited to the contractual amount of these letters. Collateral may be obtained at exercise of the commitment. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. The following is a summary of the total amount of unfunded commitments to extend credit and standby letters of credit outstanding at December 31, 2020 and 2019: 2020 2019 Commitments $ 40,331 $ 76,927 Unused lines of credit 140,665 220,553 Standby letters of credit 24 24 Legal Proceedings The Company and its subsidiaries may be subject to legal actions and claims arising from contracts or other matters from time to time in the ordinary course of business. Management is not aware of any pending or threatened legal proceedings, except as described below, that are considered other than routine legal proceedings. The Company believes that the ultimate disposition or resolution of its routine legal proceedings, in the aggregate, are immaterial to its financial position, results of operations or liquidity. The Bank is currently under formal investigation by the OCC and continues to be subject to a publicly available formal agreement with the OCC, dated June 18, 2019 (the “OCC Agreement”), relating primarily to certain aspects of its Bank Secrecy Act/Anti-Money Laundering (“BSA/AML”) compliance program as well as the Bank’s credit administration. The OCC Agreement generally requires that the Bank enhance its policies and procedures to ensure compliance with BSA/AML laws and regulations and ensure effective controls over residential loan underwriting. Specifically, the OCC Agreement requires the Bank to: (i) establish a compliance committee to monitor and oversee the Bank’s compliance with the provisions of OCC Agreement; (ii) develop a revised customer due diligence and enhanced due diligence program; (iii) develop a revised suspicious activity monitoring program; (iv) engage an independent, third-party consultant to review and provide a written report on the Bank’s suspicious activity monitoring; (v) develop revised policies and procedures to ensure effective BSA/AML model risk management for the Bank’s automated suspicious activity monitoring system, which must be validated by a qualified, independent third party; (vi) ensure that the Bank’s BSA Department maintains sufficient personnel; and (vii) develop revised policies and procedures to ensure effective controls over loan underwriting. In addition to these requirements, while the OCC Agreement remains in effect, the Bank is subject to certain restrictions on expansion activities, such as growth through acquisition or branching to supplement organic growth of the Bank. Further, any failure to comply with the requirements of the OCC Agreement could result in further enforcement actions, the imposition of material restrictions on the activities of the Bank, or the assessment of fines or penalties. The Bank established a Compliance Committee to monitor and assure compliance with the OCC Agreement, oversee the completion of an independent review of account and transaction activity to be conducted by a third-party vendor and engage a third party to conduct a model validation for its BSA/AML monitoring software. The Bank is fully cooperating with the OCC investigation and implementing the items necessary to achieve compliance with the obligations in the OCC Agreement. A finding by the OCC that the Bank failed to comply with the OCC Agreement or adverse findings in the OCC investigation could result in additional regulatory scrutiny, constraints on the Bank’s business, or other formal enforcement action. Any of those events could have a material adverse effect on our future operations, financial condition, growth, or other aspects of our business. The Bank has incurred significant costs in its efforts to comply with the OCC Agreement and respond to the OCC investigation, which are reflected in the Company’s results of operations for the year ended December 31, 2020 and 2019. The Bank also has received grand jury subpoenas from the U.S. Department of Justice (the “DOJ”) beginning in 2020 requesting the production of documents and information in connection with an investigation that appears to be focused on the Bank’s residential lending practices and related issues. The Bank is fully cooperating with this ongoing investigation. Adverse findings in the DOJ investigation could result in material losses due to damages, penalties, costs, and/or expenses imposed on the Company, which could have a material adverse effect on our future operations, financial condition, growth, or other aspects of our business. The Bank has and expects to continue to incur significant costs in its efforts to comply with the DOJ investigation in 2021. In addition, the Company, certain of its current and former officers and directors and other parties were named as defendants in a shareholder class action captioned Oklahoma Police Pension and Retirement System v. Sterling Bancorp, Inc., et al. , Case No. 5:20-cv-10490-JEL-EAS, filed on February 26, 2020 in the U.S. District Court for the Eastern District of Michigan. The plaintiffs filed an amended complaint on July 2, 2020, seeking damages and reimbursement of fees and expenses. This action alleges violations of the federal securities laws, primarily with respect to disclosures concerning the Bank’s residential lending practices that were made in the Company’s registration statement and prospectus for its initial public offering, in subsequent press releases, in periodic and other filings with the SEC and during earnings calls. On September 22, 2020, the Company filed with the court a motion to dismiss the amended complaint, and each of the Company and the plaintiff has submitted briefs in support of their respective positions. Subsequent to December 31, 2020, the Company, each individual defendant and the plaintiff reached an agreement in principle to settle the securities class action lawsuit. Refer to Note 22 – Subsequent Events for further discussion. On December 9, 2019, the Company announced it had voluntarily suspended its Advantage Loan Program in connection with the Internal Review. The primary focus of the Internal Review, which has been led by outside legal counsel under the direction of the Special Committee, has involved the origination of residential real estate loans under the Advantage Loan Program and related matters. Results from the Special Committee's Internal Review have indicated that certain employees engaged in misconduct in connection with the origination of a significant number of such loans, including with respect to verification of income, the amount of income reported for borrowers, reliance on third parties, and related documentation. As a result, the Company permanently discontinued the Advantage Loan Program. While the Internal Review is substantially complete, the Company expects it to remain open during the pendency of the government investigations discussed herein, and it is possible additional work will be required in connection with the Internal Review. The Company determined that, in the latter part of the fourth quarter of 2019, it became probable that a loss may be incurred with respect to the above mentioned pending investigations and litigations. Accordingly, at December 31, 2019, the Company established a liability of $25,000 for contingent losses based on additional information obtained during the course of the Internal Review and significant judgments by management. During the fourth quarter of 2020, the Company increased the liability for contingent losses by $2,500. At December 31, 2020, the Company has a liability of $27,500 for contingent losses. The outcome of the pending investigations and litigation is uncertain. There can be no assurance (i) that the Company will not incur material losses due to damages, penalties, costs and/or expenses as a result of such investigations and litigation, (ii) that the accrual for contingent losses will be sufficient to cover such losses, or (iii) that such losses will not materially exceed such accrual and have a material impact on the Company’s business, financial condition or results of operations. In December 2020, the Company concluded that an insurance recovery related to the contingent loss liability recorded for the class action lawsuit is probable. Therefore, a loss recovery receivable of $12,500 has been recorded, in the amount of the total losses previously recorded at December 31, 2020. The loss recovery has been recorded in non-interest expense in the statements of operations, which is where the contingent losses were previously recorded in the year ended December 31, 2019. The amount of the corresponding loss recovery receivable reflects the amount of the agreement in principle to settle the class action lawsuit that would be paid by the Company's insurance carriers. In addition, on July 28, 2020, the Company received a demand letter from two law firms representing a purported shareholder of the Company alleging facts and claims substantially the same as many of the alleged facts and claims in the class action lawsuit. The demand letter requested that the board of directors take action to (1) recover damages the Company has purportedly sustained as a result of alleged breaches of fiduciary duties by certain of its officers and directors; (2) recover for the benefit of the Company the amounts by which certain of its officers and directors purportedly were unjustly enriched; and (3) correct alleged deficiencies in the Company's internal controls. The demand letter stated that, if the board of directors had not taken the actions demanded within 90 days after the receipt of the letter, or in the event the board of directors refused to take the actions demanded, the purported shareholder would commence a shareholder derivative action on behalf of the Company seeking appropriate relief. The board of directors established a demand review committee to evaluate the matters raised in the demand letter and to determine the actions, if any, that should be taken by the Company with respect to those matters. The Company responded to the demand letter advising the purported shareholder of the appointment of the demand review committee. The demand review committee's investigation is ongoing; accordingly, no actions have been taken by the board of directors. Further, no legal action has yet to be brought by the purported shareholder. There can be no assurance as to whether any litigation will be commenced by or against the Company with respect to the claims set forth in the demand letter or that, if any such litigation is commenced, it will not have a material impact on our financial condition or results of operations. Establishment of Mortgage Repurchase Liability During the period 2015 through 2019, the Company sold portfolio loans originated under the Advantage Loan Program to private investors in the secondary market. The Company also sells conventional residential real estate loans (which excludes Advantage Loan Program loans) in the secondary market primarily to Fannie Mae on an ongoing basis. In connection with these loans sold, the Company makes customary representations and warranties about various characteristics of each loan. The Company may be required pursuant to the terms of the applicable mortgage loan purchase and sale agreements to repurchase any previously sold loan or indemnify (make whole) the investor for which the representation or warranty of the Company proves to be inaccurate, incomplete or misleading. In the event of a repurchase, the Company is typically required to pay the unpaid principal balance, the proportionate premium received when selling the loans and certain expenses. Before 2020, any repurchases due to a breach of any such representations and warranties were de minimis. In 2019, in connection with the above mentioned investigations stemming from the Advantage Loan Program, the Bank recorded a mortgage repurchase liability of $7,823 , primarily related to probable losses on the previously sold Advantage Loan Program loan portfolio. The Company determined that these losses became probable in the latter part of the fourth quarter of 2019, taking into account the results of the Internal Review. In 2020, based on further analysis, the Company increased the mortgage repurchase liability by $2,527 . The Bank applied $651 against the liability during 2020. The Bank's mortgage repurchase liability was $9,699 and $7,823 at December 31, 2020 and 2019, respectively. The repurchase liability is included in accrued expenses and other liabilities in the consolidated balance sheets. The unpaid principal balance of residential real estate loans sold that were subject to potential repurchase obligations for breach of representations and warranties totaled $562,139 and $759,568 at December 31, 2020 and 2019, respectively, including Advantage Loan Program loans totaling $429,816 and $670,243 at December 31, 2020 and 2019, respectively. The mortgage repurchase liability reflects management's estimate of losses based on a combination of factors. The Company's estimation process requires management to make subjective and complex judgements about matters that are inherently uncertain, such as future repurchase demand expectations, economic factors and findings from the Internal Review. The actual repurchase losses could vary significantly from the recorded mortgage repurchase liability, depending on the outcome of various factors, including those previously discussed. In May 2020, the Company negotiated the repurchases of two pools of Advantage Loan Program loans with a total outstanding unpaid principal balance of $38,704. These loans were previously sold to third-party investors with servicing retained and were evaluated and considered to be performing at the acquisition date. In connection with these repurchases, the Company recognized a loss of $136 related to a fair value discount in other non-interest expense and a disposition of $428 of mortgage servicing rights. To avoid the uncertainty of audits and inquiries by third-party investors in the Advantage Loan Program, beginning at the end of the second quarter of 2020, the Company commenced making offers to each of those investors to repurchase 100% of the previously sold Advantage Loan Program loans. For the remainder of 2020, certain third-party investors accepted the above mentioned offer, from which the Company repurchased pools of Advantage Loan Program loans previously sold with a total outstanding unpaid principal balance of $30,934. These loans were previously sold to such third-party investors with servicing retained and were evaluated and considered to be performing at the acquisition date. In connection with these repurchases, the Company recognized a loss of $135 related to fair value discount in other non-interest expense, and a disposition of $361 of mortgage servicing rights, and charged a loss of $651 against the mortgage repurchase liability. |
Regulatory Capital Requirements
Regulatory Capital Requirements | 12 Months Ended |
Dec. 31, 2020 | |
Regulatory Capital Requirements | |
Regulatory Capital Requirements | Note 20—Regulatory Capital Requirements The Bank is subject to the capital adequacy requirements of the OCC. The Company, as a thrift holding company, is subject to the capital adequacy requirements of the Federal Reserve. Capital adequacy guidelines and prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weightings and other factors, and the regulators in their discretion can require the Company to lower classifications in certain cases. Prompt corrective action provisions are not applicable to thrift holding companies. Failure to meet minimum capital requirements can initiate regulatory action that could have a direct material effect on the consolidated financial statements. Prompt corrective action regulations provide five classifications, including well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized, although these terms are not used to represent overall financial condition. Under the Basel III capital rules, the Company and the Bank must hold a capital conservation buffer ("CCB") over the adequately capitalized risk-based capital ratios. At present, in order to avoid the imposition of restrictions on capital distributions and discretionary bonus payments, the Company is required to maintain a CCB of at least 2.50%. The net unrealized gain or loss on investment securities is not included in regulatory capital. Banking organizations are required to maintain a minimum total capital ratio of 10.5%, a minimum Tier 1 capital ratio of 8.5 % and a minimum common equity Tier 1 capital ratio of 7.0% (in each case accounting for the required CCB). Management believes that at December 31, 2020, the Company and the Bank meet all regulatory capital requirements to which they are subject. At December 31, 2020 and 2019, the Bank exceeded all capital requirements to be categorized as well capitalized, and the Company exceeded applicable capital adequacy requirements as presented below. The Company's consolidated and the Bank’s actual and minimum required capital amounts and ratios, with such regulatory minimums not including the CCB as discussed above, at December 31, 2020 and 2019 are as follows: For Capital Adequacy To be Well Actual Purposes Capitalized Amount Ratio Amount Ratio Amount Ratio December 31, 2020 Total adjusted capital to risk-weighted assets Consolidated $ 407,733 22.58 % $ 144,466 8.00 % N/A N/A Bank 386,237 21.56 143,339 8.00 179,174 10.00 % Tier 1 (core) capital to risk-weighted assets Consolidated 319,204 17.68 108,350 6.00 N/A N/A Bank 363,224 20.27 107,504 6.00 143,339 8.00 Common Equity Tier 1 (CET1) Consolidated 319,204 17.68 81,262 4.50 N/A N/A Bank 363,224 20.27 80,628 4.50 116,463 6.50 Tier 1 (core) capital to adjusted tangible assets Consolidated 319,204 8.08 158,067 4.00 N/A N/A Bank 363,224 9.20 157,954 4.00 197,442 5.00 For Capital Adequacy To be Well Actual Purposes Capitalized Amount Ratio Amount Ratio Amount Ratio December 31, 2019 Total adjusted capital to risk-weighted assets Consolidated $ 419,327 21.49 % $ 156,081 8.00 % N/A N/A Bank 346,985 17.82 155,809 8.00 $ 194,761 10.00 % Tier 1 (core) capital to risk-weighted assets Consolidated 332,418 17.04 117,061 6.00 N/A N/A Bank 325,255 16.70 116,857 6.00 155,809 8.00 Common Equity Tier 1 (CET1) Consolidated 332,418 17.04 87,796 4.50 N/A N/A Bank 325,255 16.70 87,643 4.50 126,595 6.50 Tier 1 (core) capital to adjusted tangible assets Consolidated 332,418 10.11 131,471 4.00 N/A N/A Bank 325,255 9.90 131,469 4.00 164,337 5.00 Dividend Restrictions As noted above, banking regulations require the Bank to maintain certain capital levels and may limit the dividends paid by the bank to the holding company or by the holding company to its shareholders. The Company’s principal source of funds for dividend payments is dividends received from the Bank, and banking regulations limit the dividends that may be paid. Approval by regulatory authorities is required if (i)the total capital distributions for the applicable calendar year exceed the sum of the Bank's net income for that year to date plus the Bank's retained net income for the preceding two years or (ii) the Bank would not be at least adequately capitalized following the distribution. The Qualified Thrift Lender (“QTL”) test requires that a minimum of 65% of assets be maintained in qualified thrift investments, including mortgage loans, housing- and real estate- related finance and other specified areas. If the QTL test is not met, limits are placed on growth, branching, new investments, FHLB advances and dividends, or the Bank must convert to a commercial bank charter. Management believes that the QTL test has been met. Also, pursuant to the terms of the subordinated note agreements, the Company may pay dividends if it is well capitalized as defined by regulatory guidelines. The Bank is currently required to obtain the prior approval of the OCC in order to pay dividends to the Company due to the existence of a formal agreement with the OCC. Refer to Note 19 - Commitments and Contingencies. In addition, the Company currently is required to obtain the prior approval of the FRB in order to pay dividends to the Company’s shareholders. |
Condensed Financial Information
Condensed Financial Information of Sterling Bancorp, Inc. (Parent Only) | 12 Months Ended |
Dec. 31, 2020 | |
Condensed Financial Information of Sterling Bancorp, Inc. (Parent Only) | |
Condensed Financial Information of Sterling Bancorp, Inc. (Parent Only) | Note 21— Condensed Financial Information of Sterling Bancorp, Inc. (Parent Only) Financial statements of Sterling Bancorp, Inc. (“Parent”) are shown below. The Parent has no significant operating activities. CONDENSED BALANCE SHEETS December 31, 2020 2019 ASSETS Cash held at Bank $ 20,952 $ 79,714 Investment in subsidiaries 363,611 325,451 Other assets 13,914 3,625 Total assets $ 398,477 $ 408,790 LIABILITIES AND SHAREHOLDERS’ EQUITY Liabilities: Subordinated notes, net $ 65,341 $ 65,179 Other liabilities 13,545 10,997 Total liabilities 78,886 76,176 Total shareholders’ equity 319,591 332,614 Total liabilities and shareholders’ equity $ 398,477 $ 408,790 CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Year Ended December 31, 2020 2019 2018 Expenses: Interest expense $ 4,713 $ 4,700 $ 4,689 Provision (recovery) for contingent losses, net (10,000) 10,000 — Other 6,135 803 961 Total expenses 848 15,503 5,650 Loss before income tax and equity in subsidiaries income (loss) (848) (15,503) (5,650) Income tax benefit 246 4,496 1,186 Loss before equity in subsidiaries income (loss) (602) (11,007) (4,464) Equity in subsidiaries income (loss) income (12,365) 40,255 67,932 Net income (loss) income $ (12,967) $ 29,248 $ 63,468 Other comprehensive income Equity in other comprehensive income of subsidiaries 191 205 113 Total comprehensive income (loss) income $ (12,776) $ 29,453 $ 63,581 CONDENSED STATEMENTS OF CASH FLOWS Year Ended December 31, 2020 2019 2018 Cash flows from operating activities Net (loss) income $ (12,967) $ 29,248 $ 63,468 Adjustments to reconcile net income (loss) to net cash used in operating activities: Equity in subsidiaries loss (income) 12,365 (40,255) (67,932) Other 162 150 140 Changes in operating assets and liabilities: Change in other assets (289) (3,353) 175 Change in other liabilities (7,452) 10,000 — Net cash used in operating activities (8,181) (4,210) (4,149) Cash flows from investing activities Capital contributed to subsidiary (Bank) (50,000) — — Dividends received from subsidiaries — 19,002 6,119 Net cash (used in) provided by investing activities (50,000) 19,002 6,119 Cash flows from financing activities Repurchase of shares of common stock (82) (30,349) — Dividends paid to shareholders (499) (2,044) (2,119) Net cash used in financing activities (581) (32,393) (2,119) Net decrease in cash (58,762) (17,601) (149) Cash held at Bank, beginning of year 79,714 97,315 97,464 Cash held at Bank, end of year $ 20,952 $ 79,714 $ 97,315 Supplemental cash flows information: Cash paid for: Interest $ 4,550 $ 4,550 $ 4,550 Dividends During 2020, the Parent made a capital contribution to the Bank of $50,000. The Parent received cash dividends from its subsidiaries of $19,002 and $6,119 during the year ended December 31, 2019 and 2018, respectively. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events | |
Subsequent Events | Note 22—Subsequent Events Defined Contribution Retirement Plan The Bank has amended the defined contribution retirement plan effective as of January 1, 2021 to, among other things, increase the employer matching contributions to 100% of the amount contributed or deferred by the participant up to 6%, which will be immediately vested. In addition, beginning with employer matching contributions with respect to the 2021 plan year, the employer matching contributions under the defined contribution retirement plan will be made in the form of common stock of the Company to be held in a unitized stock fund. Executive Incentive Retirement Plan Agreements The board of directors acted to terminate the remaining executive incentive retirement plan agreements, as discussed in Note 14 above, effective January 1, 2021, which would eliminate any further crediting to an individual’s book-entry incentive award account, but would allow for interest crediting in accordance with these remaining individuals’ agreements. Legal Proceedings In February 2021, the Company reached an agreement in principle to settle the securities class action lawsuit disclosed in Note 19 - Commitments and Contingencies above. The agreement in principle provides for a single cash payment in exchange for the release of all of the defendants from all alleged claims therein and remains subject to final documentation, court approval and other conditions. The full amount of the settlement of $12,500 would be covered by the Company’s applicable insurance policies. In the event a final settlement is not executed, court approval is not received, or the settlement is not finalized for any other reason, the Company intends to vigorously defend this action. In the first quarter of 2021, the Company learned of a formal investigation recently initiated by the SEC that is related to the Advantage Loan Program. The Company expects to receive document requests from the SEC and is fully cooperating with this investigation. Adverse findings in the SEC investigation could result in material losses due to penalties, disgorgement, costs and/or expenses imposed on the Company, which could have a material adverse effect on the Company's future operations, financial condition, growth or other aspects of its business. The Company expects to incur significant costs in its efforts to comply with the SEC investigation in 2021. Branch Purchase and Assumption Agreement On March 19, 2021, the Bank entered into an agreement with First Federal Savings & Loan Association of Port Angeles, a Washington state chartered bank, to sell the Bank’s Bellevue, Washington branch office, subject to receipt of applicable regulatory approvals and other customary closing conditions. The transfer includes all deposit accounts located at the branch, with a total current approximate balance of $77.7 million. The sale includes all branch premises and equipment, and the agreement provides that the buyer intends to offer employment to all associated staff. Repurchases of Mortgage Loans In March 2021, an investor accepted the Company’s offer to repurchase a pool of Advantage Loan Program loans with an outstanding unpaid principal balance of $88,758. These loans were previously sold to such third-party investors with servicing retained and were considered to be performing at the acquisition date. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“ U.S. GAAP”). The consolidated financial statements include the results of the Company and its wholly-owned subsidiaries. On October 14, 2020, QCM, LLC, doing business as Quantum Capital Management, a wholly-owned subsidiary of Quantum Fund, LLC and an indirect wholly-owned subsidiary of the Bank entered into an Asset Purchase Agreement to sell substantially all of its assets, which consisted primarily of client advisory agreements for aggregate consideration of $250 . The transaction closed on December 21, 2020. The Company recorded a gain on sale of $189 in 2020 that is recorded in other income within non-interest income in the consolidated statements of operations. The operations of Quantum Capital Management were not significant for all periods presented. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Due to the inherent uncertainty involved in making estimates, actual results reported in the future periods may be based upon amounts that could differ from those estimates. |
Fair Value Measurements | Fair Value Measurements The Bank utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine its fair value disclosures. The determination of fair values of financial instruments often requires the use of estimates. In cases where quoted market values in an active market are not readily available, the Bank uses present value techniques and other valuation methods, as disclosed in Note 15—Fair Values of Financial Instruments, to estimate the fair value of its financial instruments. These valuation methods require considerable judgment, and the resulting estimates of fair value can be significantly affected by the assumptions made and methods used. Debt securities available for sale and equity securities with readily determinable fair values are recorded at fair value on a recurring basis. Additionally, from time to time, the Bank may be required to record other assets and liabilities on a nonrecurring basis, such as impaired loans, other real estate owned, nonmarketable equity securities and certain other assets and liabilities. These nonrecurring fair value adjustments generally involve write-downs of individual assets or application of lower of amortized cost or fair value accounting. |
Cash and Due from Banks | Cash and Due from Banks For the purposes of the accompanying consolidated statements of cash flows, cash includes cash and time deposits and other deposits held with other banks with original maturities of three months or less. Cash on hand or on deposit with the Federal Reserve was required to meet regulatory reserve and clearing requirements through March 26, 2020. After this date, the Federal Reserve eliminated such reserve and clearing requirements. Required cash on hand or on deposit with the Federal Reserve Bank was $23,969 at December 31, 2019. The Company presents the cash flows from customer loans, deposit transactions and short-term borrowings on a net basis in its consolidated statements of cash flows. |
Interest-bearing Deposits with Other Banks | Interest-bearing Deposits with Other Banks Interest-bearing deposits with other banks, consisting of certificates of deposit, have maturities greater than three months and are carried at cost. Each certificate of deposit is below the FDIC insurance limit of $250. Interest income is recorded when earned. |
Concentration of Credit Risk | Concentration of Credit Risk The loan portfolio consists primarily of residential real estate loans, which are collateralized by real estate. At December 31, 2020 and 2019, residential real estate loans accounted for 81% and 85%, respectively, of the loan portfolio. In addition, most of these residential loans and other commercial loans have been made to individuals and businesses in the state of California, which are dependent on the area economy for their livelihoods and servicing of their loan obligation. At December 31, 2020 and 2019, approximately 87% and 89%, respectively, of the loan portfolio was originated to customers in California. Starting December 9, 2019, the Bank suspended its Advantage Loan Program and announced that it permanently discontinued this program on March 6, 2020. Loans originated under this Program comprised a significant component of the Bank’s total loan originations. Advantage Loan Program loans (including nonaccrual residential real estate loans held for sale of |
Risks and Uncertainties - COVID-19 | Risks and Uncertainties – COVID-19 The coronavirus disease 2019 (“COVID-19”) pandemic, which was declared a national emergency in the United States in March 2020, continues to create extensive disruptions to United States and global economic conditions and financial markets and to businesses and the lives of individuals throughout the world. Federal and state governments have taken, and continue to take, unprecedented actions to contain the spread of the disease, including quarantines, travel bans, shelter-in-place orders, closures of businesses and schools, fiscal stimulus, and legislation designed to deliver monetary aid and other relief for businesses and individuals impacted by the pandemic. The Company’s primary market areas of California, the greater Seattle market, and New York City became part of several epicenters of the COVID-19 pandemic. Banking and financial services have been designated essential businesses, and the Bank’s operations are continuing, subject to certain modifications to business practices imposed to safeguard the health and wellness of the Bank’s customers and employees and to comply with applicable government directives. The COVID-19 pandemic, and related efforts to contain it, have caused significant disruptions in the functioning of the financial markets, resulted in an unprecedented slowdown in economic activity and a related increase in unemployment, and have increased economic and market uncertainty and volatility. In particular, COVID-19 has disrupted our normal course of providing services to our clients and adversely impacted our clients and could impair their ability to fulfill their obligations to the Bank. During the year ended December 31, 2020, the Bank experienced an increase in delinquent and nonaccrual loans, primarily in residential real estate loans, commercial real estate loans related to single-room occupancy hotels (“SROs”) and construction loans. A much higher provision for loan losses was recorded during 2020 reflecting, in part, the impact of the COVID-19 pandemic. The COVID-19 pandemic and the related adverse local and national economic consequences could have a material adverse effect on the Company’s business, financial condition, liquidity, results of operations, risk-weighted assets and regulatory capital. Currently, significant uncertainties exist concerning the magnitude of the impact and duration of the COVID-19 pandemic. |
Investment Securities | Investment Securities Investment securities includes debt securities and equity securities. Debt Securities Debt securities are classified as either available for sale or held to maturity. Management determines the classification of the debt securities when they are purchased. Debt securities available for sale are stated at fair value, with unrealized gains and losses excluded from income and shown as a separate component of shareholders’ equity in accumulated other comprehensive income (loss), net of tax. Held to maturity securities are carried at amortized cost when management has the positive intent and ability to hold them to maturity. The amortized cost of debt securities classified as held to maturity or available for sale is adjusted for amortization of premiums (noncallable) and accretion of discounts over the contractual life of the investment security using the effective interest method or, in the case of asset-backed securities, over the estimated life of the investment security using the effective yield method. Interest income includes amortization or accretion of purchase premium or discount. Gains and losses on sales are recorded on the settlement date and determined using the specific identification method. Management evaluates debt securities for other-than-temporary impairment at least on a quarterly basis and more frequently when economic or market conditions warrant such an evaluation. In determining other-than-temporary impairment for debt securities, management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the Company has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. The assessment of whether a decline is other-than-temporary involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time. A charge is recognized against income for all or a portion of the impairment if the loss is determined to be other than temporary. If the Bank intends to sell the debt security or it is more likely than not that the Bank will be required to sell the debt security prior to the recovery of its amortized cost basis, the debt security is written down to fair value, and the full amount of any impairment charge is recorded as a loss in the consolidated statements of income. If the Bank does not intend to sell the debt security and it is more likely than not that the Bank will not be required to sell the debt security prior to recovery of its amortized cost basis, only the current period credit loss of any impairment of a debt security is recognized in the consolidated statements of income, with the remaining impairment recorded in other comprehensive income (loss). Equity Securities Equity securities with readily determinable fair values are stated at fair value with unrealized and realized gains and losses reported in income. Those equity securities without readily determinable fair values are recorded at cost, less any impairments, adjusted for subsequent observable price changes in orderly transactions for an identical or similar investment of the same issuer. Any changes in the carrying value of the equity investments are recognized in income. Management performs a qualitative assessment each reporting period to identify impairment of equity securities without readily determinable fair values. When a qualitative assessment indicates that an impairment exists, management determines the fair value of the investment and if the fair value is less than the investment's carrying value, an impairment charge is recorded in income equal to the difference between the fair value and the carrying amount of the investment. |
Mortgage Loans Held for Sale | Mortgage Loans Held for Sale Residential real estate loans originated or purchased and intended for sale in the secondary market are carried at the lower of amortized cost or fair value on an individual loan basis as determined by outstanding commitments from investors. Net unrealized losses, if any, are recorded as a valuation allowance and charged to noninterest income in the consolidated statements of operations. Residential real estate loans originated as held for investment are periodically sold in order to manage liquidity, interest rate or concentration risk. Loans that are transferred into loans held for sale from loans held for investment, due to a change in intent, are recorded at the lower of amortized cost or fair value. Any changes in fair value attributable to credit deterioration are charged against the allowance for loan losses at the time of transfer. When loans originally classified as held for sale or as held for investment are reclassified due to a change in intent or ability to hold, cash flows associated with the loans are classified in the consolidated statements of cash flows by operating or investing activities, as appropriate, in accordance with the initial classification of the loans. Residential real estate loans held for sale are generally sold with servicing rights retained. Upon the sale of an originated loan, the mortgage servicing right asset is established and recorded at its estimated fair value, and a corresponding gain is recognized in gain on sale of mortgage loans held for sale or gain on sale of portfolio loans. Gains and losses on sales of residential real estate loans are based on the difference between the selling price and the carrying value of the related loans sold. |
Loans | Loans Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at the principal balance outstanding, net of unearned income, including unamortized loan fees and costs on originated loans, and allowances for loan losses. Loan origination fees, net of certain direct loan origination costs, are deferred and amortized over the contractual lives of the respective loans as a yield adjustment using the effective interest method. Other credit-related fees are recognized as fee income, as a component of noninterest income. Interest income on loans is accrued as earned using the interest method over the term of the loan. The accrual of interest income is discontinued at the time the loan is 90 days past due or earlier if conditions warrant (i.e. nonaccrual loan). In all cases, loans are placed on nonaccrual status at an earlier date if collection of principal or interest is considered doubtful. When a loan is placed on nonaccrual status, interest accrued and unpaid during prior periods is reversed. Any payments received on nonaccrual loans are applied to interest income on a cash basis if the loan is considered well secured. Otherwise, all payments received are applied first to outstanding loan principal amounts and then to the recovery of the charged off loan amounts. Any excess is treated as a recovery of interest and fees. Loans are returned to accrual status after all principal and interest amounts contractually due are made and future payments are reasonably assured. A loan is considered impaired when, based on current information and events, it is probable that Bank will be unable to collect all amounts due according to the contractual terms of the loan agreement. Loans that have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings, as defined below, and classified as impaired. Factors considered by management in determining if a loan is impaired include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Commercial real estate loans, construction loans and commercial lines of credit are individually evaluated for impairment. If a loan is impaired, a portion of the allowance for loan losses is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral or operations of collateral. Large groups of homogeneous loans, such as other consumer and residential real estate loans, are collectively evaluated for impairment and accordingly, are not separately identified for impairment disclosures. |
Troubled Debt Restructurings | Troubled Debt Restructurings The Bank periodically grants concessions to its customers in an attempt to protect as much of its investment as possible and minimize risk of loss. Loans that have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings. To determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed as part of the credit underwriting process. Troubled debt restructurings are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a troubled debt restructuring is considered a collateral dependent loan, the loan is reported, net, at the fair value of the collateral. For loans that are considered troubled debt restructurings that subsequently go into default, the Bank determines the amount of the allowance for loan losses in accordance with the accounting policy for the allowance for loan losses on loans individually identified as impaired. |
Allowance for Loan Losses | Allowance for Loan Losses The allowance for loan losses is a valuation allowance for probable incurred credit losses, increased or decreased by the provision for loan losses and decreased by charge offs less recoveries. Loan losses are charged against the allowance for loan losses when a loan is considered partially or fully uncollectible, or has such little value that continuance as an asset is not warranted. Subsequent recoveries, if any, are credited to the allowance for loan losses. Management estimates the allowance for loan losses balance using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations, estimated collateral values, economic conditions and other factors. Allocations of the allowance for loan losses may be made for specific loans, but the entire allowance for loan losses is available for any loan that, in management’s judgment, should be charged off. The allowance for loan losses consists of specific and general components. The specific component relates to loans that are individually classified as impaired. The general component covers all other loans and is based on historical loss experience adjusted for general economic conditions and other qualitative factors by portfolio segment. The historical loss experience is determined by portfolio segment, discussed below, and is based on the actual loss history experienced over the most recent three-year period. This actual loss experience is supplemented with economic and other factors based on the risks present for each portfolio segment. These economic and other risk factors include consideration of the following: levels of and trends in delinquencies and impaired loans; levels of and trends in charge offs and recoveries; trends in portfolio volume; effects of any changes in underwriting standards; other changes in lending policies, procedures and practices; experience, ability and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations. The following portfolio segments have been identified: A) these loans. Weak economic trends indicate that the borrowers’ capacity to repay their obligations may be deteriorating. The classes in the residential real estate portfolio segment consist of residential first mortgages and residential second mortgages. B) C) D) E) |
Mortgage Servicing Rights, net | Mortgage Servicing Rights, net Servicing assets (i.e. mortgage servicing rights) are recognized separately when residential real estate loans are sold with servicing rights retained by the Bank. Mortgage servicing rights are initially recorded at fair value, which is determined based on an internal valuation model that calculates the present value of estimated future net servicing income. The servicing assets are subsequently measured using the amortization method which requires servicing assets to be amortized into non-interest income in the consolidated statements of income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans. Servicing fee income is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal, or a fixed amount per loan, and are recognized as income when earned. The Bank also records late fees and ancillary fees related to loan servicing which were not material for the periods presented. On a quarterly basis, servicing assets are evaluated for impairment based upon the fair value of the mortgage servicing rights as compared to their carrying amount. Impairment is determined by stratifying rights into groupings based on predominant risk characteristics, such as interest rate, loan type and investor type. If the carrying amount of an individual grouping exceeds fair value, impairment is recorded on that grouping so that the servicing asset is carried at fair value. Impairment is recognized through a valuation allowance for an individual grouping. If it is later determined that all or a portion of the impairment no longer exists for a particular grouping, a reduction of the valuation allowance may be recorded as an increase to income. The fair values of servicing assets are subject to significant fluctuations due to changes in estimated and actual prepayment speeds and default rates and losses. |
Transfers of Financial Assets | Transfers of Financial Assets Transfers of financial assets are accounted for as sales when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. |
FHLB Stock | FHLB Stock The Bank is a member of the FHLB system. Members are required to own a certain amount of stock based on the level of FHLB borrowings and other factors and may invest additional amounts. The FHLB stock is carried at cost, classified as a restricted security and periodically evaluated for impairment based on ultimate recovery of par value. The FHLB stock does not have a readily determinable fair value and no quoted market value as the ownership is restricted to member institutions. Also, the FHLB stock is pledged as collateral on FHLB borrowings. Cash and stock dividends are reported as income in interest and dividends on investment securities and restricted stock in the consolidated statements of operations. Cash dividends received amounted to $847, $1,219 and $1,149 for the year ended December 31, 2020, 2019 and 2018, respectively. |
Cash Surrender Value of Bank-Owned Life Insurance | Cash Surrender Value of Bank-Owned Life Insurance The Bank has purchased life insurance policies on certain officers and employees; in addition, the Bank still owns policies on retired and former employees. Cash surrender value of bank-owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. |
Long-Lived Assets | Long-Lived Assets Long-lived assets, such as leasehold improvements and equipment, and definite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require long-lived assets or asset groups to be tested for possible impairment, the Company compares the undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment charge is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques, such as discounted cash flow models and third-party independent appraisals. Definite-lived intangible assets, consisting of customer-related intangibles, are amortized on a straight-line basis over their estimated useful lives of ten years. Amortization expense related to the customer-related intangibles was $450 for the year ended December 31, 2019 and 2018. |
Mortgage Repurchase Liability | Mortgage Repurchase Liability In connection with portfolio loans sold in the secondary market, the Company makes customary representations and warranties about certain characteristics of each loan. The Company establishes a liability which may result from breaches in such representations and warranties. The repurchase liability reflects management’s estimate of such losses based on a combination of factors. The Company’s estimation process requires management to make subjective and complex judgments about matters that are inherently uncertain, such as expectations of future repurchase demands, economic factors, and findings from the Internal Review discussed in Note 19 - Commitments and Contingencies. The actual loss on repurchases could vary significantly from the recorded repurchase liability, depending on the outcome of various factors. |
Legal Contingencies and Litigation Accruals | Legal Contingencies and Litigation Accruals The Company is involved in several material legal proceedings, as disclosed in Note 19—Commitments and Contingencies. On a quarterly basis, management assesses potential losses in relation to these and other pending or threatened legal matters. If a loss is considered probable and the amount can be reasonably estimated, the Company recognizes an expense for the estimated loss. Estimates of any such loss are subjective in nature and require the evaluation of numerous facts and assumptions as to future events, including the application of legal precedent that may be conflicting. To the extent these estimates are more or less than the actual liability resulting from the resolution of these matters, the Company’s net income (loss) will be increased or decreased accordingly. If the differences are material, the Company’s consolidated financial statements could be materially impacted. |
Revenue from Contracts with Customers | Revenue from Contracts with Customers In accordance with ASC 606, Revenue from Contracts with Customers The majority of the Company's revenues are from interest income and other sources, including loans and investment securities, as well as fees related to mortgage servicing activities, which are not within the scope of ASC 606 and are instead subject to other accounting guidance. The Company's services that are within the scope of ASC 606 are recorded within non-interest income, which includes investment management and advisory fees, service charges on deposit accounts, interchange income and other service charges and fees. Descriptions of these activities that are within the scope of ASC 606, which are presented in the consolidated statements of operations as components of non-interest income, are as follows: Service charges on deposit accounts Investment management and advisory fees Interchange fees: Other service charges and fees: |
Stock-based Compensation | Stock-based Compensation Compensation cost is recognized for stock options and restricted stock awards issued to employees and non-employee members of the Company's board of directors, based on the fair value of these awards at the date of grant. The fair value of stock options is estimated using a Black-Scholes option pricing model, and the fair value of restricted stock awards is based on the market price of the Company's common stock at the date of grant reduced by the present value of dividends per share expected to be paid during the period the shares are not vested. Compensation cost is recorded over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recorded on a straight-line basis over the requisite service period of the entire award. The Company's accounting policy is to record forfeitures in the period that they occur. |
Comprehensive Income | Comprehensive Income Comprehensive income consists of net income and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized gains and losses on debt securities available for sale, net of income taxes, which is also recognized as a separate component of shareholders’ equity. The Company releases the income tax effects on unrealized gains and losses on debt securities available for sale that are reported in other comprehensive income (loss) on a security-by-security basis when debt securities are sold. |
Loan Commitments and Related Financial Instruments | Loan Commitments and Related Financial Instruments Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. |
Assets Held under Administration and Investment Management and Advisory Fees | Assets Held under Administration and Investment Management and Advisory Fees The Company does not include assets held in fiduciary or agency capacities in the consolidated balance sheets, as such assets held under administration are not assets of the Company. Fees from asset management activities are recorded on an accrual basis over the period in which the service is provided. Fees, as set forth in the underlying customer contract, are a function of the market value of assets administrated and managed. Effective December 21, 2020, the Bank no longer offers asset management services. |
Income Taxes | Income Taxes Income taxes are provided for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period the change occurs. Deferred tax assets are reduced, through a valuation allowance, if necessary, by the amount of such benefits that are not expected to be realized based on current available evidence. A tax position is recognized as a benefit only if it is more likely than not that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the more likely than not test, no tax benefit is recorded. The Company recognizes interest and/or penalties related to income tax matters in income tax expense. |
Income (Loss) per Share, Basic and Diluted | Income (Loss) per Share, Basic and Diluted Basic income (loss) per share represents net income (loss) divided by the weighted average number of common shares outstanding during the period. In periods of income, diluted income per share represents net income divided by the weighted average number of common shares outstanding during the period, plus the effect of outstanding potential dilutive common shares. In periods of a loss, basic and diluted per share information are the same. |
Recently Issued Accounting Guidance Not Yet Adopted | Recently Issued Accounting Guidance Not Yet Adopted In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief. Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates . This update deferred the effective dates of Topic 326 to January 1, 2023 for certain entities including smaller reporting companies (as defined by the U.S. Securities and Exchange Commission(the “SEC”)). The Company, as a smaller reporting company as of the relevant measuring period, qualified for this extension. At this time, the Company has formed a cross-functional implementation team consisting of individuals from credit, finance and information systems. The implementation team has been working with a software vendor to assist in implementing required changes to credit loss estimation models and processes. The historical data set for model development has been finalized, and the credit loss estimation models are in the process of being developed and tested. The Company expects to recognize a cumulative effect adjustment to the opening balance of retained earnings as of the beginning of the first reporting period in which ASU No. 2016-13 is effective. The Company has not yet determined the magnitude of any such one-time adjustment or of the overall impact of ASU No. 2016-13 on its consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting . The relief provided by this guidance is elective and applies to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. The guidance provides that changes in contract terms that are made to effect the reference rate reform transition are considered related to the replacement of a reference rate if they are not the result of a business decision that is separate from or in addition to changes to the terms of a contract to effect that transition. If certain criteria are met, entities can elect to not apply certain modification accounting requirements to contracts affected by reference rate reform. The Company’s primary contracts that reference LIBOR are its loan contracts, purchase and sale agreements for investment securities transactions, customer deposit agreements and borrowing agreements with the FHLB. The Company has not yet determined an alternative rate to LIBOR at this time. The optional amendments in ASU No. 2020-04 are effective for all entities as of March 12, 2020 through December 31, 2022. The Company may take advantage of the LIBOR transition relief allowed under this ASU in the future. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848) Scope . The amendments in this guidance refine the scope of Topic 848 and clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting also apply to derivative instruments that use an interest rate for margining, discounting or contract price alignment that is modified as a result of reference rate reform (commonly referred to as the discounting transition). ASU No. 2021-01 expands the scope of Topic 848 to also include certain derivative instruments that do not reference LIBOR or a reference rate that is expected to be discontinued, but that are being modified as a result of the discounting transition. Currently, the Company does not use derivative instruments and does not anticipate taking advantage of the LIBOR transition relief allowed under this ASU . |
Investment Securities (Tables)
Investment Securities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Investment Securities | |
Schedule of amortized cost and fair value of debt securities available for sale | December 31, 2020 Amortized Gross Fair Cost Gain Loss Value Available for sale: U.S. Treasury & Agency securities $ 138,742 $ 255 $ — $ 138,997 Mortgage-backed securities 33,743 72 (1) 33,814 Collateralized mortgage obligations 126,359 628 (391) 126,596 Collateralized debt obligations 214 — (27) 187 Total $ 299,058 $ 955 $ (419) $ 299,594 December 31, 2019 Amortized Gross Fair Cost Gain Loss Value Available for sale: U.S. Treasury securities $ 122,634 $ 170 $ (1) $ 122,803 Mortgage-backed securities 23,028 76 — 23,104 Collateralized mortgage obligations 1,138 45 — 1,183 Collateralized debt obligations 216 — (17) 199 Total $ 147,016 $ 291 $ (18) $ 147,289 |
Schedule of information pertaining to sales of debt securities available for sale | 2020 2019 2018 Proceeds $ 99,971 $ 2,914 $ 14,964 Gross realized gains $ 337 $ 6 $ 89 Gross realized losses (158) — (3) Total net realized gains $ 179 $ 6 $ 86 |
Schedule of amortized cost and fair value of debt securities available for sale, shown by contractual maturity | Amortized Fair Cost Value U.S. Treasury & Agency securities Due less than one year $ 64,974 $ 65,205 Due after one year through five years 73,768 73,792 Mortgage-backed securities 33,743 33,814 Collateralized mortgage obligations 126,359 126,596 Collateralized debt obligations 214 187 Total $ 299,058 $ 299,594 |
Schedule of debt securities available for sale, at fair value, continuous unrealized losses position | December 31, 2020 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses Mortgage-backed securities $ 5,694 $ (1) $ — $ — $ 5,694 $ (1) Collateralized mortgage obligations 75,740 (391) — — 75,740 (391) Collateralized debt obligations — — 187 (27) 187 (27) Total $ 81,434 $ (392) $ 187 $ (27) $ 81,621 $ (419) December 31, 2019 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses U.S. Treasury securities $ 5,011 $ (1) $ — $ — $ 5,011 $ (1) Collateralized debt obligations — — 199 (17) 199 (17) Total $ 5,011 $ (1) $ 199 $ (17) $ 5,210 $ (18) |
Schedule of equity securities with readily determinable fair values | Year Ended December 31, 2020 2019 2018 Net gains (losses) recorded during the period on equity securities $ 108 $ 114 $ (87) Less: net gains (losses) recorded during the period on equity securities sold during the period — — — Unrealized gains (losses) recorded during the period on equity securities held at the reporting date $ 108 $ 114 $ (87) |
Loans (Tables)
Loans (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Loans | |
Schedule of major categories of loans | December 31, 2020 2019 Residential real estate $ 2,033,526 $ 2,476,866 Commercial real estate 259,958 240,081 Construction 206,581 178,376 Commercial lines of credit 6,671 17,903 Other consumer 7 34 Total loans 2,506,743 2,913,260 Less: allowance for loan losses (72,387) (21,730) Loans, net $ 2,434,356 $ 2,891,530 |
Schedule of activity in allowance for loan losses and recorded investment by portfolio segment | The following table presents the activity in the allowance for loan losses by portfolio segment for the year ended December 31, 2020, 2019 and 2018: Commercial Residential Commercial Lines of Other December 31, 2020 Real Estate Real Estate Construction Credit Consumer Unallocated Total Allowance for loan losses: Beginning balance $ 12,336 $ 5,243 $ 3,822 $ 328 $ 1 $ — $ 21,730 Provision (recovery) for loan losses 23,604 16,634 14,866 (237) (2) — 54,865 Charge offs (3,594) — (707) — — — (4,301) Recoveries 20 65 7 — 1 — 93 Total ending balance $ 32,366 $ 21,942 $ 17,988 $ 91 $ — $ — $ 72,387 Commercial Residential Commercial Lines of Other December 31, 2019 Real Estate Real Estate Construction Credit Consumer Unallocated Total Allowance for loan losses: Beginning balance $ 13,826 $ 2,573 $ 3,273 $ 1,058 $ 1 $ 1,119 $ 21,850 Provision (recovery) for loan losses (1,511) 2,509 542 (554) — (1,119) (133) Charge offs — — — (176) — — (176) Recoveries 21 161 7 — — — 189 Total ending balance $ 12,336 $ 5,243 $ 3,822 $ 328 $ 1 $ — $ 21,730 Commercial Residential Commercial Lines of Other December 31, 2018 Real Estate Real Estate Construction Credit Consumer Unallocated Total Allowance for loan losses: Beginning balance $ 12,279 $ 2,040 $ 2,218 $ 469 $ 1 $ 1,450 $ 18,457 Provision (recovery) for loan losses 1,533 398 1,040 589 — (331) 3,229 Charge offs (4) — — — — — (4) Recoveries 18 135 15 — — — 168 Total ending balance $ 13,826 $ 2,573 $ 3,273 $ 1,058 $ 1 $ 1,119 $ 21,850 The following tables present the balance in the allowance for loan losses and the recorded investment by portfolio segment and based on impairment evaluation method as of December 31, 2020 and 2019: Commercial Residential Commercial Lines of Other December 31, 2020 Real Estate Real Estate Construction Credit Consumer Unallocated Total Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 41 $ 287 $ 1,905 $ 4 $ — $ — $ 2,237 Collectively evaluated for impairment 32,325 21,655 16,083 87 — — 70,150 Total ending allowance balance $ 32,366 $ 21,942 $ 17,988 $ 91 $ — $ — $ 72,387 Loans: Loans individually evaluated for impairment $ 208 $ 20,974 $ 48,871 $ 3,981 $ — $ — $ 74,034 Loans collectively evaluated for impairment 2,033,318 238,984 157,710 2,690 7 — 2,432,709 Total ending loans balance $ 2,033,526 $ 259,958 $ 206,581 $ 6,671 $ 7 $ — $ 2,506,743 Commercial Residential Commercial Lines of Other December 31, 2019 Real Estate Real Estate Construction Credit Consumer Unallocated Total Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 43 $ — $ — $ 5 $ — $ — $ 48 Collectively evaluated for impairment 12,293 5,243 3,822 323 1 — 21,682 Total ending allowance balance $ 12,336 $ 5,243 $ 3,822 $ 328 $ 1 $ — $ 21,730 Loans: Loans individually evaluated for impairment $ 215 $ 1,100 $ 17,112 $ 1,377 $ — $ — $ 19,804 Loans collectively evaluated for impairment 2,476,651 238,981 161,264 16,526 34 — 2,893,456 Total ending loans balance $ 2,476,866 $ 240,081 $ 178,376 $ 17,903 $ 34 $ — $ 2,913,260 |
Schedule of information related to impaired loans by class of loans | At December 31, 2020 Year Ended December 31, 2020 Unpaid Average Interest Cash Basis Principal Recorded Allowance for Recorded Income Interest Balance Investment Loan Losses Investment Recognized Recognized With no related allowance for loan losses recorded: Residential real estate, first mortgage $ 116 $ 94 $ — $ 96 $ — $ — Commercial real estate: Retail 1,247 1,029 — 1,065 58 48 Multifamily — — — — — — Offices — — — — — — Hotels/SROs 11,428 11,419 — 5,221 — — Construction 42,669 41,951 — 29,395 964 744 Commercial lines of credit: Private banking — — — 1,505 42 35 C&I lending 3,857 3,857 — 1,184 — — Subtotal 59,317 58,350 — 38,466 1,064 827 With an allowance for loan losses recorded: Residential real estate, first mortgage 114 114 41 116 5 4 Commercial real estate: Hotels/SROs 8,645 8,526 287 3,858 — — Construction 6,920 6,920 1,905 6,189 255 226 Commercial lines of credit, private banking 124 124 4 128 7 6 Subtotal 15,803 15,684 2,237 10,291 267 236 Total $ 75,120 $ 74,034 $ 2,237 $ 48,757 $ 1,331 $ 1,063 At December 31, 2019 Year Ended December 31, 2019 Unpaid Average Interest Cash Basis Principal Recorded Allowance for Recorded Income Interest Balance Investment Loan Losses Investment Recognized Recognized With no related allowance for loan losses recorded: Residential real estate, first mortgage $ 125 $ 98 $ — $ 104 $ — $ — Commercial real estate: Retail 1,308 1,100 — 1,136 60 55 Multifamily — — — 449 12 12 Offices — — — 378 25 25 Construction 17,156 17,112 — 6,682 582 575 Commercial lines of credit: Private banking 1,245 1,245 — — — — C&I lending — — — 67 5 5 Subtotal 19,834 19,555 — 8,816 684 672 With an allowance for loan losses recorded: Residential real estate, first mortgage 116 117 43 118 5 5 Commercial lines of credit, private banking 132 132 5 136 7 7 Subtotal 248 249 48 254 12 12 Total $ 20,082 $ 19,804 $ 48 $ 9,070 $ 696 $ 684 At December 31, 2018 Year Ended December 31, 2018 Unpaid Average Interest Cash Basis Principal Recorded Allowance for Recorded Income Interest Balance Investment Loan Losses Investment Recognized Recognized With no related allowance for loan losses recorded: Construction $ 4,751 $ 4,751 $ — $ 3,563 $ 301 $ 230 Commercial real estate: Retail 1,370 1,174 — 1,210 64 58 Multifamily 1,088 1,083 — 812 37 33 Subtotal 7,209 7,008 — 5,585 402 321 With an allowance for loan losses recorded: Residential real estate, first mortgage 254 228 46 148 5 4 Construction 2,661 2,661 78 1,996 163 144 Commercial real estate, offices 1,530 1,522 30 1,538 88 80 Commercial lines of credit: Private banking 316 316 95 330 19 16 C&I lending 100 100 100 75 5 4 Subtotal 4,861 4,827 349 4,087 280 248 Total $ 12,070 $ 11,835 $ 349 $ 9,672 $ 682 $ 569 |
Schedule of recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans and aging of the recorded investment in past due loans | The following tables present the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans as of December 31, 2020 and 2019: At December 31, 2020 2019 Loans Past Loans Past Due Over 90 Due Over 90 Days Still Days Still Nonaccrual Accruing Nonaccrual Accruing Residential real estate: Residential first mortgage $ 20,043 $ 46 $ 14,482 $ 50 Residential second mortgage 686 — 210 — Commercial real estate: Retail 20 — 40 — Hotels/SROs 19,945 — — — Construction 41,873 — — — Commercial lines of credit Private banking 2,285 — — — C&I lending 1,572 — — — Total $ 86,424 $ 46 $ 14,732 $ 50 The following tables present the aging of the recorded investment in past due loans as of December 31, 2020 and 2019 by class of loans: 30 ‑ 59 60 ‑ 89 Greater than Days Days 89 Days Total Loans Not December 31, 2020 Past Due Past Due Past Due Past Due Past Due Total Residential real estate: Residential first mortgage $ 37,819 $ 14,524 $ 20,089 $ 72,432 $ 1,943,602 $ 2,016,034 Residential second mortgage 362 134 686 1,182 16,310 17,492 Commercial real estate: Retail 1,010 — 20 1,030 15,170 16,200 Multifamily 3,835 — — 3,835 75,374 79,209 Offices — — — — 27,061 27,061 Hotels/SROs — — 19,945 19,945 47,690 67,635 Industrial — — — — 13,186 13,186 Other — — — — 56,667 56,667 Construction 8,593 2,514 41,873 52,980 153,601 206,581 Commercial lines of credit: Private banking — — 2,285 2,285 124 2,409 C&I lending — — 1,572 1,572 2,690 4,262 Other consumer — — — — 7 7 Total $ 51,619 $ 17,172 $ 86,470 $ 155,261 $ 2,351,482 $ 2,506,743 30 ‑ 59 60 ‑ 89 Greater than Days Days 89 Days Total Loans Not December 31, 2019 Past Due Past Due Past Due Past Due Past Due Total Residential real estate: Residential first mortgage $ 36,112 $ 5,112 $ 14,532 $ 55,756 $ 2,396,800 $ 2,452,556 Residential second mortgage 97 295 210 602 23,708 24,310 Commercial real estate: Retail — — 40 40 6,089 6,129 Multifamily — — — — 64,873 64,873 Offices — — — — 28,048 28,048 Hotels/SROs 5,605 — — 5,605 76,165 81,770 Industrial — — — — 14,150 14,150 Other — — — — 45,111 45,111 Construction 15,008 — — 15,008 163,368 178,376 Commercial lines of credit: Private banking — — — — 11,914 11,914 C&I lending 1,249 — — 1,249 4,740 5,989 Other consumer — — — — 34 34 Total $ 58,071 $ 5,407 $ 14,782 $ 78,260 $ 2,835,000 $ 2,913,260 |
Schedule of troubled debt restructurings | At December 31, 2020 2019 Recorded Allowance for Recorded Allowance for Investment Loan Losses Investment Loan Losses Residential real estate, first mortgage $ 209 $ 41 $ 215 $ 43 Commercial real estate, retail 1,029 — 1,110 — Construction 26,985 1,906 12,261 — Commercial lines of credit, private banking 124 4 132 5 Total $ 28,347 $ 1,951 $ 13,718 $ 48 |
Schedule of risk rating of loans by class of loans | Special December 31, 2020 Pass Mention Substandard Doubtful Total Residential real estate: Residential first mortgage $ 1,995,945 $ — $ 19,995 $ 94 $ 2,016,034 Residential second mortgage 16,806 — 686 — 17,492 Commercial real estate: Retail 13,599 1,572 1,029 — 16,200 Multifamily 55,772 14,238 9,199 — 79,209 Offices 12,014 1,623 13,424 — 27,061 Hotels/SROs 9,115 17,984 40,536 — 67,635 Industrial 5,867 — 7,319 — 13,186 Other 43,193 7,732 5,742 — 56,667 Construction 152,577 14,234 32,850 6,920 206,581 Commercial lines of credit: Private banking 124 2,285 — — 2,409 C&I lending 3,573 — 689 — 4,262 Other consumer 7 — — — 7 Total $ 2,308,592 $ 59,668 $ 131,469 $ 7,014 $ 2,506,743 Special December 31, 2019 Pass Mention Substandard Doubtful Total Residential real estate: Residential first mortgage $ 2,438,024 $ — $ 14,077 $ 455 $ 2,452,556 Residential second mortgage 24,100 — 210 — 24,310 Commercial real estate: Retail 4,195 834 1,100 — 6,129 Multifamily 56,164 7,150 1,559 — 64,873 Offices 24,484 645 2,919 — 28,048 Hotels/SROs 60,074 18,189 3,507 — 81,770 Industrial 5,894 8,256 — — 14,150 Other 37,693 920 6,498 — 45,111 Construction 156,339 7,008 15,029 — 178,376 Commercial lines of credit: Private banking 10,669 1,245 — — 11,914 C&I lending 4,013 — 1,976 — 5,989 Other consumer 34 — — — 34 Total $ 2,821,683 $ 44,247 $ 46,875 $ 455 $ 2,913,260 |
Leasehold Improvements and Eq_2
Leasehold Improvements and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leasehold Improvements and Equipment, net | |
Schedule of leasehold improvements and equipment, net | Estimated Useful Life (in years) 2020 2019 Leasehold improvements * $ 11,259 $ 10,920 Furniture and equipment 3 ‑ 7 14,361 13,981 Total 25,620 24,901 Less: accumulated depreciation and amortization (17,108) (15,703) Leasehold improvements and equipment, net $ 8,512 $ 9,198 * Amortized over the shorter of the lease term or estimated useful life |
Mortgage Servicing Rights, net
Mortgage Servicing Rights, net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Mortgage Servicing Rights, net | |
Schedule of principal balance of mortgage loans serviced for others | 2020 2019 Residential real estate mortgage loan portfolios serviced for: FNMA $ 171,553 $ 130,425 FHLB 64,661 86,778 Private investors 429,816 656,035 Total $ 666,030 $ 873,238 |
Schedule of activity for mortgage servicing rights and related valuation allowance | 2020 2019 2018 Mortgage servicing rights: Beginning of year $ 10,845 $ 10,733 $ 6,706 Additions 713 2,964 6,052 Amortization (3,705) (2,852) (2,025) End of year 7,853 10,845 10,733 Valuation allowance at beginning of year 1,080 100 210 Additions (recoveries) 1,085 980 (110) Valuation allowance at end of year 2,165 1,080 100 Mortgage servicing rights, net $ 5,688 $ 9,765 $ 10,633 |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Deposits | |
Schedule of maturities of time deposits, including brokered deposits | At December 31, 2020, the scheduled maturities of time deposits, including brokered deposits, were as follows: 2021 $ 1,258,983 2022 297,971 2023 69,162 2024 9,126 2025 11,281 Total $ 1,646,523 |
FHLB Borrowings (Tables)
FHLB Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
FHLB Borrowings | |
Schedule of FHLB borrowings | 2020 Interest Rates 2019 Interest Rates Long-term fixed rate advances $ 318,000 0.43% -1.96 % $ 229,000 1.07% - 1.96% |
Schedule of contractual annual maturities of FHLB advances | The contractual annual maturities of FHLB advances at December 31, 2020 are as follows: 2021 $ 11,000 2022 — 2023 — 2024 — 2025 — Thereafter 307,000 $ 318,000 |
Subordinated Notes, net (Tables
Subordinated Notes, net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Subordinated Notes, net | |
Schedule of subordinated notes | December 31, 2020 2019 7.0% fixed to floating rate subordinated notes $ 65,000 $ 65,000 Unamortized note premium 411 474 Unamortized debt issuance costs (70) (295) Total $ 65,341 $ 65,179 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Stock-based Compensation | |
Schedule of assumptions used to estimate grant date fair value of stock option awards using Black-Scholes option pricing model | Year Ended December 31, 2020 2019 2018 Risk-free interest rate 0.49 % 2.66 % 2.80 % Expected term (in years) 5.61 6.75 6.75 Expected stock price volatility 33.91 % 26.26 % 23.70 % Dividend yield 0.10 % 0.40 % 0.29 % |
Summary of the Company's stock option activity | Weighted Weighted Average Average Remaining Aggregate Number Exercise Contractual Intrinsic of Shares Price Term Value (Years) Outstanding at January 1, 2020 142,477 $ 12.29 8.60 — Granted 367,361 4.57 Exercised — — Forfeited/expired (131,956) 9.93 Outstanding at December 31, 2020 377,882 $ 5.61 9.09 $ — |
Summary of the Company's restricted stock awards activity | Weighted Average Number Grant Date of Shares Fair Value Nonvested at January 1, 2020 100,096 $ 11.02 Granted 151,874 6.91 Vested (10,460) 9.52 Forfeited (103,574) 9.12 Nonvested at December 31, 2020 137,936 $ 7.90 |
Income (Loss) Per Share (Tables
Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income (Loss) Per Share | |
Schedule of computation of income (loss) per share, basic and diluted | Year Ended December 31, 2020 2019 2018 Numerator: Net income (loss) $ (12,967) $ 29,248 $ 63,468 Denominator: Weighted average common shares outstanding, basic 49,840,882 51,115,986 52,963,308 Weighted average effect of potentially dilutive common shares: Stock options — — — Restricted stock — 11,893 2,259 Weighted average common shares outstanding, diluted 49,840,882 51,127,879 52,965,567 Income (loss) per share: Basic $ (0.26) $ 0.57 $ 1.20 Diluted $ (0.26) $ 0.57 $ 1.20 |
Schedule of anti-dilutive shares that were excluded from the computation of weighted average diluted shares outstanding | Year Ended December 31, 2020 2019 2018 Stock options 359,234 167,255 92,625 Restricted stock 166,621 28,676 — Total 525,855 195,931 92,625 |
Fair Values of Financial Inst_2
Fair Values of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Values of Financial Instruments | |
Schedule of assets measured at fair value on a recurring basis categorized by level of inputs | Fair Value Measurements at December 31, 2020 Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Financial Assets Available-for-sale debt securities: U.S. Treasury & Agency securities $ 138,997 $ 40,192 $ 98,805 $ — Mortgage-backed securities 33,814 — 33,814 — Collateralized mortgage obligations 126,596 — 126,596 — Collateralized debt obligations 187 — — 187 Equity securities 5,118 5,118 — — Fair Value Measurements at December 31, 2019 Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Financial Assets Available-for-sale debt securities: U.S. Treasury securities $ 122,803 $ 122,803 $ — $ — Mortgage-backed securities 23,104 — 23,104 — Collateralized mortgage obligations 1,183 — 1,183 — Collateralized debt obligations 199 — — 199 Equity securities 5,009 5,009 — — |
Summary of reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs | Fair Value Unobservable Collateralized Debt Obligations 2020 2019 Balance of recurring Level 3 assets at beginning of period $ 199 $ 297 Total gains or losses (realized/unrealized): Included in income-realized — — Included in other comprehensive income (loss) (10) (6) Principal maturities/settlements (2) (92) Sales — — Transfers in and/or out of Level 3 — — Balance of recurring Level 3 assets at end of period $ 187 $ 199 |
Schedule of assets measured at fair value on a nonrecurring basis categorized by level of inputs | Fair Value Measurements at December 31, 2020 Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Fair Assets Inputs Inputs Value (Level 1) (Level 2) (Level 3) Impaired loans: Commercial real estate $ 8,240 $ — $ — $ 8,240 Construction 5,015 — — 5,015 Mortgage loans held for sale 19,375 — 19,375 — Mortgage servicing rights 5,175 — — 5,175 Fair Value Measurements at December 31, 2019 Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) Mortgage servicing rights $ 7,949 $ — $ — $ 7,949 |
Schedule of quantitative information about nonrecurring Level 3 fair value measurements | Quantitative Information about Level 3 Fair Value Measurements at December 31, 2020 Range Fair Value Valuation Technique Unobservable Inputs (Weighted Average) (1) Impaired loans: Commercial real estate $ 8,240 Sales comparison approach/Income capitalization approach Adjustments for differences between the comparable sales and income data for similar loans and collateral underlying such loans N/A (36%) Construction $ 5,015 Hybrid of sales comparison and income capitalization approaches Adjustments for differences between the comparable sales and income data for similar loans and collateral underlying such loans N/A (15%) Mortgage servicing rights $ 5,175 Discounted cash flow Discount rate 9.5% -12.0% (11.6)% Prepayment speed 10.5% -37.0% (23.7)% Default rate 0.1% -0.2% (0.2)% (1) The range and weighted average for an asset category consisting of a single investment represents the significant unobservable input used in the fair value of the investment. Quantitative Information about Level 3 Fair Value Measurements at December 31, 2019 Range Fair Value Valuation Technique Unobservable Inputs (Weighted Average) (1) Mortgage servicing rights $ 7,949 Discounted cash flow Discount rate 9.5% - Prepayment speed 7.2% - 47.1% (21.3)% Default rate 0.1% - 0.3% (0.2)% (1) The range and weighted average for an asset category consisting of a single investment represents the significant unobservable input used in the fair value of the investment. |
Schedule of carrying amounts and estimated fair values of financial instruments not carried at fair value | Fair Value Measurements at December 31, 2020 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial Assets Cash and due from banks $ 998,497 $ 998,497 $ 998,497 $ — $ — Interest-bearing time deposits with other banks 7,021 7,021 7,021 — — Mortgage loans held for sale 2,909 3,052 — 3,052 — Loans, net 2,434,356 2,521,874 — — 2,521,874 Financial Liabilities Time deposits 1,646,523 1,658,020 — 1,658,020 — Federal Home Loan Bank borrowings 318,000 328,150 — 328,150 — Subordinated notes, net 65,341 65,753 — 65,753 — Fair Value Measurements at December 31, 2019 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial Assets Cash and due from banks $ 77,819 $ 77,819 $ 77,819 $ — $ — Interest-bearing time deposits with other banks 1,025 1,025 1,025 — — Mortgage loans held for sale 1,337 1,368 — 1,368 — Loans, net 2,891,530 2,978,846 — — 2,978,846 Financial Liabilities Time deposits 1,154,076 1,161,490 — 1,161,490 — Federal Home Loan Bank borrowings 229,000 227,333 — 227,333 — Subordinated notes, net 65,179 65,650 — 65,650 — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Schedule of components of the income tax (benefit) expense | Year Ended December 31, 2020 2019 2018 Current: Federal $ 4,489 $ 15,341 $ 16,435 State 1,908 6,354 7,979 Total current expense 6,397 21,695 24,414 Deferred: Federal (8,373) (3,995) 478 State (3,933) (2,057) 212 Total deferred (benefit) expense (12,306) (6,052) 690 Total income tax (benefit) expense $ (5,909) $ 15,643 $ 25,104 |
Schedule of reconciliation of the U.S. federal statutory tax rate to Company's effective tax rate | 2020 2019 2018 U.S. federal statutory rate 21.0 % 21.1 % 21.0 % Effect of: State taxes, net of federal benefit 8.5 % 4.0 % 7.1 % Non-deductible items — % 9.5 % — % Income on cash surrender value of bank-owned life insurance 0.6 % (0.2) % (0.2) % Other, net 1.2 % 0.4 % 0.4 % Effective tax rate 31.3 % 34.8 % 28.3 % |
Schedule of components of deferred tax assets and liabilities | December 31, 2020 2019 Deferred tax assets: Allowance for loan losses $ 20,185 $ 6,144 Contingent losses — 2,834 Mortgage repurchase liability 2,705 2,217 Mark-to-market adjustments on mortgage loans held for sale 41 9 Supplemental retirement benefit plan 841 895 Deferred loan fee income 158 268 State franchise tax 503 1,455 Compensation plans 531 729 Operating lease liabilities 5,715 5,631 Other 1,258 633 Total deferred tax assets 31,937 20,815 Deferred tax liabilities: FHLB stock dividends (120) (122) Mortgage servicing rights (1,586) (2,768) Operating lease right-of-use asset (5,363) (5,305) Other (542) (525) Total deferred tax liabilities (7,611) (8,720) Deferred tax asset, net $ 24,326 $ 12,095 |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Operating Leases | |
Schedule of Operating lease expense information | Year Ended December 31, 2020 2019 Operating lease cost $ 4,554 $ 4,507 Variable lease cost 959 1,235 Total $ 5,513 $ 5,742 |
Schedule of Maturity of lease liabilities | Year Ended December 31, 2021 $ 4,186 2022 3,421 2023 3,180 2024 3,119 2025 2,884 Thereafter 5,942 Total lease payments 22,732 Less: future interest costs (1) (2,235) Present value of lease liabilities $ 20,497 (1) Computed using the estimated interest rate for each lease |
Schedule of Other information | Year Ended December 31, Other Information 2020 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 4,478 $ 4,307 Weighted average remaining lease term 6.60 years 6.83 years Weighted average discount rate 3.16 % 3.54 % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies | |
Summary of total amount of unfunded commitments to extend credit and standby letters of credit outstanding | 2020 2019 Commitments $ 40,331 $ 76,927 Unused lines of credit 140,665 220,553 Standby letters of credit 24 24 |
Regulatory Capital Requiremen_2
Regulatory Capital Requirements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Regulatory Capital Requirements | |
Schedule of actual and minimum required capital amounts and ratios | For Capital Adequacy To be Well Actual Purposes Capitalized Amount Ratio Amount Ratio Amount Ratio December 31, 2020 Total adjusted capital to risk-weighted assets Consolidated $ 407,733 22.58 % $ 144,466 8.00 % N/A N/A Bank 386,237 21.56 143,339 8.00 179,174 10.00 % Tier 1 (core) capital to risk-weighted assets Consolidated 319,204 17.68 108,350 6.00 N/A N/A Bank 363,224 20.27 107,504 6.00 143,339 8.00 Common Equity Tier 1 (CET1) Consolidated 319,204 17.68 81,262 4.50 N/A N/A Bank 363,224 20.27 80,628 4.50 116,463 6.50 Tier 1 (core) capital to adjusted tangible assets Consolidated 319,204 8.08 158,067 4.00 N/A N/A Bank 363,224 9.20 157,954 4.00 197,442 5.00 For Capital Adequacy To be Well Actual Purposes Capitalized Amount Ratio Amount Ratio Amount Ratio December 31, 2019 Total adjusted capital to risk-weighted assets Consolidated $ 419,327 21.49 % $ 156,081 8.00 % N/A N/A Bank 346,985 17.82 155,809 8.00 $ 194,761 10.00 % Tier 1 (core) capital to risk-weighted assets Consolidated 332,418 17.04 117,061 6.00 N/A N/A Bank 325,255 16.70 116,857 6.00 155,809 8.00 Common Equity Tier 1 (CET1) Consolidated 332,418 17.04 87,796 4.50 N/A N/A Bank 325,255 16.70 87,643 4.50 126,595 6.50 Tier 1 (core) capital to adjusted tangible assets Consolidated 332,418 10.11 131,471 4.00 N/A N/A Bank 325,255 9.90 131,469 4.00 164,337 5.00 |
Condensed Financial Informati_2
Condensed Financial Information of Sterling Bancorp, Inc. (Parent Only) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Condensed Financial Information of Sterling Bancorp, Inc. (Parent Only) | |
Schedule of Financial statements of Sterling Bancorp, Inc | CONDENSED BALANCE SHEETS December 31, 2020 2019 ASSETS Cash held at Bank $ 20,952 $ 79,714 Investment in subsidiaries 363,611 325,451 Other assets 13,914 3,625 Total assets $ 398,477 $ 408,790 LIABILITIES AND SHAREHOLDERS’ EQUITY Liabilities: Subordinated notes, net $ 65,341 $ 65,179 Other liabilities 13,545 10,997 Total liabilities 78,886 76,176 Total shareholders’ equity 319,591 332,614 Total liabilities and shareholders’ equity $ 398,477 $ 408,790 CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Year Ended December 31, 2020 2019 2018 Expenses: Interest expense $ 4,713 $ 4,700 $ 4,689 Provision (recovery) for contingent losses, net (10,000) 10,000 — Other 6,135 803 961 Total expenses 848 15,503 5,650 Loss before income tax and equity in subsidiaries income (loss) (848) (15,503) (5,650) Income tax benefit 246 4,496 1,186 Loss before equity in subsidiaries income (loss) (602) (11,007) (4,464) Equity in subsidiaries income (loss) income (12,365) 40,255 67,932 Net income (loss) income $ (12,967) $ 29,248 $ 63,468 Other comprehensive income Equity in other comprehensive income of subsidiaries 191 205 113 Total comprehensive income (loss) income $ (12,776) $ 29,453 $ 63,581 CONDENSED STATEMENTS OF CASH FLOWS Year Ended December 31, 2020 2019 2018 Cash flows from operating activities Net (loss) income $ (12,967) $ 29,248 $ 63,468 Adjustments to reconcile net income (loss) to net cash used in operating activities: Equity in subsidiaries loss (income) 12,365 (40,255) (67,932) Other 162 150 140 Changes in operating assets and liabilities: Change in other assets (289) (3,353) 175 Change in other liabilities (7,452) 10,000 — Net cash used in operating activities (8,181) (4,210) (4,149) Cash flows from investing activities Capital contributed to subsidiary (Bank) (50,000) — — Dividends received from subsidiaries — 19,002 6,119 Net cash (used in) provided by investing activities (50,000) 19,002 6,119 Cash flows from financing activities Repurchase of shares of common stock (82) (30,349) — Dividends paid to shareholders (499) (2,044) (2,119) Net cash used in financing activities (581) (32,393) (2,119) Net decrease in cash (58,762) (17,601) (149) Cash held at Bank, beginning of year 79,714 97,315 97,464 Cash held at Bank, end of year $ 20,952 $ 79,714 $ 97,315 Supplemental cash flows information: Cash paid for: Interest $ 4,550 $ 4,550 $ 4,550 |
Nature of Operations and Basi_2
Nature of Operations and Basis of Presentation (Details) | 12 Months Ended |
Dec. 31, 2020segmentitem | |
Nature of Operations and Basis of Presentation | |
Number of branches | 30 |
Number of reportable segments | segment | 1 |
San Francisco and Los Angeles, California | |
Nature of Operations and Basis of Presentation | |
Number of branches | 26 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Principles of Consolidation (Details) - Quantum Capital Management - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Oct. 14, 2020 | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Aggregate consideration | $ 250 | |
Gain on sale | $ 189 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Cash and Due from Banks (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Summary of Significant Accounting Policies | |
Cash on hand or deposit held to meet regulatory reserve | $ 23,969 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Concentration of Credit Risk (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Concentration of Credit Risk | ||
Loans Receivable | $ 2,506,743 | $ 2,913,260 |
Deferred Tax Assets, Mark-to-Market Adjustments on Mortgage Loans Held for Sale | 41 | 9 |
Residential real estate | ||
Concentration of Credit Risk | ||
Loans Receivable | $ 2,033,526 | $ 2,476,866 |
Loans receivables | Residential real estate | ||
Concentration of Credit Risk | ||
Concentration of credit risk | 81.00% | 85.00% |
California | Loans receivables | ||
Concentration of Credit Risk | ||
Concentration of credit risk | 87.00% | 89.00% |
Advantage loan program | Loans receivables | Residential real estate | ||
Concentration of Credit Risk | ||
Concentration of credit risk | 74.00% | 78.00% |
Loans Receivable | $ 1,515,248 | $ 1,942,657 |
Mortgage loans held for sale | $ 19,375 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Federal Home Loan Bank Stock (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Summary of Significant Accounting Policies | |||
Cash dividends received on investment securities | $ 847 | $ 1,219 | $ 1,149 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Long-Lived Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets | |||
Amortization expense | $ 450 | $ 450 | |
Customer-related intangibles | |||
Finite-Lived Intangible Assets | |||
Estimated useful life | 10 years | ||
Amortization expense | $ 450 | $ 450 | $ 450 |
Investment Securities - Amortiz
Investment Securities - Amortized Cost and Fair Value Corresponding Gross Unrealized Gains and Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Available for sale: | |||
Available for sale, Amortized Cost | $ 299,058 | $ 147,016 | |
Available for sale, Gross Unrealized Gain | 955 | 291 | |
Available for sale, Gross Unrealized Loss | (419) | (18) | |
Investment securities available for sale, at fair value | $ 299,594 | $ 147,289 | |
Threshold percentage of total shareholders' equity above which securities of any single issuer exceed | 10.00% | 10.00% | |
Sales of investment securities | $ 99,971 | $ 2,914 | $ 14,964 |
Gross realized gains | 337 | 6 | 89 |
Gross realized losses | (158) | (3) | |
Securities pledged as collateral on FHLB borrowings | 630,197 | 933,747 | |
Total net realized gains | 179 | 6 | 86 |
Income tax expense on net realized gains | 50 | 1 | $ 18 |
Collateralized mortgage obligations | US Government Corporations and Agencies Securities | |||
Available for sale: | |||
Investment securities available for sale, at fair value | 816 | 1,183 | |
Debt securities | |||
Available for sale: | |||
Securities pledged as collateral on FHLB borrowings | 73,792 | ||
U.S. Treasury securities | |||
Available for sale: | |||
Available for sale, Amortized Cost | 122,634 | ||
Available for sale, Gross Unrealized Gain | 170 | ||
Available for sale, Gross Unrealized Loss | (1) | ||
Investment securities available for sale, at fair value | 122,803 | ||
U.S. Treasury & Agency securities | |||
Available for sale: | |||
Available for sale, Amortized Cost | 138,742 | ||
Available for sale, Gross Unrealized Gain | 255 | ||
Investment securities available for sale, at fair value | 138,997 | ||
Mortgage-backed securities | |||
Available for sale: | |||
Available for sale, Amortized Cost | 33,743 | 23,028 | |
Available for sale, Gross Unrealized Gain | 72 | 76 | |
Available for sale, Gross Unrealized Loss | (1) | ||
Investment securities available for sale, at fair value | 33,814 | 23,104 | |
Collateralized mortgage obligations | |||
Available for sale: | |||
Available for sale, Amortized Cost | 126,359 | 1,138 | |
Available for sale, Gross Unrealized Gain | 628 | 45 | |
Available for sale, Gross Unrealized Loss | (391) | ||
Investment securities available for sale, at fair value | 126,596 | 1,183 | |
Collateralized debt obligations | |||
Available for sale: | |||
Available for sale, Amortized Cost | 214 | 216 | |
Available for sale, Gross Unrealized Loss | (27) | (17) | |
Investment securities available for sale, at fair value | $ 187 | $ 199 |
Investment Securities - Amort_2
Investment Securities - Amortized Cost and Fair Value By Contractual Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Available for sale, Amortized Cost | ||
Available for sale, Amortized Cost | $ 299,058 | $ 147,016 |
Available for sale, Fair Value | ||
Available for sale, Fair Value | 299,594 | 147,289 |
U.S. Treasury & Agency securities | ||
Available for sale, Amortized Cost | ||
Due less than one year | 64,974 | |
Due after one year through five years | 73,768 | |
Available for sale, Amortized Cost | 138,742 | |
Available for sale, Fair Value | ||
Due less than one year | 65,205 | |
Due after one year through five years | 73,792 | |
Available for sale, Fair Value | 138,997 | |
U.S. Treasury securities | ||
Available for sale, Amortized Cost | ||
Available for sale, Amortized Cost | 122,634 | |
Available for sale, Fair Value | ||
Available for sale, Fair Value | 122,803 | |
Mortgage-backed securities | ||
Available for sale, Amortized Cost | ||
Available for sale, Amortized Cost | 33,743 | 23,028 |
Available for sale, Fair Value | ||
Available for sale, Fair Value | 33,814 | 23,104 |
Collateralized mortgage obligations | ||
Available for sale, Amortized Cost | ||
Available for sale, Amortized Cost | 126,359 | 1,138 |
Available for sale, Fair Value | ||
Available for sale, Fair Value | 126,596 | 1,183 |
Collateralized debt obligations | ||
Available for sale, Amortized Cost | ||
Available for sale, Amortized Cost | 214 | 216 |
Available for sale, Fair Value | ||
Available for sale, Fair Value | $ 187 | $ 199 |
Investment Securities - Aggrega
Investment Securities - Aggregated by Major Security Type and Length of Time in a Continuous Unrealized Loss Position (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($)security | Dec. 31, 2019USD ($) | |
Fair Value | ||
Less than 12 Months, Fair value | $ 81,434 | $ 5,011 |
12 Months or More, Fair Value | 187 | 199 |
Available for sale, Continuous unrealized loss position, Fair Value | 81,621 | 5,210 |
Unrealized Losses | ||
Less than 12 Months, Unrealized Losses | (392) | (1) |
12 Months or More, Unrealized Losses | (27) | (17) |
Available for sale, Continuous unrealized loss position, Unrealized Losses | $ (419) | (18) |
Number of debt securities in portfolio | security | 23 | |
Number of debt securities in an unrealized loss position | security | 8 | |
U.S. Treasury securities | ||
Fair Value | ||
Less than 12 Months, Fair value | $ 5,694 | 5,011 |
Available for sale, Continuous unrealized loss position, Fair Value | 5,694 | 5,011 |
Unrealized Losses | ||
Less than 12 Months, Unrealized Losses | (1) | (1) |
Available for sale, Continuous unrealized loss position, Unrealized Losses | (1) | (1) |
Collateralized mortgage obligations | ||
Fair Value | ||
Less than 12 Months, Fair value | 75,740 | |
Available for sale, Continuous unrealized loss position, Fair Value | 75,740 | |
Unrealized Losses | ||
Less than 12 Months, Unrealized Losses | (391) | |
Available for sale, Continuous unrealized loss position, Unrealized Losses | (391) | |
Collateralized debt obligations | ||
Fair Value | ||
12 Months or More, Fair Value | 187 | 199 |
Available for sale, Continuous unrealized loss position, Fair Value | 187 | 199 |
Unrealized Losses | ||
12 Months or More, Unrealized Losses | (27) | (17) |
Available for sale, Continuous unrealized loss position, Unrealized Losses | $ (27) | $ (17) |
Investment Securities - Equity
Investment Securities - Equity Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Equity Securities | |||
Fair value of equity securities | $ 5,364 | $ 5,255 | |
Equity securities with readily determinable fair values | 5,118 | 5,009 | |
Equity securities with readily determinable fair values | |||
Net gains (losses) recorded during the period on equity securities | 108 | 114 | $ (87) |
Unrealized gains (losses) recorded during the period on equity securities held at the reporting date | 108 | 114 | $ (87) |
Level 3 | |||
Equity Securities | |||
Investment in equity securities without readily determinable fair value | $ 246 | $ 246 |
Loans - Major Categories of Loa
Loans - Major Categories of Loans (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Major categories of loans | ||||
Total Loans | $ 2,506,743 | $ 2,913,260 | ||
Less: allowance for loan losses | (72,387) | (21,730) | $ (21,850) | $ (18,457) |
Loans, net | 2,434,356 | 2,891,530 | ||
Carrying value of loans pledged as collateral on FHLB borrowings | 630,197 | 933,747 | ||
Residential real estate | ||||
Major categories of loans | ||||
Total Loans | 2,033,526 | 2,476,866 | ||
Less: allowance for loan losses | (32,366) | (12,336) | (13,826) | (12,279) |
Loans, net | 562,139 | 759,568 | ||
Commercial real estate | ||||
Major categories of loans | ||||
Total Loans | 259,958 | 240,081 | ||
Less: allowance for loan losses | (21,942) | (5,243) | (2,573) | (2,040) |
Construction | ||||
Major categories of loans | ||||
Total Loans | 206,581 | 178,376 | ||
Less: allowance for loan losses | (17,988) | (3,822) | (3,273) | (2,218) |
Commercial lines of credit | ||||
Major categories of loans | ||||
Total Loans | 6,671 | 17,903 | ||
Less: allowance for loan losses | (91) | (328) | (1,058) | (469) |
Other consumer | ||||
Major categories of loans | ||||
Total Loans | $ 7 | 34 | ||
Less: allowance for loan losses | $ (1) | $ (1) | $ (1) |
Loans - Activity in the Allowan
Loans - Activity in the Allowance For Loan Losses by Portfolio Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Allowance for loan losses | |||
Beginning balance | $ 21,730 | $ 21,850 | $ 18,457 |
Provision (recovery) for loan losses | 54,865 | (133) | 3,229 |
Charge offs | (4,301) | (176) | (4) |
Recoveries | 93 | 189 | 168 |
Total ending balance | 72,387 | 21,730 | 21,850 |
Residential real estate | |||
Allowance for loan losses | |||
Beginning balance | 12,336 | 13,826 | 12,279 |
Provision (recovery) for loan losses | 23,604 | (1,511) | 1,533 |
Charge offs | (3,594) | (4) | |
Recoveries | 20 | 21 | 18 |
Total ending balance | 32,366 | 12,336 | 13,826 |
Commercial real estate | |||
Allowance for loan losses | |||
Beginning balance | 5,243 | 2,573 | 2,040 |
Provision (recovery) for loan losses | 16,634 | 2,509 | 398 |
Recoveries | 65 | 161 | 135 |
Total ending balance | 21,942 | 5,243 | 2,573 |
Construction | |||
Allowance for loan losses | |||
Beginning balance | 3,822 | 3,273 | 2,218 |
Provision (recovery) for loan losses | 14,866 | 542 | 1,040 |
Charge offs | (707) | ||
Recoveries | 7 | 7 | 15 |
Total ending balance | 17,988 | 3,822 | 3,273 |
Commercial lines of credit | |||
Allowance for loan losses | |||
Beginning balance | 328 | 1,058 | 469 |
Provision (recovery) for loan losses | (237) | (554) | 589 |
Charge offs | (176) | ||
Total ending balance | 91 | 328 | 1,058 |
Other consumer | |||
Allowance for loan losses | |||
Beginning balance | 1 | 1 | 1 |
Provision (recovery) for loan losses | (2) | ||
Recoveries | $ 1 | ||
Total ending balance | 1 | 1 | |
Unallocated | |||
Allowance for loan losses | |||
Beginning balance | 1,119 | 1,450 | |
Provision (recovery) for loan losses | $ (1,119) | (331) | |
Total ending balance | $ 1,119 |
Loans - Activity in the Allow_2
Loans - Activity in the Allowance For Loan Losses by Portfolio Segment And Based On Impairment Method (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Ending allowance balance attributable to loans: | ||||
Individually evaluated for impairment | $ 2,237 | $ 48 | ||
Collectively evaluated for impairment | 70,150 | 21,682 | ||
Total ending allowance balance | 72,387 | 21,730 | $ 21,850 | $ 18,457 |
Loans: | ||||
Loans individually evaluated for impairment | 74,034 | 19,804 | ||
Loans collectively evaluated for impairment | 2,432,709 | 2,893,456 | ||
Total Loans | 2,506,743 | 2,913,260 | ||
Residential real estate | ||||
Ending allowance balance attributable to loans: | ||||
Individually evaluated for impairment | 41 | 43 | ||
Collectively evaluated for impairment | 32,325 | 12,293 | ||
Total ending allowance balance | 32,366 | 12,336 | 13,826 | 12,279 |
Loans: | ||||
Loans individually evaluated for impairment | 208 | 215 | ||
Loans collectively evaluated for impairment | 2,033,318 | 2,476,651 | ||
Total Loans | 2,033,526 | 2,476,866 | ||
Commercial real estate | ||||
Ending allowance balance attributable to loans: | ||||
Individually evaluated for impairment | 287 | |||
Collectively evaluated for impairment | 21,655 | 5,243 | ||
Total ending allowance balance | 21,942 | 5,243 | 2,573 | 2,040 |
Loans: | ||||
Loans individually evaluated for impairment | 20,974 | 1,100 | ||
Loans collectively evaluated for impairment | 238,984 | 238,981 | ||
Total Loans | 259,958 | 240,081 | ||
Construction | ||||
Ending allowance balance attributable to loans: | ||||
Individually evaluated for impairment | 1,905 | |||
Collectively evaluated for impairment | 16,083 | 3,822 | ||
Total ending allowance balance | 17,988 | 3,822 | 3,273 | 2,218 |
Loans: | ||||
Loans individually evaluated for impairment | 48,871 | 17,112 | ||
Loans collectively evaluated for impairment | 157,710 | 161,264 | ||
Total Loans | 206,581 | 178,376 | ||
Commercial lines of credit | ||||
Ending allowance balance attributable to loans: | ||||
Individually evaluated for impairment | 4 | 5 | ||
Collectively evaluated for impairment | 87 | 323 | ||
Total ending allowance balance | 91 | 328 | 1,058 | 469 |
Loans: | ||||
Loans individually evaluated for impairment | 3,981 | 1,377 | ||
Loans collectively evaluated for impairment | 2,690 | 16,526 | ||
Total Loans | 6,671 | 17,903 | ||
Other consumer | ||||
Ending allowance balance attributable to loans: | ||||
Collectively evaluated for impairment | 1 | |||
Total ending allowance balance | 1 | 1 | 1 | |
Loans: | ||||
Loans collectively evaluated for impairment | 7 | 34 | ||
Total Loans | $ 7 | $ 34 | ||
Unallocated | ||||
Ending allowance balance attributable to loans: | ||||
Total ending allowance balance | $ 1,119 | $ 1,450 |
Loans - Impaired Loans by Class
Loans - Impaired Loans by Class of Loans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Impaired loans by class of loans | |||
Unpaid principal balance, with no related allowance for loan losses recorded | $ 59,317 | $ 19,834 | $ 7,209 |
Unpaid principal balance, with an allowance for loan losses recorded | 15,803 | 248 | 4,861 |
Total Unpaid Principal Balance | 75,120 | 20,082 | 12,070 |
Recorded investment, with no related allowance for loan losses recorded | 58,350 | 19,555 | 7,008 |
Recorded investment, with an allowance for loan losses recorded | 15,684 | 249 | 4,827 |
Total Recorded Investment | 74,034 | 19,804 | 11,835 |
Allowance for Loan Losses | 2,237 | 48 | 349 |
Average recorded investment, with no related allowance for loan losses recorded | 38,466 | 8,816 | 5,585 |
Average recorded investment, with an allowance for loan losses recorded | 10,291 | 254 | 4,087 |
Total Average Recorded Investment | 48,757 | 9,070 | 9,672 |
Interest Income Recognized, with no related allowance for loan losses recorded | 1,064 | 684 | 402 |
Interest Income Recognized, with an allowance for loan losses recorded | 267 | 12 | 280 |
Total Interest Income Recognized | 1,331 | 696 | 682 |
Cash Basis Interest Recognized, with no related allowance for loan losses recorded | 827 | 672 | 321 |
Cash Basis Interest Recognized, with an allowance for loan losses recorded | 236 | 12 | 248 |
Total Cash Basis Interest Recognized | 1,063 | 684 | 569 |
Private banking | |||
Impaired loans by class of loans | |||
Unpaid principal balance, with no related allowance for loan losses recorded | 1,245 | ||
Recorded investment, with no related allowance for loan losses recorded | 1,245 | ||
C&I lending | |||
Impaired loans by class of loans | |||
Average recorded investment, with no related allowance for loan losses recorded | 67 | ||
Interest Income Recognized, with no related allowance for loan losses recorded | 5 | ||
Cash Basis Interest Recognized, with no related allowance for loan losses recorded | 5 | ||
Residential real estate | Real estate loan, first mortgage | |||
Impaired loans by class of loans | |||
Unpaid principal balance, with no related allowance for loan losses recorded | 116 | 125 | |
Unpaid principal balance, with an allowance for loan losses recorded | 114 | 116 | 254 |
Recorded investment, with no related allowance for loan losses recorded | 94 | 98 | |
Recorded investment, with an allowance for loan losses recorded | 114 | 117 | 228 |
Allowance for Loan Losses | 41 | 43 | 46 |
Average recorded investment, with no related allowance for loan losses recorded | 96 | 104 | |
Average recorded investment, with an allowance for loan losses recorded | 116 | 118 | 148 |
Interest Income Recognized, with an allowance for loan losses recorded | 5 | 5 | 5 |
Cash Basis Interest Recognized, with an allowance for loan losses recorded | 4 | 5 | 4 |
Commercial real estate | Real estate loan, Retail | |||
Impaired loans by class of loans | |||
Unpaid principal balance, with no related allowance for loan losses recorded | 1,247 | 1,308 | 1,370 |
Recorded investment, with no related allowance for loan losses recorded | 1,029 | 1,100 | 1,174 |
Average recorded investment, with no related allowance for loan losses recorded | 1,065 | 1,136 | 1,210 |
Interest Income Recognized, with no related allowance for loan losses recorded | 58 | 60 | 64 |
Cash Basis Interest Recognized, with no related allowance for loan losses recorded | 48 | 55 | 58 |
Commercial real estate | Real estate loan, Multifamily | |||
Impaired loans by class of loans | |||
Unpaid principal balance, with no related allowance for loan losses recorded | 1,088 | ||
Recorded investment, with no related allowance for loan losses recorded | 1,083 | ||
Average recorded investment, with no related allowance for loan losses recorded | 449 | 812 | |
Interest Income Recognized, with no related allowance for loan losses recorded | 12 | 37 | |
Cash Basis Interest Recognized, with no related allowance for loan losses recorded | 12 | 33 | |
Commercial real estate | Real estate loan, Offices | |||
Impaired loans by class of loans | |||
Unpaid principal balance, with an allowance for loan losses recorded | 1,530 | ||
Recorded investment, with an allowance for loan losses recorded | 1,522 | ||
Allowance for Loan Losses | 30 | ||
Average recorded investment, with no related allowance for loan losses recorded | 378 | ||
Average recorded investment, with an allowance for loan losses recorded | 1,538 | ||
Interest Income Recognized, with no related allowance for loan losses recorded | 25 | ||
Interest Income Recognized, with an allowance for loan losses recorded | 88 | ||
Cash Basis Interest Recognized, with no related allowance for loan losses recorded | 25 | ||
Cash Basis Interest Recognized, with an allowance for loan losses recorded | 80 | ||
Commercial real estate | Hotels/SROs | |||
Impaired loans by class of loans | |||
Unpaid principal balance, with no related allowance for loan losses recorded | 11,428 | ||
Unpaid principal balance, with an allowance for loan losses recorded | 8,645 | ||
Recorded investment, with no related allowance for loan losses recorded | 11,419 | ||
Recorded investment, with an allowance for loan losses recorded | 8,526 | ||
Allowance for Loan Losses | 287 | ||
Average recorded investment, with no related allowance for loan losses recorded | 5,221 | ||
Average recorded investment, with an allowance for loan losses recorded | 3,858 | ||
Construction | |||
Impaired loans by class of loans | |||
Unpaid principal balance, with no related allowance for loan losses recorded | 42,669 | 17,156 | 4,751 |
Unpaid principal balance, with an allowance for loan losses recorded | 6,920 | 2,661 | |
Recorded investment, with no related allowance for loan losses recorded | 41,951 | 17,112 | 4,751 |
Recorded investment, with an allowance for loan losses recorded | 6,920 | 2,661 | |
Allowance for Loan Losses | 1,905 | 78 | |
Average recorded investment, with no related allowance for loan losses recorded | 29,395 | 6,682 | 3,563 |
Average recorded investment, with an allowance for loan losses recorded | 6,189 | 1,996 | |
Interest Income Recognized, with no related allowance for loan losses recorded | 964 | 582 | 301 |
Interest Income Recognized, with an allowance for loan losses recorded | 255 | 163 | |
Cash Basis Interest Recognized, with no related allowance for loan losses recorded | 744 | 575 | 230 |
Cash Basis Interest Recognized, with an allowance for loan losses recorded | 226 | 144 | |
Commercial lines of credit | Private banking | |||
Impaired loans by class of loans | |||
Unpaid principal balance, with an allowance for loan losses recorded | 124 | 132 | 316 |
Recorded investment, with an allowance for loan losses recorded | 124 | 132 | 316 |
Allowance for Loan Losses | 4 | 5 | 95 |
Average recorded investment, with no related allowance for loan losses recorded | 1,505 | ||
Average recorded investment, with an allowance for loan losses recorded | 128 | 136 | 330 |
Interest Income Recognized, with no related allowance for loan losses recorded | 42 | ||
Interest Income Recognized, with an allowance for loan losses recorded | 7 | 7 | 19 |
Cash Basis Interest Recognized, with no related allowance for loan losses recorded | 35 | ||
Cash Basis Interest Recognized, with an allowance for loan losses recorded | 6 | $ 7 | 16 |
Commercial lines of credit | C&I lending | |||
Impaired loans by class of loans | |||
Unpaid principal balance, with no related allowance for loan losses recorded | 3,857 | ||
Unpaid principal balance, with an allowance for loan losses recorded | 100 | ||
Recorded investment, with no related allowance for loan losses recorded | 3,857 | ||
Recorded investment, with an allowance for loan losses recorded | 100 | ||
Allowance for Loan Losses | 100 | ||
Average recorded investment, with no related allowance for loan losses recorded | $ 1,184 | ||
Average recorded investment, with an allowance for loan losses recorded | 75 | ||
Interest Income Recognized, with an allowance for loan losses recorded | 5 | ||
Cash Basis Interest Recognized, with an allowance for loan losses recorded | $ 4 |
Loans - Investment in Nonaccrua
Loans - Investment in Nonaccrual and Loans Past Due Still Accruing by Class of Loans (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Nonaccrual | $ 86,424 | $ 14,732 |
Loans Past Due Over 90 Days Still Accruing | 46 | 50 |
Total Past Due | 155,261 | 78,260 |
Loans Not Past Due | 2,351,482 | 2,835,000 |
Total Loans | 2,506,743 | 2,913,260 |
30 - 59 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 51,619 | 58,071 |
60 - 89 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 17,172 | 5,407 |
Greater than 89 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 86,470 | 14,782 |
Residential real estate | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Loans | 2,033,526 | 2,476,866 |
Residential real estate | Real estate loan, first mortgage | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Nonaccrual | 20,043 | 14,482 |
Loans Past Due Over 90 Days Still Accruing | 46 | 50 |
Total Past Due | 72,432 | 55,756 |
Loans Not Past Due | 1,943,602 | 2,396,800 |
Total Loans | 2,016,034 | 2,452,556 |
Residential real estate | Real estate loan, first mortgage | 30 - 59 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 37,819 | 36,112 |
Residential real estate | Real estate loan, first mortgage | 60 - 89 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 14,524 | 5,112 |
Residential real estate | Real estate loan, first mortgage | Greater than 89 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 20,089 | 14,532 |
Residential real estate | Real estate loan, second mortgage | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Nonaccrual | 686 | 210 |
Total Past Due | 1,182 | 602 |
Loans Not Past Due | 16,310 | 23,708 |
Total Loans | 17,492 | 24,310 |
Residential real estate | Real estate loan, second mortgage | 30 - 59 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 362 | 97 |
Residential real estate | Real estate loan, second mortgage | 60 - 89 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 134 | 295 |
Residential real estate | Real estate loan, second mortgage | Greater than 89 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 686 | 210 |
Commercial real estate | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Loans | 259,958 | 240,081 |
Commercial real estate | Real estate loan, Retail | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Nonaccrual | 20 | 40 |
Total Past Due | 1,030 | 40 |
Loans Not Past Due | 15,170 | 6,089 |
Total Loans | 16,200 | 6,129 |
Commercial real estate | Real estate loan, Retail | 30 - 59 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 1,010 | |
Commercial real estate | Real estate loan, Retail | Greater than 89 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 20 | 40 |
Commercial real estate | Real estate loan, Multifamily | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 3,835 | |
Loans Not Past Due | 75,374 | 64,873 |
Total Loans | 79,209 | 64,873 |
Commercial real estate | Real estate loan, Multifamily | 30 - 59 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 3,835 | |
Commercial real estate | Real estate loan, Offices | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Loans Not Past Due | 27,061 | 28,048 |
Total Loans | 27,061 | 28,048 |
Commercial real estate | Real estate loan, Industrial | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Loans Not Past Due | 13,186 | 14,150 |
Total Loans | 13,186 | 14,150 |
Commercial real estate | Real estate loan, Other | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Loans Not Past Due | 56,667 | 45,111 |
Total Loans | 56,667 | 45,111 |
Commercial real estate | Hotels/SROs | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Nonaccrual | 19,945 | |
Total Past Due | 19,945 | 5,605 |
Loans Not Past Due | 47,690 | 76,165 |
Total Loans | 67,635 | 81,770 |
Commercial real estate | Hotels/SROs | 30 - 59 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 5,605 | |
Commercial real estate | Hotels/SROs | Greater than 89 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 19,945 | |
Construction | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Nonaccrual | 41,873 | |
Total Past Due | 52,980 | 15,008 |
Loans Not Past Due | 153,601 | 163,368 |
Total Loans | 206,581 | 178,376 |
Construction | 30 - 59 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 8,593 | 15,008 |
Construction | 60 - 89 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 2,514 | |
Construction | Greater than 89 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 41,873 | |
Commercial lines of credit | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Loans | 6,671 | 17,903 |
Commercial lines of credit | Private banking | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Nonaccrual | 2,285 | |
Total Past Due | 2,285 | |
Loans Not Past Due | 124 | 11,914 |
Total Loans | 2,409 | 11,914 |
Commercial lines of credit | Private banking | Greater than 89 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 2,285 | |
Commercial lines of credit | C&I lending | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Nonaccrual | 1,572 | |
Total Past Due | 1,572 | 1,249 |
Loans Not Past Due | 2,690 | 4,740 |
Total Loans | 4,262 | 5,989 |
Commercial lines of credit | C&I lending | 30 - 59 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 1,249 | |
Commercial lines of credit | C&I lending | Greater than 89 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 1,572 | |
Other consumer | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Loans Not Past Due | 7 | 34 |
Total Loans | $ 7 | $ 34 |
Loans - Troubled Debt Restructu
Loans - Troubled Debt Restructurings (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($)loan | Dec. 31, 2019USD ($)loan | |
Troubled Debt Restructurings | ||
Loans classified as troubled debt restructurings | $ 28,347 | $ 13,718 |
Allowance for outstanding loan losses classified as troubled debt restructurings | 1,951 | 48 |
Accrued interest receivable under the CARES Act COVID-19 forbearance program | $ 146 | |
Loans that remain in payment deferral under the CARES Act COVID-19 forbearance program | 15,785 | |
Loans amount modified under the CARES Act COVID-19 forbearance program | $ 132,830 | |
Private banking | ||
Troubled Debt Restructurings | ||
Number of loans modified during the period, that were considered as TDRs | loan | 1 | |
Real estate loan, first mortgage | ||
Troubled Debt Restructurings | ||
Loans classified as troubled debt restructurings | $ 209 | 215 |
Allowance for outstanding loan losses classified as troubled debt restructurings | 41 | 43 |
Real estate loan, Retail | ||
Troubled Debt Restructurings | ||
Loans classified as troubled debt restructurings | 1,029 | 1,110 |
Residential real estate | ||
Troubled Debt Restructurings | ||
Loans secured by residential real estate properties in the process of foreclosure | 5,320 | 1,643 |
Construction | ||
Troubled Debt Restructurings | ||
Loans classified as troubled debt restructurings | 26,985 | $ 12,261 |
Allowance for outstanding loan losses classified as troubled debt restructurings | 1,906 | |
Value of loans subsequently defaulted | $ 19,987 | |
Number of loans modified during the period, that were considered as TDRs | loan | 3 | 3 |
Financing Receivable, Troubled Debt Restructuring, Subsequent Default | $ 19,987 | |
Number of TDRs subsequently defaulted | loan | 5 | |
Construction | Pre and Post Modification | ||
Troubled Debt Restructurings | ||
Loans classified as troubled debt restructurings | $ 11,214 | |
Construction loans and private banking loan | Pre and Post Modification | ||
Troubled Debt Restructurings | ||
Loans classified as troubled debt restructurings | $ 13,777 | |
Commercial lines of credit and private banking | ||
Troubled Debt Restructurings | ||
Loans classified as troubled debt restructurings | 124 | 132 |
Allowance for outstanding loan losses classified as troubled debt restructurings | $ 4 | $ 5 |
Loans - Risk Rating of Loans by
Loans - Risk Rating of Loans by Class of Loans (Details) - USD ($) $ in Thousands | 1 Months Ended | 7 Months Ended | 12 Months Ended | ||
May 31, 2020 | Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Recorded investment in loans | |||||
Total | $ 2,506,743 | $ 2,506,743 | $ 2,913,260 | ||
Portfolio loans sold during the period | 173,382 | $ 475,646 | |||
Gain on sale of portfolio loans | 5,970 | 16,433 | |||
Unpaid principal balance | 2,434,356 | 2,434,356 | 2,891,530 | ||
Other Noninterest Expense | 5,741 | 7,342 | 7,220 | ||
Charge offs to allowance for loan losses | 4,301 | 176 | 4 | ||
Advantage Loan Program | |||||
Recorded investment in loans | |||||
Outstanding principal balance of loans repurchased | $ 38,704 | 30,934 | 69,638 | ||
Unpaid principal balance | 429,816 | 429,816 | 670,243 | ||
Other Noninterest Expense | $ 136 | 135 | 271 | ||
Pass | |||||
Recorded investment in loans | |||||
Total | 2,308,592 | 2,308,592 | 2,821,683 | ||
Special Mention | |||||
Recorded investment in loans | |||||
Total | 59,668 | 59,668 | 44,247 | ||
Substandard | |||||
Recorded investment in loans | |||||
Total | 131,469 | 131,469 | 46,875 | ||
Doubtful | |||||
Recorded investment in loans | |||||
Total | 7,014 | 7,014 | 455 | ||
Residential real estate | |||||
Recorded investment in loans | |||||
Total | 2,033,526 | 2,033,526 | 2,476,866 | ||
Unpaid principal balance | 562,139 | 562,139 | 759,568 | ||
Charge offs to allowance for loan losses | 3,594 | $ 4 | |||
Residential real estate | Real estate loan, first mortgage | |||||
Recorded investment in loans | |||||
Total | 2,016,034 | 2,016,034 | 2,452,556 | ||
Residential real estate | Real estate loan, second mortgage | |||||
Recorded investment in loans | |||||
Total | 17,492 | 17,492 | 24,310 | ||
Residential real estate | Pass | Real estate loan, first mortgage | |||||
Recorded investment in loans | |||||
Total | 1,995,945 | 1,995,945 | 2,438,024 | ||
Residential real estate | Pass | Real estate loan, second mortgage | |||||
Recorded investment in loans | |||||
Total | 16,806 | 16,806 | 24,100 | ||
Residential real estate | Substandard | Real estate loan, first mortgage | |||||
Recorded investment in loans | |||||
Total | 19,995 | 19,995 | 14,077 | ||
Residential real estate | Substandard | Real estate loan, second mortgage | |||||
Recorded investment in loans | |||||
Total | 686 | 686 | 210 | ||
Residential real estate | Doubtful | Real estate loan, first mortgage | |||||
Recorded investment in loans | |||||
Total | 94 | 94 | 455 | ||
Nonaccrual residential real estate loans | |||||
Recorded investment in loans | |||||
Unpaid principal balance | 19,375 | 19,375 | |||
Charge offs to allowance for loan losses | 3,486 | ||||
Commercial real estate | |||||
Recorded investment in loans | |||||
Total | 259,958 | 259,958 | 240,081 | ||
Commercial real estate | Real estate loan, Retail | |||||
Recorded investment in loans | |||||
Total | 16,200 | 16,200 | 6,129 | ||
Commercial real estate | Real estate loan, Multifamily | |||||
Recorded investment in loans | |||||
Total | 79,209 | 79,209 | 64,873 | ||
Commercial real estate | Real estate loan, Offices | |||||
Recorded investment in loans | |||||
Total | 27,061 | 27,061 | 28,048 | ||
Commercial real estate | Real estate loan, Industrial | |||||
Recorded investment in loans | |||||
Total | 13,186 | 13,186 | 14,150 | ||
Commercial real estate | Real estate loan, Other | |||||
Recorded investment in loans | |||||
Total | 56,667 | 56,667 | 45,111 | ||
Commercial real estate | Hotels/SROs | |||||
Recorded investment in loans | |||||
Total | 67,635 | 67,635 | 81,770 | ||
Commercial real estate | Pass | Real estate loan, Retail | |||||
Recorded investment in loans | |||||
Total | 13,599 | 13,599 | 4,195 | ||
Commercial real estate | Pass | Real estate loan, Multifamily | |||||
Recorded investment in loans | |||||
Total | 55,772 | 55,772 | 56,164 | ||
Commercial real estate | Pass | Real estate loan, Offices | |||||
Recorded investment in loans | |||||
Total | 12,014 | 12,014 | 24,484 | ||
Commercial real estate | Pass | Real estate loan, Industrial | |||||
Recorded investment in loans | |||||
Total | 5,867 | 5,867 | 5,894 | ||
Commercial real estate | Pass | Real estate loan, Other | |||||
Recorded investment in loans | |||||
Total | 43,193 | 43,193 | 37,693 | ||
Commercial real estate | Pass | Hotels/SROs | |||||
Recorded investment in loans | |||||
Total | 9,115 | 9,115 | 60,074 | ||
Commercial real estate | Special Mention | Real estate loan, Retail | |||||
Recorded investment in loans | |||||
Total | 1,572 | 1,572 | 834 | ||
Commercial real estate | Special Mention | Real estate loan, Multifamily | |||||
Recorded investment in loans | |||||
Total | 14,238 | 14,238 | 7,150 | ||
Commercial real estate | Special Mention | Real estate loan, Offices | |||||
Recorded investment in loans | |||||
Total | 1,623 | 1,623 | 645 | ||
Commercial real estate | Special Mention | Real estate loan, Industrial | |||||
Recorded investment in loans | |||||
Total | 8,256 | ||||
Commercial real estate | Special Mention | Real estate loan, Other | |||||
Recorded investment in loans | |||||
Total | 7,732 | 7,732 | 920 | ||
Commercial real estate | Special Mention | Hotels/SROs | |||||
Recorded investment in loans | |||||
Total | 17,984 | 17,984 | 18,189 | ||
Commercial real estate | Substandard | Real estate loan, Retail | |||||
Recorded investment in loans | |||||
Total | 1,029 | 1,029 | 1,100 | ||
Commercial real estate | Substandard | Real estate loan, Multifamily | |||||
Recorded investment in loans | |||||
Total | 9,199 | 9,199 | 1,559 | ||
Commercial real estate | Substandard | Real estate loan, Offices | |||||
Recorded investment in loans | |||||
Total | 13,424 | 13,424 | 2,919 | ||
Commercial real estate | Substandard | Real estate loan, Industrial | |||||
Recorded investment in loans | |||||
Total | 7,319 | 7,319 | |||
Commercial real estate | Substandard | Real estate loan, Other | |||||
Recorded investment in loans | |||||
Total | 5,742 | 5,742 | 6,498 | ||
Commercial real estate | Substandard | Hotels/SROs | |||||
Recorded investment in loans | |||||
Total | 40,536 | 40,536 | 3,507 | ||
Construction | |||||
Recorded investment in loans | |||||
Total | 206,581 | 206,581 | 178,376 | ||
Charge offs to allowance for loan losses | 707 | ||||
Construction | Pass | |||||
Recorded investment in loans | |||||
Total | 152,577 | 152,577 | 156,339 | ||
Construction | Special Mention | |||||
Recorded investment in loans | |||||
Total | 14,234 | 14,234 | 7,008 | ||
Construction | Substandard | |||||
Recorded investment in loans | |||||
Total | 32,850 | 32,850 | 15,029 | ||
Construction | Doubtful | |||||
Recorded investment in loans | |||||
Total | 6,920 | 6,920 | |||
Commercial lines of credit | |||||
Recorded investment in loans | |||||
Total | 6,671 | 6,671 | 17,903 | ||
Charge offs to allowance for loan losses | 176 | ||||
Commercial lines of credit | Private banking | |||||
Recorded investment in loans | |||||
Total | 2,409 | 2,409 | 11,914 | ||
Commercial lines of credit | C&I lending | |||||
Recorded investment in loans | |||||
Total | 4,262 | 4,262 | 5,989 | ||
Commercial lines of credit | Pass | Private banking | |||||
Recorded investment in loans | |||||
Total | 124 | 124 | 10,669 | ||
Commercial lines of credit | Pass | C&I lending | |||||
Recorded investment in loans | |||||
Total | 3,573 | 3,573 | 4,013 | ||
Commercial lines of credit | Special Mention | Private banking | |||||
Recorded investment in loans | |||||
Total | 2,285 | 2,285 | 1,245 | ||
Commercial lines of credit | Substandard | C&I lending | |||||
Recorded investment in loans | |||||
Total | 689 | 689 | 1,976 | ||
Other consumer | |||||
Recorded investment in loans | |||||
Total | 7 | 7 | 34 | ||
Other consumer | Pass | |||||
Recorded investment in loans | |||||
Total | $ 7 | $ 7 | $ 34 |
Leasehold Improvements and Eq_3
Leasehold Improvements and Equipment, net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Leasehold Improvements and Equipment, net | |||
Leasehold improvements and equipment, gross | $ 25,620 | $ 24,901 | |
Less: accumulated depreciation and amortization | (17,108) | (15,703) | |
Leasehold improvements and equipment, net | 8,512 | 9,198 | |
Depreciation and amortization on leasehold improvements and equipment | 1,608 | 1,621 | $ 1,399 |
Leasehold improvements | |||
Leasehold Improvements and Equipment, net | |||
Leasehold improvements and equipment, gross | 11,259 | 10,920 | |
Furniture and equipment | |||
Leasehold Improvements and Equipment, net | |||
Leasehold improvements and equipment, gross | $ 14,361 | $ 13,981 | |
Minimum | Furniture and equipment | |||
Leasehold Improvements and Equipment, net | |||
Estimated Useful Life (in years) | 3 | ||
Maximum | Furniture and equipment | |||
Leasehold Improvements and Equipment, net | |||
Estimated Useful Life (in years) | 7 |
Mortgage Servicing Rights, ne_2
Mortgage Servicing Rights, net - Principle Balance by Category (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Mortgage Servicing Rights | ||
Total | $ 666,030 | $ 873,238 |
Custodial escrow balances maintained on serviced loans | 6,051 | 7,688 |
FNMA | ||
Mortgage Servicing Rights | ||
Total | 171,553 | 130,425 |
FHLB | ||
Mortgage Servicing Rights | ||
Total | 64,661 | 86,778 |
Private investors | ||
Mortgage Servicing Rights | ||
Total | $ 429,816 | $ 656,035 |
Mortgage Servicing Rights, ne_3
Mortgage Servicing Rights, net - Activity and Related Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Mortgage servicing rights activity | |||
Mortgage servicing rights Beginning of year | $ 10,845 | $ 10,733 | $ 6,706 |
Additions | 713 | 2,964 | 6,052 |
Amortization | (3,705) | (2,852) | (2,025) |
Mortgage servicing rights End of year | 7,853 | 10,845 | 10,733 |
Valuation allowance at beginning of year | 1,080 | 100 | 210 |
Additions (recoveries) | 1,085 | 980 | (110) |
Valuation allowance at end of year | 2,165 | 1,080 | 100 |
Mortgage servicing rights, net | 5,688 | 9,765 | 10,633 |
Servicing fee income, net of amortization of servicing rights and changes in valuation allowance | $ (1,324) | $ 238 | $ 1,381 |
Mortgage Servicing Rights, ne_4
Mortgage Servicing Rights, net - Valuation techniques (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Mortgage Servicing Rights | ||
Fair value of mortgage servicing rights | $ 5,841 | $ 10,271 |
Weighted average default rate | 0.20% | |
Minimum | ||
Mortgage Servicing Rights | ||
Discount rate range | 9.50% | 9.50% |
Maximum | ||
Mortgage Servicing Rights | ||
Discount rate range | 12.00% | 12.00% |
Weighted Average | ||
Mortgage Servicing Rights | ||
Prepayment speed range | 22.50% | 20.10% |
Weighted average life of the mortgage servicing right | 43 months | 52 months |
Weighted average default rate | 0.20% |
Deposits - Time deposits (Detai
Deposits - Time deposits (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deposits | ||
Interest-bearing time deposits | $ 1,646,523 | $ 1,154,076 |
Brokered time deposits | 42,751 | 25,000 |
Time deposits that meet or exceed the FDIC insurance limit of $250 | $ 487,340 | $ 283,457 |
Deposits - Scheduled maturities
Deposits - Scheduled maturities of time deposits (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Scheduled maturities of time deposits | |
2021 | $ 1,258,983 |
2022 | 297,971 |
2023 | 69,162 |
2024 | 9,126 |
2025 | 11,281 |
Total | $ 1,646,523 |
FHLB Borrowings (Details)
FHLB Borrowings (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Federal Home Loan Bank Borrowings | ||
Long-term fixed rate advances | $ 318,000 | $ 229,000 |
Minimum | Long term | ||
Federal Home Loan Bank Borrowings | ||
FHLB interest rates (as a percent) | 0.43% | 1.07% |
Maximum | Long term | ||
Federal Home Loan Bank Borrowings | ||
FHLB interest rates (as a percent) | 1.96% | 1.96% |
FHLB Borrowings - FHLB Advances
FHLB Borrowings - FHLB Advances (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Federal Home Loan Bank Borrowings | |
Total FHLB advances | $ 318,000 |
Additional borrowing capacity | 120,797 |
Callable Option | |
Federal Home Loan Bank Borrowings | |
Total FHLB advances | 307,000 |
Callable Option February, 2021 | |
Federal Home Loan Bank Borrowings | |
Total FHLB advances | 100,000 |
Callable Option September, 2021 | |
Federal Home Loan Bank Borrowings | |
Total FHLB advances | 67,000 |
Callable Option October, 2021 | |
Federal Home Loan Bank Borrowings | |
Total FHLB advances | 90,000 |
Callable Option May, 2024 | |
Federal Home Loan Bank Borrowings | |
Total FHLB advances | $ 50,000 |
FHLB Borrowings - Contractual a
FHLB Borrowings - Contractual annual maturities of FHLB advances (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Contractual annual maturities of FHLB advances | |
2021 | $ 11,000 |
Thereafter | 307,000 |
Total FHLB advances | $ 318,000 |
FHLB Borrowings - FHLB Overdraf
FHLB Borrowings - FHLB Overdraft Line of Credit (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
FHLB Borrowings | ||
FHLB line of credit agreement maximum borrowing limit | $ 50,000 | |
FHLB overdraft line of credit average borrowings outstanding | 18 | $ 2,008 |
FHLB overdraft line of credit | $ 0 | $ 0 |
FHLB overdraft line of credit (as percent) | 0.46% | 1.99% |
FHLB, agreement term | 1 year |
FHLB Borrowings - Other Borrowi
FHLB Borrowings - Other Borrowings (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Other Borrowings | ||
Outstanding balance | $ 0 | $ 0 |
Other Banks | ||
Other Borrowings | ||
Maximum borrowing capacity | $ 100,000 | $ 70,000 |
Subordinated Notes, net (Detail
Subordinated Notes, net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Subordinated Notes | |||
Total | $ 65,341 | $ 65,179 | |
Interest expense | 4,713 | 4,701 | $ 4,689 |
Subordinated notes | |||
Subordinated Notes | |||
7.0% fixed to floating rate subordinated notes | 65,000 | 65,000 | |
Unamortized note premium | 411 | 474 | |
Unamortized debt issuance costs | (70) | (295) | |
Total | $ 65,341 | 65,179 | |
Interest rate (as a percent) | 7.00% | ||
Interest expense | $ 4,713 | $ 4,701 | $ 4,689 |
Redemption price percentage of outstanding principal amount | 100.00% | ||
LIBOR | Subordinated notes | |||
Subordinated Notes | |||
Variable interest rate on subordinate notes (in percent) | 5.82% |
Stock Repurchase Program (Detai
Stock Repurchase Program (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock Repurchase Program | |||
Shares repurchased and cancelled, value | $ 82 | $ 30,349 | |
Common stock | |||
Stock Repurchase Program | |||
Shares repurchased and canceled | 10,912 | 3,134,806 | |
Shares repurchased and cancelled, value | $ 82 | $ 30,349 | |
Average repurchase price (in dollars per share) | $ 7.57 | $ 9.68 | |
Common stock repurchases remaining value | $ 19,568 | ||
Maximum | Common stock | |||
Stock Repurchase Program | |||
Stock repurchase program authorized amount | $ 50,000 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020USD ($)Vote$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / shares | |
Shareholders' Equity | |||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | |
Number of votes | Vote | 1 | ||
Dividends paid per common share (in dollars per share) | $ / shares | $ 0.01 | $ 0.04 | $ 0.04 |
Dividends distributed | $ | $ 499 | $ 2,044 | $ 2,119 |
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 | |
Common stock | |||
Shareholders' Equity | |||
Common stock, shares authorized | 500,000,000 | 500,000,000 | |
Common stock, par value (in dollars per share) | $ / shares | $ 0 | $ 0 |
Stock-based Compensation (Detai
Stock-based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 05, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Grant Date Fair Value of Restricted Stock that Vested During the year | ||||
Vested | $ 100 | $ 214 | ||
Key employee | ||||
Stock-based Compensation | ||||
Number of share instruments issued | 67,361 | 84,889 | 92,625 | |
Non-employee directors Restricted Stock Awards | ||||
Stock-based Compensation | ||||
Number of share instruments issued | 300,000 | |||
Exercise price | $ 4 | |||
Weighted Average Exercise Price | ||||
Granted | $ 4 | |||
2017 Omnibus Equity Incentive Plan | ||||
Stock-based Compensation | ||||
Number of shares authorized | 4,237,100 | |||
2017 Omnibus Equity Incentive Plan | Stock options | ||||
Stock-based Compensation | ||||
Maximum term of stock awards granted | 10 years | |||
Exercise price | $ 4.57 | |||
Weighted average grant-date fair value | $ 1.29 | $ 3.20 | $ 4.56 | |
Number of awards granted | 367,361 | |||
Fair value assumptions used in Black-Scholes option pricing model | ||||
Risk-free interest rate | 0.49% | 2.66% | 2.80% | |
Expected term (in years) | 5 years 7 months 9 days | 6 years 9 months | 6 years 9 months | |
Expected stock price volatility | 33.91% | 26.26% | 23.70% | |
Dividend yield | 0.10% | 0.40% | 0.29% | |
Number of Shares | ||||
Outstanding at January 1, 2020 | 142,477 | |||
Granted | 367,361 | |||
Forfeited/expired | (131,956) | |||
Outstanding at December 31, 2020 | 377,882 | 142,477 | ||
Weighted Average Exercise Price | ||||
Outstanding at January 1, 2020 | $ 12.29 | |||
Granted | 4.57 | |||
Forfeited/expired | 9.93 | |||
Outstanding at December 31, 2020 | $ 5.61 | $ 12.29 | ||
Weighted Average Remaining Contractual Term | ||||
Weighted Average Remaining Contractual Term (Years) | 9 years 1 month 2 days | 8 years 7 months 6 days | ||
Stock-based compensation costs recognized | $ 200 | $ 137 | $ 82 | |
Total unrecognized compensation cost - stock options | $ 237 | |||
Unrecognized compensation cost related to nonvested awards, expected to be recognized over a weighted-average period | 1 year 1 month 24 days | |||
Number of options exercisable | 0 | |||
2017 Omnibus Equity Incentive Plan | Stock options | Awards vesting at the end of the third year | ||||
Stock-based Compensation | ||||
Percentage of awards vesting | 50.00% | |||
2017 Omnibus Equity Incentive Plan | Stock options | Awards vesting at the end of the fourth year | ||||
Stock-based Compensation | ||||
Percentage of awards vesting | 50.00% | |||
2017 Omnibus Equity Incentive Plan | Restricted stock | ||||
Weighted Average Remaining Contractual Term | ||||
Stock-based compensation costs recognized | $ 134 | $ 360 | $ 215 | |
Total unrecognized compensation cost - restricted stock awards | $ 686 | |||
Unrecognized compensation cost related to nonvested awards, expected to be recognized over a weighted-average period | 2 years 1 month 28 days | |||
Number of Shares | ||||
Nonvested, Opening balance | 100,096 | |||
Granted | 151,874 | |||
Vested | (10,460) | |||
Forfeited | (103,574) | |||
Nonvested, Ending balance | 137,936 | 100,096 | ||
Weighted Average Grant Date Fair Value | ||||
Nonvested, Opening balance | $ 11.02 | |||
Granted | 6.91 | |||
Vested | 9.52 | |||
Forfeited | 9.12 | |||
Nonvested, Ending balance | $ 7.90 | $ 11.02 | ||
2017 Omnibus Equity Incentive Plan | Restricted stock | Key employee | ||||
Stock-based Compensation | ||||
Number of share instruments issued | 151,874 | 71,144 | ||
2017 Omnibus Equity Incentive Plan | Restricted stock | Key employee | Awards vesting at the end of the third year | ||||
Stock-based Compensation | ||||
Percentage of awards vesting | 50.00% | |||
2017 Omnibus Equity Incentive Plan | Restricted stock | Key employee | Awards vesting at the end of the fourth year | ||||
Stock-based Compensation | ||||
Percentage of awards vesting | 50.00% | |||
2017 Omnibus Equity Incentive Plan | Restricted stock | Non-employee directors Restricted Stock Awards | ||||
Stock-based Compensation | ||||
Number of share instruments issued | 10,460 | |||
2017 Omnibus Equity Incentive Plan | Restricted stock | Non-employee directors Restricted Stock Awards | Awards vesting on the first anniversary of the grant date | ||||
Stock-based Compensation | ||||
Percentage of awards vesting | 100.00% | |||
2020 Omnibus Equity Incentive Plan | ||||
Stock-based Compensation | ||||
Number of shares authorized | 3,979,661 | |||
Number of shares granted | 0 |
Income (Loss) Per Share (Detail
Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Numerator: | |||
Net income (loss) | $ (12,967) | $ 29,248 | $ 63,468 |
Denominator: | |||
Weighted average common shares outstanding, basic | 49,840,882 | 51,115,986 | 52,963,308 |
Weighted average effect of potentially dilutive common shares: | |||
Weighted average common shares outstanding, diluted | 49,840,882 | 51,127,879 | 52,965,567 |
Income (loss) per share: | |||
Basic (in dollars per share) | $ (0.26) | $ 0.57 | $ 1.20 |
Diluted (in dollars per share) | $ (0.26) | $ 0.57 | $ 1.20 |
Common stock | |||
Income (loss) per share: | |||
Securities excluded from the computation of weighted average diluted shares outstanding as inclusion of such items would be anti-dilutive | 525,855 | 195,931 | 92,625 |
Common stock | Stock options | |||
Income (loss) per share: | |||
Securities excluded from the computation of weighted average diluted shares outstanding as inclusion of such items would be anti-dilutive | 359,234 | 167,255 | 92,625 |
Common stock | Restricted stock | |||
Weighted average effect of potentially dilutive common shares: | |||
Incremental shares from share-based compensation | 11,893 | 2,259 | |
Income (loss) per share: | |||
Securities excluded from the computation of weighted average diluted shares outstanding as inclusion of such items would be anti-dilutive | 166,621 | 28,676 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020USD ($)employee | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Employee Benefit Plans | |||
Employer matching contribution, as a percent of employee's contribution | 100.00% | ||
Percentage of employee's contribution or deferred contribution that will be matched by employer | 3.00% | ||
Percentage of employee's base salary that will be matched by employer | 3.00% | ||
Maximum percentage of additional contribution in-excess of employee match | 1.00% | ||
Amount of contributions to the plan | $ 256 | $ 758 | $ 773 |
Executive Incentive Retirement Plan Agreement | |||
Employee Benefit Plans | |||
Number of employees | employee | 6 | ||
Retirement obligation liability | $ 3,016 | 3,157 | |
Retirement benefit plan expense, net of forfeitures | (141) | 290 | 273 |
Spilt Dollar Life Insurance Agreement | |||
Employee Benefit Plans | |||
Postretirement benefit estimated present value | $ 4,347 | 4,340 | |
Retirement benefit plan, benefit payments | $ 31 | $ 28 |
Fair Values of Financial Inst_3
Fair Values of Financial Instruments - Assets measured at fair value on a recurring basis (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | $ 299,594 | $ 147,289 |
Equity securities | ||
Equity securities | 5,118 | 5,009 |
U.S. Treasury securities | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 122,803 | |
U.S. Treasury securities | Recurring | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 122,803 | |
U.S. Treasury securities | Level 1 | Recurring | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 122,803 | |
U.S. Treasury & Agency securities | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 138,997 | |
U.S. Treasury & Agency securities | Recurring | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 138,997 | |
U.S. Treasury & Agency securities | Level 1 | Recurring | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 40,192 | |
U.S. Treasury & Agency securities | Level 2 | Recurring | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 98,805 | |
Mortgage-backed securities | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 33,814 | 23,104 |
Mortgage-backed securities | Recurring | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 33,814 | |
Mortgage-backed securities | Level 2 | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 23,104 | |
Mortgage-backed securities | Level 2 | Recurring | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 33,814 | |
Collateralized mortgage obligations | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 126,596 | 1,183 |
Collateralized mortgage obligations | Recurring | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 126,596 | 1,183 |
Collateralized mortgage obligations | Level 2 | Recurring | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 126,596 | 1,183 |
Collateralized debt obligations | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 187 | 199 |
Collateralized debt obligations | Recurring | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 187 | 199 |
Collateralized debt obligations | Level 3 | Recurring | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 187 | 199 |
Equity securities | Recurring | ||
Equity securities | ||
Equity securities | 5,118 | 5,009 |
Equity securities | Level 1 | Recurring | ||
Equity securities | ||
Equity securities | $ 5,118 | $ 5,009 |
Fair Values of Financial Inst_4
Fair Values of Financial Instruments - Reconciliation and income statement classification using Level 3 inputs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Investment income | ||
Unrealized losses on investments | $ 419 | $ 18 |
Collateralized debt obligations | ||
Investment income | ||
Unrealized losses on investments | 27 | 17 |
Collateralized debt obligations | Recurring | Level 3 | ||
Reconciliation and income statement classification of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) | ||
Balance of recurring Level 3 assets at beginning of period | 199 | 297 |
Included in other comprehensive income (loss) | (10) | (6) |
Principal maturities/settlements | (2) | (92) |
Balance of recurring Level 3 assets at end of period | 187 | 199 |
Investment income | ||
Unrealized losses on investments | 27 | 17 |
Interest income | $ 7 | $ 13 |
Fair Values of Financial Inst_5
Fair Values of Financial Instruments - Assets Measured at Fair Value on a Non Recurring Basis and Fair Value of Financial Instruments (Details) $ in Thousands | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Financial Assets | ||
Interest-bearing time deposits with other banks | $ 7,021 | $ 1,025 |
Nonrecurring | Impaired loans, construction | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value on a non-recurring basis | 5,015 | |
Nonrecurring | Impaired loans, construction | Level 3 | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value on a non-recurring basis | 5,015 | |
Nonrecurring | Impaired loans, construction | Level 3 | Hybrid of sales comparison and income capitalization approaches | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value on a non-recurring basis | $ 5,015 | |
Nonrecurring | Impaired loans, construction | Weighted Average | Level 3 | Hybrid of sales comparison and income capitalization approaches | Adjustments for differences between the comparable sales and income data for similar loans and collateral underlying such loans | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value, measurement input | 0.15 | |
Nonrecurring | Impaired loans, commercial real estate | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value on a non-recurring basis | $ 8,240 | |
Nonrecurring | Impaired loans, commercial real estate | Level 3 | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value on a non-recurring basis | 8,240 | |
Nonrecurring | Impaired loans, commercial real estate | Level 3 | Sales comparison approach | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value on a non-recurring basis | $ 8,240 | |
Nonrecurring | Impaired loans, commercial real estate | Weighted Average | Level 3 | Sales comparison approach | Adjustments for differences between the comparable sales and income data for similar loans and collateral underlying such loans | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value, measurement input | 0.36 | |
Nonrecurring | Mortgage loans held for sale | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value on a non-recurring basis | $ 19,375 | |
Nonrecurring | Mortgage loans held for sale | Level 2 | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value on a non-recurring basis | 19,375 | |
Nonrecurring | Mortgage servicing rights | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value on a non-recurring basis | 5,175 | 7,949 |
Nonrecurring | Mortgage servicing rights | Level 3 | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value on a non-recurring basis | 5,175 | 7,949 |
Nonrecurring | Mortgage servicing rights | Level 3 | Discounted cash flow | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value on a non-recurring basis | $ 5,175 | $ 7,949 |
Nonrecurring | Mortgage servicing rights | Maximum | Level 3 | Discounted cash flow | Discount rate | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value, measurement input | 0.120 | 0.120 |
Nonrecurring | Mortgage servicing rights | Maximum | Level 3 | Discounted cash flow | Prepayment speed | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value, measurement input | 0.370 | 0.471 |
Nonrecurring | Mortgage servicing rights | Maximum | Level 3 | Discounted cash flow | Default rate | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value, measurement input | 0.002 | 0.003 |
Nonrecurring | Mortgage servicing rights | Minimum | Level 3 | Discounted cash flow | Discount rate | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value, measurement input | 0.095 | 0.095 |
Nonrecurring | Mortgage servicing rights | Minimum | Level 3 | Discounted cash flow | Prepayment speed | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value, measurement input | 0.105 | 0.072 |
Nonrecurring | Mortgage servicing rights | Minimum | Level 3 | Discounted cash flow | Default rate | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value, measurement input | 0.001 | 0.001 |
Nonrecurring | Mortgage servicing rights | Weighted Average | Level 3 | Discounted cash flow | Discount rate | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value, measurement input | 0.116 | 0.119 |
Nonrecurring | Mortgage servicing rights | Weighted Average | Level 3 | Discounted cash flow | Prepayment speed | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value, measurement input | 0.237 | 0.213 |
Nonrecurring | Mortgage servicing rights | Weighted Average | Level 3 | Discounted cash flow | Default rate | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value, measurement input | 0.002 | 0.002 |
Carrying value per balance sheet | ||
Financial Assets | ||
Cash and due from banks | $ 998,497 | $ 77,819 |
Interest-bearing time deposits with other banks | 7,021 | 1,025 |
Mortgage loans held for sale | 2,909 | 1,337 |
Loans, net | 2,434,356 | 2,891,530 |
Financial Liabilities | ||
Time deposits | 1,646,523 | 1,154,076 |
Federal Home Loan Bank borrowings | 318,000 | 229,000 |
Subordinated notes, net | 65,341 | 65,179 |
Estimated fair value | ||
Financial Assets | ||
Cash and due from banks | 998,497 | 77,819 |
Interest-bearing time deposits with other banks | 7,021 | 1,025 |
Mortgage loans held for sale | 3,052 | 1,368 |
Loans, net | 2,521,874 | 2,978,846 |
Financial Liabilities | ||
Time deposits | 1,658,020 | 1,161,490 |
Federal Home Loan Bank borrowings | 328,150 | 227,333 |
Subordinated notes, net | 65,753 | 65,650 |
Estimated fair value | Level 1 | ||
Financial Assets | ||
Cash and due from banks | 998,497 | 77,819 |
Interest-bearing time deposits with other banks | 7,021 | 1,025 |
Estimated fair value | Level 2 | ||
Financial Assets | ||
Mortgage loans held for sale | 3,052 | 1,368 |
Financial Liabilities | ||
Time deposits | 1,658,020 | 1,161,490 |
Federal Home Loan Bank borrowings | 328,150 | 227,333 |
Subordinated notes, net | 65,753 | 65,650 |
Estimated fair value | Level 3 | ||
Financial Assets | ||
Loans, net | $ 2,521,874 | $ 2,978,846 |
Income Taxes - Components of in
Income Taxes - Components of income tax (benefit) expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Current: | |||
Federal | $ 4,489 | $ 15,341 | $ 16,435 |
State | 1,908 | 6,354 | 7,979 |
Total current expense | 6,397 | 21,695 | 24,414 |
Deferred: | |||
Federal | (8,373) | (3,995) | 478 |
State | (3,933) | (2,057) | 212 |
Total deferred (benefit) expense | (12,306) | (6,052) | 690 |
Total income tax (benefit) expense | $ (5,909) | $ 15,643 | $ 25,104 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of income tax rate (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of U.S. federal statutory tax rate and effective income tax rate | |||
U.S. federal statutory rate (as a percentage) | 21.00% | 21.10% | 21.00% |
Effect of: | |||
State taxes, net of federal benefit (as a percentage) | 8.50% | 4.00% | 7.10% |
Non-deductible items | 9.50% | ||
Income on cash surrender value of bank-owned life insurance (as a percentage) | 0.60% | (0.20%) | (0.20%) |
Other, net (as a percentage) | 1.20% | 0.40% | 0.40% |
Effective tax rate (as a percentage) | 31.30% | 34.80% | 28.30% |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Allowance for loan losses | $ 20,185 | $ 6,144 |
Contingent losses | 2,834 | |
Mortgage repurchase liability | 2,705 | 2,217 |
Mark-to-market adjustments on mortgage loans held for sale | 41 | 9 |
Supplemental retirement benefit plan | 841 | 895 |
Deferred loan fee income | 158 | 268 |
State franchise tax | 503 | 1,455 |
Compensation plans | 531 | 729 |
Operating lease liabilities | 5,715 | 5,631 |
Other | 1,258 | 633 |
Total deferred tax assets | 31,937 | 20,815 |
Deferred tax liabilities: | ||
FHLB stock dividends | (120) | (122) |
Mortgage servicing rights | (1,586) | (2,768) |
Operating lease right-of-use asset | (5,363) | (5,305) |
Other | (542) | (525) |
Total deferred tax liabilities | (7,611) | (8,720) |
Deferred tax asset, net | $ 24,326 | $ 12,095 |
Income Taxes - Capital loss car
Income Taxes - Capital loss carryforward and unrecognized tax benefits (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Income Taxes | |
Capital loss carryforward | $ 1,815 |
Unrecognized tax benefits | $ 0 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Board of Directors | Charitable donation to foundation | |||
Related party transactions | |||
Amount of related party transaction, expense | $ 375 | $ 900 | $ 900 |
Controlling Shareholders | |||
Related party transactions | |||
Amount of related party transaction, expense | 12 | ||
Controlling Shareholders | Data processing and programming services provided | |||
Related party transactions | |||
Amount of related party transaction, revenue | $ 79 | $ 105 | $ 105 |
Operating Leases (Details)
Operating Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating Leases | |||
Lessee, operating lease, existence of option to extend [true false] | true | ||
Rent expense | $ 4,401 | ||
Components of lease expense | |||
Operating lease cost | $ 4,554 | $ 4,507 | |
Variable lease cost | 959 | 1,235 | |
Total | $ 5,513 | 5,742 | |
Minimum | |||
Operating Leases | |||
Renewal term (in years) | 5 years | ||
Maximum | |||
Operating Leases | |||
Renewal term (in years) | 10 years | ||
Controlling Shareholders | |||
Operating Leases | |||
Payments under leases | $ 203 | 236 | 241 |
Sublease income | $ 277 | $ 274 | $ 269 |
Operating Leases - Maturity of
Operating Leases - Maturity of lease liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Maturities of lease liabilities | ||
2021 | $ 4,186 | |
2022 | 3,421 | |
2023 | 3,180 | |
2024 | 3,119 | |
2025 | 2,884 | |
Thereafter | 5,942 | |
Total lease payments | 22,732 | |
Less: future interest costs | (2,235) | |
Present value of lease liabilities | $ 20,497 | $ 19,868 |
Operating Leases - Other Inform
Operating Leases - Other Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities | ||
Operating cash flows from operating leases | $ 4,478 | $ 4,307 |
Weighted average remaining lease term | 6 years 7 months 6 days | 6 years 9 months 29 days |
Weighted average discount rate | 3.16% | 3.54% |
Commitments and Contingencies -
Commitments and Contingencies - Unfunded Commitments to Extend Credit and Standby Letters of Credit (Details) $ in Thousands | Jul. 28, 2020item | Dec. 31, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Commitments and Contingencies | ||||
Recovery of contingent losses | $ 12,500 | |||
Loss contingency from legal proceedings | ||||
Commitments and Contingencies | ||||
Number of law firms | item | 2 | |||
Threshold period for responding to Demand letter | 90 days | |||
Loss contingency from class action lawsuit | ||||
Commitments and Contingencies | ||||
Recovery of contingent losses | 12,500 | |||
Loss contingency from Internal review of Advantage Loan Program | ||||
Commitments and Contingencies | ||||
Liability for contingent losses | $ 27,500 | 27,500 | $ 25,000 | |
Increase in liability for contingent losses | $ 2,500 | |||
Unfunded Commitments to Extend Credit | Residential real estate | ||||
Commitments and Contingencies | ||||
Outstanding commitments regarding fixed rate loans | 12,292 | |||
Outstanding commitments with varying interest rates | $ 28,039 | |||
Unfunded Commitments to Extend Credit | Residential real estate | Minimum | ||||
Commitments and Contingencies | ||||
Fixed interest rate (as a percent) | 2.50% | 2.50% | ||
Maturity period | 10 years | |||
Variable interest rate (as a percentage) | 3.125% | 3.125% | ||
Maturity period for variable interest loans | 25 years | |||
Unfunded Commitments to Extend Credit | Residential real estate | Maximum | ||||
Commitments and Contingencies | ||||
Fixed interest rate (as a percent) | 4.375% | 4.375% | ||
Maturity period | 30 years | |||
Variable interest rate (as a percentage) | 4.625% | 4.625% | ||
Maturity period for variable interest loans | 30 years | |||
Commitments to make loans | ||||
Commitments and Contingencies | ||||
Commitments to make loans | $ 40,331 | $ 40,331 | 76,927 | |
Unused lines of credit | ||||
Commitments and Contingencies | ||||
Outstanding commitments regarding fixed rate loans | 43 | |||
Outstanding commitments with varying interest rates | 140,622 | |||
Unused lines of credit | $ 140,665 | $ 140,665 | 220,553 | |
Unused lines of credit | Minimum | ||||
Commitments and Contingencies | ||||
Fixed interest rate (as a percent) | 5.50% | 5.50% | ||
Maturity period | 2 months | |||
Variable interest rate (as a percentage) | 3.25% | 3.25% | ||
Maturity period for variable interest loans | 1 month | |||
Unused lines of credit | Maximum | ||||
Commitments and Contingencies | ||||
Fixed interest rate (as a percent) | 18.00% | 18.00% | ||
Maturity period | 3 months | |||
Variable interest rate (as a percentage) | 7.75% | 7.75% | ||
Maturity period for variable interest loans | 15 years | |||
Unused lines of credit | Residential real estate | ||||
Commitments and Contingencies | ||||
Unused lines of credit | $ 19,145 | $ 19,145 | ||
Unused lines of credit | Construction | ||||
Commitments and Contingencies | ||||
Unused lines of credit | 120,716 | 120,716 | ||
Unused lines of credit | Commercial lines of credit | ||||
Commitments and Contingencies | ||||
Unused lines of credit | 762 | 762 | ||
Unused lines of credit | Other consumer | ||||
Commitments and Contingencies | ||||
Unused lines of credit | 42 | 42 | ||
Standby letters of credit | ||||
Commitments and Contingencies | ||||
Unused lines of credit | $ 24 | $ 24 | $ 24 |
Commitments and Contingencies_2
Commitments and Contingencies - Advantage Loan Program Loans Sold (Details) $ in Thousands | 1 Months Ended | 7 Months Ended | 12 Months Ended | ||
May 31, 2020USD ($)item | Dec. 31, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Commitments and Contingencies | |||||
Unpaid principal balance | $ 2,434,356 | $ 2,434,356 | $ 2,891,530 | ||
Loss related to fair value discount recorded in other non-interest expense | 5,741 | 7,342 | $ 7,220 | ||
Advantage Loan Program | |||||
Commitments and Contingencies | |||||
Number of loan pools negotiated to be repurchased | item | 2 | ||||
Unpaid principal balance | 429,816 | 429,816 | 670,243 | ||
Outstanding principal balance of loans repurchased | $ 38,704 | 30,934 | 69,638 | ||
Mortgage loan repurchase liability | 2,527 | 2,527 | 7,823 | ||
Loss related to fair value discount recorded in other non-interest expense | 136 | $ 135 | $ 271 | ||
Percentage of loans offered to each of investors to repurchase | 100.00% | 100.00% | |||
Loss charged against mortgage repurchase liability | $ 651 | $ 651 | |||
Disposition of mortgage servicing rights | $ 428 | 361 | |||
Residential real estate | |||||
Commitments and Contingencies | |||||
Unpaid principal balance | 562,139 | 562,139 | 759,568 | ||
Mortgage loan repurchase liability | $ 9,699 | $ 9,699 | $ 7,823 |
Regulatory Capital Requiremen_3
Regulatory Capital Requirements - Capital adequacy requirements (Details) | Dec. 31, 2020 |
Regulatory Capital Requirements | |
Capital conservation buffer (as a percent) | 2.50% |
Regulatory Capital Requiremen_4
Regulatory Capital Requirements - Actual and minimum required capital amounts and ratios and Dividend Restrictions (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Regulatory Capital Requirements | ||
Required Total capital adequacy with capital conservation buffer | 10.5 | |
Required Tier 1 capital adequacy with capital conservation buffer | 8.5 | |
Required Common Equity capital adequacy with capital conservation buffer | 7 | |
Total adjusted capital to risk-weighted assets, Amount | ||
Actual | $ 407,733 | $ 419,327 |
For Capital Adequacy Purposes | $ 144,466 | $ 156,081 |
Total adjusted capital to risk-weighted assets, Ratio | ||
Actual | 22.58 | 21.49 |
For Capital Adequacy Purposes | 8 | 8 |
Tier 1 (core) capital to risk-weighted assets, Amount | ||
Actual | $ 319,204 | $ 332,418 |
For Capital Adequacy Purposes | $ 108,350 | $ 117,061 |
Tier 1 (core) capital to risk-weighted assets, Ratio | ||
Actual | 17.68 | 17.04 |
For Capital Adequacy Purposes | 6 | 6 |
Common Equity Tier 1 (CET1), Amount | ||
Actual | $ 319,204 | $ 332,418 |
For Capital Adequacy Purposes | $ 81,262 | $ 87,796 |
Common Equity Tier 1 (CET1), Ratio | ||
Actual | 17.68 | 17.04 |
For Capital Adequacy Purposes | 4.50 | 4.50 |
Tier 1 (core) capital to adjusted tangible assets, Amount | ||
Actual | $ 319,204 | $ 332,418 |
For Capital Adequacy Purposes | $ 158,067 | $ 131,471 |
Tier 1 (core) capital to adjusted tangible assets, Ratio | ||
Actual | 8.08 | 10.11 |
For Capital Adequacy Purposes | 4 | 4 |
Dividend Restrictions | ||
Minimum percentage of assets be maintained as per Qualified Thrift Lender ("QTL") test | 65.00% | |
Bank | ||
Total adjusted capital to risk-weighted assets, Amount | ||
Actual | $ 386,237 | $ 346,985 |
For Capital Adequacy Purposes | 143,339 | 155,809 |
To be Well Capitalized | $ 179,174 | $ 194,761 |
Total adjusted capital to risk-weighted assets, Ratio | ||
Actual | 21.56 | 17.82 |
For Capital Adequacy Purposes | 8 | 8 |
To be Well Capitalized | 10 | 10 |
Tier 1 (core) capital to risk-weighted assets, Amount | ||
Actual | $ 363,224 | $ 325,255 |
For Capital Adequacy Purposes | 107,504 | 116,857 |
To be Well Capitalized | $ 143,339 | $ 155,809 |
Tier 1 (core) capital to risk-weighted assets, Ratio | ||
Actual | 20.27 | 16.70 |
For Capital Adequacy Purposes | 6 | 6 |
To be Well Capitalized | 8 | 8 |
Common Equity Tier 1 (CET1), Amount | ||
Actual | $ 363,224 | $ 325,255 |
For Capital Adequacy Purposes | 80,628 | 87,643 |
To be Well Capitalized | $ 116,463 | $ 126,595 |
Common Equity Tier 1 (CET1), Ratio | ||
Actual | 20.27 | 16.70 |
For Capital Adequacy Purposes | 4.50 | 4.50 |
To be Well Capitalized | 6.50 | 6.50 |
Tier 1 (core) capital to adjusted tangible assets, Amount | ||
Actual | $ 363,224 | $ 325,255 |
For Capital Adequacy Purposes | 157,954 | 131,469 |
To be Well Capitalized | $ 197,442 | $ 164,337 |
Tier 1 (core) capital to adjusted tangible assets, Ratio | ||
Actual | 9.20 | 9.90 |
For Capital Adequacy Purposes | 4 | 4 |
To be Well Capitalized | 5 | 5 |
Condensed Financial Informati_3
Condensed Financial Information of Sterling Bancorp, Inc. (Parent Only) - CONDENSED BALANCE SHEETS (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
ASSETS | ||||
Other assets | $ 22,736 | $ 2,271 | ||
Total assets | 3,914,045 | 3,244,884 | ||
Liabilities: | ||||
Subordinated notes, net | 65,341 | 65,179 | ||
Total liabilities | 3,594,454 | 2,912,270 | ||
Total shareholders' equity | 319,591 | 332,614 | $ 335,057 | $ 273,298 |
Total liabilities and shareholders' equity | 3,914,045 | 3,244,884 | ||
Parent company | Reportable legal entities | ||||
ASSETS | ||||
Cash held at Bank | 20,952 | 79,714 | ||
Investment in subsidiaries | 363,611 | 325,451 | ||
Other assets | 13,914 | 3,625 | ||
Total assets | 398,477 | 408,790 | ||
Liabilities: | ||||
Subordinated notes, net | 65,341 | 65,179 | ||
Other liabilities | 13,545 | 10,997 | ||
Total liabilities | 78,886 | 76,176 | ||
Total shareholders' equity | 319,591 | 332,614 | ||
Total liabilities and shareholders' equity | $ 398,477 | $ 408,790 |
Condensed Financial Informati_4
Condensed Financial Information of Sterling Bancorp, Inc. (Parent Only) - CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Expenses: | |||
Interest expense | $ 4,713 | $ 4,701 | $ 4,689 |
Income tax benefit | 5,909 | (15,643) | (25,104) |
Net income (loss) | (12,967) | 29,248 | 63,468 |
Other comprehensive income | |||
Comprehensive income (loss) | (12,776) | 29,453 | 63,581 |
Parent company | Reportable legal entities | |||
Expenses: | |||
Interest expense | 4,713 | 4,700 | 4,689 |
Provision (recovery) for contingent losses, net | (10,000) | 10,000 | |
Other | 6,135 | 803 | 961 |
Total expenses | 848 | 15,503 | 5,650 |
Loss before income tax and equity in subsidiaries income (loss) | (848) | (15,503) | (5,650) |
Income tax benefit | 246 | 4,496 | 1,186 |
Loss before equity in subsidiaries income (loss) | (602) | (11,007) | (4,464) |
Equity in subsidiaries (loss) income | (12,365) | 40,255 | 67,932 |
Net income (loss) | (12,967) | 29,248 | 63,468 |
Other comprehensive income | |||
Equity in other comprehensive income of subsidiaries | 191 | 205 | 113 |
Comprehensive income (loss) | $ (12,776) | $ 29,453 | $ 63,581 |
Condensed Financial Informati_5
Condensed Financial Information of Sterling Bancorp, Inc. (Parent Only) - CONDENSED STATEMENTS OF CASH FLOWS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities | |||
Net (loss) income | $ (12,967) | $ 29,248 | $ 63,468 |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||
Other | 162 | 163 | 140 |
Changes in operating assets and liabilities: | |||
Change in other assets | (8,946) | 5,032 | (1,245) |
Net cash provided by operating activities | 4,945 | 71,288 | 60,575 |
Cash Flows From Investing Activities | |||
Dividends received from subsidiaries | 19,002 | 6,119 | |
Net cash provided by (used in) investing activities | 223,788 | 7,643 | (208,652) |
Cash Flows From Financing Activities | |||
Repurchases of shares of common stock | (82) | (30,349) | |
Dividend paid to shareholders | (499) | (2,044) | (2,119) |
Net cash provided by (used in) financing activities | 691,945 | (53,638) | 160,456 |
Net change in cash and due from banks | 920,678 | 25,293 | 12,379 |
Cash and due from banks at beginning of period | 77,819 | 52,526 | 40,147 |
Cash and due from banks at end of period | 998,497 | 77,819 | 52,526 |
Cash paid for: | |||
Interest | 48,270 | 38,196 | 34,792 |
Parent company | Reportable legal entities | |||
Cash flows from operating activities | |||
Net (loss) income | (12,967) | 29,248 | 63,468 |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||
Equity in subsidiaries loss (income) | 12,365 | (40,255) | (67,932) |
Other | 162 | 150 | 140 |
Changes in operating assets and liabilities: | |||
Change in other assets | (289) | (3,353) | 175 |
Change in other liabilities | (7,452) | 10,000 | |
Net cash provided by operating activities | (8,181) | (4,210) | (4,149) |
Cash Flows From Investing Activities | |||
Capital contributed to subsidiary (Bank) | (50,000) | ||
Dividends received from subsidiaries | 19,002 | 6,119 | |
Net cash provided by (used in) investing activities | (50,000) | 19,002 | 6,119 |
Cash Flows From Financing Activities | |||
Repurchases of shares of common stock | (82) | (30,349) | |
Dividend paid to shareholders | (499) | (2,044) | (2,119) |
Net cash provided by (used in) financing activities | (581) | (32,393) | (2,119) |
Net change in cash and due from banks | (58,762) | (17,601) | (149) |
Cash and due from banks at beginning of period | 79,714 | 97,315 | 97,464 |
Cash and due from banks at end of period | 20,952 | 79,714 | 97,315 |
Cash paid for: | |||
Interest | $ 4,550 | $ 4,550 | $ 4,550 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | Jan. 01, 2021 | Dec. 31, 2020 | Mar. 31, 2021 | Mar. 19, 2021 | Feb. 28, 2021 | Dec. 31, 2019 |
Subsequent Events | ||||||
Employer matching contribution, as a percent of employee's contribution | 100.00% | |||||
Percentage of employee's contribution or deferred contribution that will be matched by employer | 3.00% | |||||
Deposit accounts current approximate balance | $ 3,098,966 | $ 2,495,440 | ||||
Unpaid principal balance | 2,434,356 | 2,891,530 | ||||
Advantage Loan Program | ||||||
Subsequent Events | ||||||
Unpaid principal balance | $ 429,816 | $ 670,243 | ||||
Subsequent event | ||||||
Subsequent Events | ||||||
Employer matching contribution, as a percent of employee's contribution | 100.00% | |||||
Percentage of employee's contribution or deferred contribution that will be matched by employer | 6.00% | |||||
Deposit accounts current approximate balance | $ 77,700 | |||||
Subsequent event | Advantage Loan Program loans repurchased | ||||||
Subsequent Events | ||||||
Unpaid principal balance | $ 88,758 | |||||
Subsequent event | Loss contingency from class action lawsuit | ||||||
Subsequent Events | ||||||
Full amount of the settlement covered by the Company's applicable insurance policies | $ 12,500 |