Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2024 | Apr. 30, 2024 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2024 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
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 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 | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 52,025,988 | |
Entity Central Index Key | 0001680379 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Assets | ||
Cash and due from banks | $ 646,168 | $ 577,967 |
Interest-bearing time deposits with other banks | 5,229 | 5,226 |
Debt securities available for sale, at fair value (amortized cost $416,917 and $440,211 at March 31, 2024 and December 31, 2023, respectively) | 394,852 | 419,213 |
Equity securities | 4,656 | 4,703 |
Loans, net of allowance for credit losses of $29,257 and $29,404 at March 31, 2024 and December 31, 2023, respectively | 1,274,022 | 1,319,568 |
Accrued interest receivable | 9,195 | 8,509 |
Mortgage servicing rights, net | 1,485 | 1,542 |
Leasehold improvements and equipment, net | 5,206 | 5,430 |
Operating lease right-of-use assets | 12,358 | 11,454 |
Federal Home Loan Bank stock, at cost | 18,923 | 18,923 |
Federal Reserve Bank stock, at cost | 9,096 | 9,048 |
Company-owned life insurance | 8,764 | 8,711 |
Deferred tax asset, net | 18,240 | 16,959 |
Other assets | 6,361 | 8,750 |
Total assets | 2,414,555 | 2,416,003 |
Liabilities | ||
Noninterest-bearing deposits | 32,680 | 35,245 |
Interest-bearing deposits | 1,973,175 | 1,968,741 |
Total deposits | 2,005,855 | 2,003,986 |
Federal Home Loan Bank borrowings | 50,000 | 50,000 |
Operating lease liabilities | 13,407 | 12,537 |
Other liabilities | 18,027 | 21,757 |
Total liabilities | 2,087,289 | 2,088,280 |
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 52,046,683 shares and 52,070,361 shares at March 31, 2024 and December 31, 2023, respectively | 84,323 | 84,323 |
Additional paid-in capital | 17,173 | 16,660 |
Retained earnings | 241,767 | 241,964 |
Accumulated other comprehensive loss | (15,997) | (15,224) |
Total shareholders' equity | 327,266 | 327,723 |
Total liabilities and shareholders' equity | $ 2,414,555 | $ 2,416,003 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Condensed Consolidated Balance Sheets (Unaudited) | ||
Debt securities available for sale - Amortized Cost | $ 416,917 | $ 440,211 |
Allowance for credit losses | $ 29,257 | $ 29,404 |
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, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, issued (in shares) | 52,046,683 | 52,070,361 |
Common stock, outstanding (in shares) | 52,046,683 | 52,070,361 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited)) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Interest income | ||
Interest and fees on loans | $ 20,969 | $ 22,160 |
Interest and dividends on investment securities and restricted stock | 4,018 | 2,456 |
Other interest | 8,295 | 4,807 |
Total interest income | 33,282 | 29,423 |
Interest expense | ||
Interest on deposits | 18,100 | 9,809 |
Interest on Federal Home Loan Bank borrowings | 248 | 245 |
Interest on Subordinated Notes | 1,693 | |
Total interest expense | 18,348 | 11,747 |
Net interest income | 14,934 | 17,676 |
Provision for credit losses | 41 | 674 |
Net interest income after provision for (recovery of) credit losses | 14,893 | 17,002 |
Non-interest income | ||
Service charges and fees | $ 87 | $ 94 |
Revenue, Product and Service [Extensible List] | sbt:ServiceChargesAndFeesMember | sbt:ServiceChargesAndFeesMember |
Loss on the sale of investment securities | $ (2) | |
Loss on sale of loans held for sale | (25) | |
Unrealized gain (loss) on equity securities | $ (47) | 71 |
Net servicing income | 75 | 59 |
Income earned on company-owned life insurance | 83 | 80 |
Other | 1 | 1 |
Total non-interest income | 199 | 278 |
Non-interest expense | ||
Salaries and employee benefits | 8,460 | 9,410 |
Occupancy and equipment | 2,084 | 2,112 |
Professional fees | 2,182 | 3,221 |
FDIC assessments | 262 | 257 |
Data processing | 733 | 738 |
Other | 1,671 | 2,099 |
Total non-interest expense | 15,392 | 17,837 |
Loss before income taxes | (300) | (557) |
Income tax expense (benefit) | (103) | (54) |
Net loss | $ (197) | $ (503) |
Loss per share, basic (in $ per share) | $ 0 | $ (0.01) |
Loss per share, diluted (in $ per share) | $ 0 | $ (0.01) |
Weighted average common shares outstanding: | ||
Basic | 50,843,106 | 50,444,463 |
Diluted | 50,843,106 | 50,444,463 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) | ||
Net loss | $ (197) | $ (503) |
Other comprehensive income (loss), net of tax: | ||
Unrealized gain (loss) on investment securities, arising during the period, net of tax effect of $(293) and $1,054, respectively | (773) | 2,785 |
Reclassification adjustment for loss included in net loss of $- and $2, respectively, included in loss on sale of investment securities, net of tax effect of $- and $1, respectively | 1 | |
Total other comprehensive income (loss) | (773) | 2,786 |
Comprehensive income (loss) | $ (970) | $ 2,283 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) | ||
Unrealized gain (loss) on investment securities, arising during the period, net of tax effect | $ (293) | $ 1,054 |
Reclassification adjustment for gain (loss) included in net income (loss) on sale of investment securities, before tax | 2 | |
Reclassification adjustment for gain (loss) included in net gain (loss) on sale of investment securities, tax effect | $ 1 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings Cumulative Effect Adjustment | Retained Earnings | Accumulated Other Comprehensive Loss | Cumulative Effect Adjustment | Total |
Balance at beginning of the period (ASU 2016-13) at Dec. 31, 2022 | $ 778 | $ 778 | |||||
Balance at beginning of the period (ASU 2022-02) at Dec. 31, 2022 | $ 276 | $ 276 | |||||
Balance at beginning of the period at Dec. 31, 2022 | $ 83,295 | $ 14,808 | $ 234,049 | $ (19,525) | $ 312,627 | ||
Balance at beginning of the period (in shares) at Dec. 31, 2022 | 50,795,871 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net Income (Loss) | (503) | (503) | |||||
Repurchase of restricted shares to pay employee tax liability | (75) | (75) | |||||
Repurchase of restricted shares to pay employee tax liability (in shares) | (12,166) | ||||||
Stock-based compensation | 173 | 173 | |||||
Stock-based compensation (in shares) | 24,411 | ||||||
Other comprehensive income (loss) | 2,786 | 2,786 | |||||
Balance at end of the period at Mar. 31, 2023 | $ 83,295 | 14,906 | 234,048 | (16,739) | 315,510 | ||
Balance at end of the period (in shares) at Mar. 31, 2023 | 50,808,116 | ||||||
Balance at beginning of the period at Dec. 31, 2023 | $ 84,323 | 16,660 | 241,964 | (15,224) | 327,723 | ||
Balance at beginning of the period (in shares) at Dec. 31, 2023 | 52,070,361 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net Income (Loss) | (197) | (197) | |||||
Repurchase of restricted shares to pay employee tax liability | (216) | (216) | |||||
Repurchase of restricted shares to pay employee tax liability (in shares) | (38,033) | ||||||
Stock-based compensation | 729 | 729 | |||||
Stock-based compensation (in shares) | 14,355 | ||||||
Other comprehensive income (loss) | (773) | (773) | |||||
Balance at end of the period at Mar. 31, 2024 | $ 84,323 | $ 17,173 | $ 241,767 | $ (15,997) | $ 327,266 | ||
Balance at end of the period (in shares) at Mar. 31, 2024 | 52,046,683 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash Flows From Operating Activities | ||
Net loss | $ (197) | $ (503) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Provision for credit losses | 41 | 674 |
Deferred income taxes | (988) | 2,394 |
Loss on sale of investment securities | 2 | |
Unrealized (gain) loss on equity securities | 47 | (71) |
Net amortization (accretion) on debt securities | (1,128) | (491) |
Depreciation and amortization on leasehold improvements and equipment | 276 | 352 |
Originations, net of principal payments, of loans held for sale | (2,667) | |
Proceeds from sale of mortgage loans held for sale | 2,979 | |
Loss on sale of loans held for sale | 25 | |
Increase in cash surrender value of company-owned life insurance, net of premiums | (53) | (52) |
Valuation allowance adjustments and amortization of mortgage servicing rights | 57 | 91 |
Stock-based compensation | 729 | 173 |
Other | 9 | 175 |
Change in operating assets and liabilities: | ||
Accrued interest receivable | (686) | 212 |
Other assets | 1,967 | (2,340) |
Other liabilities | (3,951) | (4,426) |
Net cash used in operating activities | (3,877) | (3,473) |
Cash Flows From Investing Activities | ||
Maturities and principal receipts of debt securities | 106,585 | 5,358 |
Proceeds from sale of debt securities | 2,977 | |
Purchases of debt securities | (82,162) | (2,979) |
Purchase of shares of Federal Reserve Bank Stock | (48) | |
Net decrease in loans | 46,113 | 70,008 |
Principal payments received on commercial real estate loans held for sale | 10 | |
Purchases of leasehold improvements and equipment | (63) | (190) |
Net cash provided by investing activities | 70,425 | 75,184 |
Cash Flows From Financing Activities | ||
Net increase (decrease) in deposits | 1,869 | (32,215) |
Cash paid for surrender of vested shares to satisfy employee tax liability | (216) | (75) |
Net cash provided (used in) financing activities | 1,653 | (32,290) |
Net change in cash and due from banks | 68,201 | 39,421 |
Cash and due from banks at beginning of period | 577,967 | 379,798 |
Cash and due from banks at end of period | 646,168 | 419,219 |
Cash paid for: | ||
Interest | 18,129 | 11,424 |
Income taxes | 25 | |
Noncash investing and financing activities: | ||
Transfer of residential real estate loans to loans held for sale | 34,581 | |
Transfer of residential real estate loans from loans held for sale | $ 3,906 | |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 1,780 |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 3 Months Ended |
Mar. 31, 2024 | |
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, together with its subsidiaries, the “Company”) is a unitary thrift holding company that was incorporated in 1989 and the parent company of its wholly owned subsidiary, Sterling Bank and Trust, F.S.B. (the “Bank”), which was formed in 1984. The Company’s business is conducted through the Bank. The Bank originates commercial real estate loans and commercial and industrial loans, and provides deposit products, consisting primarily of checking, savings and term certificate accounts. The Bank also engages in mortgage banking activities and, as such, acquires, sells and services residential mortgage loans. The Bank operates through a network of 27 branches of which 25 branches are located in the San Francisco and Los Angeles, California metropolitan areas with the remaining branches located in New York, New York and Southfield, Michigan. In February 2024, the Company closed one of its branches in San Francisco and consolidated the operations into a nearby branch office. The Company is headquartered in Southfield, Michigan. Historically, the Company’s largest asset class has been residential mortgage loans. In 2023, the Bank discontinued originating residential loans. The Company is currently exploring and evaluating potential strategic alternatives which may include incorporating new banking products and services. 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 has elected to operate as a covered savings association, effective August 9, 2023. As a covered savings association, the Bank will generally function as a commercial bank without the constraints applicable to a thrift institution. Prior to the election becoming effective, the Bank was subject to the Qualified Thrift Lender (“QTL”) test. Under the QTL test, a savings institution is required to maintain at least 65% of its portfolio assets in certain qualified thrift investments (primarily residential mortgages and related investments, including certain mortgage-backed and related securities) in at least nine months out of each 12-month period. The Bank 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 FRB system and Federal Home Loan Bank (“FHLB”) system. Basis of Presentation The condensed consolidated balance sheet as of March 31, 2024, and the condensed consolidated statements of operations, comprehensive income (loss), changes in shareholders’ equity and cash flows for the three months ended March 31, 2024 and 2023 are unaudited. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect all adjustments, in the opinion of management, of a normal recurring nature that are necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented. The financial data and other financial information disclosed in these notes to the condensed consolidated financial statements related to these periods are also unaudited. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ended December 31, 2024 or for any future annual or interim period. The condensed consolidated balance sheet at December 31, 2023 included herein was derived from the audited financial statements as of that date. The accompanying unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the U.S. Securities and Exchange Commission on March 14, 2024. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2—Summary of Significant Accounting Policies Principles of Consolidation The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The condensed consolidated financial statements include the results of Sterling Bancorp, Inc. and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of the condensed 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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. 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. Concentration of Credit Risk The loan portfolio consists primarily of residential real estate loans, which are collateralized by real estate. At March 31, 2024 and December 31, 2023, residential real estate loans accounted for 80% of total gross loans. 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 March 31, 2024 and December 31, 2023, approximately 79% and 80%, respectively, of gross loans were originated with respect to properties or businesses located in the state of California. Also, the loan portfolio consists of a loan product of one-, three-, five- or seven-year adjustable-rate mortgages that required a down payment of at least 35% (also referred to herein as “Advantage Loan Program loans”) which was terminated at the end of 2019 and continues to be the largest portion of gross residential loans. An internal review of the Advantage Loan Program and investigations conducted by the U.S. Department of Justice and the OCC indicated that certain employees engaged in misconduct in connection with the origination of a significant number of such loans, including the falsification of information with respect to verification of income, the amount of income reported for borrowers, reliance on third parties and related documentation. This former loan product totaled $593,144, or 57% of gross residential loans, and $628,245, or 58% of gross residential loans, at March 31, 2024 and December 31, 2023, respectively. Recently Issued Accounting Standards Not Yet Adopted In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures |
Debt Securities
Debt Securities | 3 Months Ended |
Mar. 31, 2024 | |
Debt Securities | |
Debt Securities | Note 3—Debt Securities The following tables summarize the amortized cost and fair value of available for sale debt securities at March 31, 2024 and December 31, 2023 and the corresponding amounts of gross unrealized gains and losses: March 31, 2024 Amortized Gross Unrealized Fair Cost Gain Loss Value Available for sale: U.S. Treasury and Agency securities $ 154,007 $ 3 $ (4,141) $ 149,869 Mortgage-backed securities 34,629 — (4,020) 30,609 Collateralized mortgage obligations 228,131 10 (13,910) 214,231 Collateralized debt obligations 150 — (7) 143 Total $ 416,917 $ 13 $ (22,078) $ 394,852 December 31, 2023 Amortized Gross Unrealized Fair Cost Gain Loss Value Available for sale: U.S. Treasury and Agency securities $ 253,107 $ 57 $ (4,176) $ 248,988 Mortgage-backed securities 35,757 — (3,830) 31,927 Collateralized mortgage obligations 151,196 27 (13,066) 138,157 Collateralized debt obligations 151 — (10) 141 Total $ 440,211 $ 84 $ (21,082) $ 419,213 Investment securities with a fair value of Accrued interest receivable on available for sale debt securities totaled $1,403 and $1,535 at March 31, 2024 and December 31, 2023, respectively. The mortgage-backed securities, and a majority of the collateralized mortgage obligations 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 $285 and $308 at March 31, 2024 and December 31, 2023, respectively. 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 March 31, 2024 and December 31, 2023. Information pertaining to sales of available for sale debt securities for the three months ended March 31, 2024 and 2023 is as follows: Three Months Ended March 31, 2024 2023 Proceeds from the sale of debt securities $ — $ 2,977 Gross realized gains $ — $ 1 Gross realized losses — (3) Total net realized losses $ — $ (2) The income tax benefit related to the net realized losses was $(1) for the three months ended March 31, 2023. The amortized cost and fair value of U.S. Treasury and Agency securities at March 31, 2024 are shown by contractual maturity in the table below. Mortgage-backed securities, collateralized mortgage obligations and collateralized debt obligations are disclosed separately 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 and Agency securities: Due less than one year $ 74,470 $ 74,469 Due after one year through five years 79,537 75,400 Mortgage-backed securities 34,629 30,609 Collateralized mortgage obligations 228,131 214,231 Collateralized debt obligations 150 143 Total $ 416,917 $ 394,852 The following table summarizes available for sale debt securities, at fair value, in an unrealized loss position for which an allowance for credit losses has not been recorded at March 31, 2024 and December 31, 2023, aggregated by major security type and length of time the individual securities have been in a continuous unrealized loss position: March 31, 2024 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses U.S. Treasury and Agency securities $ 49,820 $ (4) $ 75,400 $ (4,137) $ 125,220 $ (4,141) Mortgage-backed securities — — 30,609 (4,020) 30,609 (4,020) Collateralized mortgage obligations 103,507 (277) 107,065 (13,633) 210,572 (13,910) Collateralized debt obligations — — 143 (7) 143 (7) Total $ 153,327 $ (281) $ 213,217 $ (21,797) $ 366,544 $ (22,078) December 31, 2023 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses U.S. Treasury and Agency securities $ 49,836 $ (1) $ 125,183 $ (4,175) $ 175,019 $ (4,176) Mortgage-backed securities — — 31,927 (3,830) 31,927 (3,830) Collateralized mortgage obligations 10,297 (221) 111,554 (12,845) 121,851 (13,066) Collateralized debt obligations — — 141 (10) 141 (10) Total $ 60,133 $ (222) $ 268,805 $ (20,860) $ 328,938 $ (21,082) As of March 31, 2024, the debt securities portfolio consisted of 35 debt securities, with 32 debt securities in an unrealized loss position. For debt securities in an unrealized loss position, the Company has both the intent and ability to hold these investments and, based on the current conditions, the Company does not believe it is likely that it will be required to sell these debt securities prior to recovery of the amortized cost. As the Company had the intent and the ability to hold the debt securities in an unrealized loss position at March 31, 2024, each security with an unrealized loss position was further assessed to determine if a credit loss exists. The Company’s debt, mortgage-backed securities and the majority of the collateralized mortgage obligations are issued and guaranteed by the U.S. government, its agencies and government-sponsored enterprises. The Company has a long history with no credit losses from issuers of U.S. government, its agencies and government-sponsored enterprises. As a result, management does not expect any credit losses on its available for sale debt securities. Accordingly, the Company has not recorded an allowance for credit losses for its available for sale debt securities at March 31, 2024 and December 31, 2023. |
Equity Securities
Equity Securities | 3 Months Ended |
Mar. 31, 2024 | |
Equity Securities | |
Equity Securities | Note 4—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 March 31, 2024 and December 31, 2023, equity securities totaled $4,656 and $4,703, respectively. Equity securities with readily determinable fair values are stated at fair value with realized and unrealized gains and losses reported in non-interest income in the condensed consolidated statements of operations. At March 31, 2024 and December 31, 2023, equity securities with readily determinable fair values were $4,410 and $4,457, respectively. The following is a summary of unrealized and realized gains and losses recognized in the condensed consolidated statements of operations: Three Months Ended March 31, 2024 2023 Net gain (loss) recorded during the period on equity securities $ (47) $ 71 Less: net gain (loss) recorded during the period on equity securities sold during the period — — Unrealized gain (loss) recorded during the period on equity securities held at the reporting date $ (47) $ 71 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 the three months ended March 31, 2024 and 2023. The investment was reported at $246 at March 31, 2024 and December 31, 2023. |
Loans
Loans | 3 Months Ended |
Mar. 31, 2024 | |
Loans | |
Loans | Note 5—Loans Loans Held for Investment The major categories of loans held for investment and the allowance for credit losses were as follows: March 31, December 31, 2024 2023 Residential real estate $ 1,040,464 $ 1,085,776 Commercial real estate 244,546 236,982 Construction 4,915 10,381 Commercial and industrial 13,348 15,832 Other consumer 6 1 Total loans 1,303,279 1,348,972 Less: allowance for credit losses (29,257) (29,404) Loans, net $ 1,274,022 $ 1,319,568 Accrued interest receivable related to total gross loans was $6,701 and $6,617 as of March 31, 2024 and December 31, 2023, respectively. Loans totaling $533,650 and $428,358 were pledged as collateral on the FHLB borrowings at March 31, 2024 and December 31, 2023, respectively. Residential real estate loans collateralized by properties that were in the process of foreclosure totaled $2,027 and $4,004 at March 31, 2024 and December 31, 2023, respectively. In March 2023, residential real estate loans held for investment with an amortized cost of $41,059 were transferred to loans held for sale due to management’s change in intent and decision to sell the loans. On the transfer, the Company recorded a $6,478 charge off applied against the allowance for credit losses to reflect these loans at their estimated fair value. These residential real estate loans were sold in May 2023. Allowance for Credit Losses The allowance for credit losses was estimated using the current expected credit loss model. The Company’s estimate of the allowance for credit losses reflects losses expected over the remaining contractual life of the loans. The contractual term does not consider extensions, renewals or modifications unless the Company has identified a loan where the individual borrower is experiencing financial difficulty. The following tables present the activity in the allowance for credit losses related to loans held for investment by portfolio segment for the three months ended March 31, 2024 and 2023: Residential Commercial Commercial Three Months Ended March 31, 2024 Real Estate Real Estate Construction and Industrial Total Allowance for credit losses: Balance at the beginning of the period $ 14,322 $ 13,550 $ 1,386 $ 146 $ 29,404 Provision for (recovery of) credit losses 912 (395) (616) (48) (147) Charge offs — — — — — Recoveries — — — — — Total ending balance $ 15,234 $ 13,155 $ 770 $ 98 $ 29,257 Residential Commercial Commercial Three Months Ended March 31, 2023 Real Estate Real Estate Construction and Industrial Total Allowance for credit losses: Balance at the beginning of the period $ 27,951 $ 11,694 $ 5,781 $ 38 $ 45,464 Adoption of ASU 2016-13 865 1,151 (3,633) (34) (1,651) Adoption of ASU 2022-02 (11) — 391 — 380 Provision for (recovery of) credit losses (1,889) 3,217 (546) 2 784 Charge offs (6,478) — — — (6,478) Recoveries 60 5 1 — 66 Total ending balance $ 20,498 $ 16,067 $ 1,994 $ 6 $ 38,565 Nonaccrual Loans and Past Due Loans Past due loans held for investment are loans contractually past due 30 days or more as to principal or interest payments. A loan held for investment is classified as nonaccrual, and the accrual of interest on such loan is discontinued, when the contractual payment of principal or interest becomes 90 days past due. In addition, a loan may be placed on nonaccrual at any other time management has serious doubts about further collectability of principal or interest according to the contractual terms, even though the loan is currently performing. A loan held for investment may remain in accrual status if it is in the process of collection and well secured. When a loan held for investment is placed in nonaccrual status, interest accrued but not received is reversed against interest income. Interest received on such loans is applied to the principal balance of the loan until qualifying for return to accrual status. Loans are returned to accrual status after all principal and interest amounts contractually due are made and future payments are reasonably assured. The following table presents the total amortized cost basis of loans on nonaccrual status, the amortized cost basis of loans on nonaccrual status with no related allowance for credit losses and loans past due 90 days or more and still accruing at March 31, 2024 and December 31, 2023: March 31, 2024 December 31, 2023 Nonaccrual Past Due 90 Nonaccrual Past Due 90 With No Days or More With No Days or More Nonaccrual Allowance for and Still Nonaccrual Allowance for and Still Loans Credit Losses Accruing Loans Credit Losses Accruing Residential real estate: Residential first mortgage $ 9,318 $ 2,064 $ 30 $ 8,942 $ 4,079 $ 31 At March 31, 2024, the Company had nonaccrual loans of $9,318 in its held for investment loan portfolio. The increase in nonaccrual loans from December 31, 2023 was due to the addition of $1,480 of residential loans to nonaccrual status which was partially offset by loans totaling $877 that were returned to accrual status and payments of the loan principal of $227. The total interest income that would have been recorded if the nonaccrual loans had been current in accordance with their original terms was $215 and $538 for the three months ended March 31, 2024 and 2023, respectively. The Company does not record interest income on nonaccrual loans. Aging Analysis of Past Due Loans The following table presents an aging of the amortized cost basis of contractually past due loans as of March 31, 2024 and December 31, 2023: 30 - 59 60 - 89 90 Days Days Days or More Total Current March 31, 2024 Past Due Past Due Past Due Past Due Loans Total Residential real estate $ 10,316 $ 2,708 $ 9,348 $ 22,372 $ 1,018,092 $ 1,040,464 Commercial real estate — — — — 244,546 244,546 Construction — — — — 4,915 4,915 Commercial and industrial — — — — 13,348 13,348 Other consumer — — — — 6 6 Total $ 10,316 $ 2,708 $ 9,348 $ 22,372 $ 1,280,907 $ 1,303,279 30 - 59 60 - 89 90 Days Days Days or More Total Current December 31, 2023 Past Due Past Due Past Due Past Due Loans Total Residential real estate $ 16,634 $ 2,305 $ 8,973 $ 27,912 $ 1,057,864 $ 1,085,776 Commercial real estate — — — — 236,982 236,982 Construction — — — — 10,381 10,381 Commercial and industrial — — — — 15,832 15,832 Other consumer — — — — 1 1 Total $ 16,634 $ 2,305 $ 8,973 $ 27,912 $ 1,321,060 $ 1,348,972 Collateral-Dependent Loans Collateral-dependent loans are those for which repayment (on the basis of the Company’s assessment as of the reporting date) is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. The amortized cost basis of collateral-dependent loans was $ 2,027 and $4,004 at March 31, 2024 and December 31, 2023, respectively. These loans were collateralized by residential real estate property and the fair value of collateral on substantially all collateral-dependent loans were significantly in excess of their amortized cost basis. Modifications to borrowers experiencing financial difficulty may include interest rate reductions, principal or interest forgiveness, forbearances, term extensions, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral. Historically, the Company has provided loan forbearances to residential borrowers when mandated and modified construction loans by providing term extensions. The Company did not have any loans held for investment to borrowers experiencing financial difficulty that were modified during the three months ended March 31, 2024. The Company did not have any loans held for investment to borrowers experiencing financial difficulty that were previously modified that subsequently defaulted during the three months ended March 31, 2024. Credit Quality Indicators 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 and industrial, construction and commercial real estate loans. This analysis is performed at least quarterly. The Company uses the following definitions for risk ratings: 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 loan. 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. Loans not meeting the criteria above that are analyzed individually as part of the above-described process are considered pass-rated loans. For residential and consumer loan classes, the Company evaluates credit quality based on the accrual status of the loan. The following table presents the amortized cost in residential loans based on accrual status: Revolving Revolving Loans Loans Term Loans Amortized Cost Basis by Origination Year Amortized Converted As of March 31, 2024 2024 2023 2022 2021 2020 Prior Costs Basis to Term Total Residential lending Residential mortgage loans: Payment performance: Accrual $ — $ 762 $ 71,885 $ 130,283 $ 97,241 $ 722,935 $ 7,767 $ 273 $ 1,031,146 Nonaccrual — — — — — 9,318 — — 9,318 Total residential mortgage loans $ — $ 762 $ 71,885 $ 130,283 $ 97,241 $ 732,253 $ 7,767 $ 273 $ 1,040,464 Residential mortgage loans: Current period gross write offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Revolving Revolving Loans Loans Term Loans Amortized Cost Basis by Origination Year Amortized Converted As of December 31, 2023 2023 2022 2021 2020 2019 Prior Costs Basis to Term Total Residential lending Residential mortgage loans: Payment performance: Accrual $ 764 $ 72,840 $ 132,567 $ 99,676 $ 202,793 $ 560,185 $ 7,729 $ 280 $ 1,076,834 Nonaccrual — — — — 1,739 7,203 — — 8,942 Total residential mortgage loans $ 764 $ 72,840 $ 132,567 $ 99,676 $ 204,532 $ 567,388 $ 7,729 $ 280 $ 1,085,776 Residential mortgage loans: Current period gross write offs $ — $ — $ — $ — $ 1,858 $ 4,601 $ 19 $ — $ 6,478 The amortized cost basis by year of origination and credit quality indicator of the Company’s commercial loans based on the most recent analysis performed was as follows: Revolving Revolving Loans Loans Term Loans Amortized Cost Basis by Origination Year Amortized Converted As of March 31, 2024 2024 2023 2022 2021 2020 Prior Costs Basis to Term Total Commercial lending Real estate - commercial real estate: Risk rating Pass $ 14,929 $ 22,176 $ 78,672 $ 34,970 $ 34,958 $ 24,352 $ — $ — $ 210,057 Special mention — 944 3,550 — 2,718 8,632 — — 15,844 Substandard or lower — — — 11,785 — 6,860 — — 18,645 Total real estate – commercial real estate $ 14,929 $ 23,120 $ 82,222 $ 46,755 $ 37,676 $ 39,844 $ — $ — $ 244,546 Real estate – commercial real estate: Current period gross charge offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Real estate – construction: Risk rating Pass $ — $ 12 $ — $ — $ — $ — $ — $ — $ 12 Substandard or lower — — — — — 4,903 — — 4,903 Total real estate - construction $ — $ 12 $ — $ — $ — $ 4,903 $ — $ — $ 4,915 Real estate – construction: Current period gross charge offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial and industrial: Risk rating Pass $ — $ 9,467 $ 1,064 $ — $ — $ 94 $ 2,672 $ 51 $ 13,348 Total commercial and industrial $ — $ 9,467 $ 1,064 $ — $ — $ 94 $ 2,672 $ 51 $ 13,348 Commercial and industrial: Current period gross charge offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Revolving Revolving Loans Loans Term Loans Amortized Cost Basis by Origination Year Amortized Converted As of December 31, 2023 2023 2022 2021 2020 2019 Prior Costs Basis to Term Total Commercial lending Real estate - commercial real estate: Risk rating Pass $ 28,975 $ 79,013 $ 33,694 $ 35,148 $ 6,938 $ 13,020 $ — $ — $ 196,788 Special mention 948 3,574 1,407 2,724 8,610 4,253 — — 21,516 Substandard or lower — — 11,778 — 2,805 4,095 — — 18,678 Total real estate - commercial real estate $ 29,923 $ 82,587 $ 46,879 $ 37,872 $ 18,353 $ 21,368 $ — $ — $ 236,982 Real estate - commercial real estate: Current period gross charge offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Real estate - construction: Risk rating Pass $ 14 $ — $ — $ 1,591 $ — $ — $ — $ — $ 1,605 Substandard or lower — — — — 8,776 — — — 8,776 Total real estate - construction $ 14 $ — $ — $ 1,591 $ 8,776 $ — $ — $ — $ 10,381 Real estate - construction: Current period gross charge offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial and industrial: Risk rating Pass $ 14,461 $ 1,071 $ — $ — $ — $ 97 $ 130 $ 73 $ 15,832 Total commercial and industrial $ 14,461 $ 1,071 $ — $ — $ — $ 97 $ 130 $ 73 $ 15,832 Commercial and industrial: Current period gross charge offs $ — $ — $ — $ — $ — $ — $ — $ — $ — |
Mortgage Servicing Rights, net
Mortgage Servicing Rights, net | 3 Months Ended |
Mar. 31, 2024 | |
Mortgage Servicing Rights, net | |
Mortgage Servicing Rights, net | Note 6—Mortgage Servicing Rights, net The Company 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 condensed consolidated balance sheets. The principal balance of these loans at March 31, 2024 and December 31, 2023 are as follows: March 31, December 31, 2024 2023 Residential real estate mortgage loan portfolios serviced for: FNMA $ 103,969 $ 105,689 FHLB 30,464 31,016 Private investors 29,937 33,044 Total $ 164,370 $ 169,749 Custodial escrow balances maintained with these serviced loans were $352 and $620 at March 31, 2024 and December 31, 2023, respectively. These balances are included in noninterest-bearing deposits in the condensed consolidated balance sheets. Activity for mortgage servicing rights and the related valuation allowance are as follows: Three Months Ended March 31, 2024 2023 Mortgage servicing rights: Beginning of period $ 1,590 $ 1,840 Additions — — Amortization (64) (74) End of period 1,526 1,766 Valuation allowance: Beginning of period 48 46 Additions (recoveries) (7) 17 End of period 41 63 Mortgage servicing rights, net $ 1,485 $ 1,703 Servicing income, net of amortization of servicing rights and changes in the valuation allowance, was $75 and $59 for the three months ended March 31, 2024 and 2023, respectively. The fair value of mortgage servicing rights was $1,807 and $1,857 at March 31, 2024 and December 31, 2023, 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 March 31, 2024 was determined using discount rates ranging from 10.0% to 12.5%, prepayment speeds with a weighted average of 9.6% (depending on the stratification of the specific right), a weighted average life of the mortgage servicing right of 77 months and a weighted average default rate of 0.2%. The fair value at December 31, 2023 was determined using discount rates ranging from 10.0% to 12.5%, prepayment speeds with a weighted average of 9.8% (depending on the stratification of the specific right), a weighted average life of the mortgage servicing right of 77 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 March 31, 2024 and December 31, 2023, the carrying amount of certain individual groupings exceeded their fair value, resulting in write-downs to fair value. Refer to Note 12—Fair Value. |
Deposits
Deposits | 3 Months Ended |
Mar. 31, 2024 | |
Deposits | |
Deposits | Note 7—Deposits Time deposits, included in interest-bearing deposits in the condensed consolidated balance sheets, were $900,996 and $873,220 at March 31, 2024 and December 31, 2023, respectively. The Company did not have any brokered deposits at March 31, 2024 and December 31, 2023. Time deposits that meet or exceed the FDIC insurance limit of $250 were $267,934 and $255,222 at March 31, 2024 and December 31, 2023, respectively. |
FHLB Borrowings
FHLB Borrowings | 3 Months Ended |
Mar. 31, 2024 | |
FHLB Borrowings | |
FHLB Borrowings | Note 8—FHLB Borrowings FHLB Advances At March 31, 2024 and December 31, 2023, the Company has a long-term fixed-rate FHLB advance of $50,000 with a maturity date of May 2029. The FHLB advance requires monthly interest-only payments at 1.96% per annum with the principal amount due on the maturity date and may contain a prepayment penalty if paid before maturity. The advance is callable by the FHLB on May 15, 2024. FHLB Overdraft Line of Credit and Letters of Credit The Company has established a short-term overdraft line of credit agreement with the FHLB, which provides for maximum borrowings of $20,000. The overdraft line of credit was not used during the three months ended March 31, 2024 and 2023. Borrowings accrue interest at a variable-rate based on the FHLB’s overnight cost of funds rate, which was 5.71% and 5.76% at March 31, 2024 and December 31, 2023, respectively. At March 31, 2024 and December 31, 2023, there were no outstanding borrowings under this agreement. The overdraft line of credit was renewed in October 2023. The overdraft line of credit is issued for a one-year term and automatically extends for an additional one-year term unless terminated in advance of the renewal by the Company. The Company entered into irrevocable standby letters of credit arrangements with the FHLB to provide credit support for certain of its obligations related to its commitment to repurchase certain pools of Advantage Loan Program loans. The irrevocable standby letter of credit of $2,000 has a 36-month term and expires in July 2024. There were no borrowings outstanding on these standby letters of credit during the three months ended March 31, 2024 and 2023. The long-term fixed-rate advance and the overdraft line of credit are collateralized by certain investment securities and loans. Based on this collateral and holdings of FHLB stock, the Company had additional borrowing capacity with the FHLB of $370,471 at March 31, 2024. Refer to Note 3—Debt Securities for further information on securities pledged and Note 5—Loans for further information on loans pledged. Other Borrowings The Company has available unsecured federal funds credit lines, which were held by two banks and reduced to $60,000 in March 2024. Previously, these unsecured federal funds credit lines were held by three banks totaling $80,000. There were no borrowings under these unsecured credit lines during the three months ended March 31, 2024 and 2023. |
Stock-based Compensation
Stock-based Compensation | 3 Months Ended |
Mar. 31, 2024 | |
Stock-based Compensation | |
Stock-based Compensation | Note 9—Stock-based Compensation 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 the board of directors of the Company, of which 2,239,858 shares were available for future grants as of March 31, 2024. The stock-based awards are issued at no less than the market price on the date the awards are granted. Previously, the board of directors had established a 2017 Omnibus Equity Incentive Plan (the “2017 Plan”) which was approved by the shareholders. The 2017 Plan initially provided 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 the board of directors of the Company. The stock-based awards were issued at no less than the market price on the date the awards were granted. 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. Beginning with grants in 2020, stock option awards vest ratably over three years ( one - third per year) after the date of grant, while stock option awards granted prior to 2020 generally vest 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 . A summary of the Company’s stock option activity as of and for the three months ended March 31, 2024 is as follows: Weighted Weighted Average Average Remaining Aggregate Number Exercise Contractual Intrinsic of Shares Price Term Value (Years) Outstanding at January 1, 2024 340,395 $ 4.96 6.23 $ 531 Granted — Exercised — Forfeited/expired — Outstanding and exercisable at March 31, 2024 340,395 $ 4.96 5.98 $ 348 The Company recorded stock-based compensation expense associated with stock options of $1 for the three months ended March 31, 2023. Restricted Stock Awards Restricted stock awards are issued to independent directors and certain key employees. The restricted stock awards generally vest one third year During the three months ended March 31, 2024, the board of directors approved the issuance of 60,000 shares of restricted stock to independent directors with a weighted average grant-date fair value of $5.77. During the three months ended March 31, 2023, the board of directors approved the issuance of 60,000 shares of restricted stock to independent directors with a weighted average grant-date fair value of $6.09. During the three months ended March 31, 2024 and 2023, the Company withheld 38,033 shares and 12,166 shares, respectively, of common stock representing a portion of the restricted stock awards that vested during the period in order to satisfy certain related employee tax withholding liabilities of $216 and $75, respectively, associated with vesting. These withheld shares are treated the same as repurchased shares for accounting purposes. A summary of the restricted stock awards activity as of and for the three months ended March 31, 2024 is as follows: Weighted Average Number Grant Date of Shares Fair Value Nonvested at January 1, 2024 1,364,570 $ 5.27 Granted 60,000 5.77 Vested (176,644) 5.50 Forfeited (45,645) 5.36 Nonvested at March 31, 2024 1,202,281 $ 5.26 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 $729 and $172 for the three months ended March 31, 2024 and 2023, respectively. At March 31, 2024, there was $4,527 of total unrecognized compensation cost related to the nonvested stock granted which is expected to be recognized over a weighted-average period of 2.33 years. The total fair value of shares vested during the three months ended March 31, 2024 and 2023 was $1,007 and $399, respectively. |
Regulatory Capital Requirements
Regulatory Capital Requirements | 3 Months Ended |
Mar. 31, 2024 | |
Regulatory Capital Requirements | |
Regulatory Capital Requirements | Note 10—Regulatory Capital Requirements The Bank is subject to the capital adequacy requirements of the OCC. The Company, as a thrift holding company, generally 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. Prompt corrective action regulations provide five classifications for depository institutions like the Bank, including well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized, although these terms are not used to represent overall financial condition. 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. Failure to meet minimum capital requirements can initiate regulatory action that could have a direct material effect on the Company’s business, financial condition and results of operations. The federal banking agencies’ regulations provide for an optional simplified measure of capital adequacy for qualifying community banking organizations (that is, the “CBLR” framework), as implemented pursuant to the Economic Growth, Regulatory Relief and Consumer Protection Act of 2018. The CBLR framework is designed to reduce the burden of the requirements for calculating and reporting risk-based capital ratios for qualifying community banking organizations that opt into the framework. In order to qualify for the CBLR framework, a community banking organization must have (i) a Tier 1 leverage ratio of greater than 9.0%, (ii) less than $10 billion in total consolidated assets, and (iii) limited amounts of off-balance-sheet exposure and trading assets and liabilities. A qualifying community banking organization that opts into the CBLR framework and meets all requirements under the framework will be considered to have met the capital ratio requirements for the well capitalized capital category under applicable prompt corrective action regulations and will not be required to report or calculate risk-based capital under generally applicable capital adequacy requirements. Failure to meet the qualifying criteria within the grace period of two reporting periods, or to maintain a leverage ratio of 8.0% or greater, would require the institution to comply with the generally applicable capital adequacy requirements. An eligible banking organization can opt out of the CBLR framework and revert to compliance with general capital adequacy requirements and capital measurements under prompt corrective action regulations without restriction. The Company and the Bank have determined the organization is a qualifying community banking organization and has elected to measure capital adequacy under the CBLR framework, effective as of January 1, 2023. Management believes as of March 31, 2024, the Company and the Bank meet all capital adequacy requirements to which they are subject. The following tables present the consolidated Company’s and the Bank’s actual and minimum required capital amounts and ratios under the CBLR framework at March 31, 2024 and December 31, 2023: To be Well Capitalized Under Prompt Corrective Action Regulations Actual (CBLR Framework) Amount Ratio Amount Ratio (1) March 31, 2024 Tier 1 (core) capital to average total assets (leverage ratio) Consolidated $ 341,243 14.10 % $ 217,783 9.00 % Bank $ 328,531 13.58 % $ 217,727 9.00 % (1) Also represents the minimum leverage ratio threshold under the CBLR framework. To be Well Capitalized Under Prompt Corrective Action Regulations Actual (CBLR Framework) Amount Ratio Amount Ratio (1) December 31, 2023 Tier 1 (core) capital to average total assets (leverage ratio) Consolidated $ 342,368 13.95 % $ 220,950 9.00 % Bank $ 328,362 13.38 % $ 220,920 9.00 % (1) Also represents the minimum leverage ratio threshold under the CBLR framework. Dividend Restrictions As noted above, federal 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 holding company’s principal source of funds for dividend payments is dividends received from the Bank. Regulatory approval 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. 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. |
Loss Per Share
Loss Per Share | 3 Months Ended |
Mar. 31, 2024 | |
Loss Per Share | |
Loss Per Share | Note 11—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 loss per share, basic and diluted: Three Months Ended March 31, 2024 2023 Numerator: Net loss $ (197) $ (503) Denominator: Weighted average common shares outstanding, basic 50,843,106 50,444,463 Weighted average effect of potentially dilutive common shares: Stock options — — Restricted stock — — Weighted average common shares outstanding, diluted 50,843,106 50,444,463 Loss per share: Basic $ (0.00) $ (0.01) Diluted $ (0.00) $ (0.01) 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: Three Months Ended March 31, 2024 2023 Stock options 109,775 349,545 Restricted stock 530,449 349,512 Total 640,224 699,057 |
Fair Value
Fair Value | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value | |
Fair Value | Note 12—Fair Value 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 condensed 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). The fair value of the collateralized debt obligations, which are categorized as Level 3, is obtained from third-party pricing information. It is determined by calculating discounted cash flows that include 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. 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 March 31, 2024 and December 31, 2023: Fair Value Measurements at March 31, 2024 Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Financial Assets Available for sale debt securities: U.S. Treasury and Agency securities $ 149,869 $ 120,598 $ 29,271 $ — Mortgage-backed securities 30,609 — 30,609 — Collateralized mortgage obligations 214,231 — 214,231 — Collateralized debt obligations 143 — — 143 Equity securities 4,410 4,410 — — Fair Value Measurements at December 31, 2023 Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Financial Assets Available for sale debt securities: U.S. Treasury and Agency securities $ 248,988 $ 219,582 $ 29,406 $ — Mortgage-backed securities 31,927 — 31,927 — Collateralized mortgage obligations 138,157 — 138,157 — Collateralized debt obligations 141 — — 141 Equity securities 4,457 4,457 — — The table below presents a reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2024 and 2023: Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Collateralized Debt Obligations Three Months Ended March 31, 2024 2023 Balance of recurring Level 3 assets at beginning of period $ 141 $ 147 Total gains or losses (realized/unrealized): Included in other comprehensive income (loss) 3 (2) Principal maturities/settlements (1) (1) Balance of recurring Level 3 assets at end of period $ 143 $ 144 Assets Measured at Fair Value on a Nonrecurring Basis From time to time, the Company 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 condensed consolidated balance sheets at March 31, 2024 and December 31, 2023, the following table provides the level of valuation assumptions used to determine each adjustment and the related carrying value: Fair Value Measurements at March 31, 2024 Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Fair Identical Assets Inputs Inputs Value (Level 1) (Level 2) (Level 3) Mortgage servicing rights $ 382 $ — $ — $ 382 Fair Value Measurements at December 31, 2023 Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Fair Identical Assets Inputs Inputs Value (Level 1) (Level 2) (Level 3) Mortgage servicing rights $ 576 $ — $ — $ 576 The following tables present quantitative information about Level 3 fair value measurements for assets measured at fair value on a nonrecurring basis at March 31, 2024 and December 31, 2023: Quantitative Information about Level 3 Fair Value Measurements at March 31, 2024 Range Fair Value Valuation Technique Unobservable Inputs (Weighted Average) (1) Mortgage servicing rights $ 382 Discounted cash flow Discount rate 10.0% - 12.5% (11.9%) Prepayment speed 7.1% - 22.8% (16.7%) Default rate 0.1% - 0.2% (0.1%) Quantitative Information about Level 3 Fair Value Measurements at December 31, 2023 Range Fair Value Valuation Technique Unobservable Inputs (Weighted Average) (1) Mortgage servicing rights $ 576 Discounted cash flow Discount rate 10.0% - 12.5% (12.2%) Prepayment speed 6.9% - 22.7% (18.5%) Default rate 0.1% - 0.2% (0.1%) (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 March 31, 2024 and December 31, 2023, are as follows: Fair Value Measurements at March 31, 2024 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial Assets Cash and due from banks $ 646,168 $ 646,168 $ 646,168 $ — $ — Interest-bearing time deposits with other banks 5,229 5,229 5,229 — — Loans, net 1,274,022 1,270,120 — — 1,270,120 Financial Liabilities Time deposits 900,996 902,983 — 902,983 — Federal Home Loan Bank borrowings 50,000 49,780 — 49,780 — Fair Value Measurements at December 31, 2023 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial Assets Cash and due from banks $ 577,967 $ 577,967 $ 577,967 $ — $ — Interest-bearing time deposits with other banks 5,226 5,226 5,226 — — Loans, net 1,319,568 1,313,282 — — 1,313,282 Financial Liabilities Time deposits 873,220 874,274 — 874,274 — Federal Home Loan Bank borrowings 50,000 49,370 — 49,370 — |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 13—Commitments and Contingencies Financial Instruments with Off-Balance Sheet Risk The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of its customers. These financial instruments include commitments to extend credit, such as loan commitments and unused credit lines, and standby letters of credit, which are not reflected in the condensed consolidated financial statements. The Company is required to estimate the expected credit losses for off-balance sheet credit exposures. The Company maintains an estimated liability for unfunded commitments, primarily related to commitments to extend credit, which is included in other liabilities on the condensed consolidated balance sheets. The liability for unfunded commitments is reduced in the period in which the off-balance sheet financial instruments expire, loan funding occurs or is otherwise settled. The following presents the activity in the liability for unfunded commitments for the three months ended March 31, 2024 and 2023: Residential Commercial Commercial Three Months Ended March 31, 2024 Real Estate Real Estate Construction and Industrial Total Liability for unfunded commitments: Balance at the beginning of the period $ 1 $ 124 $ 763 $ 8 $ 896 Increase (decrease) in provision for (recovery of) credit losses — (9) 107 90 188 Total ending balance $ 1 $ 115 $ 870 $ 98 $ 1,084 Residential Commercial Commercial Three Months Ended March 31, 2023 Real Estate Real Estate Construction and Industrial Total Liability for unfunded commitments: Balance at the beginning of the period $ — $ — $ — $ — $ — Adoption of ASU 2016-13 53 125 398 3 579 Increase (decrease) in provision for (recovery of) credit losses 49 30 (190) 1 (110) Total ending balance $ 102 $ 155 $ 208 $ 4 $ 469 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 Company may 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 used. Certain commitments are subject to loan agreements containing covenants regarding the financial performance of the customer that must be met before the Company is required to fund the commitment. The Company uses the same credit policies in making commitments to extend credit as it does in making loans. Unused Lines of Credit The Company also issues unused lines of credit to meet customer financing needs. At March 31, 2024, the unused lines of credit include residential second mortgages of $9,370, construction loans of $5,536, commercial real estate of $2,165 and commercial and industrial loans of $13,279, totaling $30,350. These unused lines of credit consisted of a fixed rate loan of $5,000 with an interest rate of 6.00% and a maturity of two years and variable-rate loans of $25,350 with interest rates ranging from 4.54% to 10.88% and maturities ranging from five months 22 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 Company assures that the third parties will receive specified funds if customers fail to meet their contractual obligations. The credit risk to the Company 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 Company 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 March 31, 2024 and December 31, 2023: March 31, December 31, 2024 2023 Unused lines of credit $ 30,350 $ 18,542 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 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 not material to its financial position, results of operations or liquidity. The Bank has incurred and expects to continue to incur significant costs in connection with its ongoing cooperation with the government investigations of certain individuals and the advancement or reimbursement of third parties for the legal costs pursuant to requests for indemnification and advancement of expenses, which are reflected in the Company’s condensed consolidated statements of operations for the three months ended March 31, 2024 and 2023. In addition, the Company’s directors and officers insurance policies for matters related to the ongoing government investigations against selected individuals was exhausted in the fourth quarter of 2023. The Company understands that the government investigations into certain individuals are continuing, including calling individuals as witnessess. Therefore, the Company expects to continue to receive claims for advancement or reimbursement of legal fees and any future costs the Company incurs will not be reimbursed by its insurance carriers. Mortgage Repurchase Liability The Company has previously sold portfolio loans originated under the Advantage Loan Program to private investors in the secondary market. The Company also sold 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 loan and certain expenses. As a result, the Company may incur a loss with respect to each repurchased loan. Pursuant to the existing agreements with such investors, the Company also agreed to repurchase additional pools of Advantage Loan Program loans at the predetermined repurchase prices as stated in the agreements. At March 31, 2024, there is an outstanding agreement to repurchase an additional pool of Advantage Loan Program loans with an unpaid principal balance of $15,481 that extends to July 2025, with the final decision to effect any such repurchase, as determined by the applicable investor. At March 31, 2024 and December 31, 2023, the mortgage repurchase liability was $749 and $750, respectively, which is included in other liabilities in the condensed consolidated balance sheets. The unpaid principal balance of residential real estate loans sold that were subject to potential repurchase obligations in the event of breach of representations and warranties totaled $40,033 and $49,667 at March 31, 2024 and December 31, 2023, respectively, including Advantage Loan Program loans totaling $29,936 and $33,044 at March 31, 2024 and December 31, 2023, respectively. Activity in the mortgage repurchase liability was as follows: Three Months Ended March 31, 2024 2023 Balance, beginning of period $ 750 $ 809 Net provision (recovery) (1) 120 Balance, end of the period $ 749 $ 929 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The condensed consolidated financial statements include the results of Sterling Bancorp, Inc. and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the condensed 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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. 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. |
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 March 31, 2024 and December 31, 2023, residential real estate loans accounted for 80% of total gross loans. 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 March 31, 2024 and December 31, 2023, approximately 79% and 80%, respectively, of gross loans were originated with respect to properties or businesses located in the state of California. Also, the loan portfolio consists of a loan product of one-, three-, five- or seven-year adjustable-rate mortgages that required a down payment of at least 35% (also referred to herein as “Advantage Loan Program loans”) which was terminated at the end of 2019 and continues to be the largest portion of gross residential loans. An internal review of the Advantage Loan Program and investigations conducted by the U.S. Department of Justice and the OCC indicated that certain employees engaged in misconduct in connection with the origination of a significant number of such loans, including the falsification of information with respect to verification of income, the amount of income reported for borrowers, reliance on third parties and related documentation. This former loan product totaled $593,144, or 57% of gross residential loans, and $628,245, or 58% of gross residential loans, at March 31, 2024 and December 31, 2023, respectively. |
Recently Issued Accounting Standards Not Yet Adopted | Recently Issued Accounting Standards Not Yet Adopted In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures |
Debt Securities (Tables)
Debt Securities (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Securities | |
Summary of amortized cost and fair value of debt securities available for sale | March 31, 2024 Amortized Gross Unrealized Fair Cost Gain Loss Value Available for sale: U.S. Treasury and Agency securities $ 154,007 $ 3 $ (4,141) $ 149,869 Mortgage-backed securities 34,629 — (4,020) 30,609 Collateralized mortgage obligations 228,131 10 (13,910) 214,231 Collateralized debt obligations 150 — (7) 143 Total $ 416,917 $ 13 $ (22,078) $ 394,852 December 31, 2023 Amortized Gross Unrealized Fair Cost Gain Loss Value Available for sale: U.S. Treasury and Agency securities $ 253,107 $ 57 $ (4,176) $ 248,988 Mortgage-backed securities 35,757 — (3,830) 31,927 Collateralized mortgage obligations 151,196 27 (13,066) 138,157 Collateralized debt obligations 151 — (10) 141 Total $ 440,211 $ 84 $ (21,082) $ 419,213 |
Schedule of information pertaining to sales of available for sale debt securities | Three Months Ended March 31, 2024 2023 Proceeds from the sale of debt securities $ — $ 2,977 Gross realized gains $ — $ 1 Gross realized losses — (3) Total net realized losses $ — $ (2) |
Schedule of amortized cost and fair value of debt securities available for sale, shown by contractual maturity | Amortized Fair Cost Value U.S. Treasury and Agency securities: Due less than one year $ 74,470 $ 74,469 Due after one year through five years 79,537 75,400 Mortgage-backed securities 34,629 30,609 Collateralized mortgage obligations 228,131 214,231 Collateralized debt obligations 150 143 Total $ 416,917 $ 394,852 |
Summary of available for sale debt securities, at fair value, continuous unrealized loss position | March 31, 2024 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses U.S. Treasury and Agency securities $ 49,820 $ (4) $ 75,400 $ (4,137) $ 125,220 $ (4,141) Mortgage-backed securities — — 30,609 (4,020) 30,609 (4,020) Collateralized mortgage obligations 103,507 (277) 107,065 (13,633) 210,572 (13,910) Collateralized debt obligations — — 143 (7) 143 (7) Total $ 153,327 $ (281) $ 213,217 $ (21,797) $ 366,544 $ (22,078) December 31, 2023 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses U.S. Treasury and Agency securities $ 49,836 $ (1) $ 125,183 $ (4,175) $ 175,019 $ (4,176) Mortgage-backed securities — — 31,927 (3,830) 31,927 (3,830) Collateralized mortgage obligations 10,297 (221) 111,554 (12,845) 121,851 (13,066) Collateralized debt obligations — — 141 (10) 141 (10) Total $ 60,133 $ (222) $ 268,805 $ (20,860) $ 328,938 $ (21,082) |
Equity Securities (Tables)
Equity Securities (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Equity Securities | |
Summary of unrealized and realized gains and losses recognized in the condensed consolidated statements of income | Three Months Ended March 31, 2024 2023 Net gain (loss) recorded during the period on equity securities $ (47) $ 71 Less: net gain (loss) recorded during the period on equity securities sold during the period — — Unrealized gain (loss) recorded during the period on equity securities held at the reporting date $ (47) $ 71 |
Loans (Tables)
Loans (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Loans | |
Schedule of major categories of loans held for investment and allowance for credit losses | March 31, December 31, 2024 2023 Residential real estate $ 1,040,464 $ 1,085,776 Commercial real estate 244,546 236,982 Construction 4,915 10,381 Commercial and industrial 13,348 15,832 Other consumer 6 1 Total loans 1,303,279 1,348,972 Less: allowance for credit losses (29,257) (29,404) Loans, net $ 1,274,022 $ 1,319,568 |
Schedule of activity in allowance for credit losses and recorded investment by portfolio segment | Residential Commercial Commercial Three Months Ended March 31, 2024 Real Estate Real Estate Construction and Industrial Total Allowance for credit losses: Balance at the beginning of the period $ 14,322 $ 13,550 $ 1,386 $ 146 $ 29,404 Provision for (recovery of) credit losses 912 (395) (616) (48) (147) Charge offs — — — — — Recoveries — — — — — Total ending balance $ 15,234 $ 13,155 $ 770 $ 98 $ 29,257 Residential Commercial Commercial Three Months Ended March 31, 2023 Real Estate Real Estate Construction and Industrial Total Allowance for credit losses: Balance at the beginning of the period $ 27,951 $ 11,694 $ 5,781 $ 38 $ 45,464 Adoption of ASU 2016-13 865 1,151 (3,633) (34) (1,651) Adoption of ASU 2022-02 (11) — 391 — 380 Provision for (recovery of) credit losses (1,889) 3,217 (546) 2 784 Charge offs (6,478) — — — (6,478) Recoveries 60 5 1 — 66 Total ending balance $ 20,498 $ 16,067 $ 1,994 $ 6 $ 38,565 |
Schedule of recorded investment in nonaccrual and loans past due over 90 days or more and still on accrual by class of loans and aging of the recorded investment in past due loans | March 31, 2024 December 31, 2023 Nonaccrual Past Due 90 Nonaccrual Past Due 90 With No Days or More With No Days or More Nonaccrual Allowance for and Still Nonaccrual Allowance for and Still Loans Credit Losses Accruing Loans Credit Losses Accruing Residential real estate: Residential first mortgage $ 9,318 $ 2,064 $ 30 $ 8,942 $ 4,079 $ 31 The following table presents an aging of the amortized cost basis of contractually past due loans as of March 31, 2024 and December 31, 2023: 30 - 59 60 - 89 90 Days Days Days or More Total Current March 31, 2024 Past Due Past Due Past Due Past Due Loans Total Residential real estate $ 10,316 $ 2,708 $ 9,348 $ 22,372 $ 1,018,092 $ 1,040,464 Commercial real estate — — — — 244,546 244,546 Construction — — — — 4,915 4,915 Commercial and industrial — — — — 13,348 13,348 Other consumer — — — — 6 6 Total $ 10,316 $ 2,708 $ 9,348 $ 22,372 $ 1,280,907 $ 1,303,279 30 - 59 60 - 89 90 Days Days Days or More Total Current December 31, 2023 Past Due Past Due Past Due Past Due Loans Total Residential real estate $ 16,634 $ 2,305 $ 8,973 $ 27,912 $ 1,057,864 $ 1,085,776 Commercial real estate — — — — 236,982 236,982 Construction — — — — 10,381 10,381 Commercial and industrial — — — — 15,832 15,832 Other consumer — — — — 1 1 Total $ 16,634 $ 2,305 $ 8,973 $ 27,912 $ 1,321,060 $ 1,348,972 |
Schedule of risk rating of loans by class of loans | Revolving Revolving Loans Loans Term Loans Amortized Cost Basis by Origination Year Amortized Converted As of March 31, 2024 2024 2023 2022 2021 2020 Prior Costs Basis to Term Total Residential lending Residential mortgage loans: Payment performance: Accrual $ — $ 762 $ 71,885 $ 130,283 $ 97,241 $ 722,935 $ 7,767 $ 273 $ 1,031,146 Nonaccrual — — — — — 9,318 — — 9,318 Total residential mortgage loans $ — $ 762 $ 71,885 $ 130,283 $ 97,241 $ 732,253 $ 7,767 $ 273 $ 1,040,464 Residential mortgage loans: Current period gross write offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Revolving Revolving Loans Loans Term Loans Amortized Cost Basis by Origination Year Amortized Converted As of December 31, 2023 2023 2022 2021 2020 2019 Prior Costs Basis to Term Total Residential lending Residential mortgage loans: Payment performance: Accrual $ 764 $ 72,840 $ 132,567 $ 99,676 $ 202,793 $ 560,185 $ 7,729 $ 280 $ 1,076,834 Nonaccrual — — — — 1,739 7,203 — — 8,942 Total residential mortgage loans $ 764 $ 72,840 $ 132,567 $ 99,676 $ 204,532 $ 567,388 $ 7,729 $ 280 $ 1,085,776 Residential mortgage loans: Current period gross write offs $ — $ — $ — $ — $ 1,858 $ 4,601 $ 19 $ — $ 6,478 The amortized cost basis by year of origination and credit quality indicator of the Company’s commercial loans based on the most recent analysis performed was as follows: Revolving Revolving Loans Loans Term Loans Amortized Cost Basis by Origination Year Amortized Converted As of March 31, 2024 2024 2023 2022 2021 2020 Prior Costs Basis to Term Total Commercial lending Real estate - commercial real estate: Risk rating Pass $ 14,929 $ 22,176 $ 78,672 $ 34,970 $ 34,958 $ 24,352 $ — $ — $ 210,057 Special mention — 944 3,550 — 2,718 8,632 — — 15,844 Substandard or lower — — — 11,785 — 6,860 — — 18,645 Total real estate – commercial real estate $ 14,929 $ 23,120 $ 82,222 $ 46,755 $ 37,676 $ 39,844 $ — $ — $ 244,546 Real estate – commercial real estate: Current period gross charge offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Real estate – construction: Risk rating Pass $ — $ 12 $ — $ — $ — $ — $ — $ — $ 12 Substandard or lower — — — — — 4,903 — — 4,903 Total real estate - construction $ — $ 12 $ — $ — $ — $ 4,903 $ — $ — $ 4,915 Real estate – construction: Current period gross charge offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial and industrial: Risk rating Pass $ — $ 9,467 $ 1,064 $ — $ — $ 94 $ 2,672 $ 51 $ 13,348 Total commercial and industrial $ — $ 9,467 $ 1,064 $ — $ — $ 94 $ 2,672 $ 51 $ 13,348 Commercial and industrial: Current period gross charge offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Revolving Revolving Loans Loans Term Loans Amortized Cost Basis by Origination Year Amortized Converted As of December 31, 2023 2023 2022 2021 2020 2019 Prior Costs Basis to Term Total Commercial lending Real estate - commercial real estate: Risk rating Pass $ 28,975 $ 79,013 $ 33,694 $ 35,148 $ 6,938 $ 13,020 $ — $ — $ 196,788 Special mention 948 3,574 1,407 2,724 8,610 4,253 — — 21,516 Substandard or lower — — 11,778 — 2,805 4,095 — — 18,678 Total real estate - commercial real estate $ 29,923 $ 82,587 $ 46,879 $ 37,872 $ 18,353 $ 21,368 $ — $ — $ 236,982 Real estate - commercial real estate: Current period gross charge offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Real estate - construction: Risk rating Pass $ 14 $ — $ — $ 1,591 $ — $ — $ — $ — $ 1,605 Substandard or lower — — — — 8,776 — — — 8,776 Total real estate - construction $ 14 $ — $ — $ 1,591 $ 8,776 $ — $ — $ — $ 10,381 Real estate - construction: Current period gross charge offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial and industrial: Risk rating Pass $ 14,461 $ 1,071 $ — $ — $ — $ 97 $ 130 $ 73 $ 15,832 Total commercial and industrial $ 14,461 $ 1,071 $ — $ — $ — $ 97 $ 130 $ 73 $ 15,832 Commercial and industrial: Current period gross charge offs $ — $ — $ — $ — $ — $ — $ — $ — $ — |
Mortgage Servicing Rights, net
Mortgage Servicing Rights, net (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Mortgage Servicing Rights, net | |
Schedule of principal balance of mortgage loans serviced for others | March 31, December 31, 2024 2023 Residential real estate mortgage loan portfolios serviced for: FNMA $ 103,969 $ 105,689 FHLB 30,464 31,016 Private investors 29,937 33,044 Total $ 164,370 $ 169,749 |
Schedule of activity for mortgage servicing rights and related valuation allowance | Three Months Ended March 31, 2024 2023 Mortgage servicing rights: Beginning of period $ 1,590 $ 1,840 Additions — — Amortization (64) (74) End of period 1,526 1,766 Valuation allowance: Beginning of period 48 46 Additions (recoveries) (7) 17 End of period 41 63 Mortgage servicing rights, net $ 1,485 $ 1,703 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Stock-based Compensation | |
Summary of stock option activity | Weighted Weighted Average Average Remaining Aggregate Number Exercise Contractual Intrinsic of Shares Price Term Value (Years) Outstanding at January 1, 2024 340,395 $ 4.96 6.23 $ 531 Granted — Exercised — Forfeited/expired — Outstanding and exercisable at March 31, 2024 340,395 $ 4.96 5.98 $ 348 |
Summary of the company's restricted stock awards activity | Weighted Average Number Grant Date of Shares Fair Value Nonvested at January 1, 2024 1,364,570 $ 5.27 Granted 60,000 5.77 Vested (176,644) 5.50 Forfeited (45,645) 5.36 Nonvested at March 31, 2024 1,202,281 $ 5.26 |
Regulatory Capital Requiremen_2
Regulatory Capital Requirements (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Regulatory Capital Requirements | |
Schedule of minimum requirements under prompt corrective action regulations classifications | To be Well Capitalized Under Prompt Corrective Action Regulations Actual (CBLR Framework) Amount Ratio Amount Ratio (1) March 31, 2024 Tier 1 (core) capital to average total assets (leverage ratio) Consolidated $ 341,243 14.10 % $ 217,783 9.00 % Bank $ 328,531 13.58 % $ 217,727 9.00 % (1) Also represents the minimum leverage ratio threshold under the CBLR framework. To be Well Capitalized Under Prompt Corrective Action Regulations Actual (CBLR Framework) Amount Ratio Amount Ratio (1) December 31, 2023 Tier 1 (core) capital to average total assets (leverage ratio) Consolidated $ 342,368 13.95 % $ 220,950 9.00 % Bank $ 328,362 13.38 % $ 220,920 9.00 % (1) Also represents the minimum leverage ratio threshold under the CBLR framework. |
Loss Per Share (Tables)
Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Loss Per Share | |
Schedule of computation of income (loss) per share, basic and diluted | Three Months Ended March 31, 2024 2023 Numerator: Net loss $ (197) $ (503) Denominator: Weighted average common shares outstanding, basic 50,843,106 50,444,463 Weighted average effect of potentially dilutive common shares: Stock options — — Restricted stock — — Weighted average common shares outstanding, diluted 50,843,106 50,444,463 Loss per share: Basic $ (0.00) $ (0.01) Diluted $ (0.00) $ (0.01) |
Schedule of anti-dilutive shares that were excluded from the computation of weighted average diluted shares outstanding | Three Months Ended March 31, 2024 2023 Stock options 109,775 349,545 Restricted stock 530,449 349,512 Total 640,224 699,057 |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value | |
Schedule of assets measured at fair value on a recurring basis categorized by level of inputs | Fair Value Measurements at March 31, 2024 Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Financial Assets Available for sale debt securities: U.S. Treasury and Agency securities $ 149,869 $ 120,598 $ 29,271 $ — Mortgage-backed securities 30,609 — 30,609 — Collateralized mortgage obligations 214,231 — 214,231 — Collateralized debt obligations 143 — — 143 Equity securities 4,410 4,410 — — Fair Value Measurements at December 31, 2023 Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Financial Assets Available for sale debt securities: U.S. Treasury and Agency securities $ 248,988 $ 219,582 $ 29,406 $ — Mortgage-backed securities 31,927 — 31,927 — Collateralized mortgage obligations 138,157 — 138,157 — Collateralized debt obligations 141 — — 141 Equity securities 4,457 4,457 — — |
Schedule of reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs | Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Collateralized Debt Obligations Three Months Ended March 31, 2024 2023 Balance of recurring Level 3 assets at beginning of period $ 141 $ 147 Total gains or losses (realized/unrealized): Included in other comprehensive income (loss) 3 (2) Principal maturities/settlements (1) (1) Balance of recurring Level 3 assets at end of period $ 143 $ 144 |
Schedule of assets measured at fair value on a nonrecurring basis categorized by level of inputs | Fair Value Measurements at March 31, 2024 Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Fair Identical Assets Inputs Inputs Value (Level 1) (Level 2) (Level 3) Mortgage servicing rights $ 382 $ — $ — $ 382 Fair Value Measurements at December 31, 2023 Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Fair Identical Assets Inputs Inputs Value (Level 1) (Level 2) (Level 3) Mortgage servicing rights $ 576 $ — $ — $ 576 |
Schedule of quantitative information about nonrecurring Level 3 fair value measurements | Quantitative Information about Level 3 Fair Value Measurements at March 31, 2024 Range Fair Value Valuation Technique Unobservable Inputs (Weighted Average) (1) Mortgage servicing rights $ 382 Discounted cash flow Discount rate 10.0% - 12.5% (11.9%) Prepayment speed 7.1% - 22.8% (16.7%) Default rate 0.1% - 0.2% (0.1%) Quantitative Information about Level 3 Fair Value Measurements at December 31, 2023 Range Fair Value Valuation Technique Unobservable Inputs (Weighted Average) (1) Mortgage servicing rights $ 576 Discounted cash flow Discount rate 10.0% - 12.5% (12.2%) Prepayment speed 6.9% - 22.7% (18.5%) Default rate 0.1% - 0.2% (0.1%) (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 March 31, 2024 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial Assets Cash and due from banks $ 646,168 $ 646,168 $ 646,168 $ — $ — Interest-bearing time deposits with other banks 5,229 5,229 5,229 — — Loans, net 1,274,022 1,270,120 — — 1,270,120 Financial Liabilities Time deposits 900,996 902,983 — 902,983 — Federal Home Loan Bank borrowings 50,000 49,780 — 49,780 — Fair Value Measurements at December 31, 2023 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial Assets Cash and due from banks $ 577,967 $ 577,967 $ 577,967 $ — $ — Interest-bearing time deposits with other banks 5,226 5,226 5,226 — — Loans, net 1,319,568 1,313,282 — — 1,313,282 Financial Liabilities Time deposits 873,220 874,274 — 874,274 — Federal Home Loan Bank borrowings 50,000 49,370 — 49,370 — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies | |
Summary of the activity in the liability for unfunded commitments | Residential Commercial Commercial Three Months Ended March 31, 2024 Real Estate Real Estate Construction and Industrial Total Liability for unfunded commitments: Balance at the beginning of the period $ 1 $ 124 $ 763 $ 8 $ 896 Increase (decrease) in provision for (recovery of) credit losses — (9) 107 90 188 Total ending balance $ 1 $ 115 $ 870 $ 98 $ 1,084 Residential Commercial Commercial Three Months Ended March 31, 2023 Real Estate Real Estate Construction and Industrial Total Liability for unfunded commitments: Balance at the beginning of the period $ — $ — $ — $ — $ — Adoption of ASU 2016-13 53 125 398 3 579 Increase (decrease) in provision for (recovery of) credit losses 49 30 (190) 1 (110) Total ending balance $ 102 $ 155 $ 208 $ 4 $ 469 |
Summary of total amount of unfunded commitments to extend credit and standby letters of credit outstanding | March 31, December 31, 2024 2023 Unused lines of credit $ 30,350 $ 18,542 Standby letters of credit 24 24 |
Summary of activity in the mortgage repurchase liability | Three Months Ended March 31, 2024 2023 Balance, beginning of period $ 750 $ 809 Net provision (recovery) (1) 120 Balance, end of the period $ 749 $ 929 |
Nature of Operations and Basi_2
Nature of Operations and Basis of Presentation (Details) | 3 Months Ended |
Mar. 31, 2024 item | |
Nature of Operations and Basis of Presentation | |
Number of branches | 27 |
San Francisco and Los Angeles, California | |
Nature of Operations and Basis of Presentation | |
Number of branches | 25 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Concentration of Credit Risk (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Concentration of Credit Risk | ||
Minimum down payment percentage for Advantage Loan Program loans | 35% | |
Residential real estate loans | Loans receivables | Residential real estate | ||
Concentration of Credit Risk | ||
Concentration of credit risk | 80% | 80% |
California | Loans receivables | Residential real estate | ||
Concentration of Credit Risk | ||
Concentration of credit risk | 79% | 80% |
Advantage Loan Program | Loans receivables | Residential real estate | ||
Concentration of Credit Risk | ||
Concentration of credit risk | 57% | 58% |
Loans receivable | $ 593,144 | $ 628,245 |
Debt Securities-Amortized Cost
Debt Securities-Amortized Cost and Fair Value, Realized Gains and Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Debt Securities | |||
Amortized Cost | $ 416,917 | $ 440,211 | |
Gross Unrealized Gain | 13 | 84 | |
Gross Unrealized Loss | (22,078) | (21,082) | |
Fair Value | 394,852 | 419,213 | |
Accrued interest receivable on available for sale debt securities | 1,403 | 1,535 | |
Carrying value of debt securities held of any single issuer in excess of 10% of shareholders equity | $ 0 | $ 0 | |
Threshold percentage of total shareholders' equity above which securities of any single issuer exceed | 10% | 10% | |
Proceeds from the sale of debt securities | $ 2,977 | ||
Gross realized gains | 1 | ||
Gross realized losses | (3) | ||
Total net realized losses | (2) | ||
Income tax expense (benefit) related to the net realized losses | $ (1) | ||
Collateralized mortgage obligations | US Government Corporations and Agencies Securities | |||
Debt Securities | |||
Fair Value | $ 285 | $ 308 | |
Debt securities | Assets pledged as collateral | FHLB borrowings | |||
Debt Securities | |||
Fair Value | 75,400 | ||
U.S. Treasury and Agency securities | |||
Debt Securities | |||
Amortized Cost | 154,007 | 253,107 | |
Gross Unrealized Gain | 3 | 57 | |
Gross Unrealized Loss | (4,141) | (4,176) | |
Fair Value | 149,869 | 248,988 | |
Mortgage-backed securities | |||
Debt Securities | |||
Amortized Cost | 34,629 | 35,757 | |
Gross Unrealized Loss | (4,020) | (3,830) | |
Fair Value | 30,609 | 31,927 | |
Collateralized mortgage obligations | |||
Debt Securities | |||
Amortized Cost | 228,131 | 151,196 | |
Gross Unrealized Gain | 10 | 27 | |
Gross Unrealized Loss | (13,910) | (13,066) | |
Fair Value | 214,231 | 138,157 | |
Collateralized debt obligations | |||
Debt Securities | |||
Amortized Cost | 150 | 151 | |
Gross Unrealized Loss | (7) | (10) | |
Fair Value | $ 143 | $ 141 |
Debt Securities - Amortized Cos
Debt Securities - Amortized Cost and Fair Value By Contractual Maturity (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Available for sale, Amortized Cost | ||
Available for sale, Amortized Cost | $ 416,917 | $ 440,211 |
Available for sale, Fair Value | ||
Available for sale, Fair Value | 394,852 | 419,213 |
U.S. Treasury and Agency securities | ||
Available for sale, Amortized Cost | ||
Due less than one year | 74,470 | |
Due after one year through five years | 79,537 | |
Available for sale, Amortized Cost | 154,007 | 253,107 |
Available for sale, Fair Value | ||
Due less than one year | 74,469 | |
Due after one year through five years | 75,400 | |
Available for sale, Fair Value | 149,869 | 248,988 |
Mortgage-backed securities | ||
Available for sale, Amortized Cost | ||
Available for sale, Amortized Cost | 34,629 | 35,757 |
Available for sale, Fair Value | ||
Available for sale, Fair Value | 30,609 | 31,927 |
Collateralized mortgage obligations | ||
Available for sale, Amortized Cost | ||
Available for sale, Amortized Cost | 228,131 | 151,196 |
Available for sale, Fair Value | ||
Available for sale, Fair Value | 214,231 | 138,157 |
Collateralized debt obligations | ||
Available for sale, Amortized Cost | ||
Available for sale, Amortized Cost | 150 | 151 |
Available for sale, Fair Value | ||
Available for sale, Fair Value | $ 143 | $ 141 |
Debt Securities - Aggregated by
Debt Securities - Aggregated by Major Security Type and Length of Time in a Continuous Unrealized Loss Position (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 USD ($) security | Dec. 31, 2023 USD ($) | |
Fair Value | ||
Less than 12 Months, Fair value | $ 153,327 | $ 60,133 |
12 Months or More, Fair Value | 213,217 | 268,805 |
Available for sale, Continuous unrealized loss position, Fair Value | 366,544 | 328,938 |
Unrealized Losses | ||
Less than 12 Months, Unrealized Losses | (281) | (222) |
12 Months or More, Unrealized Losses | (21,797) | (20,860) |
Available for sale, Continuous unrealized loss position, Unrealized Losses | $ (22,078) | (21,082) |
Number of debt securities in portfolio | security | 35 | |
Number of debt securities in an unrealized loss position | security | 32 | |
U.S. Treasury and Agency securities | ||
Fair Value | ||
Less than 12 Months, Fair value | $ 49,820 | 49,836 |
12 Months or More, Fair Value | 75,400 | 125,183 |
Available for sale, Continuous unrealized loss position, Fair Value | 125,220 | 175,019 |
Unrealized Losses | ||
Less than 12 Months, Unrealized Losses | (4) | (1) |
12 Months or More, Unrealized Losses | (4,137) | (4,175) |
Available for sale, Continuous unrealized loss position, Unrealized Losses | (4,141) | (4,176) |
Mortgage-backed securities | ||
Fair Value | ||
12 Months or More, Fair Value | 30,609 | 31,927 |
Available for sale, Continuous unrealized loss position, Fair Value | 30,609 | 31,927 |
Unrealized Losses | ||
12 Months or More, Unrealized Losses | (4,020) | (3,830) |
Available for sale, Continuous unrealized loss position, Unrealized Losses | (4,020) | (3,830) |
Collateralized mortgage obligations | ||
Fair Value | ||
Less than 12 Months, Fair value | 103,507 | 10,297 |
12 Months or More, Fair Value | 107,065 | 111,554 |
Available for sale, Continuous unrealized loss position, Fair Value | 210,572 | 121,851 |
Unrealized Losses | ||
Less than 12 Months, Unrealized Losses | (277) | (221) |
12 Months or More, Unrealized Losses | (13,633) | (12,845) |
Available for sale, Continuous unrealized loss position, Unrealized Losses | (13,910) | (13,066) |
Collateralized debt obligations | ||
Fair Value | ||
12 Months or More, Fair Value | 143 | 141 |
Available for sale, Continuous unrealized loss position, Fair Value | 143 | 141 |
Unrealized Losses | ||
12 Months or More, Unrealized Losses | (7) | (10) |
Available for sale, Continuous unrealized loss position, Unrealized Losses | $ (7) | $ (10) |
Equity Securities (Details)
Equity Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Investment Securities | |||
Fair value of equity securities | $ 4,656 | $ 4,703 | |
Equity securities | 4,410 | 4,457 | |
Equity securities with readily determinable fair values | |||
Net gain (loss) recorded during the period on equity securities | (47) | $ 71 | |
Unrealized gain (loss) recorded during the period on equity securities held at the reporting date | (47) | $ 71 | |
Level 3 | |||
Investment Securities | |||
Investment in equity securities without readily determinable fair value | $ 246 | $ 246 |
Loans - Loans Held for Investme
Loans - Loans Held for Investment - Major categories, accrued interest, pledged (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2023 | Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | |
Loans | |||||
Total | $ 1,303,279 | $ 1,348,972 | |||
Less: allowance for credit losses | $ (38,565) | $ (38,565) | (29,257) | (29,404) | $ (45,464) |
Loans, net | 1,274,022 | 1,319,568 | |||
Accrued interest receivable related to gross loans | 6,701 | 6,617 | |||
Transfer of residential real estate loans to loans held for sale | 34,581 | ||||
Assets pledged as collateral | |||||
Loans | |||||
Loans, net | 2,027 | 4,004 | |||
Assets pledged as collateral | FHLB borrowings | |||||
Loans | |||||
Loans pledged as collateral | 533,650 | 428,358 | |||
Residential real estate | |||||
Loans | |||||
Total | 1,040,464 | 1,085,776 | |||
Less: allowance for credit losses | (20,498) | (20,498) | (15,234) | (14,322) | (27,951) |
Transfer of residential real estate loans to loans held for sale | 41,059 | ||||
Loans receivable charged off | 6,478 | ||||
Residential real estate | Assets pledged as collateral | |||||
Loans | |||||
Loans in formal foreclosure proceedings | 2,027 | ||||
Residential real estate mortgage loans | Assets pledged as collateral | |||||
Loans | |||||
Loans in formal foreclosure proceedings | 4,004 | ||||
Commercial real estate | |||||
Loans | |||||
Total | 244,546 | 236,982 | |||
Less: allowance for credit losses | (16,067) | (16,067) | (13,155) | (13,550) | (11,694) |
Construction loans | |||||
Loans | |||||
Total | 4,915 | 10,381 | |||
Less: allowance for credit losses | (1,994) | (1,994) | (770) | (1,386) | (5,781) |
Commercial and industrial | |||||
Loans | |||||
Total | 13,348 | 15,832 | |||
Less: allowance for credit losses | $ (6) | $ (6) | (98) | (146) | $ (38) |
Other consumer | |||||
Loans | |||||
Total | $ 6 | $ 1 |
Loans - Activity in the Allowan
Loans - Activity in the Allowance For Credit Losses by Portfolio Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Allowance for credit losses | ||
Balance at the beginning of the period | $ 29,404 | $ 45,464 |
Provision for (recovery of) credit losses | (147) | 784 |
Charge offs | (6,478) | |
Recoveries | 66 | |
Total ending balance | 29,257 | 38,565 |
ASU 2016-13 | ||
Allowance for credit losses | ||
Balance at the beginning of the period | (1,651) | |
ASU 2022-02 | ||
Allowance for credit losses | ||
Balance at the beginning of the period | (380) | |
Residential Real Estate | ||
Allowance for credit losses | ||
Balance at the beginning of the period | 14,322 | 27,951 |
Provision for (recovery of) credit losses | 912 | (1,889) |
Charge offs | (6,478) | |
Recoveries | 60 | |
Total ending balance | 15,234 | 20,498 |
Residential Real Estate | ASU 2016-13 | ||
Allowance for credit losses | ||
Balance at the beginning of the period | 865 | |
Residential Real Estate | ASU 2022-02 | ||
Allowance for credit losses | ||
Balance at the beginning of the period | 11 | |
Commercial Real Estate | ||
Allowance for credit losses | ||
Balance at the beginning of the period | 13,550 | 11,694 |
Provision for (recovery of) credit losses | (395) | 3,217 |
Recoveries | 5 | |
Total ending balance | 13,155 | 16,067 |
Commercial Real Estate | ASU 2016-13 | ||
Allowance for credit losses | ||
Balance at the beginning of the period | 1,151 | |
Construction loans | ||
Allowance for credit losses | ||
Balance at the beginning of the period | 1,386 | 5,781 |
Provision for (recovery of) credit losses | (616) | (546) |
Recoveries | 1 | |
Total ending balance | 770 | 1,994 |
Construction loans | ASU 2016-13 | ||
Allowance for credit losses | ||
Balance at the beginning of the period | (3,633) | |
Construction loans | ASU 2022-02 | ||
Allowance for credit losses | ||
Balance at the beginning of the period | (391) | |
Commercial and industrial | ||
Allowance for credit losses | ||
Balance at the beginning of the period | 146 | 38 |
Provision for (recovery of) credit losses | (48) | 2 |
Total ending balance | $ 98 | 6 |
Commercial and industrial | ASU 2016-13 | ||
Allowance for credit losses | ||
Balance at the beginning of the period | $ (34) |
Loans - Nonaccrual loans cost b
Loans - Nonaccrual loans cost basis, Aging analysis of past due loans, foreclosure (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Loans | ||||
Nonaccrual loans held for sale | $ 9,318 | |||
Transfer of loans to loans held for sale | $ 34,581 | |||
Total | 1,303,279 | $ 1,348,972 | ||
Not Past Due | ||||
Loans | ||||
Total | 1,280,907 | 1,321,060 | ||
Past Due | ||||
Loans | ||||
Total | 22,372 | 27,912 | ||
30 - 59 Days Past Due | ||||
Loans | ||||
Total | 10,316 | 16,634 | ||
60 - 89 Days Past Due | ||||
Loans | ||||
Total | 2,708 | 2,305 | ||
90 Days or More Past Due | ||||
Loans | ||||
Total | 9,348 | 8,973 | ||
Residential real estate | ||||
Loans | ||||
Transfer of loans to loans held for sale | $ 41,059 | |||
Payment of nonaccrual residential real estate loan | 227 | |||
Total interest income on nonaccrual loan | 215 | $ 538 | ||
Total | 1,040,464 | 1,085,776 | ||
Loans returned to accrual status | 877 | |||
Residential real estate | Not Past Due | ||||
Loans | ||||
Total | 1,018,092 | 1,057,864 | ||
Residential real estate | Past Due | ||||
Loans | ||||
Total | 22,372 | 27,912 | ||
Residential real estate | 30 - 59 Days Past Due | ||||
Loans | ||||
Total | 10,316 | 16,634 | ||
Residential real estate | 60 - 89 Days Past Due | ||||
Loans | ||||
Total | 2,708 | 2,305 | ||
Residential real estate | 90 Days or More Past Due | ||||
Loans | ||||
Total | 9,348 | 8,973 | ||
Residential real estate | Real estate loan, first mortgage | ||||
Loans | ||||
Nonaccrual loans | 9,318 | 8,942 | ||
Nonaccrual With No Allowance for Credit Losses | 2,064 | 4,079 | ||
Past Due 90 Days or More and Still Accruing | 30 | 31 | ||
Nonaccrual residential real estate loans | ||||
Loans | ||||
Loans added to nonaccrual status | 1,480 | |||
Commercial real estate | ||||
Loans | ||||
Total | 244,546 | 236,982 | ||
Commercial real estate | Not Past Due | ||||
Loans | ||||
Total | 244,546 | 236,982 | ||
Construction loans | ||||
Loans | ||||
Total | 4,915 | 10,381 | ||
Construction loans | Not Past Due | ||||
Loans | ||||
Total | 4,915 | 10,381 | ||
Commercial and industrial | ||||
Loans | ||||
Total | 13,348 | 15,832 | ||
Commercial and industrial | Not Past Due | ||||
Loans | ||||
Total | 13,348 | 15,832 | ||
Other consumer | ||||
Loans | ||||
Total | 6 | 1 | ||
Other consumer | Not Past Due | ||||
Loans | ||||
Total | $ 6 | $ 1 |
Loans - Credit quality indicato
Loans - Credit quality indicator by origination year (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Commercial Portfolio Segment | Internal Noninvestment Grade | Construction loans | ||
Financing Receivable, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
2024 | $ 14 | |
2023 | $ 12 | |
2021 | 1,591 | |
2020 | 8,776 | |
Prior | 4,903 | |
Total, term and revolving loans by origination year | 4,915 | 10,381 |
Commercial Portfolio Segment | Internal Noninvestment Grade | C&I lending | ||
Financing Receivable, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
2024 | 14,461 | |
2023 | 9,467 | 1,071 |
2022 | 1,064 | |
Prior | 94 | 97 |
Revolving Loans Amortized Costs Basis | 2,672 | 130 |
Revolving Loans Converted to Term | 51 | 73 |
Total, term and revolving loans by origination year | 13,348 | 15,832 |
Commercial Portfolio Segment | Internal Noninvestment Grade | Commercial Real Estate Loan | ||
Financing Receivable, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
2024 | 14,929 | 29,923 |
2023 | 23,120 | 82,587 |
2022 | 82,222 | 46,879 |
2021 | 46,755 | 37,872 |
2020 | 37,676 | 18,353 |
Prior | 39,844 | 21,368 |
Total, term and revolving loans by origination year | 244,546 | 236,982 |
Commercial Portfolio Segment | Pass | Construction loans | ||
Financing Receivable, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
2024 | 14 | |
2023 | 12 | |
2021 | 1,591 | |
Total, term and revolving loans by origination year | 12 | 1,605 |
Commercial Portfolio Segment | Pass | C&I lending | ||
Financing Receivable, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
2024 | 14,461 | |
2023 | 9,467 | 1,071 |
2022 | 1,064 | |
Prior | 94 | 97 |
Revolving Loans Amortized Costs Basis | 2,672 | 130 |
Revolving Loans Converted to Term | 51 | 73 |
Total, term and revolving loans by origination year | 13,348 | 15,832 |
Commercial Portfolio Segment | Pass | Commercial Real Estate Loan | ||
Financing Receivable, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
2024 | 14,929 | 28,975 |
2023 | 22,176 | 79,013 |
2022 | 78,672 | 33,694 |
2021 | 34,970 | 35,148 |
2020 | 34,958 | 6,938 |
Prior | 24,352 | 13,020 |
Total, term and revolving loans by origination year | 210,057 | 196,788 |
Commercial Portfolio Segment | Special Mention | Commercial Real Estate Loan | ||
Financing Receivable, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
2024 | 948 | |
2023 | 944 | 3,574 |
2022 | 3,550 | 1,407 |
2021 | 2,724 | |
2020 | 2,718 | 8,610 |
Prior | 8,632 | 4,253 |
Total, term and revolving loans by origination year | 15,844 | 21,516 |
Commercial Portfolio Segment | Substandard | Construction loans | ||
Financing Receivable, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
2020 | 8,776 | |
Prior | 4,903 | |
Total, term and revolving loans by origination year | 4,903 | 8,776 |
Commercial Portfolio Segment | Substandard | Commercial Real Estate Loan | ||
Financing Receivable, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
2022 | 11,778 | |
2021 | 11,785 | |
2020 | 2,805 | |
Prior | 6,860 | 4,095 |
Total, term and revolving loans by origination year | 18,645 | 18,678 |
Residential Portfolio Segment | Performing And Nonperforming Financial Instruments | Residential Mortgage Loans | ||
Financing Receivable, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
2024 | 764 | |
2023 | 762 | 72,840 |
2022 | 71,885 | 132,567 |
2021 | 130,283 | 99,676 |
2020 | 97,241 | 204,532 |
Prior | 732,253 | 567,388 |
Revolving Loans Amortized Costs Basis | 7,767 | 7,729 |
Revolving Loans Converted to Term | 273 | 280 |
Total, term and revolving loans by origination year | 1,040,464 | 1,085,776 |
Residential Portfolio Segment | Accrual | Residential Mortgage Loans | ||
Financing Receivable, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
2024 | 764 | |
2023 | 762 | 72,840 |
2022 | 71,885 | 132,567 |
2021 | 130,283 | 99,676 |
2020 | 97,241 | 202,793 |
Prior | 722,935 | 560,185 |
Revolving Loans Amortized Costs Basis | 7,767 | 7,729 |
Revolving Loans Converted to Term | 273 | 280 |
Total, term and revolving loans by origination year | 1,031,146 | 1,076,834 |
Residential Portfolio Segment | Nonaccrual | Residential Mortgage Loans | ||
Financing Receivable, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
2020 | 1,739 | |
Prior | 9,318 | 7,203 |
Total, term and revolving loans by origination year | $ 9,318 | 8,942 |
Residential Portfolio Segment | Current Period Gross Charge offs, Performance Rated | Residential Mortgage Loans | ||
Financing Receivable, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
2020 | 1,858 | |
Prior | 4,601 | |
Revolving Loans Amortized Costs Basis | 19 | |
Total, term and revolving loans by origination year | $ 6,478 |
Mortgage Servicing Rights, ne_2
Mortgage Servicing Rights, net - Principle Balance by Category (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Mortgage Servicing Rights, net | ||
Total | $ 164,370 | $ 169,749 |
Custodial escrow balances | 352 | 620 |
FNMA | ||
Mortgage Servicing Rights, net | ||
Total | 103,969 | 105,689 |
FHLB | ||
Mortgage Servicing Rights, net | ||
Total | 30,464 | 31,016 |
Private investors | ||
Mortgage Servicing Rights, net | ||
Total | $ 29,937 | $ 33,044 |
Mortgage Servicing Rights, ne_3
Mortgage Servicing Rights, net - Activity and Related Valuation Allowance (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Mortgage servicing rights: | |||
Mortgage servicing rights - Beginning of year | $ 1,590 | $ 1,840 | |
Amortization | (64) | (74) | |
Mortgage servicing rights - End of year | 1,526 | 1,766 | |
Valuation allowance at beginning of year | 48 | 46 | |
Additions (recoveries) | (7) | 17 | |
Valuation allowance at end of year | 41 | 63 | |
Mortgage servicing rights, net | 1,485 | 1,703 | $ 1,542 |
Net servicing income (loss) | $ 75 | $ 59 |
Mortgage Servicing Rights, ne_4
Mortgage Servicing Rights, net - Valuation techniques (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Mortgage Servicing Rights, net | ||
Fair value of mortgage servicing rights | $ 1,807 | $ 1,857 |
Weighted average default rate | 0.20% | |
Minimum | ||
Mortgage Servicing Rights, net | ||
Discount rate range | 10% | 10% |
Maximum | ||
Mortgage Servicing Rights, net | ||
Discount rate range | 12.50% | 12.50% |
Weighted Average | ||
Mortgage Servicing Rights, net | ||
Prepayment speed range | 9.60% | 9.80% |
Weighted average life of the mortgage servicing right | 77 months | 77 months |
Weighted average default rate | 0.20% |
Deposits (Details)
Deposits (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Deposits | ||
Interest-bearing time deposits | $ 900,996 | $ 873,220 |
Time deposits that meet or exceed the FDIC insurance limit of $250 | $ 267,934 | $ 255,222 |
FHLB Borrowings - FHLB Advances
FHLB Borrowings - FHLB Advances (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
FHLB Borrowings | ||
Long-term fixed-rate FHLBNY advances | $ 50,000 | $ 50,000 |
Long-Term Debt | ||
FHLB Borrowings | ||
FHLB interest rates (as a percent) | 1.96% |
FHLB Borrowings - FHLB Overdraf
FHLB Borrowings - FHLB Overdraft Line of Credit and Letters of Credit (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Jul. 31, 2021 | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | |
FHLB Borrowings | ||||
Borrowings outstanding on FHLB standby letters of credit | $ 0 | $ 0 | ||
FHLB fixed rate advances and overdraft line of credit additional borrowing capacity | 370,471 | |||
FHLB short-term overdraft line of credit expiring October, 2023 | ||||
FHLB Borrowings | ||||
FHLB overdraft line of credit | $ 20,000 | |||
FHLB overdraft line of credit (as percent) | 5.71% | 5.76% | ||
FHLB overdraft line of credit outstanding borrowings | $ 0 | $ 0 | ||
FHLB short-term overdraft line of credit expiring October, 2024 | ||||
FHLB Borrowings | ||||
FHLB, agreement term | 1 year | |||
FHLB, additional agreement term | 1 year | |||
Standby letter of credit expiring July, 2022 | ||||
FHLB Borrowings | ||||
FHLB overdraft line of credit outstanding borrowings | $ 0 | $ 0 | ||
Standby letters of credit expiring July 2024 | ||||
FHLB Borrowings | ||||
FHLB letter of credit | $ 2,000 | |||
FHLB letter of credit term | 36 months |
FHLB Borrowings - Other Borrowi
FHLB Borrowings - Other Borrowings (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Mar. 31, 2023 |
Other Banks | ||
Other Borrowings | ||
Outstanding balance | $ 0 | $ 0 |
Two bank | ||
Other Borrowings | ||
Maximum borrowing capacity | 60,000 | |
Three Banks | ||
Other Borrowings | ||
Maximum borrowing capacity | $ 80,000 |
Stock-based Compensation (Detai
Stock-based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Employee Stock Option | |||
Stock-based Compensation | |||
Maximum term of stock awards granted | 10 years | ||
Weighted Average Remaining Contractual Term | |||
Stock-based compensation costs recognized | $ 1 | ||
Restricted Stock | |||
Stock-based Compensation | |||
Number of share instruments issued | 60,000 | 60,000 | |
Restricted Stock | Non-employee directors Restricted Stock Awards | |||
Stock-based Compensation | |||
Number of share instruments issued | 5.77 | ||
Weighted average grant-date fair value | $ 6.09 | ||
2017 Omnibus Equity Incentive Plan | |||
Stock-based Compensation | |||
Number of shares authorized | 4,237,100 | ||
2017 Omnibus Equity Incentive Plan | Employee Stock Option | |||
Stock-based Compensation | |||
Percentage of awards vesting | 50% | ||
Number of Shares | |||
Outstanding at January 1, 2024 | 340,395 | ||
Outstanding at March 31, 2024 | 340,395 | 340,395 | |
Exercisable at March 31, 2024 | 340,395 | ||
Weighted Average Exercise Price | |||
Outstanding at January 1, 2024 | $ 4.96 | ||
Outstanding at March 31, 2024 | 4.96 | $ 4.96 | |
Exercisable at March 31, 2024 | $ 4.96 | ||
Weighted Average Remaining Contractual Term | |||
Weighted Average Remaining Contractual Term (Years) | 0 years | 0 years | |
Weighted Average Remaining Contractual Term, Exercisable | 5 years 11 months 23 days | ||
Aggregate Intrinsic Value | $ 348 | $ 531 | |
Aggregate Intrinsic Value Exercisable | $ 348 | ||
2017 Omnibus Equity Incentive Plan | Stock Options granted prior to 2020 | Awards vesting at the end of the third year | |||
Stock-based Compensation | |||
Percentage of awards vesting | 50% | ||
2017 Omnibus Equity Incentive Plan | Stock Options granted prior to 2020 | Awards vesting at the end of the fourth year | |||
Stock-based Compensation | |||
Percentage of awards vesting | 50% | ||
2017 Omnibus Equity Incentive Plan | Stock Options granted starting in 2020 | |||
Stock-based Compensation | |||
Percentage of awards vesting | 33.33% | ||
2017 Omnibus Equity Incentive Plan | Stock Options granted starting in 2020 | Awards vesting on the first anniversary of the grant date | |||
Stock-based Compensation | |||
Vesting period | 3 years | ||
2017 Omnibus Equity Incentive Plan | Stock Options granted starting in 2020 | Awards vesting at the end of the second year | |||
Stock-based Compensation | |||
Percentage of awards vesting | 33.33% | ||
2017 Omnibus Equity Incentive Plan | Restricted Stock | |||
Stock-based Compensation | |||
Vesting period | 3 years | ||
Weighted Average Remaining Contractual Term | |||
Shares withheld in order to pay employee tax liabilities on vested awards | 38,033 | 12,166 | |
Stock-based compensation costs recognized | $ 729 | $ 172 | |
Employee tax liability associated with restricted stock awards the vested during the period | 216 | 75 | |
Total unrecognized compensation cost - restricted stock awards | $ 4,527 | ||
Unrecognized compensation cost related to nonvested awards, expected to be recognized over a weighted-average period | 2 years 3 months 29 days | ||
Number of Shares | |||
Nonvested, Opening balance | 1,364,570 | ||
Granted | 60,000 | ||
Vested | (176,644) | ||
Forfeited | (45,645) | ||
Nonvested, Ending balance | 1,202,281 | 1,364,570 | |
Weighted Average Grant Date Fair Value | |||
Nonvested, Opening balance | $ 5.27 | ||
Granted | 5.77 | ||
Vested | 5.50 | ||
Forfeited | 5.36 | ||
Nonvested, Ending balance | $ 5.26 | $ 5.27 | |
Grant Date Fair Value of Restricted Stock that Vested During the year | |||
Fair value of restricted stock awards vested | $ 1,007 | $ 399 | |
2017 Omnibus Equity Incentive Plan | Restricted Stock | Awards vesting on the first anniversary of the grant date | |||
Stock-based Compensation | |||
Percentage of awards vesting | 33.33% | ||
2017 Omnibus Equity Incentive Plan | Restricted Stock | Awards vesting at the end of the second year | |||
Stock-based Compensation | |||
Percentage of awards vesting | 33.33% | ||
2017 Omnibus Equity Incentive Plan | Restricted Stock | Awards vesting at the end of the third year | |||
Stock-based Compensation | |||
Percentage of awards vesting | 33.33% | ||
2020 Omnibus Equity Incentive Plan | |||
Stock-based Compensation | |||
Number of shares authorized | 3,979,661 | ||
Number of shares available for future grants | 2,239,858 |
Regulatory Capital Requiremen_3
Regulatory Capital Requirements (Details) $ in Thousands | Mar. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) |
Regulatory Capital Requirements | ||
Minimum required Tier 1 leverage ratio for CBRL framework | 9% | |
Maximum allowed total consolidated assets for CBRL framework | $ 10,000,000 | |
Leverage ratio percentage | 8% | |
Tier 1 (core) capital to average total assets, Amount | ||
Actual | $ 341,243 | |
To be Well Capitalized | $ 217,783 | |
Tier 1 (core) capital to average total assets, Leverage Ratio | ||
Actual | 0.1410 | |
To be Well Capitalized | 0.0900 | |
Risk-weighting 100% Scenario | ||
Total adjusted capital to risk-weighted assets, Amount | ||
Actual | $ 342,368 | |
For Capital Adequacy Purposes | $ 220,950 | |
Total adjusted capital to risk-weighted assets, Ratio | ||
Actual | 0.1395 | |
For Capital Adequacy Purposes | 0.0900 | |
Bank | ||
Tier 1 (core) capital to average total assets, Amount | ||
Actual | $ 328,531 | |
To be Well Capitalized | $ 217,727 | |
Tier 1 (core) capital to average total assets, Leverage Ratio | ||
Actual | 0.1358 | |
To be Well Capitalized | 0.0900 | |
Bank | Risk-weighting 100% Scenario | ||
Total adjusted capital to risk-weighted assets, Amount | ||
Actual | $ 328,362 | |
For Capital Adequacy Purposes | $ 220,920 | |
Total adjusted capital to risk-weighted assets, Ratio | ||
Actual | 0.1338 | |
For Capital Adequacy Purposes | 0.0900 |
Loss Per Share (Details)
Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Numerator: | ||
Net loss | $ (197) | $ (503) |
Denominator: | ||
Weighted average common shares outstanding, basic | 50,843,106 | 50,444,463 |
Weighted average effect of potentially dilutive common shares: | ||
Weighted average common shares outstanding, diluted | 50,843,106 | 50,444,463 |
Loss per share: | ||
Basic (in dollars per shares) | $ 0 | $ (0.01) |
Diluted (in dollars per shares) | $ 0 | $ (0.01) |
Securities excluded from the computation of weighted average diluted shares outstanding as inclusion of such items would be anti-dilutive | 640,224 | 699,057 |
Employee Stock Option | ||
Loss per share: | ||
Securities excluded from the computation of weighted average diluted shares outstanding as inclusion of such items would be anti-dilutive | 109,775 | 349,545 |
Restricted stock | ||
Loss per share: | ||
Securities excluded from the computation of weighted average diluted shares outstanding as inclusion of such items would be anti-dilutive | 530,449 | 349,512 |
Fair Value - Assets measured at
Fair Value - Assets measured at fair value on a recurring basis (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Available for sale debt securities: | ||
Fair Value | $ 394,852 | $ 419,213 |
Equity securities | ||
Equity securities | 4,410 | 4,457 |
U.S. Treasury and Agency securities | ||
Available for sale debt securities: | ||
Fair Value | 149,869 | 248,988 |
U.S. Treasury and Agency securities | Recurring | ||
Available for sale debt securities: | ||
Fair Value | 149,869 | 248,988 |
U.S. Treasury and Agency securities | Level 1 | Recurring | ||
Available for sale debt securities: | ||
Fair Value | 120,598 | 219,582 |
U.S. Treasury and Agency securities | Level 2 | Recurring | ||
Available for sale debt securities: | ||
Fair Value | 29,271 | 29,406 |
Mortgage-backed securities | ||
Available for sale debt securities: | ||
Fair Value | 30,609 | 31,927 |
Mortgage-backed securities | Recurring | ||
Available for sale debt securities: | ||
Fair Value | 30,609 | 31,927 |
Mortgage-backed securities | Level 2 | Recurring | ||
Available for sale debt securities: | ||
Fair Value | 30,609 | 31,927 |
Collateralized mortgage obligations | ||
Available for sale debt securities: | ||
Fair Value | 214,231 | 138,157 |
Collateralized mortgage obligations | Recurring | ||
Available for sale debt securities: | ||
Fair Value | 214,231 | 138,157 |
Collateralized mortgage obligations | Level 2 | Recurring | ||
Available for sale debt securities: | ||
Fair Value | 214,231 | 138,157 |
Collateralized debt obligations | ||
Available for sale debt securities: | ||
Fair Value | 143 | 141 |
Collateralized debt obligations | Recurring | ||
Available for sale debt securities: | ||
Fair Value | 143 | 141 |
Collateralized debt obligations | Level 3 | Recurring | ||
Available for sale debt securities: | ||
Fair Value | 143 | 141 |
Equity securities | Recurring | ||
Equity securities | ||
Equity securities | 4,410 | 4,457 |
Equity securities | Level 1 | Recurring | ||
Equity securities | ||
Equity securities | $ 4,410 | $ 4,457 |
Fair Value - Reconciliation and
Fair Value - Reconciliation and income statement classification using Level 3 inputs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
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) | ||
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Asset, Gain (Loss), Statement of Other Comprehensive Income or Comprehensive Income [Extensible Enumeration] | Other Comprehensive Income (Loss), Securities, Available-for-Sale, Unrealized Holding Gain (Loss) Arising During Period, after Tax | Other Comprehensive Income (Loss), Securities, Available-for-Sale, Unrealized Holding Gain (Loss) Arising During Period, after Tax |
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 year | $ 141 | $ 147 |
Included in other comprehensive income (loss) | 3 | (2) |
Principal maturities/settlements | (1) | (1) |
Balance of recurring Level 3 assets at end of year | $ 143 | $ 144 |
Fair Value - Assets Measured _2
Fair Value - Assets Measured at Fair Value on a Nonrecurring Basis and Fair Value of Financial Instruments (Details) $ in Thousands | Mar. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) |
Financial Assets | ||
Interest-bearing time deposits with other banks | $ 5,229 | $ 5,226 |
Nonrecurring | Mortgage servicing rights | ||
Fair Value | ||
Assets measured at fair value on a nonrecurring basis | 382 | 576 |
Nonrecurring | Mortgage servicing rights | Level 3 | ||
Fair Value | ||
Assets measured at fair value on a nonrecurring basis | 382 | 576 |
Nonrecurring | Mortgage servicing rights | Level 3 | Discounted cash flow | ||
Fair Value | ||
Assets measured at fair value on a nonrecurring basis | $ 382 | $ 576 |
Nonrecurring | Mortgage servicing rights | Level 3 | Discounted cash flow | Discount rate | ||
Fair Value | ||
Assets measured at fair value, measurement input | 0.100 | |
Nonrecurring | Mortgage servicing rights | Maximum | Level 3 | Discounted cash flow | Discount rate | ||
Fair Value | ||
Assets measured at fair value, measurement input | 0.125 | 0.125 |
Nonrecurring | Mortgage servicing rights | Maximum | Level 3 | Discounted cash flow | Prepayment speed | ||
Fair Value | ||
Assets measured at fair value, measurement input | 0.228 | 0.227 |
Nonrecurring | Mortgage servicing rights | Maximum | Level 3 | Discounted cash flow | Default rate | ||
Fair Value | ||
Assets measured at fair value, measurement input | 0.002 | 0.002 |
Nonrecurring | Mortgage servicing rights | Minimum | Level 3 | Discounted cash flow | Discount rate | ||
Fair Value | ||
Assets measured at fair value, measurement input | 0.100 | |
Nonrecurring | Mortgage servicing rights | Minimum | Level 3 | Discounted cash flow | Prepayment speed | ||
Fair Value | ||
Assets measured at fair value, measurement input | 0.071 | 0.069 |
Nonrecurring | Mortgage servicing rights | Minimum | Level 3 | Discounted cash flow | Default rate | ||
Fair Value | ||
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 | ||
Assets measured at fair value, measurement input | 0.119 | 0.122 |
Nonrecurring | Mortgage servicing rights | Weighted Average | Level 3 | Discounted cash flow | Prepayment speed | ||
Fair Value | ||
Assets measured at fair value, measurement input | 0.167 | 0.185 |
Nonrecurring | Mortgage servicing rights | Weighted Average | Level 3 | Discounted cash flow | Default rate | ||
Fair Value | ||
Assets measured at fair value, measurement input | 0.001 | 0.001 |
Carrying value per balance sheet | ||
Financial Assets | ||
Cash and due from banks | $ 646,168 | $ 577,967 |
Interest-bearing time deposits with other banks | 5,229 | 5,226 |
Loans, net | 1,274,022 | 1,319,568 |
Financial Liabilities | ||
Time deposits | 900,996 | 873,220 |
Federal Home Loan Bank borrowings | 50,000 | 50,000 |
Estimated fair value | ||
Financial Assets | ||
Cash and due from banks | 646,168 | 577,967 |
Interest-bearing time deposits with other banks | 5,229 | 5,226 |
Loans, net | 1,270,120 | 1,313,282 |
Financial Liabilities | ||
Time deposits | 902,983 | 874,274 |
Federal Home Loan Bank borrowings | 49,780 | 49,370 |
Estimated fair value | Level 1 | ||
Financial Assets | ||
Cash and due from banks | 646,168 | 577,967 |
Interest-bearing time deposits with other banks | 5,229 | 5,226 |
Estimated fair value | Level 2 | ||
Financial Liabilities | ||
Time deposits | 902,983 | 874,274 |
Federal Home Loan Bank borrowings | 49,780 | 49,370 |
Estimated fair value | Level 3 | ||
Financial Assets | ||
Loans, net | $ 1,270,120 | $ 1,313,282 |
Commitments and Contingencies -
Commitments and Contingencies - Rollforward of the activity in the liability for unfunded commitments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Off-Balance-Sheet, Credit Loss, Liability [Roll Forward] | ||
Liability for unfunded commitment, beginning of period | $ 896 | $ 0 |
Increase (decrease) in provision for (recovery of) credit losses | 188 | (110) |
Liability for unfunded commitment, end of period | 1,084 | 469 |
ASU 2016-13 | ||
Off-Balance-Sheet, Credit Loss, Liability [Roll Forward] | ||
Liability for unfunded commitment, end of period | 579 | |
Residential real estate | ||
Off-Balance-Sheet, Credit Loss, Liability [Roll Forward] | ||
Liability for unfunded commitment, beginning of period | 1 | 0 |
Increase (decrease) in provision for (recovery of) credit losses | 49 | |
Liability for unfunded commitment, end of period | 1 | 102 |
Residential real estate | ASU 2016-13 | ||
Off-Balance-Sheet, Credit Loss, Liability [Roll Forward] | ||
Liability for unfunded commitment, end of period | 53 | |
Commercial real estate | ||
Off-Balance-Sheet, Credit Loss, Liability [Roll Forward] | ||
Liability for unfunded commitment, beginning of period | 124 | 0 |
Increase (decrease) in provision for (recovery of) credit losses | (9) | 30 |
Liability for unfunded commitment, end of period | 115 | 155 |
Commercial real estate | ASU 2016-13 | ||
Off-Balance-Sheet, Credit Loss, Liability [Roll Forward] | ||
Liability for unfunded commitment, end of period | 125 | |
Construction loans | ||
Off-Balance-Sheet, Credit Loss, Liability [Roll Forward] | ||
Liability for unfunded commitment, beginning of period | 763 | 0 |
Increase (decrease) in provision for (recovery of) credit losses | 107 | (190) |
Liability for unfunded commitment, end of period | 870 | 208 |
Construction loans | ASU 2016-13 | ||
Off-Balance-Sheet, Credit Loss, Liability [Roll Forward] | ||
Liability for unfunded commitment, end of period | 398 | |
Commercial and industrial | ||
Off-Balance-Sheet, Credit Loss, Liability [Roll Forward] | ||
Liability for unfunded commitment, beginning of period | 8 | 0 |
Increase (decrease) in provision for (recovery of) credit losses | 90 | 1 |
Liability for unfunded commitment, end of period | $ 98 | 4 |
Commercial and industrial | ASU 2016-13 | ||
Off-Balance-Sheet, Credit Loss, Liability [Roll Forward] | ||
Liability for unfunded commitment, end of period | $ 3 |
Commitments and Contingencies_2
Commitments and Contingencies - Unfunded Commitments and Litigation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
Unused lines of credit | ||
Commitments and Contingencies | ||
Unused lines of credit | $ 30,350 | $ 18,542 |
Fixed rate loans | $ 5,000 | |
Interest rate on fixed rate loans | 6% | |
Variable-rate loans | $ 25,350 | |
Unused lines of credit | Minimum | ||
Commitments and Contingencies | ||
Variable interest rate (as a percentage) | 4.54% | |
Maturity period for variable interest loans | 5 months | |
Unused lines of credit | Maximum | ||
Commitments and Contingencies | ||
Variable interest rate (as a percentage) | 10.88% | |
Maturity period for variable interest loans | 22 years | |
Unused lines of credit | Construction loans | ||
Commitments and Contingencies | ||
Unused lines of credit | $ 5,536 | |
Unused lines of credit | Commercial and industrial loans | ||
Commitments and Contingencies | ||
Unused lines of credit | 13,279 | |
Unused lines of credit | Commercial real estate | ||
Commitments and Contingencies | ||
Unused lines of credit | 2,165 | |
Unused lines of credit | Real estate loan, second mortgage | ||
Commitments and Contingencies | ||
Unused lines of credit | 9,370 | |
Standby letters of credit | ||
Commitments and Contingencies | ||
Unused lines of credit | $ 24 | $ 24 |
Commitments and Contingencies_3
Commitments and Contingencies - Mortgage Repurchase Liability and Offers (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Commitments and Contingencies | ||||
Mortgage repurchase liability | $ 749 | $ 750 | $ 929 | $ 809 |
Advantage Loan Program | ||||
Commitments and Contingencies | ||||
Unpaid principal balance, Loans | 15,481 | |||
Residential Real Estate | ||||
Commitments and Contingencies | ||||
Mortgage repurchase liability | 749 | 750 | ||
Residential Real Estate | Obligation to repurchase receivables sold | ||||
Commitments and Contingencies | ||||
Unpaid principal balance, Loans | 40,033 | 49,667 | ||
Residential Real Estate | Advantage Loan Program | Obligation to repurchase receivables sold | ||||
Commitments and Contingencies | ||||
Unpaid principal balance, Loans | $ 29,936 | $ 33,044 |
Commitments and Contingencies_4
Commitments and Contingencies - Mortgage Repurchase Liability Activity and Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Mortgage repurchase liability: | ||
Balance, beginning of period | $ 750 | $ 809 |
Net provision for (recovery of) mortgage repurchase liability | (1) | 120 |
Balance, end of the period | $ 749 | $ 929 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ (197) | $ (503) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |