Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 26, 2024 | Jun. 30, 2023 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2023 | ||
Entity File Number | 001-41899 | ||
Entity Registrant Name | NB BANCORP, INC. | ||
Entity Incorporation, State or Country Code | MD | ||
Entity Tax Identification Number | 93-2560883 | ||
Entity Address State Or Province | MA | ||
Entity Address, Address Line One | 1063 Great Plain Avenue, | ||
Entity Address, City or Town | Needham | ||
Entity Address, Postal Zip Code | 02492 | ||
City Area Code | 781 | ||
Local Phone Number | 444-2100 | ||
Title of 12(b) Security | Common stock, par value $0.01 per share | ||
Trading Symbol | NBBK | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 541 | ||
Entity Common Stock, Shares Outstanding | 42,705,729 | ||
Entity Central Index Key | 0001979330 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Name | Elliott Davis, LLC | ||
Auditor Location | Columbia, South Carolina | ||
Auditor Firm ID | 149 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Assets | ||
Cash and due from banks | $ 90,485,000 | $ 131,073,000 |
Federal funds sold | 182,106,000 | 25,472,000 |
Total cash and cash equivalents | 272,591,000 | 156,545,000 |
Available-for-sale securities, at fair value | 189,465,000 | |
Available-for-sale securities, at fair value | 245,480,000 | |
Loans receivable | 3,015,445,000 | |
Loans receivable | 3,889,279,000 | |
Allowance for credit losses | (25,028,000) | |
Allowance for credit losses | (32,222,000) | (25,028,000) |
Net loans | 2,990,417,000 | |
Net loans | 3,857,057,000 | |
Accrued interest receivable | $ 17,284,000 | 10,837,000 |
Financing Receivable, Accrued Interest, after Allowance for Credit Loss, Statement of Financial Position [Extensible Enumeration] | Accrued interest receivable | |
Banking premises and equipment, net | $ 35,531,000 | 35,344,000 |
Depositors Insurance Fund stock | 139,000 | 139,000 |
Federal Home Loan Bank stock | 14,558,000 | 13,182,000 |
Federal Reserve Bank stock | 10,323,000 | 8,104,000 |
Non-public investments | 13,713,000 | 10,592,000 |
Bank owned life insurance ("BOLI") | 50,516,000 | 49,006,000 |
Prepaid expenses and other assets | 53,109,000 | 57,167,000 |
Income tax refunds receivable | 4,134,000 | |
Deferred income tax asset | 19,126,000 | 11,388,000 |
Total assets | 4,533,412,000 | 3,592,335,000 |
Liabilities and shareholders' equity | ||
Deposits | 3,387,348,000 | 2,886,743,000 |
Mortgagors' escrow accounts | 4,229,000 | 4,064,000 |
FHLB Borrowings | 283,338,000 | 293,082,000 |
Accrued expenses and other liabilities | 81,325,000 | 52,399,000 |
Accrued retirement liabilities | 19,213,000 | 11,982,000 |
Total liabilities | 3,775,453,000 | 3,248,270,000 |
Commitments and contingencies (Notes 6, 8 & 12) | ||
Shareholders' equity | ||
Preferred stock, $0.01 par value, 5,000,000 shares authorized; no shares issued and outstanding | ||
Common shares, $0.01 par value, 120,000,000 shares authorized; 42,705,729 shares issued and outstanding at December 31, 2023; no shares issued and outstanding at December 31, 2022 | 427,000 | |
Additional paid in capital | 417,030,000 | |
Unallocated common shares held by the Employee Stock Ownership Plan | (13,774,000) | |
Retained earnings | 366,173,000 | 358,466,000 |
Accumulated other comprehensive loss | (11,897,000) | (14,401,000) |
Total shareholders' equity | 757,959,000 | 344,065,000 |
Total liabilities and shareholders' equity | $ 4,533,412,000 | $ 3,592,335,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Consolidated Balance Sheets | ||
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 120,000,000 | 120,000,000 |
Common Stock, Shares, Issued | 42,705,729 | 0 |
Common Stock, Shares, Outstanding | 42,705,729 | 0 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
INTEREST AND DIVIDEND INCOME | ||
Interest and fees on loans | $ 211,973 | $ 113,760 |
Interest on investments securities | 4,773 | 4,954 |
Interest on cash equivalents and other | 3,755 | 1,798 |
Total interest and dividend income | 220,501 | 120,512 |
INTEREST EXPENSE | ||
Interest on deposits | 76,394 | 12,689 |
Interest on FHLB borrowings | 14,050 | 2,859 |
Total interest expense | 90,444 | 15,548 |
NET INTEREST INCOME | 130,057 | 104,964 |
PROVISION FOR CREDIT LOSSES | ||
Provision for credit losses - allowance for credit losses | 9,657 | 6,700 |
Provision for credit losses - allowance for unfunded commitments | 4,228 | |
Total provision for credit losses | 13,885 | 6,700 |
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | 116,172 | 98,264 |
NONINTEREST INCOME | ||
Gain from bargain purchase and assumption agreement | 1,070 | |
Customer service fees | 7,817 | 5,138 |
Increase in cash surrender value of BOLI | 1,510 | 1,157 |
Mortgage banking income | 581 | 595 |
Swap contract income | 2,153 | 1,262 |
Employee retention credit income | 3,452 | |
Other income | 64 | 53 |
Total noninterest income | 15,577 | 9,275 |
NONINTEREST EXPENSE | ||
Salaries and employee benefits | 68,344 | 47,466 |
Director and professional service fees | 6,232 | 4,758 |
Occupancy and equipment expenses | 5,192 | 4,354 |
Data processing expenses | 7,500 | 5,657 |
Charitable contribution expense | 20,335 | 1,066 |
Marketing expense | 2,747 | 2,338 |
FDIC and state insurance assessments | 4,707 | 1,829 |
General and administrative expenses | 4,848 | 3,683 |
Total noninterest expense | 119,905 | 71,151 |
INCOME BEFORE TAXES | 11,844 | 36,388 |
INCOME TAXES | 2,019 | 6,323 |
NET INCOME | $ 9,825 | $ 30,065 |
Weighted average common shares outstanding, Basic | 42,018,229 | |
Weighted Average Number of Shares Outstanding, Diluted | 42,018,229 | |
Earnings Per Share, Basic | $ 0.23 | |
Earnings Per Share, Diluted | $ 0.23 |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Consolidated Statement of Comprehensive Income | ||
Net Income (Loss) | $ 9,825 | $ 30,065 |
Unrealized Holding Gains (Losses) on AFS Securities | 3,740 | (17,657) |
Unrecognized Pension Losses on Director Pension Plan | (106) | (200) |
Unrealized Holding (Losses) Gains on Cash Flow Hedge | (321) | 1,548 |
OTHER COMPREHENSIVE INCOME (LOSS), BEFORE TAX PROVISIONS | 3,313 | (16,309) |
INCOME TAX (BENEFIT) PROVISIONS | (809) | 4,180 |
OTHER COMPREHENSIVE INCOME (LOSS), AFTER TAX PROVISIONS | 2,504 | (12,129) |
COMPREHENSIVE INCOME | $ 12,329 | $ 17,936 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Shareholders' Equity - USD ($) $ in Thousands | Common stock | Additional Paid-in Capital | Retained Earnings Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Unallocated Common stock, Held By ESOP | Cumulative Effect, Period of Adoption, Adjustment | Total |
Balance at the beginning at Dec. 31, 2021 | $ 328,401 | $ (2,272) | $ 326,129 | |||||
Consolidated Statement of Changes in Shareholders' Equity | ||||||||
Net income | 30,065 | 30,065 | ||||||
Other comprehensive income, net of tax | (12,129) | (12,129) | ||||||
Balance at the end at Dec. 31, 2022 | 358,466 | (14,401) | 344,065 | |||||
Consolidated Statement of Changes in Shareholders' Equity | ||||||||
Net income | 9,825 | 9,825 | ||||||
Other comprehensive income, net of tax | 2,504 | 2,504 | ||||||
Proceeds of stock offering and issuance of common shares (net of costs of $9,600) | $ 410 | $ 399,965 | 400,375 | |||||
Proceeds of stock offering and issuance of common shares (net of costs of $9,600) (in shares) | 40,997,500 | |||||||
Issuance of common shares donated to Needham Bank Charitable Foundation | $ 17 | 17,065 | 17,082 | |||||
Issuance of common shares donated to Needham Bank Charitable Foundation (in shares) | 1,708,229 | |||||||
Purchase of common shares by the ESOP (1,000,000 shares) | $ (13,774) | (13,774) | ||||||
Balance at the end (Accounting Standards Update 2016-13) at Dec. 31, 2023 | $ (2,118) | $ (2,118) | ||||||
Balance at the end at Dec. 31, 2023 | $ 427 | $ 417,030 | $ 366,173 | $ (11,897) | $ (13,774) | $ 757,959 | ||
Balance at the end (in shares) at Dec. 31, 2023 | 42,705,729 |
Consolidated Statement of Cha_2
Consolidated Statement of Changes in Shareholders' Equity (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) shares | |
Consolidated Statement of Changes in Shareholders' Equity | |
Stock offering and issuance | $ | $ 9,600 |
Common shares ESOP | shares | 1,000,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 9,825 | $ 30,065 |
Adjustments to reconcile net income to net cash from operating activities: | ||
Net (accretion) amortization of investment securities | (240) | 71 |
Gain from bargain purchase and assumption agreement | (1,070) | |
Amortization of core deposit intangible | 149 | 111 |
Provision for credit losses | 13,885 | 6,700 |
Loan hedge fair value adjustments, including amortization | 161 | 502 |
Change in net deferred loan origination fees | 4,419 | 2,522 |
Mortgage loans originated for sale | (2,400) | (1,840) |
Proceeds from sale of mortgage loans held for sale | 2,405 | 1,887 |
Gain on sale of mortgage loans | (5) | (47) |
Depreciation and amortization expense | 2,678 | 2,363 |
Increase in cash surrender values of bank owned life insurance | (1,510) | (1,157) |
Deferred income taxes (credits) | (7,720) | (1,253) |
Changes in operating assets and liabilities: | ||
Accrued interest receivable | (6,447) | (3,299) |
Prepaid expenses and other assets | 3,909 | (22,800) |
Income tax refunds receivable | 4,134 | (4,149) |
Accrued expenses and other liabilities | 22,591 | 27,221 |
Accrued retirement liabilities | 7,125 | 3,887 |
NET CASH PROVIDED FROM OPERATING ACTIVITIES | 52,959 | 39,714 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Loan originations and pools purchased, net of repayments | (882,036) | (913,800) |
Purchases of available-for-sale securities | (43,590) | (174,053) |
Maturities, calls and principal repayments of available-for-sale securities | 103,585 | 170,595 |
Purchases of Federal Home Loan Bank stock, net | (1,376) | (10,896) |
Purchases of Federal Reserve Bank stock, net | (2,219) | (508) |
Net change in non-public investments | (3,121) | (6,306) |
Cash acquired under purchase and assumption agreement | 297,671 | |
Premiums paid on bank-owned life insurance | (22,198) | |
Purchases of banking premises and equipment | (2,865) | (8,498) |
NET CASH USED IN INVESTING ACTIVITIES | (831,622) | (667,993) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Net change in deposits | 500,605 | 24,534 |
Net change in mortgagors' escrow accounts | 165 | 414 |
Net proceeds from stock offering and issuance of common shares | 417,457 | |
Purchase of common shares by the ESOP | (13,774) | |
(Increase) decrease in FHLB borrowings, net | (9,744) | 292,826 |
NET CASH PROVIDED FROM FINANCING ACTIVITIES | 894,709 | 317,774 |
RESULTING IN A NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 116,046 | (310,505) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 156,545 | 467,050 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 272,591 | 156,545 |
Supplemental disclosure of cash paid during the period for: | ||
Interest | 88,746 | 6,585 |
Income taxes | 4,791 | 8,561 |
Supplemental disclosure of non-cash transactions: | ||
Cumulative effect adjustment due to adoption of CECL accounting standard under ASC 326, net of income taxes | (2,118) | |
Initial recognition of right of use assets under ASC 842 | (1,505) | |
Initial recognition of operating lease liabilities under ASC 842 | 1,505 | |
Unrealized gains (losses) on securities available for sale | 731 | (19,006) |
Unrecognized Pension Losses on Director Pension Plan | 106 | |
Unrealized holding (losses) gains on cash flow hedge | $ (321) | $ 1,814 |
Organization, Activities and Si
Organization, Activities and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Activities and Significant Accounting Policies | |
Organization, Activities and Significant Accounting Policies | NB Bancorp, Inc. Notes to Consolidated Financial Statements Note 1 – Organization, Activities and Significant Accounting Policies Corporate Structure and Nature of Operations NB Bancorp, Inc. (the “Company”), a Maryland corporation, is a bank holding company. Through its wholly-owned subsidiary, Needham Bank (the “Bank”), the Company provides a variety of banking services, through its full-service bank branches, located in Massachusetts. The Bank’s deposits are insured by the Deposit Insurance Fund of the Federal Deposit Insurance Corporation (FDIC) up to federal limits. All deposits above the FDIC insurance amount are insured by the Depositors Insurance Fund (DIF). The DIF is a private, industry-sponsored insurance fund that insures all deposits above FDIC limits at our member banks. The Bank provides numerous services to customers, including the maintenance of checking, savings, money market and certificate of deposit accounts, and the granting of several types of residential, construction, commercial, and consumer loans. The primary market area of the Company is the metro-west area of Boston and surrounding communities, with headquarters in Needham and branch locations in Wellesley, Westwood, Dedham, Medfield, Medford, Dover, Ashland, Millis, Natick and Mission Hill. The Bank is subject to competition from other financial institutions, including commercial banks, other savings and co-operative banks, credit unions, mortgage banking companies, and other financial service providers. The primary regulators of the Company are the Massachusetts Commissioner of Banks and the Federal Reserve System (see Note 11, Regulatory Capital Requirements). As part of the criteria for membership in the Federal Reserve System, the Company is required to maintain stock in the Federal Reserve Bank (see Note 2, Investment Securities). Conversion and Reorganization Pursuant to a Plan of Conversion (the “Plan”), NB Financial, MHC (the “MHC”), the Bank’s former mutual holding company parent and the predecessor of the Company, converted from a mutual holding company into a publicly traded stock form of organization on December 27, 2023. In connection with the conversion, the MHC transferred to the Company 100% of MHC’s common stock, and immediately thereafter merged into the Company. Pursuant to the Plan, the Company sold 40,997,500 shares of common stock in a public offering at $10.00 per share for net offering proceeds of approximately $400.4 million. The Company completed the offering on December 27, 2023. Effective as of December 27, 2023, the Company donated $2.0 million of cash and 1,708,229 shares of common stock to Needham Bank Charitable Foundation (the “Foundation”). A total of 42,705,729 shares of common stock of the Company were issued and outstanding The cost of conversion and issuing the capital stock was deferred and deducted from the proceeds of the offering. As of December 31, 2023, the Company incurred approximately $9.6 million in conversion costs, which are included in shareholders’ equity on the consolidated balance sheet as of December 31, 2023. In connection with the conversion, liquidation accounts are established by the Company and the Bank in an aggregate amount equal to (i) the MHC’s ownership interest in the shareholders’ equity of NB Financial, Inc. as of the date of the latest statement of financial condition included in the Company’s definitive prospectus dated October 12, 2023, plus (ii) the value of the net assets of the MHC as of the date of the MHC’s latest statement of financial condition before the consummation of the Conversion (excluding the MHC’s ownership interest in NB Financial, Inc.). Each eligible account holder and supplemental eligible account holder is entitled to a proportionate share of the liquidation accounts in the event of a liquidation of (i) the Company and the Bank or (ii) the Bank, and only in such events. This share will be reduced if the eligible account holder’s or supplemental account holder’s deposit balance falls below the amounts on the date of record and will cease to exist if the account is closed. The liquidation account will never be increased despite any increase after conversion in the related deposit balance. The Bank may not pay a dividend on its capital stock if the effect thereof would cause retained earnings to be reduced below the liquidation account amount or regulatory capital requirements. Basis of Presentation The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) as set forth by the Financial Accounting Standards Board (“FASB”) and its Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) as well as the rules and interpretive releases of the Securities and Exchange Commission (the “SEC”) under the authority of federal securities laws. The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, and entities in which it holds a controlling financial interest through being the primary beneficiary or through holding a majority of the voting interest. All intercompany accounts and transactions have been eliminated in consolidation. Certain previously reported amounts have been reclassified to conform to the current year's presentation. Operating Segments Accounting standards require that information be reported about a company’s operating segments using a “management approach.” Reportable segments are identified in these standards as those revenue producing components for which separate financial information is produced internally and which are subject to evaluation by the chief operating decision maker. While the chief operating decision maker monitors the revenue streams of the various products and services, operations are managed, and financial performance is evaluated on a Company-wide basis. Accordingly, all of the financial service operations are considered by management to be aggregated in one reportable segment. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for credit losses, the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans, the valuation of deferred tax assets, actuarial estimates related to the Company’s various retirement programs, and the valuation of financial instruments. In connection with the determination of the allowances for credit losses on loans and foreclosed real estate, management obtains independent appraisals for significant properties. A majority of the Company's loan portfolio consists of one to four-family residential, commercial real estate, construction and land development loans in the metro-west area of Boston and its surrounding communities. Accordingly, the ultimate collectability of a substantial portion of the Company's loan portfolio and the recovery of the carrying amount of foreclosed real estate are susceptible to changes in local market conditions. While management uses currently available information to recognize losses on loans and foreclosed real estate, future additions to the allowances for credit losses on loans and foreclosed real estate may be necessary based on changes in local economic conditions. In addition, regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowances for credit losses on loans and foreclosed real estate. Such agencies may require the Company to recognize additions to the allowances based on their judgments about information available to them at the time of their examination. Because of these factors, it is reasonably possible that the allowance for losses on loans and foreclosed real estate may change in the near future. Summary of Significant Accounting Policies Adoption of New Accounting Standards Vintage Disclosures (“ASU 2022-02”). Together, these ASUs, referred to herein as ASC 326, replace the incurred loss impairment methodology with the current expected credit loss methodology (“CECL”) and require consideration of a broader range of information to determine credit loss estimates at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. ASC 326 applies to financial assets subject to credit losses that are measured at amortized cost and certain off-balance sheet credit exposures, which include, but are not limited to, loans receivable, leases, held-to-maturity (“HTM”) securities, loan commitments, and financial guarantees. In addition, ASC 326 made changes to the accounting for available for sale (“AFS”) debt securities. One such change is to require credit losses to be presented as an allowance rather than as a write-down on available for sale debt securities if management does not intend to sell and does not believe that it is more likely than not, they will be required to sell. The Company adopted ASC 326 using the prospective transition approach for debt securities for which other-than-temporary impairment had been recognized prior to January 1, 2023. As of December 31, 2022, the Company did not have any other than-temporarily impaired investment securities. Upon adoption of ASC 326, the Company determined that an allowance for credit losses on available for sale securities was not required. The Company adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost and off-balance sheet credit exposures, which included loans receivable and commitments to extend credit (loan commitments and stand-by letters of credit), respectively. The Company does not have any securities classified as HTM. Results for reporting periods beginning after January 1, 2023 are presented under ASC 326 while prior period amounts are reported in accordance with previously applicable GAAP. The following table presents the impact to the consolidated balance sheet as the result of adopting ASC 326 effective January 1, 2023. January 1, 2023 December 31, 2022 Impact of Post-ASC 326 Pre-ASC 326 ASC 326 (In thousands) Adoption Adoption Adoption Assets: Loans receivable, net of deferred fees and costs $ 3,015,445 $ 3,015,445 $ — Allowance for credit losses (26,187) (25,028) (1,159) Deferred income tax asset 7,862 7,035 827 Liabilities: Reserve for unfunded commitments (1,786) — (1,786) Equity: Retained earnings 356,348 358,466 (2,118) On January 1, 2023, the Company on a modified retrospective basis early adopted ASU 2023-02, Investments – Equity Method and Joint Ventures (Topic 323): Investments in Tax Credit Structures Loans Receivable and Allowance for Credit Losses (“ACL”) Loans are generally placed into nonaccrual status when they are past due 90 days or more as to either principal or interest or when, in the opinion of management, the collection of principal and/or interest is in doubt. A loan remains in nonaccrual status until the loan is current as to payment of both principal and interest or past due less than 90 days and the borrower demonstrates the ability to pay and remain current. When cash payments are received, they are applied to principal first, then to accrued interest. It is the Company’s policy not to record interest income on nonaccrual loans until principal has become current. In certain instances, accruing loans that are past due 90 days or more as to principal or interest may not go on nonaccrual status if the Company determines that the loans are well-secured and are in the process of collection. In accordance with ASC 326, the Company elected to exclude accrued interest from the amortized cost basis in its determination of the ACL for loans receivable, and will instead reverse accrued but unpaid interest through interest income in the period in which the loan is placed on nonaccrual status. Accrued interest The ACL represents management’s best estimate of credit losses over the remaining life of the loan portfolio. Loans are charged-off against the ACL when management believes the loan balance is no longer collectible. Subsequent recoveries of previously charged-off amounts are recorded as increases to the ACL. The provision for credit losses is an amount sufficient to bring the ACL to an estimated balance that management considers adequate to absorb lifetime expected losses in the Company’s held for investment loan portfolio. The ACL is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Management’s determination of the adequacy of the ACL under ASC 326 is based on an evaluation of the composition of the loan portfolio current economic conditions, historical loan loss experience, reasonable and supportable forecasts, and other risk factors. The Company uses a third-party CECL model as part of its estimation of the ACL on a quarterly basis. Loans with similar risk characteristics are collectively assessed within pools (or segments). Loss estimates within the collectively assessed population are based on a combination of pooled assumptions and loan-level characteristics. The Company has determined that using federal call codes is an appropriate loan segmentation methodology, as it is generally based on risk characteristics of a loan’s underlying collateral. Using federal call codes also allows the Company to utilize and assess publicly available external information when developing its estimate of the ACL. The weighted average remaining maturity (“WARM”) method is the primary credit loss estimation methodology used by the Company and involves estimating future cash flows and expected credit losses for pools of loans using their expected remaining weighted average life. In applying future economic forecasts, the Company utilizes a forecast period of up to two years. The Company considers economic forecasts of inflation, Federal Open Market Committee interest rates, national gross domestic product, and unemployment rates sourced from the Federal Reserve System’s “Beige Book,” Wells Fargo’s “U.S. Economic Outlook,” and the “Economic Forecast” publications from FHN Financial to inform the model for loss estimation. Historical loss rates used in the quantitative model are primarily derived using both the Bank’s data, supplemented with peer bank data obtained from publicly available sources (i.e., federal call reports). The Bank’s peer group is comprised of financial institutions of relatively similar size and in similar markets (i.e., $10.00 billion or less of total assets and headquartered in Massachusetts). Management also considers qualitative adjustments when estimating credit losses to take into account the model’s quantitative limitations. Qualitative adjustments to quantitative loss factors, either negative or positive, may include considerations of economic conditions, volume and severity of past due loans, value of underlying collateral, experience, depth, and ability of management, and concentrations of credit. For those loans that do not share similar risk characteristics, the Company evaluates the ACL needs on an individual (or loan by loan) basis. This population of individually evaluated loans (or loan relationships with the same primary source of repayment) is determined on a quarterly basis and is based on whether the risk grade of the loan is substandard or worse and the balance exceeds $500,000, and the loan’s terms differ significantly from other pooled loans. In accordance with the Company’s policy, non-accrual residential real estate loans that are well secured (LTV <75%) are not considered to warrant a downgrade to substandard risk rating and are therefore excluded from individually evaluated loans. Measurement of credit loss is based on the expected future cash flows of an individually evaluated loan, discounted at the loan’s effective interest rate, or measured on an observable market value, if one exists, or the estimated market value of the collateral underlying the loan, discounted to consider estimated costs to sell the collateral for collateral-dependent loans. If the net value is less than the loan’s amortized cost, a specific reserve in the ACL is recorded, which is charged-off in the period when management believes the loan balance is no longer collectible. The Company’s Allowance Committee approves the key methodologies and assumptions, as well as the final ACL on a quarterly basis. While management uses available information at the time of estimation to determine expected credit losses on loans, future changes in the ACL may be necessary based on changes in portfolio composition, portfolio credit quality, and/or economic conditions. In addition, bank regulatory agencies periodically review its ACL and may require an increase in the provision for credit losses or the recognition of further loan charge-offs, based on judgments different than those of management. Upon the adoption of ASC 326, the Company recognized an adjustment to retained earnings in the amount of $2.1 million, and recorded an adjustment to the allowance for credit losses in loans of approximately of $1.2 million and unfunded commitments on loans in the amount of approximately $1.8 million, net of deferred taxes of approximately $827,000. Subsequent to the CECL adoption, management refined the modeling assuming and enhanced the CECL calculation, including the reserve for unfunded commitments, specifically regarding the probability of funding assumptions related to unfunded commitments and enhanced the qualitative analysis used in the determination of expected credit losses. The impact of these changes, in addition to growth in the unfunded commitment balances resulted in provisions for credit losses of $4.2 million. Collateral-dependent Loans – The Company has certain loans for which repayment is dependent upon the operation or sale of collateral, as the borrower is experiencing financial difficulty. The underlying collateral can vary based upon the type of loan. The following provides more detail about the types of collateral that secure collateral-dependent loans: ● Commercial real estate loans may be secured by either owner occupied commercial real estate or non-owner-occupied investment commercial real estate. Typically, owner occupied commercial real estate loans are secured by office buildings, warehouses, manufacturing facilities, and other commercial and industrial properties occupied by operating companies. Repayment is generally from the cash flows of the business occupying the property. Non-owner occupied commercial real estate loans are generally secured by office buildings and complexes, retail facilities, multifamily complexes, land under development, industrial properties, as well as other commercial or industrial real estate. ● Commercial and industrial loans may be secured by non-real estate collateral such as accounts receivable, inventory, equipment, or other similar assets. ● Residential real estate loans are typically secured by first mortgages, and in some cases could be secured by a second mortgage. ● Home equity lines of credit are generally secured by second mortgages on residential real estate property. ● Consumer loans are generally secured by boat and recreational vehicles, automobiles, solar panels and other personal property. Some consumer loans are unsecured, have no underlying collateral, and would not be considered collateral-dependent. Modified Loans – ASU 2022-22 eliminated the concept of troubled debt restructurings (“TDRs”) from the accounting standards for companies that have adopted ASC 326. ASU 2022-02 also requires additional disclosures for certain loan modifications and disclosures of gross charge-offs by year of origination. Specifically, loan modification disclosures in periods subsequent to the adoption of ASC 326 must be made for modifications of existing loans to borrowers who were experiencing financial difficulties at the time of the modification. The modification type must include a direct change in the timing or amount of a loan’s contractual cash flows. The additional disclosures are applicable to situations where there is: principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, a term extension, or any combination thereof. Available for Sale Securities – is influenced by a number of security-specific factors that may include obligor cash flow, geography, seniority, and others. If unrealized losses are related to credit quality, the Company estimates the credit-related loss by evaluating the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. Subsequent to the adoption of ASC 326, if the present value of cash flows expected to be collected is less than the amortized cost basis of the security and a credit loss exists, then an ACL is recorded for the credit loss, limited by the amount that the fair value is less than amortized cost basis. As of December 31, 2022, the Company did not have any other-than-temporarily impaired AFS securities. Upon adoption of ASC 326, the Company determined that an ACL on AFS securities was not warranted. As of December 31, 2023, there was no allowance for credit losses related to the available for sale portfolio. For AFS debt securities, management evaluates all investments in an unrealized loss position on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. If the Company has the intent to sell the security or it is more likely than not that the Company will be required to sell the security, the security is written down to fair value and the entire loss is recorded in earnings through an allowance for credit loss. If either of the above criteria is not met, the Company evaluates whether the decline in fair value is the result of credit losses or other factors. In making the assessment, the Company may consider various factors including the extent to which fair value is less than amortized cost, performance on any underlying collateral, downgrades in the ratings of the security by a rating agency, the failure of the issuer to make scheduled interest or principal payments and adverse conditions specifically related to the security. If the assessment indicates that a credit loss exists, the present value of cash flows expected to be collected are compared to the amortized cost basis of the security and any excess is recorded as an allowance for credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any amount of unrealized loss that has not been recorded through an allowance for credit loss is recognized in other comprehensive income. Changes in the allowance for credit loss are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance for credit loss when management believes an available for sale security is confirmed to be uncollectible or when either of the criteria regarding intent or requirement to sell is met. As of December 31, 2023, there was no allowance for credit loss related to the available- for-sale portfolio. Accrued interest receivable on available for sale debt securities totaled $1.2 million at December 31, 2023 and was excluded from the estimate of credit losses. Purchase premiums and discounts are recognized in interest income, using the interest method, to arrive at periodic interest income at a constant effective yield, thereby reflecting the securities' market yield. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method. Such gains and losses are recognized within non-interest income in the consolidated statements of income. Reserve for Unfunded Commitments – Comprehensive Income – The Company presents the components of OCI in a separate consolidated statement of comprehensive income (see Note 15). Fair Value Measurements – This standard defines fair value and establishes a framework for measuring fair value. This standard applies to certain other existing accounting pronouncements that require or permit fair value measurements (see Note 13). Cash and Cash Equivalents – Other Investments – A non-controlling partnership interest in the Massachusetts Housing Equity Fund XXII LLC (a Qualified Affordable Housing Project “QAHP” of the Massachusetts Housing Investment Corporation), is accounted for using the proportional amortization method, whereby the Company amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance as a component of income tax expense. The Company’s interest in the Massachusetts Housing Equity Fund XXII LLC constitutes a variable interest entity, which is not consolidated into the Company as there is a separate managing member who controls and operates the entity. Investments in solar energy programs are accounted for under the proportional amortization method of accounting, rather than consolidation, due to the nature of the investee’s business (solar project where control remains with the managing LLC member) and the relative insignificance to the Company’s consolidated financial statements and constitute unconsolidated variable interest entities. Derivative Instruments and Hedging Activities – As required by ASC 815, the Company reports all derivatives on its balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting, and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with 1) the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge, or 2) the earnings effect of the hedged forecasted transactions in a cash flow hedge. Other Real Estate Owned Transfers of Financial Assets Revenue Recognition Revenues from contracts with customers that are subject to the principles of ASC Topic 606 are included in “non-interest income” under the customer service fees category in the Company’s consolidated statements of income. The following is a summary of such revenues from contracts with customers for the years ended December 31: (In thousands) 2023 2022 ATM and interchange income, net of related expenses $ 1,224 $ 1,071 Non-sufficient funds ("NSF") and overdraft fees 527 438 Other customer service fees 6,066 3,629 Total $ 7,817 $ 5,138 ATM and interchange income are reported net of directly related expenses and are recognized by the Company when customers use their ATM/debit cards issued by the Company through a third-party payment network. NSF and overdraft protection fees represent fees charged to customers to cover or protect customer transactions in case of insufficient customer funds. Other customer service fees are primarily comprised of fees on cash management services, deposit account maintenance fees, wire transfer fees, certain loan prepayment fees and investment advisory fees. All of these fees are recognized at a point in time. Transaction based fees are recognized at the time of the transaction while account maintenance and protection fees are both charged and recognized on a monthly basis. In each of the revenue streams identified above, there were no significant judgments made in determining or allocating the transaction price, as the consideration and service requirements are generally explicitly identified in the associated contracts and consist of a single performance obligation. Loan Servicing Banking Premises and Equipment assets (see Note 5). Maintenance and repairs are expensed as incurred while major improvements are capitalized. Gains and losses on dispositions are included in current operations. Impairment of Long-Lived Assets Defined Benefit Plans: Director Pension Plan The Company recognizes the over-funded or under-funded status of a defined benefit plan as an asset or liability in its balance sheet and it recognizes changes in the funded status of the plan in the year in which the changes occur. The funded status of a plan is measured as the difference between the fair value of plan assets and the “projected benefit obligation” (PBO) at the financial statement date. The unrecognized prior service costs, net actuarial gains and accounting transition obligation are reflected as “accumulated other comprehensive income” (OCI). The changes in the plan’s funded status are recognized as charges or credits to “OCI” to the extent that they are not required to be recognized as components of “net periodic pension cost” in net income (see Notes 9 and 15). Employee Pension Plans Employee Stock Ownership Plan ("ESOP") – Advertising Costs Income Taxes deductible amounts in the future, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. In accordance with generally accepted accounting principles, management assesses the likelihood that tax positions taken will be sustained upon examination based on their technical merit, considering the facts, circumstances and information available at the end of each period. The Company recognizes the effects of significant income tax positions taken on tax returns only if the positions are “more likely than not” to be sustained upon examination by the taxing authorities. Positions taken on tax returns that do not meet that threshold are not recognized in the Company’s provisions for income taxes. The measurement of uncertain tax positions is adjusted when new information is available, or when an event occurs that requires a change. The Company’s policy is to analyze its tax positions for all open tax years. Interest and penalties, if any, associated with uncertain tax positions, are classified as additional income tax expense in the consolidated statements of income (see Note 10). Subsequent events Reclassifications – |
Investment Securities
Investment Securities | 12 Months Ended |
Dec. 31, 2023 | |
Investment Securities | |
Investment Securities | Note 2 – Investment Securities Available for Sale Amortized Unrealized Unrealized (In thousands) Cost Gain Loss Fair Value December 31, 2023 Debt Securities: U.S. Treasury securities $ 66,874 $ 27 $ (2,549) $ 64,352 Agency mortgage-backed securities 13,154 5 (1,729) 11,430 Agency collateralized mortgage obligations 2,987 — (569) 2,418 Corporate bonds 101,244 5 (9,014) 92,235 Municipal obligations 20,010 — (980) 19,030 Total $ 204,269 $ 37 $ (14,841) $ 189,465 Amortized Unrealized Unrealized (In thousands) Cost Gain Loss Fair Value December 31, 2022 Debt Securities: U.S. Treasury securities $ 111,953 $ 43 $ (5,195) $ 106,801 Agency mortgage-backed securities 14,123 3 (1,985) 12,141 Agency collateralized mortgage obligations 3,749 — (676) 3,073 Corporate bonds 110,886 — (9,079) 101,807 Municipal obligations 23,313 — (1,655) 21,658 Total $ 264,024 $ 46 $ (18,590) $ 245,480 Investment securities with carrying values of $49.6 million as of December 31, 2023 were pledged to secure borrowings with the Federal Reserve Bank (see Note 8). There were no investment securities pledged to secure borrowings with the Federal Reserve Bank as of December 31, 2022. The Company did not sell any AFS securities during the years ended December 31, 2023 and 2022. The net unrealized gain (loss) on AFS securities is reported, net of deferred income tax effects, as a separate component of the Company’s shareholders’ equity, “Accumulated Other Comprehensive Income (Loss)”, and approximates the following as of the dates stated: (In thousands) December 31, 2023 December 31, 2022 Unrealized losses, net $ (14,804) $ (18,544) Deferred income tax asset 3,876 4,805 $ (10,928) $ (13,739) Maturities of Debt Securities – Available for Sale Amortized Cost Fair Value (In thousands) Within one year $ 57,476 $ 56,824 Over one year to five years 95,163 88,905 Over five years to ten years 35,489 29,888 188,128 175,617 Agency mortgage-backed securities 13,154 11,430 Agency collateralized mortgage obligations 2,987 2,418 $ 204,269 $ 189,465 Credit Loss Evaluation Less than 12 Months 12 Months or More Total Gross Gross Gross (In thousands) Unrealized Fair Unrealized Fair Unrealized Fair December 31, 2023 Number of Securities Losses Value Losses Value Losses Value U.S. Treasuries 15 $ (95) $ 7,884 $ (2,454) $ 46,515 $ (2,549) $ 54,399 U.S. Government Agencies 18 — — (1,730) 11,124 (1,730) 11,124 Taxable municipals 5 — — (569) 2,418 (569) 2,418 Corporate bonds 33 (1,135) 6,866 (7,879) 78,365 (9,014) 85,231 Mortgage backed securities 13 (181) 1,819 (799) 17,211 (980) 19,030 Total 84 $ (1,411) $ 16,569 $ (13,431) $ 155,633 $ (14,842) $ 172,202 Less than 12 Months 12 Months or More Total Gross Gross Gross (In thousands) Unrealized Fair Unrealized Fair Unrealized Fair December 31, 2022 Number of Securities Losses Value Losses Value Losses Value U.S. Treasury securities 20 $ (47) $ 19,958 $ (5,148) $ 83,759 $ (5,195) $ 103,717 Agency mortgage-backed securities 25 (263) 2,900 (1,722) 8,932 (1,985) 11,832 Agency collateralized mortgage obligations 6 (54) 1,048 (622) 2,025 (676) 3,073 Corporate bonds 34 (4,332) 44,537 (4,747) 46,270 (9,079) 90,807 Municipal obligations 14 (382) 10,841 (1,273) 10,817 (1,655) 21,658 Total 99 $ (5,078) $ 79,284 $ (13,512) $ 151,803 $ (18,590) $ 231,087 Municipal, Agency Debt, and U.S. Treasury Securities Corporate Bonds – As of December 31, 2023 and 2022, the majority of securities in an unrealized loss position were of investment grade; however, a few did not have a third-party investment grade available. These ungraded securities were primarily subordinated debt instruments issued by bank holding companies and are classified as corporate bonds in the tables above. As of December 31, 2023, 14 securities with a market value of $37.9 million, respectively, did not have a third-party investment grade available. Investment securities with unrealized losses are generally a result of pricing changes due to changes in the interest rate environment since purchase and not as a result of permanent credit loss. The Company does not intend to sell, nor does it believe it will be required to sell, any of its securities prior to the recovery of the amortized cost. Because the declines in fair value are attributable to market changes in interest rates and not due to credit quality, management did not recognize an allowance for credit loss against the Company’s investment portfolio as of December 31, 2023. Depositors Insurance Fund Stock Federal Home Loan Bank Stock Federal Reserve Bank Stock Non-Public Investments Connecticut On-Line Computer Center, Inc. (“COCC”) Jassby Inc. Reinventure Capital Fund I LP distribution of $1,000,000 leaving the Company with a remaining investment (carrying value) of $1,000,000 as of December 31, 2022. During 2023, there was an additional capital call of $500,000 that increased the Company’s investment (carrying value) to $1,500,000 as of December 31, 2023. LearnLaunch Fund III L.P. Unconsolidated variable interest entities included in non-public investments consist of the following (See Note 22): Massachusetts Housing Investment Corporation ("MHIC") Sunwealth Project Pool 20 LLC (“Sunwealth”) During 2021, through its subsidiary, 1892 Investments, the Company invested $2.5 million in Sunwealth for Project Pool 20. The carrying value of the investment is approximately $1.9 million as of December 31, 2023 compared to $2.3 million as of December 31, 2022. In addition, the Company has made a $2.5 million loan to Holdco to fund the project, which is included in the Company’s construction and industrial loan portfolio as of December 31, 2023 and 2022. Sunwealth Project Pool 26 LLC Patriot Renewable Energy Capital, LLC (“Patriot Renewables”) Bertoline Project – The Company invested $623,000 in the Bertoline Project in 2022 with a total commitment of $656,000. During 2023, the Company invested an additional $26,000. The carrying value of the investment approximates $535,000 and $623,000 as of December 31, 2023 and 2022, respectively. Maple Crest Project – During 2023, the Company invested $1.0 million towards the Maple Crest Project. The total commitment to this solar project is $5.0 million, with $1.0 million contributed as of December 31, 2023. |
Loans Receivable and ACL
Loans Receivable and ACL | 12 Months Ended |
Dec. 31, 2023 | |
Loans Receivable and ACL | |
Loans Receivable and ACL | Note 3 – Loans Receivable and ACL All loan and ACL information presented as of and for the year ended December 31, 2023 is in accordance with ASC 326. All loan information presented prior to this period is presented in accordance with previous GAAP. As a result, the presentation of information pre-ASC 326 and post-ASC 326 adoption will not be comparable for most disclosures. Loans consist of the following as of the dates stated (in thousands): December 31, 2023 December 31, 2022 One-to four-family residential $ 1,097,475 $ 932,436 Home equity 97,270 75,226 Residential real estate 1,194,745 1,007,662 Commercial real estate 1,174,020 822,744 Multi-family residential 209,982 189,279 Commercial real estate 1,384,002 1,012,023 Construction and land development 622,713 552,375 Commercial and industrial 487,878 247,361 Commercial 2,494,593 1,811,759 Consumer, net of premium/discount 204,871 196,535 Total loans 3,894,209 3,015,956 Deferred fees, net (4,930) (511) Allowance for credit losses (32,222) (25,028) Net loans $ 3,857,057 $ 2,990,417 Included in the above as of December 31, 2023 is approximately $320.5 million in loans to borrowers in the cannabis industry, of which 80% is collateralized by real estate compared to $58.3 million of cannabis industry loans, of which 91% is collateralized by real estate at December 31, 2022. None of the loans to borrowers in the cannabis industry are collateralized by cannabis. During the years ended December 31, 2023 and 2022, the Company purchased approximately $34.2 million and $187.3 million, respectively, of consumer loan pools. These purchases included loan pools collateralized by boat and recreational vehicles, automobiles, and solar panels, as well as unsecured home improvement loans. The outstanding balances of these consumer loan pools, shown net of premium (discount) are as follows as of the dates stated (in thousands): December 31, 2023 Gross Loan Premium (Discount) Net Loan Student loans $ 8,989 $ 49 $ 9,038 Boat and RV loans 58,483 1,422 59,905 Automobile loans 14,662 — 14,662 Solar panel loans 61,430 (5,443) 55,987 Home improvement loans 53,220 (26) 53,194 Total $ 196,784 $ (3,998) $ 192,786 December 31, 2022 Gross Loan Premium (Discount) Net Loan Student loans $ 11,679 $ 61 $ 11,740 Boat and RV loans 40,270 925 41,195 Automobile loans 15,498 — 15,498 Solar panel loans 67,994 (5,914) 62,080 Home improvement loans 63,146 (44) 63,102 Total $ 198,587 $ (4,972) $ 193,615 For purposes of the schedules included in this note, the Company classifies multi-family residential loans as commercial real estate. The following table presents the aging of the amortized cost of loans receivable by loan category as of the date stated (in thousands): 30-59 60-89 90 Days or Current Days Days More Past Due Total December 31, 2023 Loans Past Due Past Due Still Accruing Nonaccrual Loans Real estate loans: One-to four-family residential $ 1,091,472 $ 1,903 $ — $ — $ 4,100 $ 1,097,475 Home equity 96,327 288 65 — 590 97,270 Commercial real estate 1,380,845 2,735 — — 422 1,384,002 Construction and land development 622,703 — — — 10 622,713 Commercial and industrial 483,737 2 1 — 4,138 487,878 Consumer 198,316 4,009 1,008 — 1,538 204,871 Total $ 3,873,400 $ 8,937 $ 1,074 $ — $ 10,798 $ 3,894,209 Past Due 90 30-59 60-89 Days or Current Days Days 90 Days or Total More & Still Loans on December 31, 2022 Loans Past Due Past Due More Loans Accruing Nonaccrual Real estate loans: One-to four-family residential $ 929,323 $ 1,449 $ — $ 1,664 $ 932,436 $ — $ 5,579 Home equity 74,008 728 490 — 75,226 — 818 Commercial 1,007,110 4,243 — 670 1,012,023 — 670 Construction & land development 552,375 — — — 552,375 — 10 Commercial & industrial loans 246,523 38 — 800 247,361 — 5,086 Consumer loans 193,783 1,499 436 817 196,535 — 859 Total $ 3,003,122 $ 7,957 $ 926 $ 3,951 $ 3,015,956 $ — $ 13,022 The following table presents the amortized cost of nonaccrual loans receivable by loan category as of the date stated (in thousands): December 31, 2023 December 31, 2022 Incurred Nonaccrual Nonaccrual Total Loss Model- Loans with Loans with Nonaccrual Nonaccrual No ACL an ACL Loans Loans Real estate loans: One-to four-family residential $ 4,100 $ — $ 4,100 $ 5,579 Home equity 590 — 590 818 Commercial real estate 422 — 422 670 Construction and land development 10 — 10 10 Commercial and industrial 376 3,762 4,138 5,086 Consumer 1,538 — 1,538 859 Total $ 7,036 $ 3,762 $ 10,798 $ 13,022 During the year ended December 31, 2023, the Company reversed $37 thousand of interest income for loans that were placed on non-accrual. Credit Quality Information The Company utilizes a nine-grade internal rating system for all loans, except consumer loans, which are not risk rated, as follows: Loans rated 1-5: Loans in these categories are considered “pass” rated loans with low to average risk. Loans rated 6: Loans in this category are considered “special mention”. These loans are starting to show signs of potential weakness and are being closely monitored by management. Loans rated 7: Loans in this category are considered “substandard”. Generally, a loan is considered substandard if it is inadequately protected by the current net worth and paying capacity of the obligors and/or the collateral pledged. There is a distinct possibility that the Company will sustain some loss if the weakness is not corrected. Non-accrual residential real estate loans that are well secured (LTV<75%) are not considered to warrant a downgrade to a substandard risk rating. Loans rated 8: Loans in this category are considered “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, on the basis of currently existing facts, highly questionable and improbable. Loans rated 9: Loans in this category are considered uncollectible (“loss”) and of such little value that their continuance as loans is not warranted. On an annual basis, or more often if needed, the Company reviews the accuracy of risk ratings for all commercial real estate, construction and land development loans, and commercial and industrial loans based on various ongoing performance characteristics and supporting information that is provided from time to time by commercial borrowers. Annually, the Company engages an independent third-party to review a significant portion of loans within these segments. Management uses the results of these reviews as part of its annual review process. The following table presents the amortized cost of loans receivable by internal risk grade by year of origination as of December 31, 2023. Also presented are current period gross charge-offs by loan type and vintage year for the year ended December 31, 2023. Term Loans Amortized Cost Basis by Origination Year (in thousands) Risk Rating 2023 2022 2021 2020 2019 Prior Revolving Loans Total Residential Real Estate Grade: Pass 1-5 $ 152,824 $ 272,448 $ 256,666 $ 128,181 $ 78,739 $ 174,654 $ 130,256 $ 1,193,768 Special Mention 6 — — — — — — — — Substandard 7 — — — — — 898 79 977 Doubtful 8 — — — — — — — — Loss 9 — — — — — — — — Total $ 152,824 $ 272,448 $ 256,666 $ 128,181 $ 78,739 $ 175,552 $ 130,335 $ 1,194,745 Current period gross charge-offs $ — $ — $ — $ — $ — $ 379 $ — $ 379 Commercial Real Estate Grade: Pass 1-5 $ 388,563 $ 421,419 $ 81,913 $ 124,461 $ 142,092 $ 179,713 $ 33,944 $ 1,372,105 Special Mention 6 — — — — 6,183 5,714 — 11,897 Substandard 7 — — — — — — — — Doubtful 8 — — — — — — — — Loss 9 — — — — — — — — Total $ 388,563 $ 421,419 $ 81,913 $ 124,461 $ 148,275 $ 185,427 $ 33,944 $ 1,384,002 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Construction and Land Development Grade: Pass 1-5 $ 157,270 $ 305,558 $ 127,720 $ 20,929 $ 10,333 $ — $ 893 $ 622,703 Special Mention 6 — — — — — — — — Substandard 7 — — — — — — — — Doubtful 8 — — — — — 10 — 10 Loss 9 — — — — — — — — Total $ 157,270 $ 305,558 $ 127,720 $ 20,929 $ 10,333 $ 10 $ 893 $ 622,713 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Commercial and Industrial Grade: Pass 1-5 $ 58,676 $ 88,286 $ 45,960 $ 8,080 $ 3,038 $ 16,178 $ 258,468 $ 478,686 Special Mention 6 — — 250 — — 475 — 725 Substandard 7 — — — — 119 3,762 4,586 8,467 Doubtful 8 — — — — — — — — Loss 9 — — — — — — — — Total $ 58,676 $ 88,286 $ 46,210 $ 8,080 $ 3,157 $ 20,415 $ 263,054 $ 487,878 Current period gross charge-offs $ — $ — $ — $ — $ 570 $ 109 $ — $ 679 Consumer Grade: Pass 1-5 $ 36,453 $ 83,720 $ 53,404 $ 9,826 $ 10,896 $ 8,700 $ 1,872 $ 204,871 Non-Pass 6-9 — — — — — — — — Total $ 36,453 $ 83,720 $ 53,404 $ 9,826 $ 10,896 $ 8,700 $ 1,872 $ 204,871 Current period gross charge-offs $ 42 $ 1,524 $ 1,163 $ 311 $ 219 $ 221 $ 7 $ 3,487 Total Loans Grade: Pass 1-5 $ 793,786 $ 1,171,431 $ 565,663 $ 291,477 $ 245,098 $ 379,245 $ 425,433 $ 3,872,133 Special Mention 6 — — 250 — 6,183 6,189 — 12,622 Substandard 7 — — — — 119 4,660 4,665 9,444 Doubtful 8 — — — — — 10 — 10 Loss 9 — — — — — — — — Total $ 793,786 $ 1,171,431 $ 565,913 $ 291,477 $ 251,400 $ 390,104 $ 430,098 $ 3,894,209 Current period gross charge-offs $ 42 $ 1,524 $ 1,163 $ 311 $ 789 $ 709 $ 7 $ 4,545 The following tables present an analysis of the change in the ACL by major loan segment for the period stated (in thousands): For the Year ended December 31, 2023 One-to-Four Construction Family Commercial and Land Commercial and Residential Home Equity Real Estate Development Industrial Consumer Unallocated Total Balance at December 31, 2022 $ 3,485 $ 258 $ 6,538 $ 3,846 $ 8,255 $ 1,403 $ 1,243 $ 25,028 Adjustment to allowance for adoption of ASU 2016-13 266 13 822 (246) 932 615 (1,243) 1,159 Provision for credit losses - ACL (1,537) (154) (1,332) 4,030 2,370 6,280 — 9,657 Charge offs (379) — — — (679) (3,487) — (4,545) Recoveries of loans previously charged off — — 48 — — 875 — 923 Balance at December 31, 2023 $ 1,835 $ 117 $ 6,076 $ 7,630 $ 10,878 $ 5,686 $ — $ 32,222 Subsequent to the CECL adoption, management refined the modeling assuming and enhanced the CECL calculation, including the reserve for unfunded commitments, specifically regarding the qualitative analysis used in the determination of expected credit losses. The impact of these changes resulted in provisions for credit losses of $333 thousand. The following table presents the amortized cost of collateral-dependent loans of December 31, 2023 (in thousands): One-to four-family residential $ 977 Construction and land development 10 Commercial and industrial loans 8,443 Total $ 9,430 The Company closely monitors the performance of borrowers experiencing financial difficulty to understand the effectiveness of its loan modification efforts. The Company did not modify any loans to borrowers experiencing financial difficulty during the year ended December 31, 2023. Allowance for Credit Losses – Unfunded Commitments The Company maintains an allowance for off-balance sheet credit exposures such as unfunded balances for existing lines of credit, commitments to extend future credit, as well as both standby and commercial letters of credit when there is a contractual obligation to extend credit and when this extension of credit is not unconditionally cancellable (i.e., commitment cannot be canceled at any time). The allowance for off-balance sheet credit exposures is adjusted as a provision for (reversal of) credit loss expense. The estimate includes consideration of the likelihood that funding will occur, which is based on a historical funding study derived from internal information, and an estimate of expected credit losses on commitments expected to be funded over its estimated life, which are the same loss rates that are used in computing the allowance for credit losses on loans. The allowance for credit losses for unfunded loan commitments of $6.0 million as of December 31, 2023 is classified separately on the consolidated balance sheet with accrued expenses and other liabilities. There no allowance was for credit losses for unfunded commitments as of December 31, 2022. The following table presents the balance and activity in the allowance for credit losses for unfunded loan commitments for the year ended December 31, 2023 (in thousands): Year Ended December 31, 2023 Beginning balance $ — Adjustment to allowance for unfunded commitments for adoption of ASC 326 1,786 Provision for unfunded commitments 4,228 Balance, December 31, 2023 $ 6,014 Subsequent to the CECL adoption, management refined the modeling assuming and enhanced the CECL calculation, including the reserve for unfunded commitments, specifically regarding the probability of funding assumptions related to unfunded commitments and enhanced the qualitative analysis used in the determination of expected credit losses. The impact of these changes resulted in provisions for credit losses for unfunded commitments of $4.2 million. Pre-ASC 326 Adoption Disclosures Prior to the adoption of ASC 326 on January 1, 2023, the Company calculated the allowance for loan losses under the incurred loss methodology. The following disclosures are presented under this previously applicable GAAP for the applicable prior periods. Due to the adoption of CECL under ASC 326, two significant concepts under the incurred loss methodology disclosed below, impaired loans and troubled debt restructurings (TDRs) have been eliminated and replaced by collateral-dependent loans and modifications made to borrowers experiencing financial difficulties which were discussed in Note 1 and disclosed previously. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal and interest when due according to the contractual terms of the loan agreement. Under the incurred loss methodology, when a loan is modified and a concession is made to a borrower experiencing financial difficulty, the modification was considered a TDR. All TDRs were initially classified by the Company as impaired. The following table presents a summary of the loan portfolio individually and collectively evaluated for impairment as of the date stated (in thousands): Real Estate One-to Four- Family Commercial Construction & Commercial & Residential Home Equity Real Estate Land Development Industrial Consumer Unallocated Total December 31, 2022 Allowance for loans individually evaluated for impairment $ 422 $ — $ — $ — $ 4,998 $ — $ — $ 5,420 Allowance for loans collectively evaluated for impairment 3,063 258 6,538 3,846 3,257 1,403 1,243 19,608 Total Allowance for Loan Loss $ 3,485 $ 258 $ 6,538 $ 3,846 $ 8,255 $ 1,403 $ 1,243 $ 25,028 Loans individually evaluated for impairment $ 1,809 $ 80 $ 3,360 $ 10 $ 9,121 $ — $ — $ 14,380 Loans collectively evaluated for impairment 930,627 75,146 1,008,663 552,365 238,240 196,535 — 3,001,576 Total Loans $ 932,436 $ 75,226 $ 1,012,023 $ 552,375 $ 247,361 $ 196,535 $ — $ 3,015,956 The following tables presents a summary of impaired loans as of the date stated (in thousands): Recorded Unpaid Related Investment in Principal Allowance for Net Impaired Impaired Loans Balance Loan Losses Loan Balance (In thousands) December 31, 2022 Impaired loans with no related allowance recorded: Real estate: One-to four-family residential $ 1,387 $ 1,912 $ — $ 1,387 Home equity 80 80 — 80 Commercial real estate 3,360 9,178 — 3,360 Construction & land development 10 640 — 10 Commercial & industrial 874 2,669 — 874 Consumer — — — — Total 5,711 14,479 — 5,711 Impaired loans with an allowance recorded: Real estate: One-to four-family residential 422 422 422 — Home equity — — — — Commercial real estate — — — — Construction & land development — — — — Commercial & industrial 8,247 8,247 4,998 3,249 Consumer — — — — Total 8,669 8,669 5,420 3,249 Total impaired loans: Real estate: One-to four-family residential 1,809 2,334 422 1,387 Home equity 80 80 — 80 Commercial real estate 3,360 9,178 — 3,360 Construction & land development 10 640 — 10 Commercial & industrial 9,121 10,916 4,998 4,123 Consumer — — — — Total impaired loans $ 14,380 $ 23,148 $ 5,420 $ 8,960 Additional information about impaired loans is as follows for the period stated (in thousands): Year Ended December 31, 2022 Average recorded investment in impaired loans: Real Estate: One-to-four family residential 1,633 Home equity 16 Commercial real estate 3,413 Construction and land development 10 Commercial and industrial 8,802 Total $ 13,874 Related amount of interest income recognized during the period that the loans were impaired: Total recognized $ 683 Amount recognized using a cash-basis method of accounting $ 367 The following table summarizes the carrying balance of troubled debt restructurings (“TDRs”) as of December 31, 2022 (in thousands): Performing TDRs $ 8,304 Nonperforming TDRs 3,762 Total TDRs $ 12,066 There were no loans modified as TDRs and no TDRs that defaulted in the first twelve months after restructuring during the year ended December 31, 2022. The following tables present an analysis of the change in the allowance for loan losses by loan type for the period stated (in thousands): For the Year Ended December 31, 2022 One-to Four- Family Home Commercial Construction and Commercial and Residential Equity Real Estate Land Development Industrial Consumer Unallocated Total Balance, December 31, 2021 $ 3,016 $ 175 $ 4,449 $ 3,467 $ 5,749 $ 109 $ 1,450 $ 18,415 Provision for loan losses 471 83 2,041 379 2,506 1,427 (207) 6,700 Charge offs (35) — — — — (287) — (322) Recoveries of loans previously charged off 33 — 48 — — 154 — 235 Balance, December 31, 2022 $ 3,485 $ 258 $ 6,538 $ 3,846 $ 8,255 $ 1,403 $ 1,243 $ 25,028 The following table summarizes the Company’s loans by risk rating category as of the date stated (in thousands): Residential Risk Real Commercial Construction & Commercial & Total Rating Estate Real Estate Land Development Industrial Consumer Loans December 31, 2022 Grade: Pass 1-5 $ 1,006,275 $ 998,788 $ 552,365 $ 232,742 $ 196,535 $ 2,986,705 Special Mention 6 — 13,235 — 5,474 — 18,709 Substandard 7 1,387 — — 9,145 — 10,532 Doubtful 8 — — 10 — — 10 Loss 9 — — — — — — Total $ 1,007,662 $ 1,012,023 $ 552,375 $ 247,361 $ 196,535 $ 3,015,956 |
Mortgage Banking - Loan Sales a
Mortgage Banking - Loan Sales and Servicing | 12 Months Ended |
Dec. 31, 2023 | |
Mortgage Banking - Loan Sales and Servicing | |
Mortgage Banking - Loan Sales and Servicing | Note 4 – Mortgage Banking – Loan Sales and Servicing Mortgage loans sold to and serviced for investors are not included in the accompanying financial statements. The loans serviced for others were sold without recourse provisions. The aggregate outstanding unpaid principal balance of such loans approximates $215.7 million and $231.4 million at December 31, 2023 and 2022, respectively. Gains on loans sold, including recognition of mortgage servicing rights, for the years ended December 31, 2023 and 2022 were approximately $29,000 and $60,000, respectively, and are included in "mortgage banking income" in the noninterest income section in the consolidated statements of income. The fair value of the rights to service mortgage loans sold is estimated by management using independent market information. This fair value is capitalized and amortized into income in proportion to, and over the period of, estimated net servicing income using the interest amortization method. The following is a schedule of mortgage servicing assets, including the final carrying value, as of and for the years ended December 31 (in thousands): 2023 2022 Balance at the beginning of the year $ 2,298 $ 2,735 Servicing obligations that result from transfers of financial assets 25 14 Amortization (273) (451) Balance at the end of the year $ 2,050 $ 2,298 Management has concluded that the fair value of mortgage servicing rights, which is based on market prices for comparable mortgage servicing contracts, exceeds the carrying value. Accordingly, there is no adjustment for impairment. |
Premises and Equipment
Premises and Equipment | 12 Months Ended |
Dec. 31, 2023 | |
Premises and Equipment | |
Premises and Equipment | Note 5 – Premises and Equipment The following table summarizes the Company’s premises and equipment as of December 31: (Dollars in thousands) Expected Useful Lives December 31, 2023 December 31, 2022 Land $ 4,631 $ 4,631 Land improvements 7 - 20 years 2,727 2,727 Leasehold improvements Lease term (including all anticipated extensions) 13,017 12,308 Buildings and improvements 20 - 50 22,478 21,171 Furniture, fixtures, and equipment 3 - 10 19,211 18,377 62,064 59,214 Less accumulated depreciation (26,533) (23,870) Total $ 35,531 $ 35,344 The Company had depreciation expense for the years ended December 31, 2023 and 2022 in the amount of $2.7 million and $2.4 million, respectively. |
Lease Commitments
Lease Commitments | 12 Months Ended |
Dec. 31, 2023 | |
Lease Commitments | |
Lease Commitments | Note 6 – Lease Commitments The Company is the lessee under seven building and land lease agreements for branch locations in Dedham, Dover, Ashland, Millis, Medford, Natick and Mission Hill. The Company’s operating leases have remaining lease terms of 12 to 25 10 The Company follows ASC 842, “Leases”, The following is a summary of the recorded lease right-of-use assets for all of the above-mentioned lease agreements as of the dates stated (in thousands): December 31, 2023 December 31, 2022 Operating lease right-of-use assets $ 11,540 $ 11,540 Less accumulated amortization (992) (563) Operating lease right-of-use assets, net 10,548 10,977 Operating lease liabilities $ 10,773 $ 11,049 Weighted average remaining term (years) 19 20 Weighted average discount rate 4.38% 4.38% The future minimum lease payments under the terms of the above leases at December 31, 2023, along with the recorded present value of the lease obligations, are as follows: (in thousands) 2024 $ 765 2025 787 2026 808 2027 825 2028 and thereafter 835 Thereafter 12,846 $ 16,866 Less unamortized discount (6,093) Recorded present value of lease obligations $ 10,773 The Company has included in its recorded lease obligations and right-of-use assets any of the available lease extension options permitted under the agreements for branch locations as management can be reasonably certain under lease accounting criteria that the options will be exercised. Required payments for real estate taxes, insurance, utilities and management fees are not included in the recorded lease obligations and assets since they are variable payments that do not depend on a specified index or rate and they are recorded to expense as they are incurred. Any increases in lease payments as a result of changes in the CPI are charged to lease expense. Common area maintenance charges under the agreements are not considered in the lease payments since they represent a service provided to the Company and, as such, they are recorded to expense as incurred. The discount rates imputed on the lease obligations range from 3.01% to 5.29%, which represented the Company’s incremental borrowing rates for similar length terms as the applicable leases. Total lease expense for the year ended December 31, 2023 and 2022 approximated $938,000 and $630,000, respectively. |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2023 | |
Deposits. | |
Deposits | Note 7 – Deposits A comparative summary of deposits is as follows as of the dates stated: December 31, 2023 December 31, 2022 (In thousands) Transactional accounts: Noninterest-bearing demand deposits $ 528,409 $ 445,518 Savings accounts 127,640 163,257 NOW accounts 345,753 408,894 Money market accounts 888,511 659,455 Total transactional accounts 1,890,313 1,677,124 Time deposits Greater than $250,000 544,246 415,860 Less than or equal to $250,000 952,789 793,759 Total time deposits 1,497,035 1,209,619 Total deposits $ 3,387,348 $ 2,886,743 Contractual maturities of time deposits are as follows (in thousands): December 31, 2023 December 31, 2022 Within 1 year $ 1,472,067 $ 1,022,891 Over 1 year to 2 years 13,360 160,545 Over 2 years to 3 years 3,434 11,137 Over 3 years to 4 years 6,159 5,937 Over 4 years to 5 years 2,015 9,109 $ 1,497,035 $ 1,209,619 Included in time deposits less than or equal to $250,000 are brokered certificates of deposit of approximately $183.6 million and $250.0 million as of December 31, 2023 and 2022, respectively. As of December 31, 2023 and 2022, total deposits related to the cannabis industry are $316.0 million and $234.9 million, or 9.3% and 8.1%, of total deposits, respectively. There are no customers that exceed 5% of total deposits as of December 31, 2023 and 2022. |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2023 | |
Borrowings | |
Borrowings | Note 8 – Borrowings Federal Home Loan Bank Maturities on outstanding borrowings from the FHLB are summarized as follows: December 31, 2023 December 31, 2022 Weighted Weighted Average Average (Dollars in thousands) Amount Rate Amount Rate Advances maturing within: One year $ 282,503 5.53% $ 293,075 4.27% One to two years — — 7 2.80% Four to five years 560 0.00% — — Five to ten years 275 0.00% — — Total $ 283,063 5.53% $ 293,082 4.27% The Company also had a line of credit from the FHLB Ideal Way in the amount of $6.1 million at December 31, 2023 and 2022. The Company has no borrowings outstanding under this line of credit at December 31, 2023 or 2022. Interest expense on the above FHLB borrowings approximated $14.1 million and $2.9 million for the years ended December 31, 2023 and 2022, respectively. The Federal Reserve Bank Interest Rate Swap Contracts The effect of the swap contract was to limit the interest rate exposure on the brokered certificates of deposits to a fixed rate (2.53%) versus the three-month LIBOR. In accordance with the swap agreement, the interest charge was calculated based upon the LIBOR and the fixed rate. If interest as calculated was greater based on the LIBOR, the counterparty paid the difference to the Company. However, if interest as calculated was greater based on the fixed rates, the Company paid the difference to the counterparty. Depending on the fluctuations in the LIBOR, the Company’s interest rate exposure and its related impact on interest expense and net cash flow could increase or decrease. The fair value of the interest rate swap agreement was the estimated amount the Company would receive or pay to terminate the agreement at a particular point in time, considering current interest rates and the creditworthiness of the counterparty. The estimated fair value of the interest rate swap contract was provided by a third-party valuation expert. As of December 31, 2022, the fair value of the swap contract was estimated to be an asset of approximately $321,000, which was reflected as prepaid expenses and other assets, on the Company’s accompanying consolidated balance sheet. An unrealized gain on the swap contract of approximately $231,000 at December 31, 2022, net of income tax effects, was recorded in AOCI on the consolidated balance sheets at December 31, 2022. This financial instrument involved counterparty credit exposure. The counterparty for the interest rate exchange was a major financial institution that met the Company’s criteria for financial stability and creditworthiness. In order to mitigate counterparty default risk, should there be a significant difference in the market value of the swap components and/or the projected net interest payments, the Company or the counterparty could demand that collateral be pledged to cover the difference on each swap contract. The Company was required to maintain $500,000 of collateral deposits with the counterparty at December 31, 2022. The swap agreement resulted in a credit to the Company’s interest expense of approximately $321,000 for the year ended December 31, 2023 (this swap contract matured during April 2023) and a charge to the Company’s interest expense of approximately $496,000 for the year ended December 31, 2022 (included with interest expense on deposits). |
Employee Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2023 | |
Employee Benefits | |
Employee Benefits | Note 9 – Employee Benefits 401(k) Plan Employee Pension Plan The Company’s participation in the CBERA Plan C defined benefit plan for year ended December 31 is summarized below: Pension Protect Act Zone Bank’s Contributions for Status Year Ended December 31, FIP/RP Status December 31, December 31, Pending / Surcharge Pension Fund EIN/Plan Number 2023 2022 Implemented 2023 2022 Imposed The Defined Benefit Plan (Plan C) of the CBERA Retirement Program EIN: 04-6035593; Plan No. 334 Green Green No $ 3,476,667 $ 2,000,000 No The Company’s contributions to the Plan in each of the two periods disclosed above exceeded 5% of the total plan contributions. The Plan’s audited financial statements for the year ended December 31, 2022, indicated total net assets available for benefits of $403.6 million and total contributions from all participating employers of $8.6 million. Deferred Compensation Plans Long-Term Incentive Plan this plan, individuals are granted “phantom shares” and benefits are accrued based upon the projected growth of the Bank’s capital. The obligations under this plan are included in accrued retirement liabilities on the Company’s consolidated balance sheets and approximated $11.1 million and $4.9 million as of December 31, 2023 and 2022, respectively. The expense under this plan (recorded in salaries and employee benefits in the consolidated statements of income) approximated $7.8 million and $3.3 million for the years ended December 31, 2023 and 2022, respectively. The increase during 2023 was a result of a discretionary increase by the Compensation Committee. Director Pension Plan A comparison of the actuarial estimates of the benefit obligations to the recorded obligations are as follows as of the measurement date, December 31 (in thousands): 2023 2022 Projected benefit obligations $ (5,744) $ (4,998) Plan assets at fair value - - Funded status $ (5,744) $ (4,998) Amounts recognized on the consolidated balance sheet as of December 31 are as follows (in thousands): 2023 2022 Accrued retirement liabilities $ (5,744) $ 4,998 Accumulated other comprehensive loss in equity, before taxes (1,347) (1,241) Net amount recognized $ (7,091) $ 3,757 Amounts included in “Accumulated Other Comprehensive Income (Loss)” that have not yet been recognized as components of net periodic pension cost as of December 31 are as follows (in thousands): 2023 2022 Unrecognized prior service cost $ (258) $ (315) Unrecognized net loss (1,089) (926) Unrecognized losses included in AOCI $ (1,347) $ (1,241) The weighted average actuarial assumptions used to determine the director pension plan projected benefit obligations and net periodic pension cost are as follows as of December 31 (in thousands): 2023 2022 Pre-retirement discount rate for net periodic pension cost 5.03% 2.35% Pre-retirement discount rate for projected benefit obligation 4.81% 5.03% Post-retirement discount rate for projected benefit obligation 4.81% 5.03% Rate of compensation increase 0.00% 0.00% The components of projected net periodic pension cost for the year ended December 31, 2023 and 2022 are as follows (amortization amounts will be recorded via charges or credits to “other comprehensive income”) (in thousands): 2023 2022 Benefit obligation at beginning of the year $ 4,998 $ 4,549 Service cost 260 232 Interest cost 261 114 Plan amendments 430 372 Actuarial loss (gain) 244 (30) Benefits paid (449) (239) Benefit obligation at end of the year $ 5,744 $ 4,998 The following schedule reflects the net periodic pension cost, contributions received, and benefits paid for the year ended December 31: (In thousands) December 31, 2023 December 31, 2022 Service cost $ 260 $ 232 Interest cost 261 114 Amortization of net actuarial losses 81 85 Amortization of prior service costs 487 57 Net periodic pension cost $ 1,089 $ 488 Employer contribution $ 449 $ 239 Benefits paid $ 449 $ 239 The Company records an estimate of net periodic pension cost for the director pension plan to accrued retirement liabilities on the consolidated balance sheet on a quarterly basis. Equity adjustments, to accumulated other comprehensive loss, in conjunction with the pension plan are recorded by the Company annually upon receipt of the independent actuarial report. The following estimated pension benefit payments, which reflect expected future service as appropriate, are expected to be paid over the next ten years (in thousands): Estimated benefit payments 2024 $ 480 2025 526 2026 547 2027 528 2028 563 2029 and thereafter 3,682 Total $ 6,326 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes | |
Income Taxes | Note 10 – Income Taxes The components of income tax expense for the years ended December 31 are as follows: (Dollars in thousands) December 31, 2023 December 31, 2022 Current tax expense Federal $ 5,216 $ 3,625 State 4,523 3,951 9,739 7,576 Deferred tax expense (credits) Federal (5,704) (458) State (2,016) (795) (7,720) (1,253) Total income tax expense $ 2,019 $ 6,323 The Company’s effective tax rate differs from that computed at the statutory federal income tax rate for the years ended December 31 as follows: 2023 2022 Statutory federal tax rate Increase (decrease) resulting from: 21.0% 21.0% State taxes, net of federal tax benefit 6.8 6.9 Tax-exempt income (0.7) (0.9) Disallowed compensation under 162(m) 31.10 - Federal solar tax credits (39.8) (10.1) Income from bank-owned life insurance (3.6) (0.9) Bargain purchase gain 0.0 (0.9) Other, net 2.3 2.3 Effective tax rate 17.1% 17.4% During the year ended December 31, 2023, the Company recognized $5.1 million in investment tax credits and $1.4 million in proportional amortization expense of its carrying basis in non-public investments, both of which are included in the income tax expense line item in the consolidated statements of income. The Company’s deferred income tax assets and liabilities at December 31 consist of the following: (In thousands) 2023 2022 Deferred income tax assets: Allowance for credit losses $ 9,058 $ 7,035 Reserve for off balance sheet commitments 1,691 - Loan impairment charges 478 491 Director retirement plans 1,236 1,056 Deferred compensation 1,760 1,963 Charitable contribution carryforward 5,363 - Non-accrual interest on loans 205 184 Unrecognized pension cost on director pension plan 377 348 Unrealized loss on investment securities available for sale 3,876 4,805 Other 55 29 Gross deferred income tax assets 24,099 15,911 Deferred income tax liabilities: Mortgage servicing rights (576) (646) Depreciation (1,752) (1,777) Unrealized gain on cash flow hedge - (90) Solar tax credit investment (2,300) (1,623) Bargain purchase gain (345) (387) Gross deferred income tax liabilities (4,973) (4,523) Net deferred income tax asset $ 19,126 $ 11,388 Based on the Company’s projected pretax earnings, management believes it is more likely than not that the Company will realize the gross deferred tax assets existing as of December 31, 2023. Therefore, no valuation allowance has been provided. The primary sources of recovery of the gross federal and state deferred tax assets is the expectation that the existing net deductible temporary differences will reverse during periods in which the Company generates net taxable income. There can be no assurance, however, that the Company will generate any earnings or any specific level of continuing earnings. It should be noted, however, that factors beyond management’s control, such as the general state of the economy and real estate values, can affect future levels of taxable income, and that no assurance can be given that sufficient taxable income will be generated to fully absorb gross deductible temporary differences. In the past, the Internal Revenue Code provisions permitted co-operative banks a special bad debt deduction, irrespective of the amounts provided for financial reporting purposes. As a result, the Company's total pre-1988 bad debt reserve for federal income tax purposes approximates $13,806,000 as of December 31, 2023, for which no deferred income tax liabilities have been recognized. Reduction of this amount for purposes other than to absorb bad debt losses would be subject to income taxes. The Company has not identified any uncertain tax positions requiring accrual or disclosure as of December 31, 2023 and 2022. The Company’s income tax returns are subject to review and examination by federal and state taxing authorities; however, there are currently no examinations for any tax periods in progress. Management of the Company believes it is no longer subject to examination for tax years prior to 2020. |
Regulatory Capital Requirements
Regulatory Capital Requirements | 12 Months Ended |
Dec. 31, 2023 | |
Regulatory Capital Requirements | |
Regulatory Capital Requirements | Note 11 – Regulatory Capital Requirements The Company is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under regulatory capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Effective January 1, 2020, the federal banking agencies published a final rule on a Community Bank Leverage Ratio (“CBLR”) Framework that provides a simplified measure of capital adequacy for qualified community banking organizations. Management has determined that the Company meets the standards to qualify under the CBLR framework and opted into this framework for FDIC call reporting purposes during 2020. Under the CBLR framework, a bank that maintains a CBLR of 9% (defined as Tier 1 capital divided by total average assets) is considered to have satisfied its capital requirements, determined to be well-capitalized, and will no longer be required to calculate risk-based capital ratios. As of December 31, 2023 the Bank met the minimum requirement with a CBLR of 13.6%. As of December 31, 2022, the Company did not meet the requirement for the CBLR framework due to its unfunded loan commitments being over 25.00% of its capital for more than two consecutive quarters. As a result, the Company operated under the risk-based framework for the year ended December 31, 2022. Under this framework, quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios of Total Capital, Tier 1 Capital and Common Equity Tier 1 Capital to Risk-Weighted Assets, and Tier 1 Capital to Total Average Assets (as defined in the regulations). As of December 31, 2022, the Bank was categorized as well capitalized under this regulatory framework for prompt corrective action as presented in the table below (dollars in thousands). To be well capitalized For minimum capital under prompt corrective Actual adequacy purposes action provisions December 31, 2022 Amount Ratio Amount Ratio Amount Ratio Total Capital $ 382,417 11.3% $ 271,323 8.0% $ 339,153 10.0% (to Risk-Weighted Assets) Tier 1 Capital 357,389 10.5% 203,492 6.0% 271,323 8.0% (to Risk-Weighted Assets) Common Equity Tier 1 Capital 357,389 10.5% 152,619 4.5% 220,450 6.5% (to Risk-Weighted Assets) Tier 1 Capital 357,389 10.5% 136,311 4.0% 170,389 5.0% (to Total Average Assets) The Company’s consolidated capital ratios are consistent with the Bank’s regulatory capital ratios as reported above for December 31, 2023 and 2022. |
Financial Instruments with Off-
Financial Instruments with Off-Balance Sheet Risk and Concentrations of Credit Risk | 12 Months Ended |
Dec. 31, 2023 | |
Financial Instruments with Off-Balance Sheet Risk and Concentrations of Credit Risk | |
Financial Instruments with Off-Balance Sheet Risk and Concentrations of Credit Risk | Note 12 – Financial Instruments with Off-Balance Sheet Risk and Concentrations of Credit Risk Off-Balance Sheet Risk Commitments to originate loans and disburse additional funds to borrowers on lines of credit are agreements to lend to a customer provided there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the borrower. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for loan commitments, is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. The commitments to originate loans and lines of credit may expire without being funded or drawn upon; therefore, the total commitment amounts do not necessarily represent future cash requirements. Financial instruments whose contract amounts represents off-balance sheet credit risk and are not reflected in the Company’s consolidated balance sheets consist of the following at the dates stated: (In thousands) December 31, 2023 December 31, 2022 Unused commitments to extend credit $ 1,112,931 $ 723,175 Letters of credit 7,471 6,106 Concentrations of Credit Risk Cash and Cash Equivalents As of December 31, 2023, the Company has approximately $182.1 million of uninsured investments in Federal Funds sold, which are obligations of the Federal Reserve. Investment Securities Available for Sale Loans Receivable – Bank Owned Life Insurance Deposits – Borrowings – Derivative Financial Instruments |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Measurements | |
Fair Value Measurements | Note 13 – Fair Value Measurements The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The Company records fair value adjustments to certain assets and liabilities and determines fair value disclosures utilizing a definition of fair value of assets and liabilities that states that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value is best determined using quoted market prices, however additional considerations are involved to determine the fair value of financial assets in markets that are not active. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available to management. FASB ASC 820, “Fair Value Measurement and Disclosures Topic,” defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value. Generally accepted accounting principles establish a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value, and 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 – Observable inputs such as quoted prices in active markets. Level 2 – Observable inputs other than Level 1 inputs 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 for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs that are supported by little or no market data and are significant to the fair value measurement of the assets or liabilities. Level 3 inputs include fair value measurements that use pricing models, discounted cash flow methodologies, or similar techniques, as well as significant management judgment or estimation. The following describes the valuation techniques used by the Company to measure certain financial assets and liabilities recorded at fair value on a recurring basis in the financial statements. Investment securities Derivative arrangements – Assets measured and reported at estimated fair value on a recurring basis are summarized below (in thousands): December 31, 2023 Level 1 Level 2 Level 3 Fair Value Assets: Available-for-sale securities U.S. Treasury securities $ 64,352 $ — $ — $ 64,352 Agency mortgage-backed securities — 11,430 — 11,430 Agency collateralized mortgage obligations — 2,418 — 2,418 Corporate bonds — 82,367 9,868 92,235 Municipal obligations — 19,030 — 19,030 $ 64,352 $ 115,245 $ 9,868 $ 189,465 Derivative assets $ — $ 27,769 $ — $ 27,769 Liabilities: Derivative liabilities $ — $ 27,786 $ — $ 27,786 December 31, 2022 Level 1 Level 2 Level 3 Fair Value Assets: Available-for-sale securities U.S. Treasury securities $ 106,801 $ — $ — $ 106,801 Agency mortgage-backed securities — 12,141 — 12,141 Agency collateralized mortgage obligations — 3,073 — 3,073 Corporate bonds — 92,807 9,000 101,807 Municipal obligations — 21,658 — 21,658 $ 106,801 $ 129,679 $ 9,000 $ 245,480 Interest rate swap (cash flow hedge) $ — $ 321 $ — $ 321 Derivative assets $ — $ 31,483 $ — $ 31,483 Liabilities: Derivative liabilities $ — $ 31,492 $ — $ 31,492 The Company purchased $3.0 million in level 3 subordinated debentures during the year ended December 31, 2022. There were no purchases during the year ended December 31, 2023. There were no sales or transfers of level 3 assets during the year ended December 31, 2023 or 2022. The changes in level 3 subordinated debentures during the year ended December 31, 2023 are attributable to total net gains (losses) included in other comprehensive income The Company may also be required from time to time to measure certain other assets on a non-recurring basis in accordance with generally accepted accounting principles. Any adjustments to fair value usually result in write-downs of individual assets. Collateral-Dependent Loans Mortgage Servicing Rights The Company had no liabilities measured at fair value on a non-recurring basis. The following table summarizes assets measured at fair value on a non-recurring basis: December 31, 2023 (in thousands) Level 1 Level 2 Level 3 Fair Value Collateral-dependent loans $ — $ — $ 4,432 $ 4,432 Mortgage servicing rights $ — $ — $ 2,640 $ 2,640 December 31, 2022 (in thousands) Level 1 Level 2 Level 3 Fair Value Impaired Loans - Pre-ASC 326 $ — $ — $ 8,960 $ 8,960 Mortgage servicing rights $ — $ — $ 2,781 $ 2,781 For Level 3 assets and liabilities measured at fair value on a nonrecurring basis as of December 31, 2023 and 2022, the significant unobservable inputs used in the fair value measurements were as follows: Significant Significant Valuation Observable Unobservable December 31, 2023 Technique Inputs Inputs Collateral-dependent loans (previously known as impaired loans) Appraisal Value/ Comparison Sales Appraisals and/or sales of comparable properties Appraisals discounted 5 to 20% for sales commission and other holding costs Mortgage servicing rights Discounted Cash Flows Comparable sales Weighted average discount rate - 8% Significant Significant Valuation Observable Unobservable December 31, 2022 Technique Inputs Inputs Impaired Loans Appraisal Value/ Comparison Sales Appraisals and/or sales of comparable properties Appraisals discounted 5 to 20% for sales commission and other holding costs Mortgage servicing rights Discounted Cash Flows Comparable sales Constant prepayment rate - 5% Fair Value of Financial Instruments The following tables present the estimated fair values, related carrying amounts, and valuation level of the financial instruments as of the dates stated: December 31, 2023 Fair Value Measurements Carrying (Dollars in thousands) Value Fair Value Level 1 Level 2 Level 3 Financial Assets Cash and cash equivalents $ 272,591 $ 272,591 $ 272,591 $ — $ — Non-public investments 13,713 13,713 — — 13,713 Loans receivable, net 3,857,057 3,732,361 — — 3,732,361 Accrued interest receivable 17,284 17,284 — 17,284 — Bank owned life insurance ("BOLI") 50,516 50,516 — 50,516 — Financial Liabilities Noninterest-bearing demand deposits $ 528,409 $ 528,409 $ 528,409 $ — $ — Savings, NOW and money markets 1,361,904 1,361,904 — 1,361,904 — Time deposits 1,497,035 1,495,008 — — 1,495,008 FHLB borrowings 283,338 283,172 — 283,172 — December 31, 2022 Fair Value Measurements Carrying (Dollars in thousands) Value Fair Value Level 1 Level 2 Level 3 Financial Assets Cash and cash equivalents $ 156,545 $ 156,545 $ 156,545 $ — $ — Non-public investments 10,592 10,592 — — 10,592 Loans receivable, net 2,990,417 2,928,734 — — 2,928,734 Accrued interest receivable 10,837 10,837 — 10,837 — Bank owned life insurance ("BOLI") 49,006 49,006 — 49,006 — Financial Liabilities Noninterest-bearing demand deposits $ 445,518 $ 445,518 $ 445,518 $ — $ — Savings, NOW and money markets 1,231,606 1,231,606 — 1,231,606 — Time deposits 1,209,619 1,194,871 — — 1,194,871 FHLB borrowings 293,082 293,056 — 293,056 — Cash and cash equivalents – Non-public investments – Loans receivable, net – Accrued interest receivable – Bank owned life insurance – Deposits – Federal Home Loan Bank borrowings – |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 12 Months Ended |
Dec. 31, 2023 | |
Derivatives and Hedging Activities | |
Derivatives and Hedging Activities | Note 14 – Derivatives and Hedging Activities Risk Management Objective of Using Derivatives Fair Value Hedges of Interest Rate Risk For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in interest income. The Company had previously entered into two “last of layer hedges” on a significant portion of its fixed rate residential loan pool. These amounts include the amortized cost basis of closed portfolios used to designate hedging relationships in which the hedged item is the last layer expected to remain at the end of the hedging relationship. During September 2021, the Company terminated these last of layer hedges by paying out $2.15 million to the respective third parties. These fees were capitalized into loans receivable and are being amortized against loan income over the contractual lives of the remaining designated residential loans. The unamortized amount of this cost basis adjustment is $1.0 million and $1.2 million at December 31, 2023 and 2022, respectively. Non-designated Hedges The Company executes interest rate swaps and cap agreements with commercial banking customers to facilitate its respective risk management strategies. Those interest rate swap and cap agreements are simultaneously hedged by offsetting interest rate swaps and caps that are executed with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. As of December 31, 2023, the Company had 52 interest rate swap agreements with an aggregate notional amount of $338.58 million related to this program. As of December 31, 2022, the Company had 36 interest rate swap agreements and one interest rate cap agreement with an aggregate notional amount of $263.9 million related to this program. Risk Participation Agreements Under the terms of these agreements, the “participating bank” receives a fee from the “lead bank” in exchange for the guarantee of reimbursement if the customer defaults on an interest rate swap. The interest rate swap is transacted such that any and all exchanges of interest payments (favorable and unfavorable) are made between the lead bank and the customer. In the event that an early termination of the swap occurs, and the customer is unable to make a required close out payment, the participating bank assumes that obligation and is required to make this payment. RPAs where the Company acts as the lead bank are referred to as “participations-out,” in reference to the credit risk associated with the customer derivatives being transferred out of the Company. Participations-out generally occur concurrently with the sale of new customer derivatives. RPAs where the Company acts as the participating bank are referred to as “participations-in,” in reference to the credit risk associated with the counterparty’s derivatives being assumed by the Company. The Company’s maximum credit exposure is based on its proportionate share of the settlement amount of the referenced interest rate swap. Settlement amounts are generally calculated based on the fair value of the swap plus outstanding accrued interest receivable from the customer. As of December 31, 2023, the Company had 16 RPAs with an aggregate notional amount of $44.5 million related to this program compared to 8 RPAs with an aggregate notional amount of $31.4 million as of December 31, 2022. These RPAs all represent “participations-in” and generally have terms ranging from five Tabular Disclosure of Fair Values of Derivative Instruments on the Consolidated Balance Sheet Asset Liability December 31, 2023 Derivatives (1) Derivatives (2) Derivatives not designated as hedging instruments: Interest rate products $ 27,769 $ 27,769 RPA credit contracts — 17 Total derivatives not designated as hedging instruments $ 27,769 $ 27,786 December 31, 2022 Derivatives not designated as hedging instruments: Interest rate products $ 31,483 $ 31,483 RPA credit contracts — 9 Total derivatives not designated as hedging instruments $ 31,483 $ 31,492 (1) Recorded in prepaid expenses and other assets on the consolidated balance sheets (2) Recorded in accrued expenses and other liabilities on the consolidated balance sheets The table below presents the financial impact of the Company’s derivative financial instruments not designated as hedges in the consolidated statements of income, caused by changes in fair value and default termination fees paid on the swap arrangements for the year ended December 31 (in thousands): Location of Gain or (Loss) Recognized Year ended December 31 in Income on Derivative 2023 2022 Derivatives Not Designated as Hedging Instruments: RPA credit contracts-fair value adjustments Other non-interest income $ (8) $ 19 Swap contract fees, net of brokerage costs, recognized in earnings on the above noted interest rate products and RPA contracts approximated $2.2 million and $1.3 million for the years ended December 31, 2023 and 2022, respectively. The Company has agreements with each of its derivative counterparties that contain a provision where if the Company defaults (or is capable of being declared in default) on any of its indebtedness, then the Company could also be declared in default on its derivative obligations, and it could be required to terminate its derivative positions with the counterparty. The Company also has agreements with certain of its derivative counterparties that contain a provision whereby if the counterparty fails to maintain its status as a well-capitalized institution, then the Company could be required to terminate its derivative positions with the counterparty. In order to mitigate counterparty default risk in conjunction with these interest rate products and RPA credit contracts, the Company was required to maintain collateral deposit accounts with the counterparties to these agreements in amounts of $9.1 million and $8.6 million at December 31, 2023 and 2022. |
Other Comprehensive Income
Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2023 | |
Other Comprehensive Income | |
Other Comprehensive Income | Note 15 – Other Comprehensive Income The components of the Company’s “Accumulated Other Comprehensive Income”, along with the changes during the dates stated (net of deferred income tax effects), are as follows (in thousands): Unrealized Gain Director Unrealized Gain Total Accumulated (Loss) on AFS Pension (Loss) on Cash Other Comprehensive Securities Plan Flow Hedge Income (Loss) Balances at December 31, 2021 $ (639) $ (749) $ (884) $ (2,272) Other comprehensive (losses) income, net of taxes (13,100) (144) 1,115 (12,129) Balances at December 31, 2022 $ (13,739) $ (893) $ 231 $ (14,401) Other comprehensive income (losses), net of taxes 2,811 (76) (231) 2,504 Balances at December 31, 2023 $ (10,928) $ (969) $ — $ (11,897) The following table presents a reconciliation of the changes in the components of “other comprehensive income” and the reclassifications out of “accumulated other comprehensive income” (in thousands): Tax Before-Tax (Expense) After-Tax Year Ended December 31, 2023 Amount Benefit Amount Unrealized Gains on AFS Securities: Unrealized holding gains arising during the year $ 3,740 $ (929) $ 2,811 Unrecognized Pension Losses from Director Pension Plan: Net actuarial losses arising during the year (244) 69 (175) New prior service costs related to plan amendments (430) 123 (307) Reclassification adjustments into net periodic pension cost: Amortization of prior service costs 487 (139) 348 Amortization of net actuarial losses 81 (23) 58 Net change in unrecognized pension cost (106) 30 (76) Unrealized Losses on Cash Flow Hedge: Unrealized holding losses arising during the year (321) 90 (231) Total other comprehensive income $ 3,313 $ (809) $ 2,504 Tax Before-Tax (Expense) After-Tax Year Ended December 31, 2022 Amount Benefit Amount Unrealized Losses on AFS Securities: Unrealized holding losses arising during the year $ (17,657) $ 4,557 $ (13,100) Unrecognized Pension Losses from Director Pension Plan: Net actuarial gains arising during the year 30 (8) 22 New prior service costs related to plan amendments (372) 104 (268) Reclassification adjustments into net periodic pension cost: Amortization of prior service costs 57 (16) 41 Amortization of net actuarial losses 85 (24) 61 Net change in unrecognized pension cost (200) 56 (144) Unrealized Gains on Cash Flow Hedge: Unrealized holding gains arising during the year 1,548 (433) 1,115 Total other comprehensive loss $ (16,309) $ 4,180 $ (12,129) |
Earnings Per Share ("EPS)
Earnings Per Share ("EPS) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share ("EPS) | |
Earnings Per Share ("EPS) | Note 17 – Earnings Per Share (“EPS) Basic EPS represents net income available to common shareholders divided by the weighted-average number of common shares outstanding during the year. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common shares (such as stock options) were exercised or converted into additional common shares that would then share in the earnings of the entity. Diluted EPS is computed by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding for the year, plus the effect of potential dilutive common share equivalents computed using the treasury stock method. There were no securities that had a dilutive effect during the year ended December 31, 2023, and therefore the weighted-average common shares outstanding used to calculate both basic and diluted EPS are the same. Unallocated ESOP shares are not deemed outstanding for earnings per share calculations. Earnings per share data is not applicable for the years ended December 31, 2022 as the Company had no shares outstanding. (Dollars in thousands, except per share data) For the Year Ended December 31, 2023 Net income applicable to common shares $ 9,825 Average number of common shares outstanding 42,705,729 Less: average unallocated ESOP shares (687,500) Average number of common shares outstanding used to calculate basic EPS 42,018,229 Common stock equivalents - Average number of common shares outstanding used to calculate diluted EPS 42,018,229 Earnings per common share: Basic and diluted $ 0.23 |
Parent Company Only Financial I
Parent Company Only Financial Information | 12 Months Ended |
Dec. 31, 2023 | |
Parent Company Only Financial Information | |
Parent Company Only Financial Information | Note 18 – Parent Company Only Financial Information The following information presents the condensed balance sheet of NB Bancorp, Inc. as of December 31, 2023 (in thousands). December 31, 2023 Assets Cash and cash equivalents $ 207,685 Investment in consolidated subsidiary 576,480 Total assets 784,165 Liabilities and Shareholders' Equity Other liabilities 26,206 Total shareholders' equity 757,959 Total liabilities and shareholders' equity $ 784,165 The following information presents the statement of income and statement of cash flows of NB Bancorp, Inc. for the year ended December 31, 2023 (in thousands). Year ended December 31, 2023 Interest income $ 233 Charitable contribution expense 19,082 Other expenses 30 Loss before income taxes and equity in undistributed net income of subsidiary (18,879) Income taxes 5,318 Loss before equity in undistributed net income of subsidiary (13,561) Equity in undistributed net income of subsidiary 23,386 Net income $ 9,825 Year ended December 31, 2023 Cash flows from operating activities: Net income $ 9,825 Adjustments to reconcile net income to net cash used in operating activities: Changes in other liabilities 26,206 Equity in undistributed net income of subsidiary (23,386) Net cash used in operating activities 12,645 Cash flows from investing activities: Investment in Needham Bank (208,643) Net cash used in investing activities (208,643) Cash flows from financing activities: Net proceeds from stock offering and issuance of common shares 417,457 Purchase of common shares by the ESOP (13,774) Net cash provided by financing activities: 403,683 Net increase in cash and cash equivalents 207,685 Cash and cash equivalents at beginning of the period - Cash and cash equivalents at end of the period $ 207,685 |
Litigation Matters
Litigation Matters | 12 Months Ended |
Dec. 31, 2023 | |
Litigation Matters | |
Litigation Matters | Note 19 – Litigation Matters Various legal claims arise from time to time in the normal course of business which, in the opinion of management, at December 31, 2023, will not have a material effect on the Company’s consolidated financial statements. |
Purchase and Assumption Agreeme
Purchase and Assumption Agreement | 12 Months Ended |
Dec. 31, 2023 | |
Purchase and Assumption Agreement | |
Purchase and Assumption Agreement | Note 20 – Purchase and Assumption Agreement On January 14, 2022, Needham Bank entered into a purchase and assumption agreement with Eastern Bank for the transfer of Eastern Bank’s cannabis and money service banking businesses. As part of the agreement, customer relationships transitioned to Needham Bank on April 1, 2022. The Eastern Bank team that served this customer base transitioned to Needham Bank and are now employed at the Company’s new branch location in Medford, therefore the Company treated this as a business combination. Approximately $297.7 million in deposits transitioned from Eastern Bank to Needham Bank. Also, as a result of this transaction Needham Bank recognized a core deposit intangible of approximately $1.5 million as well as a corresponding after-tax bargain purchase gain of approximately $1.1 million. The core deposit intangible is being amortized over a 10 - year period resulting in amortization expense of $149,000 and $112,000 during the years ended December 31, 2023 and 2022, respectively. |
Employee Retention Tax Credit C
Employee Retention Tax Credit Claims | 12 Months Ended |
Dec. 31, 2023 | |
Employee Retention Tax Credit Claims | |
Employee Retention Tax Credit Claims | Note 21 – Employee Retention Tax Credit Claims The CARES Act provided for an Employee Retention Tax Credit (“ERTC”), which is a broad-based refundable payroll tax credit that incentivized businesses to retain employees on the payroll during the COVID-19 pandemic. The ERTC is a credit against certain employment taxes of up to $5,000 per employee for eligible employers based on certain wages paid after March 12, 2020 through December 31, 2020. In 2021, the ERTC increased to up to $7,000 for each quarter, equal to 70% of qualified wages paid to employees during a quarter, capped at $10,000 of qualified wages per employee per quarter. The ERTC terminated effective September 30, 2021. During the first quarter of 2023, the Company made a determination that it was eligible to claim Employee Retention Tax Credits (“ERTC”) in the form of refunds based on the significant adverse financial impacts of the COVID-19 pandemic. As a result, during 2023 the Company filed amended employment tax returns for certain periods in 2021 to claim refunds related to the ERTC in the approximate amount of $3.5 million. Eligibility and qualification to file a claim for the ERTC is self-determined. Regardless of whether ERTC claims are pending payment by the IRS or have already been received by the taxpayer, Congress has extended the time by which the IRS could audit ERTC claims from three years to five years . |
Variable Interest Entities (''V
Variable Interest Entities (''VIE'') | 12 Months Ended |
Dec. 31, 2023 | |
Variable Interest Entities (''VIE'') | |
Variable Interest Entities (''VIE'') | Note 22 – Variable Interest Entities (“VIE”) The Company makes equity investments in various entities that are considered VIEs, as defined by GAAP. A VIE typically does not have sufficient equity at risk to finance its activities without additional subordinated financial support from other parties. The Company’s variable interest arises from contractual, ownership or other monetary interests in the entity, which change with fluctuations in the fair value of the entity's net assets. The Company consolidates a VIE if it is the primary beneficiary of the entity. The Company is determined to be the primary beneficiary of a VIE if its variable interest provides it with the power to direct the activities that most significantly impact the VIE and the right to receive benefits (or the obligation to absorb losses) that could potentially be significant to the VIE. To determine whether or not a variable interest held could potentially be significant to the VIE, the Company considers both qualitative and quantitative factors regarding the nature, size and form of its involvement with the VIE. The Company assesses whether or not it is the primary beneficiary of a VIE on an ongoing basis. Unconsolidated Variable Interest Entities Low Income Housing Tax Credit (“LIHTC”) Partnerships Through designated wholly-owned subsidiaries, Needham Bank makes equity investments as a limited partner in various partnerships that sponsor affordable housing projects utilizing the LIHTC. The purpose of these investments is to achieve a satisfactory return on capital and to support the Company’s community reinvestment initiatives. LIHTC partnerships are managed by unrelated general partners that have the power to direct the activities which most significantly affect the performance of the partnerships. The Company is therefore not the primary beneficiary of any LIHTC partnerships. Accordingly, the Company does not consolidate these VIEs and accounts for these investments in non-public investments on the consolidated balance sheets. The Company accounts for all qualifying LIHTC investments under the proportional amortization method. Under this method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance as a component of income tax expense. Renewable Energy Tax Credit Investments The Company invests in renewable energy tax credits, through its wholly-owned subsidiary, 1892 Investments, whereby the Company contributes capital to the energy providers as a non-managing member in return for income tax credits. The purpose of these investments is to achieve a satisfactory return on capital and to support clean-energy initiatives. These entities are considered VIEs as the Company’s subsidiaries represent the holders of the equity investments at risk, but do not have the ability to direct the activities that most significantly affect the performance of the entities. Accordingly, the Company does not consolidate these VIEs and accounts for these investments in non-public investments on the consolidated balance sheets. The Company accounts for all qualifying renewable energy tax credit investments under the proportional amortization method. Under this method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance as a component of income tax expense. |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2023 | |
Recently Issued Accounting Pronouncements | |
Recently Issued Accounting Pronouncements | Note 23 – Recently Issued Accounting Pronouncements The following is a summary of recent authoritative announcements: In June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”. ASU 2022-03 clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The ASU is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2023. Early adoption is permitted. The Company does not expect the adoption of ASU 2022-03 to have a material impact on its consolidated financial statements. In December 2022, the FASB issued ASU 2022-06, “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848”. ASU 2022-06 extends the period of time preparers can utilize the reference rate reform relief guidance in Topic 848. The objective of the guidance in Topic 848 is to provide relief during the temporary transition period, so the FASB included a sunset provision within Topic 848 based on expectations of when the London Interbank Offered Rate (LIBOR) would cease being published. In 2021, the UK Financial Conduct Authority (FCA) delayed the intended cessation date of certain tenors of USD LIBOR to June 30, 2023. To ensure the relief in Topic 848 covers the period of time during which a significant number of modifications may take place, the ASU defers the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. The ASU is effective for all entities upon issuance. The Company is assessing ASU 2022-06 and its impact on the Company’s transition away from LIBOR for its loan and other financial instruments that have not already been transitioned to an alternative reference rate. In July 2023, the FASB issued ASU 2023-03, “Presentation of Financial Statements (Topic 205), Income Statement—Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation—Stock Compensation (Topic 718)”. This ASU amends the FASB Accounting Standards Codification for SEC paragraphs pursuant to SEC Staff Accounting Bulletin No. 120, SEC Staff Announcement at the March 24, 2022 EITF Meeting, and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280—General Revision of Regulation S-X: Income or Loss Applicable to Common Stock. ASU 2023-03 is effective upon addition to the FASB Codification. The Company does not expect the adoption of ASU 2023-03 to have a material impact on its consolidated financial statements. In November 2023, the FASB amended ASC 2023-07, "Segment Reporting (Topic 280)" to improve disclosures about a public entity's reportable segments and provide more detailed information about a reportable segment's expense. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company does not expect these amendments to have a material effect on its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" to improve the transparency of income tax disclosures. The amendments are effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The Company does not expect these amendments to have a material effect on its consolidated financial statements. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations or cash flows. |
Organization, Activities and _2
Organization, Activities and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Activities and Significant Accounting Policies | |
Corporate Structure and Nature of Operations | Corporate Structure and Nature of Operations NB Bancorp, Inc. (the “Company”), a Maryland corporation, is a bank holding company. Through its wholly-owned subsidiary, Needham Bank (the “Bank”), the Company provides a variety of banking services, through its full-service bank branches, located in Massachusetts. The Bank’s deposits are insured by the Deposit Insurance Fund of the Federal Deposit Insurance Corporation (FDIC) up to federal limits. All deposits above the FDIC insurance amount are insured by the Depositors Insurance Fund (DIF). The DIF is a private, industry-sponsored insurance fund that insures all deposits above FDIC limits at our member banks. The Bank provides numerous services to customers, including the maintenance of checking, savings, money market and certificate of deposit accounts, and the granting of several types of residential, construction, commercial, and consumer loans. The primary market area of the Company is the metro-west area of Boston and surrounding communities, with headquarters in Needham and branch locations in Wellesley, Westwood, Dedham, Medfield, Medford, Dover, Ashland, Millis, Natick and Mission Hill. The Bank is subject to competition from other financial institutions, including commercial banks, other savings and co-operative banks, credit unions, mortgage banking companies, and other financial service providers. The primary regulators of the Company are the Massachusetts Commissioner of Banks and the Federal Reserve System (see Note 11, Regulatory Capital Requirements). As part of the criteria for membership in the Federal Reserve System, the Company is required to maintain stock in the Federal Reserve Bank (see Note 2, Investment Securities). |
Conversion and Reorganization | Conversion and Reorganization Pursuant to a Plan of Conversion (the “Plan”), NB Financial, MHC (the “MHC”), the Bank’s former mutual holding company parent and the predecessor of the Company, converted from a mutual holding company into a publicly traded stock form of organization on December 27, 2023. In connection with the conversion, the MHC transferred to the Company 100% of MHC’s common stock, and immediately thereafter merged into the Company. Pursuant to the Plan, the Company sold 40,997,500 shares of common stock in a public offering at $10.00 per share for net offering proceeds of approximately $400.4 million. The Company completed the offering on December 27, 2023. Effective as of December 27, 2023, the Company donated $2.0 million of cash and 1,708,229 shares of common stock to Needham Bank Charitable Foundation (the “Foundation”). A total of 42,705,729 shares of common stock of the Company were issued and outstanding The cost of conversion and issuing the capital stock was deferred and deducted from the proceeds of the offering. As of December 31, 2023, the Company incurred approximately $9.6 million in conversion costs, which are included in shareholders’ equity on the consolidated balance sheet as of December 31, 2023. In connection with the conversion, liquidation accounts are established by the Company and the Bank in an aggregate amount equal to (i) the MHC’s ownership interest in the shareholders’ equity of NB Financial, Inc. as of the date of the latest statement of financial condition included in the Company’s definitive prospectus dated October 12, 2023, plus (ii) the value of the net assets of the MHC as of the date of the MHC’s latest statement of financial condition before the consummation of the Conversion (excluding the MHC’s ownership interest in NB Financial, Inc.). Each eligible account holder and supplemental eligible account holder is entitled to a proportionate share of the liquidation accounts in the event of a liquidation of (i) the Company and the Bank or (ii) the Bank, and only in such events. This share will be reduced if the eligible account holder’s or supplemental account holder’s deposit balance falls below the amounts on the date of record and will cease to exist if the account is closed. The liquidation account will never be increased despite any increase after conversion in the related deposit balance. The Bank may not pay a dividend on its capital stock if the effect thereof would cause retained earnings to be reduced below the liquidation account amount or regulatory capital requirements. |
Basis of Presentation | Basis of Presentation The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) as set forth by the Financial Accounting Standards Board (“FASB”) and its Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) as well as the rules and interpretive releases of the Securities and Exchange Commission (the “SEC”) under the authority of federal securities laws. The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, and entities in which it holds a controlling financial interest through being the primary beneficiary or through holding a majority of the voting interest. All intercompany accounts and transactions have been eliminated in consolidation. Certain previously reported amounts have been reclassified to conform to the current year's presentation. |
Operating Segments | Operating Segments Accounting standards require that information be reported about a company’s operating segments using a “management approach.” Reportable segments are identified in these standards as those revenue producing components for which separate financial information is produced internally and which are subject to evaluation by the chief operating decision maker. While the chief operating decision maker monitors the revenue streams of the various products and services, operations are managed, and financial performance is evaluated on a Company-wide basis. Accordingly, all of the financial service operations are considered by management to be aggregated in one reportable segment. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for credit losses, the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans, the valuation of deferred tax assets, actuarial estimates related to the Company’s various retirement programs, and the valuation of financial instruments. In connection with the determination of the allowances for credit losses on loans and foreclosed real estate, management obtains independent appraisals for significant properties. A majority of the Company's loan portfolio consists of one to four-family residential, commercial real estate, construction and land development loans in the metro-west area of Boston and its surrounding communities. Accordingly, the ultimate collectability of a substantial portion of the Company's loan portfolio and the recovery of the carrying amount of foreclosed real estate are susceptible to changes in local market conditions. While management uses currently available information to recognize losses on loans and foreclosed real estate, future additions to the allowances for credit losses on loans and foreclosed real estate may be necessary based on changes in local economic conditions. In addition, regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowances for credit losses on loans and foreclosed real estate. Such agencies may require the Company to recognize additions to the allowances based on their judgments about information available to them at the time of their examination. Because of these factors, it is reasonably possible that the allowance for losses on loans and foreclosed real estate may change in the near future. |
Adoption of New Accounting Standard | Adoption of New Accounting Standards Vintage Disclosures (“ASU 2022-02”). Together, these ASUs, referred to herein as ASC 326, replace the incurred loss impairment methodology with the current expected credit loss methodology (“CECL”) and require consideration of a broader range of information to determine credit loss estimates at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. ASC 326 applies to financial assets subject to credit losses that are measured at amortized cost and certain off-balance sheet credit exposures, which include, but are not limited to, loans receivable, leases, held-to-maturity (“HTM”) securities, loan commitments, and financial guarantees. In addition, ASC 326 made changes to the accounting for available for sale (“AFS”) debt securities. One such change is to require credit losses to be presented as an allowance rather than as a write-down on available for sale debt securities if management does not intend to sell and does not believe that it is more likely than not, they will be required to sell. The Company adopted ASC 326 using the prospective transition approach for debt securities for which other-than-temporary impairment had been recognized prior to January 1, 2023. As of December 31, 2022, the Company did not have any other than-temporarily impaired investment securities. Upon adoption of ASC 326, the Company determined that an allowance for credit losses on available for sale securities was not required. The Company adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost and off-balance sheet credit exposures, which included loans receivable and commitments to extend credit (loan commitments and stand-by letters of credit), respectively. The Company does not have any securities classified as HTM. Results for reporting periods beginning after January 1, 2023 are presented under ASC 326 while prior period amounts are reported in accordance with previously applicable GAAP. The following table presents the impact to the consolidated balance sheet as the result of adopting ASC 326 effective January 1, 2023. January 1, 2023 December 31, 2022 Impact of Post-ASC 326 Pre-ASC 326 ASC 326 (In thousands) Adoption Adoption Adoption Assets: Loans receivable, net of deferred fees and costs $ 3,015,445 $ 3,015,445 $ — Allowance for credit losses (26,187) (25,028) (1,159) Deferred income tax asset 7,862 7,035 827 Liabilities: Reserve for unfunded commitments (1,786) — (1,786) Equity: Retained earnings 356,348 358,466 (2,118) On January 1, 2023, the Company on a modified retrospective basis early adopted ASU 2023-02, Investments – Equity Method and Joint Ventures (Topic 323): Investments in Tax Credit Structures |
Loans Receivable and Allowance for Credit Losses ("ACL") | Loans Receivable and Allowance for Credit Losses (“ACL”) Loans are generally placed into nonaccrual status when they are past due 90 days or more as to either principal or interest or when, in the opinion of management, the collection of principal and/or interest is in doubt. A loan remains in nonaccrual status until the loan is current as to payment of both principal and interest or past due less than 90 days and the borrower demonstrates the ability to pay and remain current. When cash payments are received, they are applied to principal first, then to accrued interest. It is the Company’s policy not to record interest income on nonaccrual loans until principal has become current. In certain instances, accruing loans that are past due 90 days or more as to principal or interest may not go on nonaccrual status if the Company determines that the loans are well-secured and are in the process of collection. In accordance with ASC 326, the Company elected to exclude accrued interest from the amortized cost basis in its determination of the ACL for loans receivable, and will instead reverse accrued but unpaid interest through interest income in the period in which the loan is placed on nonaccrual status. Accrued interest The ACL represents management’s best estimate of credit losses over the remaining life of the loan portfolio. Loans are charged-off against the ACL when management believes the loan balance is no longer collectible. Subsequent recoveries of previously charged-off amounts are recorded as increases to the ACL. The provision for credit losses is an amount sufficient to bring the ACL to an estimated balance that management considers adequate to absorb lifetime expected losses in the Company’s held for investment loan portfolio. The ACL is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Management’s determination of the adequacy of the ACL under ASC 326 is based on an evaluation of the composition of the loan portfolio current economic conditions, historical loan loss experience, reasonable and supportable forecasts, and other risk factors. The Company uses a third-party CECL model as part of its estimation of the ACL on a quarterly basis. Loans with similar risk characteristics are collectively assessed within pools (or segments). Loss estimates within the collectively assessed population are based on a combination of pooled assumptions and loan-level characteristics. The Company has determined that using federal call codes is an appropriate loan segmentation methodology, as it is generally based on risk characteristics of a loan’s underlying collateral. Using federal call codes also allows the Company to utilize and assess publicly available external information when developing its estimate of the ACL. The weighted average remaining maturity (“WARM”) method is the primary credit loss estimation methodology used by the Company and involves estimating future cash flows and expected credit losses for pools of loans using their expected remaining weighted average life. In applying future economic forecasts, the Company utilizes a forecast period of up to two years. The Company considers economic forecasts of inflation, Federal Open Market Committee interest rates, national gross domestic product, and unemployment rates sourced from the Federal Reserve System’s “Beige Book,” Wells Fargo’s “U.S. Economic Outlook,” and the “Economic Forecast” publications from FHN Financial to inform the model for loss estimation. Historical loss rates used in the quantitative model are primarily derived using both the Bank’s data, supplemented with peer bank data obtained from publicly available sources (i.e., federal call reports). The Bank’s peer group is comprised of financial institutions of relatively similar size and in similar markets (i.e., $10.00 billion or less of total assets and headquartered in Massachusetts). Management also considers qualitative adjustments when estimating credit losses to take into account the model’s quantitative limitations. Qualitative adjustments to quantitative loss factors, either negative or positive, may include considerations of economic conditions, volume and severity of past due loans, value of underlying collateral, experience, depth, and ability of management, and concentrations of credit. For those loans that do not share similar risk characteristics, the Company evaluates the ACL needs on an individual (or loan by loan) basis. This population of individually evaluated loans (or loan relationships with the same primary source of repayment) is determined on a quarterly basis and is based on whether the risk grade of the loan is substandard or worse and the balance exceeds $500,000, and the loan’s terms differ significantly from other pooled loans. In accordance with the Company’s policy, non-accrual residential real estate loans that are well secured (LTV <75%) are not considered to warrant a downgrade to substandard risk rating and are therefore excluded from individually evaluated loans. Measurement of credit loss is based on the expected future cash flows of an individually evaluated loan, discounted at the loan’s effective interest rate, or measured on an observable market value, if one exists, or the estimated market value of the collateral underlying the loan, discounted to consider estimated costs to sell the collateral for collateral-dependent loans. If the net value is less than the loan’s amortized cost, a specific reserve in the ACL is recorded, which is charged-off in the period when management believes the loan balance is no longer collectible. The Company’s Allowance Committee approves the key methodologies and assumptions, as well as the final ACL on a quarterly basis. While management uses available information at the time of estimation to determine expected credit losses on loans, future changes in the ACL may be necessary based on changes in portfolio composition, portfolio credit quality, and/or economic conditions. In addition, bank regulatory agencies periodically review its ACL and may require an increase in the provision for credit losses or the recognition of further loan charge-offs, based on judgments different than those of management. Upon the adoption of ASC 326, the Company recognized an adjustment to retained earnings in the amount of $2.1 million, and recorded an adjustment to the allowance for credit losses in loans of approximately of $1.2 million and unfunded commitments on loans in the amount of approximately $1.8 million, net of deferred taxes of approximately $827,000. Subsequent to the CECL adoption, management refined the modeling assuming and enhanced the CECL calculation, including the reserve for unfunded commitments, specifically regarding the probability of funding assumptions related to unfunded commitments and enhanced the qualitative analysis used in the determination of expected credit losses. The impact of these changes, in addition to growth in the unfunded commitment balances resulted in provisions for credit losses of $4.2 million. Collateral-dependent Loans – The Company has certain loans for which repayment is dependent upon the operation or sale of collateral, as the borrower is experiencing financial difficulty. The underlying collateral can vary based upon the type of loan. The following provides more detail about the types of collateral that secure collateral-dependent loans: ● Commercial real estate loans may be secured by either owner occupied commercial real estate or non-owner-occupied investment commercial real estate. Typically, owner occupied commercial real estate loans are secured by office buildings, warehouses, manufacturing facilities, and other commercial and industrial properties occupied by operating companies. Repayment is generally from the cash flows of the business occupying the property. Non-owner occupied commercial real estate loans are generally secured by office buildings and complexes, retail facilities, multifamily complexes, land under development, industrial properties, as well as other commercial or industrial real estate. ● Commercial and industrial loans may be secured by non-real estate collateral such as accounts receivable, inventory, equipment, or other similar assets. ● Residential real estate loans are typically secured by first mortgages, and in some cases could be secured by a second mortgage. ● Home equity lines of credit are generally secured by second mortgages on residential real estate property. ● Consumer loans are generally secured by boat and recreational vehicles, automobiles, solar panels and other personal property. Some consumer loans are unsecured, have no underlying collateral, and would not be considered collateral-dependent. Modified Loans – ASU 2022-22 eliminated the concept of troubled debt restructurings (“TDRs”) from the accounting standards for companies that have adopted ASC 326. ASU 2022-02 also requires additional disclosures for certain loan modifications and disclosures of gross charge-offs by year of origination. Specifically, loan modification disclosures in periods subsequent to the adoption of ASC 326 must be made for modifications of existing loans to borrowers who were experiencing financial difficulties at the time of the modification. The modification type must include a direct change in the timing or amount of a loan’s contractual cash flows. The additional disclosures are applicable to situations where there is: principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, a term extension, or any combination thereof. |
Available for Sale Securities | Available for Sale Securities – is influenced by a number of security-specific factors that may include obligor cash flow, geography, seniority, and others. If unrealized losses are related to credit quality, the Company estimates the credit-related loss by evaluating the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. Subsequent to the adoption of ASC 326, if the present value of cash flows expected to be collected is less than the amortized cost basis of the security and a credit loss exists, then an ACL is recorded for the credit loss, limited by the amount that the fair value is less than amortized cost basis. As of December 31, 2022, the Company did not have any other-than-temporarily impaired AFS securities. Upon adoption of ASC 326, the Company determined that an ACL on AFS securities was not warranted. As of December 31, 2023, there was no allowance for credit losses related to the available for sale portfolio. For AFS debt securities, management evaluates all investments in an unrealized loss position on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. If the Company has the intent to sell the security or it is more likely than not that the Company will be required to sell the security, the security is written down to fair value and the entire loss is recorded in earnings through an allowance for credit loss. If either of the above criteria is not met, the Company evaluates whether the decline in fair value is the result of credit losses or other factors. In making the assessment, the Company may consider various factors including the extent to which fair value is less than amortized cost, performance on any underlying collateral, downgrades in the ratings of the security by a rating agency, the failure of the issuer to make scheduled interest or principal payments and adverse conditions specifically related to the security. If the assessment indicates that a credit loss exists, the present value of cash flows expected to be collected are compared to the amortized cost basis of the security and any excess is recorded as an allowance for credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any amount of unrealized loss that has not been recorded through an allowance for credit loss is recognized in other comprehensive income. Changes in the allowance for credit loss are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance for credit loss when management believes an available for sale security is confirmed to be uncollectible or when either of the criteria regarding intent or requirement to sell is met. As of December 31, 2023, there was no allowance for credit loss related to the available- for-sale portfolio. Accrued interest receivable on available for sale debt securities totaled $1.2 million at December 31, 2023 and was excluded from the estimate of credit losses. Purchase premiums and discounts are recognized in interest income, using the interest method, to arrive at periodic interest income at a constant effective yield, thereby reflecting the securities' market yield. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method. Such gains and losses are recognized within non-interest income in the consolidated statements of income. |
Reserve for Unfunded Commitments | Reserve for Unfunded Commitments – |
Comprehensive Income | Comprehensive Income – The Company presents the components of OCI in a separate consolidated statement of comprehensive income (see Note 15). |
Fair Value Measurements | Fair Value Measurements – This standard defines fair value and establishes a framework for measuring fair value. This standard applies to certain other existing accounting pronouncements that require or permit fair value measurements (see Note 13). |
Cash and Cash Equivalents | Cash and Cash Equivalents – |
Other Investments | Other Investments – A non-controlling partnership interest in the Massachusetts Housing Equity Fund XXII LLC (a Qualified Affordable Housing Project “QAHP” of the Massachusetts Housing Investment Corporation), is accounted for using the proportional amortization method, whereby the Company amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance as a component of income tax expense. The Company’s interest in the Massachusetts Housing Equity Fund XXII LLC constitutes a variable interest entity, which is not consolidated into the Company as there is a separate managing member who controls and operates the entity. Investments in solar energy programs are accounted for under the proportional amortization method of accounting, rather than consolidation, due to the nature of the investee’s business (solar project where control remains with the managing LLC member) and the relative insignificance to the Company’s consolidated financial statements and constitute unconsolidated variable interest entities. |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities – As required by ASC 815, the Company reports all derivatives on its balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting, and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with 1) the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge, or 2) the earnings effect of the hedged forecasted transactions in a cash flow hedge. |
Other Real Estate Owned | Other Real Estate Owned |
Transfers of Financial Assets | Transfers of Financial Assets |
Revenue Recognition | Revenue Recognition Revenues from contracts with customers that are subject to the principles of ASC Topic 606 are included in “non-interest income” under the customer service fees category in the Company’s consolidated statements of income. The following is a summary of such revenues from contracts with customers for the years ended December 31: (In thousands) 2023 2022 ATM and interchange income, net of related expenses $ 1,224 $ 1,071 Non-sufficient funds ("NSF") and overdraft fees 527 438 Other customer service fees 6,066 3,629 Total $ 7,817 $ 5,138 ATM and interchange income are reported net of directly related expenses and are recognized by the Company when customers use their ATM/debit cards issued by the Company through a third-party payment network. NSF and overdraft protection fees represent fees charged to customers to cover or protect customer transactions in case of insufficient customer funds. Other customer service fees are primarily comprised of fees on cash management services, deposit account maintenance fees, wire transfer fees, certain loan prepayment fees and investment advisory fees. All of these fees are recognized at a point in time. Transaction based fees are recognized at the time of the transaction while account maintenance and protection fees are both charged and recognized on a monthly basis. In each of the revenue streams identified above, there were no significant judgments made in determining or allocating the transaction price, as the consideration and service requirements are generally explicitly identified in the associated contracts and consist of a single performance obligation. |
Loan Servicing | Loan Servicing |
Banking Premises and Equipment | Banking Premises and Equipment assets (see Note 5). Maintenance and repairs are expensed as incurred while major improvements are capitalized. Gains and losses on dispositions are included in current operations. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets |
Defined Benefit Plans | Defined Benefit Plans: Director Pension Plan The Company recognizes the over-funded or under-funded status of a defined benefit plan as an asset or liability in its balance sheet and it recognizes changes in the funded status of the plan in the year in which the changes occur. The funded status of a plan is measured as the difference between the fair value of plan assets and the “projected benefit obligation” (PBO) at the financial statement date. The unrecognized prior service costs, net actuarial gains and accounting transition obligation are reflected as “accumulated other comprehensive income” (OCI). The changes in the plan’s funded status are recognized as charges or credits to “OCI” to the extent that they are not required to be recognized as components of “net periodic pension cost” in net income (see Notes 9 and 15). Employee Pension Plans |
Employee Stock Ownership Plan ("ESOP") | Employee Stock Ownership Plan ("ESOP") – |
Advertising Costs | Advertising Costs |
Income Taxes | Income Taxes deductible amounts in the future, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. In accordance with generally accepted accounting principles, management assesses the likelihood that tax positions taken will be sustained upon examination based on their technical merit, considering the facts, circumstances and information available at the end of each period. The Company recognizes the effects of significant income tax positions taken on tax returns only if the positions are “more likely than not” to be sustained upon examination by the taxing authorities. Positions taken on tax returns that do not meet that threshold are not recognized in the Company’s provisions for income taxes. The measurement of uncertain tax positions is adjusted when new information is available, or when an event occurs that requires a change. The Company’s policy is to analyze its tax positions for all open tax years. Interest and penalties, if any, associated with uncertain tax positions, are classified as additional income tax expense in the consolidated statements of income (see Note 10). |
Subsequent events | Subsequent events |
Reclassifications | Reclassifications – |
Organization, Activities and _3
Organization, Activities and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Activities and Significant Accounting Policies | |
Schedule of impact to the consolidated balance sheet as the result of adopting ASC 326 | January 1, 2023 December 31, 2022 Impact of Post-ASC 326 Pre-ASC 326 ASC 326 (In thousands) Adoption Adoption Adoption Assets: Loans receivable, net of deferred fees and costs $ 3,015,445 $ 3,015,445 $ — Allowance for credit losses (26,187) (25,028) (1,159) Deferred income tax asset 7,862 7,035 827 Liabilities: Reserve for unfunded commitments (1,786) — (1,786) Equity: Retained earnings 356,348 358,466 (2,118) |
Schedule of revenues from contracts with customers | (In thousands) 2023 2022 ATM and interchange income, net of related expenses $ 1,224 $ 1,071 Non-sufficient funds ("NSF") and overdraft fees 527 438 Other customer service fees 6,066 3,629 Total $ 7,817 $ 5,138 |
Investment Securities (Tables)
Investment Securities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Investment Securities | |
Schedule of amortized cost and estimated fair values of securities classified as Available-for-Sale | Amortized Unrealized Unrealized (In thousands) Cost Gain Loss Fair Value December 31, 2023 Debt Securities: U.S. Treasury securities $ 66,874 $ 27 $ (2,549) $ 64,352 Agency mortgage-backed securities 13,154 5 (1,729) 11,430 Agency collateralized mortgage obligations 2,987 — (569) 2,418 Corporate bonds 101,244 5 (9,014) 92,235 Municipal obligations 20,010 — (980) 19,030 Total $ 204,269 $ 37 $ (14,841) $ 189,465 Amortized Unrealized Unrealized (In thousands) Cost Gain Loss Fair Value December 31, 2022 Debt Securities: U.S. Treasury securities $ 111,953 $ 43 $ (5,195) $ 106,801 Agency mortgage-backed securities 14,123 3 (1,985) 12,141 Agency collateralized mortgage obligations 3,749 — (676) 3,073 Corporate bonds 110,886 — (9,079) 101,807 Municipal obligations 23,313 — (1,655) 21,658 Total $ 264,024 $ 46 $ (18,590) $ 245,480 |
Schedule of net unrealized gain (loss) on AFS securities | (In thousands) December 31, 2023 December 31, 2022 Unrealized losses, net $ (14,804) $ (18,544) Deferred income tax asset 3,876 4,805 $ (10,928) $ (13,739) |
Schedule of maturities of securities available for sale | Available for Sale Amortized Cost Fair Value (In thousands) Within one year $ 57,476 $ 56,824 Over one year to five years 95,163 88,905 Over five years to ten years 35,489 29,888 188,128 175,617 Agency mortgage-backed securities 13,154 11,430 Agency collateralized mortgage obligations 2,987 2,418 $ 204,269 $ 189,465 |
Schedule of fair value and gross unrealized losses, individual securities have been in a continuous unrealized loss position | Less than 12 Months 12 Months or More Total Gross Gross Gross (In thousands) Unrealized Fair Unrealized Fair Unrealized Fair December 31, 2023 Number of Securities Losses Value Losses Value Losses Value U.S. Treasuries 15 $ (95) $ 7,884 $ (2,454) $ 46,515 $ (2,549) $ 54,399 U.S. Government Agencies 18 — — (1,730) 11,124 (1,730) 11,124 Taxable municipals 5 — — (569) 2,418 (569) 2,418 Corporate bonds 33 (1,135) 6,866 (7,879) 78,365 (9,014) 85,231 Mortgage backed securities 13 (181) 1,819 (799) 17,211 (980) 19,030 Total 84 $ (1,411) $ 16,569 $ (13,431) $ 155,633 $ (14,842) $ 172,202 Less than 12 Months 12 Months or More Total Gross Gross Gross (In thousands) Unrealized Fair Unrealized Fair Unrealized Fair December 31, 2022 Number of Securities Losses Value Losses Value Losses Value U.S. Treasury securities 20 $ (47) $ 19,958 $ (5,148) $ 83,759 $ (5,195) $ 103,717 Agency mortgage-backed securities 25 (263) 2,900 (1,722) 8,932 (1,985) 11,832 Agency collateralized mortgage obligations 6 (54) 1,048 (622) 2,025 (676) 3,073 Corporate bonds 34 (4,332) 44,537 (4,747) 46,270 (9,079) 90,807 Municipal obligations 14 (382) 10,841 (1,273) 10,817 (1,655) 21,658 Total 99 $ (5,078) $ 79,284 $ (13,512) $ 151,803 $ (18,590) $ 231,087 |
Loans Receivable and ACL (Table
Loans Receivable and ACL (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Loans Receivable and ACL | |
Schedule of Loans | Loans consist of the following as of the dates stated (in thousands): December 31, 2023 December 31, 2022 One-to four-family residential $ 1,097,475 $ 932,436 Home equity 97,270 75,226 Residential real estate 1,194,745 1,007,662 Commercial real estate 1,174,020 822,744 Multi-family residential 209,982 189,279 Commercial real estate 1,384,002 1,012,023 Construction and land development 622,713 552,375 Commercial and industrial 487,878 247,361 Commercial 2,494,593 1,811,759 Consumer, net of premium/discount 204,871 196,535 Total loans 3,894,209 3,015,956 Deferred fees, net (4,930) (511) Allowance for credit losses (32,222) (25,028) Net loans $ 3,857,057 $ 2,990,417 |
Schedule of outstanding balances of consumer loan pools, shown net of premium (discount) | The outstanding balances of these consumer loan pools, shown net of premium (discount) are as follows as of the dates stated (in thousands): December 31, 2023 Gross Loan Premium (Discount) Net Loan Student loans $ 8,989 $ 49 $ 9,038 Boat and RV loans 58,483 1,422 59,905 Automobile loans 14,662 — 14,662 Solar panel loans 61,430 (5,443) 55,987 Home improvement loans 53,220 (26) 53,194 Total $ 196,784 $ (3,998) $ 192,786 December 31, 2022 Gross Loan Premium (Discount) Net Loan Student loans $ 11,679 $ 61 $ 11,740 Boat and RV loans 40,270 925 41,195 Automobile loans 15,498 — 15,498 Solar panel loans 67,994 (5,914) 62,080 Home improvement loans 63,146 (44) 63,102 Total $ 198,587 $ (4,972) $ 193,615 |
Schedule of aging of the amortized cost of loans receivable by loan category | The following table presents the aging of the amortized cost of loans receivable by loan category as of the date stated (in thousands): 30-59 60-89 90 Days or Current Days Days More Past Due Total December 31, 2023 Loans Past Due Past Due Still Accruing Nonaccrual Loans Real estate loans: One-to four-family residential $ 1,091,472 $ 1,903 $ — $ — $ 4,100 $ 1,097,475 Home equity 96,327 288 65 — 590 97,270 Commercial real estate 1,380,845 2,735 — — 422 1,384,002 Construction and land development 622,703 — — — 10 622,713 Commercial and industrial 483,737 2 1 — 4,138 487,878 Consumer 198,316 4,009 1,008 — 1,538 204,871 Total $ 3,873,400 $ 8,937 $ 1,074 $ — $ 10,798 $ 3,894,209 Past Due 90 30-59 60-89 Days or Current Days Days 90 Days or Total More & Still Loans on December 31, 2022 Loans Past Due Past Due More Loans Accruing Nonaccrual Real estate loans: One-to four-family residential $ 929,323 $ 1,449 $ — $ 1,664 $ 932,436 $ — $ 5,579 Home equity 74,008 728 490 — 75,226 — 818 Commercial 1,007,110 4,243 — 670 1,012,023 — 670 Construction & land development 552,375 — — — 552,375 — 10 Commercial & industrial loans 246,523 38 — 800 247,361 — 5,086 Consumer loans 193,783 1,499 436 817 196,535 — 859 Total $ 3,003,122 $ 7,957 $ 926 $ 3,951 $ 3,015,956 $ — $ 13,022 |
Schedule of amortized cost of nonaccrual loans receivable by loan category | The following table presents the amortized cost of nonaccrual loans receivable by loan category as of the date stated (in thousands): December 31, 2023 December 31, 2022 Incurred Nonaccrual Nonaccrual Total Loss Model- Loans with Loans with Nonaccrual Nonaccrual No ACL an ACL Loans Loans Real estate loans: One-to four-family residential $ 4,100 $ — $ 4,100 $ 5,579 Home equity 590 — 590 818 Commercial real estate 422 — 422 670 Construction and land development 10 — 10 10 Commercial and industrial 376 3,762 4,138 5,086 Consumer 1,538 — 1,538 859 Total $ 7,036 $ 3,762 $ 10,798 $ 13,022 |
Schedule of amortized cost of loans receivable by internal risk grade by year of origination | Term Loans Amortized Cost Basis by Origination Year (in thousands) Risk Rating 2023 2022 2021 2020 2019 Prior Revolving Loans Total Residential Real Estate Grade: Pass 1-5 $ 152,824 $ 272,448 $ 256,666 $ 128,181 $ 78,739 $ 174,654 $ 130,256 $ 1,193,768 Special Mention 6 — — — — — — — — Substandard 7 — — — — — 898 79 977 Doubtful 8 — — — — — — — — Loss 9 — — — — — — — — Total $ 152,824 $ 272,448 $ 256,666 $ 128,181 $ 78,739 $ 175,552 $ 130,335 $ 1,194,745 Current period gross charge-offs $ — $ — $ — $ — $ — $ 379 $ — $ 379 Commercial Real Estate Grade: Pass 1-5 $ 388,563 $ 421,419 $ 81,913 $ 124,461 $ 142,092 $ 179,713 $ 33,944 $ 1,372,105 Special Mention 6 — — — — 6,183 5,714 — 11,897 Substandard 7 — — — — — — — — Doubtful 8 — — — — — — — — Loss 9 — — — — — — — — Total $ 388,563 $ 421,419 $ 81,913 $ 124,461 $ 148,275 $ 185,427 $ 33,944 $ 1,384,002 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Construction and Land Development Grade: Pass 1-5 $ 157,270 $ 305,558 $ 127,720 $ 20,929 $ 10,333 $ — $ 893 $ 622,703 Special Mention 6 — — — — — — — — Substandard 7 — — — — — — — — Doubtful 8 — — — — — 10 — 10 Loss 9 — — — — — — — — Total $ 157,270 $ 305,558 $ 127,720 $ 20,929 $ 10,333 $ 10 $ 893 $ 622,713 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Commercial and Industrial Grade: Pass 1-5 $ 58,676 $ 88,286 $ 45,960 $ 8,080 $ 3,038 $ 16,178 $ 258,468 $ 478,686 Special Mention 6 — — 250 — — 475 — 725 Substandard 7 — — — — 119 3,762 4,586 8,467 Doubtful 8 — — — — — — — — Loss 9 — — — — — — — — Total $ 58,676 $ 88,286 $ 46,210 $ 8,080 $ 3,157 $ 20,415 $ 263,054 $ 487,878 Current period gross charge-offs $ — $ — $ — $ — $ 570 $ 109 $ — $ 679 Consumer Grade: Pass 1-5 $ 36,453 $ 83,720 $ 53,404 $ 9,826 $ 10,896 $ 8,700 $ 1,872 $ 204,871 Non-Pass 6-9 — — — — — — — — Total $ 36,453 $ 83,720 $ 53,404 $ 9,826 $ 10,896 $ 8,700 $ 1,872 $ 204,871 Current period gross charge-offs $ 42 $ 1,524 $ 1,163 $ 311 $ 219 $ 221 $ 7 $ 3,487 Total Loans Grade: Pass 1-5 $ 793,786 $ 1,171,431 $ 565,663 $ 291,477 $ 245,098 $ 379,245 $ 425,433 $ 3,872,133 Special Mention 6 — — 250 — 6,183 6,189 — 12,622 Substandard 7 — — — — 119 4,660 4,665 9,444 Doubtful 8 — — — — — 10 — 10 Loss 9 — — — — — — — — Total $ 793,786 $ 1,171,431 $ 565,913 $ 291,477 $ 251,400 $ 390,104 $ 430,098 $ 3,894,209 Current period gross charge-offs $ 42 $ 1,524 $ 1,163 $ 311 $ 789 $ 709 $ 7 $ 4,545 |
Schedule of the change in the ACL by major loan segment | For the Year ended December 31, 2023 One-to-Four Construction Family Commercial and Land Commercial and Residential Home Equity Real Estate Development Industrial Consumer Unallocated Total Balance at December 31, 2022 $ 3,485 $ 258 $ 6,538 $ 3,846 $ 8,255 $ 1,403 $ 1,243 $ 25,028 Adjustment to allowance for adoption of ASU 2016-13 266 13 822 (246) 932 615 (1,243) 1,159 Provision for credit losses - ACL (1,537) (154) (1,332) 4,030 2,370 6,280 — 9,657 Charge offs (379) — — — (679) (3,487) — (4,545) Recoveries of loans previously charged off — — 48 — — 875 — 923 Balance at December 31, 2023 $ 1,835 $ 117 $ 6,076 $ 7,630 $ 10,878 $ 5,686 $ — $ 32,222 |
Schedule of amortized cost of collateral-dependent loans | Subsequent to the CECL adoption, management refined the modeling assuming and enhanced the CECL calculation, including the reserve for unfunded commitments, specifically regarding the qualitative analysis used in the determination of expected credit losses. The impact of these changes resulted in provisions for credit losses of $333 thousand. The following table presents the amortized cost of collateral-dependent loans of December 31, 2023 (in thousands): One-to four-family residential $ 977 Construction and land development 10 Commercial and industrial loans 8,443 Total $ 9,430 |
Schedule of balance and activity in the allowance for credit losses for unfunded loan commitments | The following table presents the balance and activity in the allowance for credit losses for unfunded loan commitments for the year ended December 31, 2023 (in thousands): Year Ended December 31, 2023 Beginning balance $ — Adjustment to allowance for unfunded commitments for adoption of ASC 326 1,786 Provision for unfunded commitments 4,228 Balance, December 31, 2023 $ 6,014 |
Summary of the loan portfolio individually and collectively evaluated for impairment | The following table presents a summary of the loan portfolio individually and collectively evaluated for impairment as of the date stated (in thousands): Real Estate One-to Four- Family Commercial Construction & Commercial & Residential Home Equity Real Estate Land Development Industrial Consumer Unallocated Total December 31, 2022 Allowance for loans individually evaluated for impairment $ 422 $ — $ — $ — $ 4,998 $ — $ — $ 5,420 Allowance for loans collectively evaluated for impairment 3,063 258 6,538 3,846 3,257 1,403 1,243 19,608 Total Allowance for Loan Loss $ 3,485 $ 258 $ 6,538 $ 3,846 $ 8,255 $ 1,403 $ 1,243 $ 25,028 Loans individually evaluated for impairment $ 1,809 $ 80 $ 3,360 $ 10 $ 9,121 $ — $ — $ 14,380 Loans collectively evaluated for impairment 930,627 75,146 1,008,663 552,365 238,240 196,535 — 3,001,576 Total Loans $ 932,436 $ 75,226 $ 1,012,023 $ 552,375 $ 247,361 $ 196,535 $ — $ 3,015,956 |
Schedule of summary of impaired loans and additional information about impaired loans | The following tables presents a summary of impaired loans as of the date stated (in thousands): Recorded Unpaid Related Investment in Principal Allowance for Net Impaired Impaired Loans Balance Loan Losses Loan Balance (In thousands) December 31, 2022 Impaired loans with no related allowance recorded: Real estate: One-to four-family residential $ 1,387 $ 1,912 $ — $ 1,387 Home equity 80 80 — 80 Commercial real estate 3,360 9,178 — 3,360 Construction & land development 10 640 — 10 Commercial & industrial 874 2,669 — 874 Consumer — — — — Total 5,711 14,479 — 5,711 Impaired loans with an allowance recorded: Real estate: One-to four-family residential 422 422 422 — Home equity — — — — Commercial real estate — — — — Construction & land development — — — — Commercial & industrial 8,247 8,247 4,998 3,249 Consumer — — — — Total 8,669 8,669 5,420 3,249 Total impaired loans: Real estate: One-to four-family residential 1,809 2,334 422 1,387 Home equity 80 80 — 80 Commercial real estate 3,360 9,178 — 3,360 Construction & land development 10 640 — 10 Commercial & industrial 9,121 10,916 4,998 4,123 Consumer — — — — Total impaired loans $ 14,380 $ 23,148 $ 5,420 $ 8,960 Additional information about impaired loans is as follows for the period stated (in thousands): Year Ended December 31, 2022 Average recorded investment in impaired loans: Real Estate: One-to-four family residential 1,633 Home equity 16 Commercial real estate 3,413 Construction and land development 10 Commercial and industrial 8,802 Total $ 13,874 Related amount of interest income recognized during the period that the loans were impaired: Total recognized $ 683 Amount recognized using a cash-basis method of accounting $ 367 |
Schedule of the carrying balance of troubled debt restructurings (TDRs) | The following table summarizes the carrying balance of troubled debt restructurings (“TDRs”) as of December 31, 2022 (in thousands): Performing TDRs $ 8,304 Nonperforming TDRs 3,762 Total TDRs $ 12,066 |
Schedule of analysis of the change in the allowance for loan losses by loan type | The following tables present an analysis of the change in the allowance for loan losses by loan type for the period stated (in thousands): For the Year Ended December 31, 2022 One-to Four- Family Home Commercial Construction and Commercial and Residential Equity Real Estate Land Development Industrial Consumer Unallocated Total Balance, December 31, 2021 $ 3,016 $ 175 $ 4,449 $ 3,467 $ 5,749 $ 109 $ 1,450 $ 18,415 Provision for loan losses 471 83 2,041 379 2,506 1,427 (207) 6,700 Charge offs (35) — — — — (287) — (322) Recoveries of loans previously charged off 33 — 48 — — 154 — 235 Balance, December 31, 2022 $ 3,485 $ 258 $ 6,538 $ 3,846 $ 8,255 $ 1,403 $ 1,243 $ 25,028 |
Schedule of summary of company's loans by risk rating category | The following table summarizes the Company’s loans by risk rating category as of the date stated (in thousands): Residential Risk Real Commercial Construction & Commercial & Total Rating Estate Real Estate Land Development Industrial Consumer Loans December 31, 2022 Grade: Pass 1-5 $ 1,006,275 $ 998,788 $ 552,365 $ 232,742 $ 196,535 $ 2,986,705 Special Mention 6 — 13,235 — 5,474 — 18,709 Substandard 7 1,387 — — 9,145 — 10,532 Doubtful 8 — — 10 — — 10 Loss 9 — — — — — — Total $ 1,007,662 $ 1,012,023 $ 552,375 $ 247,361 $ 196,535 $ 3,015,956 |
Mortgage Banking - Loan Sales_2
Mortgage Banking - Loan Sales and Servicing (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Mortgage Banking - Loan Sales and Servicing | |
Summary of schedule of mortgage servicing assets, including the final carrying value | The following is a schedule of mortgage servicing assets, including the final carrying value, as of and for the years ended December 31 (in thousands): 2023 2022 Balance at the beginning of the year $ 2,298 $ 2,735 Servicing obligations that result from transfers of financial assets 25 14 Amortization (273) (451) Balance at the end of the year $ 2,050 $ 2,298 |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Premises and Equipment | |
Schedule of the Company's premises and equipment | (Dollars in thousands) Expected Useful Lives December 31, 2023 December 31, 2022 Land $ 4,631 $ 4,631 Land improvements 7 - 20 years 2,727 2,727 Leasehold improvements Lease term (including all anticipated extensions) 13,017 12,308 Buildings and improvements 20 - 50 22,478 21,171 Furniture, fixtures, and equipment 3 - 10 19,211 18,377 62,064 59,214 Less accumulated depreciation (26,533) (23,870) Total $ 35,531 $ 35,344 |
Lease Commitments (Tables)
Lease Commitments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Lease Commitments | |
Summary of recorded lease right-of-use assets | December 31, 2023 December 31, 2022 Operating lease right-of-use assets $ 11,540 $ 11,540 Less accumulated amortization (992) (563) Operating lease right-of-use assets, net 10,548 10,977 Operating lease liabilities $ 10,773 $ 11,049 Weighted average remaining term (years) 19 20 Weighted average discount rate 4.38% 4.38% |
Summary of future minimum lease payments under the terms of leases along with the recorded present value of the lease obligations | The future minimum lease payments under the terms of the above leases at December 31, 2023, along with the recorded present value of the lease obligations, are as follows: (in thousands) 2024 $ 765 2025 787 2026 808 2027 825 2028 and thereafter 835 Thereafter 12,846 $ 16,866 Less unamortized discount (6,093) Recorded present value of lease obligations $ 10,773 |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Deposits. | |
Summary of comparative summary of deposits | A comparative summary of deposits is as follows as of the dates stated: December 31, 2023 December 31, 2022 (In thousands) Transactional accounts: Noninterest-bearing demand deposits $ 528,409 $ 445,518 Savings accounts 127,640 163,257 NOW accounts 345,753 408,894 Money market accounts 888,511 659,455 Total transactional accounts 1,890,313 1,677,124 Time deposits Greater than $250,000 544,246 415,860 Less than or equal to $250,000 952,789 793,759 Total time deposits 1,497,035 1,209,619 Total deposits $ 3,387,348 $ 2,886,743 |
Summary of contractual maturities of time deposits | Contractual maturities of time deposits are as follows (in thousands): December 31, 2023 December 31, 2022 Within 1 year $ 1,472,067 $ 1,022,891 Over 1 year to 2 years 13,360 160,545 Over 2 years to 3 years 3,434 11,137 Over 3 years to 4 years 6,159 5,937 Over 4 years to 5 years 2,015 9,109 $ 1,497,035 $ 1,209,619 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Borrowings | |
Summary of maturities on outstanding borrowings from the FHLB | December 31, 2023 December 31, 2022 Weighted Weighted Average Average (Dollars in thousands) Amount Rate Amount Rate Advances maturing within: One year $ 282,503 5.53% $ 293,075 4.27% One to two years — — 7 2.80% Four to five years 560 0.00% — — Five to ten years 275 0.00% — — Total $ 283,063 5.53% $ 293,082 4.27% |
Employee Benefits (Tables)
Employee Benefits (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Employee Benefits | |
Schedule of participation in the CBERA Plan C defined benefit plan | The Company’s participation in the CBERA Plan C defined benefit plan for year ended December 31 is summarized below: Pension Protect Act Zone Bank’s Contributions for Status Year Ended December 31, FIP/RP Status December 31, December 31, Pending / Surcharge Pension Fund EIN/Plan Number 2023 2022 Implemented 2023 2022 Imposed The Defined Benefit Plan (Plan C) of the CBERA Retirement Program EIN: 04-6035593; Plan No. 334 Green Green No $ 3,476,667 $ 2,000,000 No |
Summary of comparison of the actuarial estimates of the benefit obligations to the recorded obligations | A comparison of the actuarial estimates of the benefit obligations to the recorded obligations are as follows as of the measurement date, December 31 (in thousands): 2023 2022 Projected benefit obligations $ (5,744) $ (4,998) Plan assets at fair value - - Funded status $ (5,744) $ (4,998) |
Summary of amounts recognized on the consolidated balance sheet for pension plan | Amounts recognized on the consolidated balance sheet as of December 31 are as follows (in thousands): 2023 2022 Accrued retirement liabilities $ (5,744) $ 4,998 Accumulated other comprehensive loss in equity, before taxes (1,347) (1,241) Net amount recognized $ (7,091) $ 3,757 |
Summary of amounts included in "Accumulated Other Comprehensive Income (Loss)" that have not yet been recognized as components of net periodic pension cost | Amounts included in “Accumulated Other Comprehensive Income (Loss)” that have not yet been recognized as components of net periodic pension cost as of December 31 are as follows (in thousands): 2023 2022 Unrecognized prior service cost $ (258) $ (315) Unrecognized net loss (1,089) (926) Unrecognized losses included in AOCI $ (1,347) $ (1,241) |
Summary of weighted average actuarial assumptions used to determine the director pension plan projected benefit obligations and net periodic pension cost | The weighted average actuarial assumptions used to determine the director pension plan projected benefit obligations and net periodic pension cost are as follows as of December 31 (in thousands): 2023 2022 Pre-retirement discount rate for net periodic pension cost 5.03% 2.35% Pre-retirement discount rate for projected benefit obligation 4.81% 5.03% Post-retirement discount rate for projected benefit obligation 4.81% 5.03% Rate of compensation increase 0.00% 0.00% |
Summary of components of projected net periodic pension cost | The components of projected net periodic pension cost for the year ended December 31, 2023 and 2022 are as follows (amortization amounts will be recorded via charges or credits to “other comprehensive income”) (in thousands): 2023 2022 Benefit obligation at beginning of the year $ 4,998 $ 4,549 Service cost 260 232 Interest cost 261 114 Plan amendments 430 372 Actuarial loss (gain) 244 (30) Benefits paid (449) (239) Benefit obligation at end of the year $ 5,744 $ 4,998 |
Schedule of net periodic pension cost, contributions received, and benefits paid | The following schedule reflects the net periodic pension cost, contributions received, and benefits paid for the year ended December 31: (In thousands) December 31, 2023 December 31, 2022 Service cost $ 260 $ 232 Interest cost 261 114 Amortization of net actuarial losses 81 85 Amortization of prior service costs 487 57 Net periodic pension cost $ 1,089 $ 488 Employer contribution $ 449 $ 239 Benefits paid $ 449 $ 239 |
Summary of estimated pension benefit payments, which reflect expected future service as appropriate, expected to be paid over the next ten years | The following estimated pension benefit payments, which reflect expected future service as appropriate, are expected to be paid over the next ten years (in thousands): Estimated benefit payments 2024 $ 480 2025 526 2026 547 2027 528 2028 563 2029 and thereafter 3,682 Total $ 6,326 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes | |
Summary of components of income tax expense | (Dollars in thousands) December 31, 2023 December 31, 2022 Current tax expense Federal $ 5,216 $ 3,625 State 4,523 3,951 9,739 7,576 Deferred tax expense (credits) Federal (5,704) (458) State (2,016) (795) (7,720) (1,253) Total income tax expense $ 2,019 $ 6,323 |
Summary of effective tax rate differs from that computed at the statutory federal income tax rate | 2023 2022 Statutory federal tax rate Increase (decrease) resulting from: 21.0% 21.0% State taxes, net of federal tax benefit 6.8 6.9 Tax-exempt income (0.7) (0.9) Disallowed compensation under 162(m) 31.10 - Federal solar tax credits (39.8) (10.1) Income from bank-owned life insurance (3.6) (0.9) Bargain purchase gain 0.0 (0.9) Other, net 2.3 2.3 Effective tax rate 17.1% 17.4% |
Summary of deferred income tax assets and liabilities | (In thousands) 2023 2022 Deferred income tax assets: Allowance for credit losses $ 9,058 $ 7,035 Reserve for off balance sheet commitments 1,691 - Loan impairment charges 478 491 Director retirement plans 1,236 1,056 Deferred compensation 1,760 1,963 Charitable contribution carryforward 5,363 - Non-accrual interest on loans 205 184 Unrecognized pension cost on director pension plan 377 348 Unrealized loss on investment securities available for sale 3,876 4,805 Other 55 29 Gross deferred income tax assets 24,099 15,911 Deferred income tax liabilities: Mortgage servicing rights (576) (646) Depreciation (1,752) (1,777) Unrealized gain on cash flow hedge - (90) Solar tax credit investment (2,300) (1,623) Bargain purchase gain (345) (387) Gross deferred income tax liabilities (4,973) (4,523) Net deferred income tax asset $ 19,126 $ 11,388 |
Regulatory Capital Requiremen_2
Regulatory Capital Requirements (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Regulatory Capital Requirements | |
Schedule of actual capital amounts and ratios | As of December 31, 2022, the Bank was categorized as well capitalized under this regulatory framework for prompt corrective action as presented in the table below (dollars in thousands). To be well capitalized For minimum capital under prompt corrective Actual adequacy purposes action provisions December 31, 2022 Amount Ratio Amount Ratio Amount Ratio Total Capital $ 382,417 11.3% $ 271,323 8.0% $ 339,153 10.0% (to Risk-Weighted Assets) Tier 1 Capital 357,389 10.5% 203,492 6.0% 271,323 8.0% (to Risk-Weighted Assets) Common Equity Tier 1 Capital 357,389 10.5% 152,619 4.5% 220,450 6.5% (to Risk-Weighted Assets) Tier 1 Capital 357,389 10.5% 136,311 4.0% 170,389 5.0% (to Total Average Assets) |
Financial Instruments with Of_2
Financial Instruments with Off-Balance Sheet Risk and Concentrations of Credit Risk (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Financial Instruments with Off-Balance Sheet Risk and Concentrations of Credit Risk | |
Schedule of financial instruments whose contract amounts represents off-balance sheet credit risk | (In thousands) December 31, 2023 December 31, 2022 Unused commitments to extend credit $ 1,112,931 $ 723,175 Letters of credit 7,471 6,106 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Measurements | |
Summary of assets measured and reported at estimated fair value on a recurring basis | December 31, 2023 Level 1 Level 2 Level 3 Fair Value Assets: Available-for-sale securities U.S. Treasury securities $ 64,352 $ — $ — $ 64,352 Agency mortgage-backed securities — 11,430 — 11,430 Agency collateralized mortgage obligations — 2,418 — 2,418 Corporate bonds — 82,367 9,868 92,235 Municipal obligations — 19,030 — 19,030 $ 64,352 $ 115,245 $ 9,868 $ 189,465 Derivative assets $ — $ 27,769 $ — $ 27,769 Liabilities: Derivative liabilities $ — $ 27,786 $ — $ 27,786 December 31, 2022 Level 1 Level 2 Level 3 Fair Value Assets: Available-for-sale securities U.S. Treasury securities $ 106,801 $ — $ — $ 106,801 Agency mortgage-backed securities — 12,141 — 12,141 Agency collateralized mortgage obligations — 3,073 — 3,073 Corporate bonds — 92,807 9,000 101,807 Municipal obligations — 21,658 — 21,658 $ 106,801 $ 129,679 $ 9,000 $ 245,480 Interest rate swap (cash flow hedge) $ — $ 321 $ — $ 321 Derivative assets $ — $ 31,483 $ — $ 31,483 Liabilities: Derivative liabilities $ — $ 31,492 $ — $ 31,492 |
Summary of assets measured at fair value on a non-recurring basis | December 31, 2023 (in thousands) Level 1 Level 2 Level 3 Fair Value Collateral-dependent loans $ — $ — $ 4,432 $ 4,432 Mortgage servicing rights $ — $ — $ 2,640 $ 2,640 December 31, 2022 (in thousands) Level 1 Level 2 Level 3 Fair Value Impaired Loans - Pre-ASC 326 $ — $ — $ 8,960 $ 8,960 Mortgage servicing rights $ — $ — $ 2,781 $ 2,781 |
Summary of significant unobservable inputs used in the fair value measurements for Level 3 assets and liabilities measured at fair value on a nonrecurring basis | Significant Significant Valuation Observable Unobservable December 31, 2023 Technique Inputs Inputs Collateral-dependent loans (previously known as impaired loans) Appraisal Value/ Comparison Sales Appraisals and/or sales of comparable properties Appraisals discounted 5 to 20% for sales commission and other holding costs Mortgage servicing rights Discounted Cash Flows Comparable sales Weighted average discount rate - 8% Significant Significant Valuation Observable Unobservable December 31, 2022 Technique Inputs Inputs Impaired Loans Appraisal Value/ Comparison Sales Appraisals and/or sales of comparable properties Appraisals discounted 5 to 20% for sales commission and other holding costs Mortgage servicing rights Discounted Cash Flows Comparable sales Constant prepayment rate - 5% |
Summary of estimated fair values, related carrying amounts, and valuation level of the financial instruments | December 31, 2023 Fair Value Measurements Carrying (Dollars in thousands) Value Fair Value Level 1 Level 2 Level 3 Financial Assets Cash and cash equivalents $ 272,591 $ 272,591 $ 272,591 $ — $ — Non-public investments 13,713 13,713 — — 13,713 Loans receivable, net 3,857,057 3,732,361 — — 3,732,361 Accrued interest receivable 17,284 17,284 — 17,284 — Bank owned life insurance ("BOLI") 50,516 50,516 — 50,516 — Financial Liabilities Noninterest-bearing demand deposits $ 528,409 $ 528,409 $ 528,409 $ — $ — Savings, NOW and money markets 1,361,904 1,361,904 — 1,361,904 — Time deposits 1,497,035 1,495,008 — — 1,495,008 FHLB borrowings 283,338 283,172 — 283,172 — December 31, 2022 Fair Value Measurements Carrying (Dollars in thousands) Value Fair Value Level 1 Level 2 Level 3 Financial Assets Cash and cash equivalents $ 156,545 $ 156,545 $ 156,545 $ — $ — Non-public investments 10,592 10,592 — — 10,592 Loans receivable, net 2,990,417 2,928,734 — — 2,928,734 Accrued interest receivable 10,837 10,837 — 10,837 — Bank owned life insurance ("BOLI") 49,006 49,006 — 49,006 — Financial Liabilities Noninterest-bearing demand deposits $ 445,518 $ 445,518 $ 445,518 $ — $ — Savings, NOW and money markets 1,231,606 1,231,606 — 1,231,606 — Time deposits 1,209,619 1,194,871 — — 1,194,871 FHLB borrowings 293,082 293,056 — 293,056 — |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Derivatives and Hedging Activities | |
Schedule of fair values of derivative instruments on the balance sheet | The table below presents the fair value of the Company’s derivative financial instruments not designated as hedging instruments, as well as their classification on the consolidated balance sheets as of the dates stated (in thousands): Asset Liability December 31, 2023 Derivatives (1) Derivatives (2) Derivatives not designated as hedging instruments: Interest rate products $ 27,769 $ 27,769 RPA credit contracts — 17 Total derivatives not designated as hedging instruments $ 27,769 $ 27,786 December 31, 2022 Derivatives not designated as hedging instruments: Interest rate products $ 31,483 $ 31,483 RPA credit contracts — 9 Total derivatives not designated as hedging instruments $ 31,483 $ 31,492 (1) Recorded in prepaid expenses and other assets on the consolidated balance sheets (2) Recorded in accrued expenses and other liabilities on the consolidated balance sheets |
Schedule of derivative financial instruments not designated as hedges to the consolidated statements of income | The table below presents the financial impact of the Company’s derivative financial instruments not designated as hedges in the consolidated statements of income, caused by changes in fair value and default termination fees paid on the swap arrangements for the year ended December 31 (in thousands): Location of Gain or (Loss) Recognized Year ended December 31 in Income on Derivative 2023 2022 Derivatives Not Designated as Hedging Instruments: RPA credit contracts-fair value adjustments Other non-interest income $ (8) $ 19 |
Other Comprehensive Income (Tab
Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Other Comprehensive Income | |
Schedule of components of Accumulated Other Comprehensive Income | The components of the Company’s “Accumulated Other Comprehensive Income”, along with the changes during the dates stated (net of deferred income tax effects), are as follows (in thousands): Unrealized Gain Director Unrealized Gain Total Accumulated (Loss) on AFS Pension (Loss) on Cash Other Comprehensive Securities Plan Flow Hedge Income (Loss) Balances at December 31, 2021 $ (639) $ (749) $ (884) $ (2,272) Other comprehensive (losses) income, net of taxes (13,100) (144) 1,115 (12,129) Balances at December 31, 2022 $ (13,739) $ (893) $ 231 $ (14,401) Other comprehensive income (losses), net of taxes 2,811 (76) (231) 2,504 Balances at December 31, 2023 $ (10,928) $ (969) $ — $ (11,897) |
Schedule of reconciliation of the changes in the components of other comprehensive income and the reclassifications out of accumulated other comprehensive income | The following table presents a reconciliation of the changes in the components of “other comprehensive income” and the reclassifications out of “accumulated other comprehensive income” (in thousands): Tax Before-Tax (Expense) After-Tax Year Ended December 31, 2023 Amount Benefit Amount Unrealized Gains on AFS Securities: Unrealized holding gains arising during the year $ 3,740 $ (929) $ 2,811 Unrecognized Pension Losses from Director Pension Plan: Net actuarial losses arising during the year (244) 69 (175) New prior service costs related to plan amendments (430) 123 (307) Reclassification adjustments into net periodic pension cost: Amortization of prior service costs 487 (139) 348 Amortization of net actuarial losses 81 (23) 58 Net change in unrecognized pension cost (106) 30 (76) Unrealized Losses on Cash Flow Hedge: Unrealized holding losses arising during the year (321) 90 (231) Total other comprehensive income $ 3,313 $ (809) $ 2,504 Tax Before-Tax (Expense) After-Tax Year Ended December 31, 2022 Amount Benefit Amount Unrealized Losses on AFS Securities: Unrealized holding losses arising during the year $ (17,657) $ 4,557 $ (13,100) Unrecognized Pension Losses from Director Pension Plan: Net actuarial gains arising during the year 30 (8) 22 New prior service costs related to plan amendments (372) 104 (268) Reclassification adjustments into net periodic pension cost: Amortization of prior service costs 57 (16) 41 Amortization of net actuarial losses 85 (24) 61 Net change in unrecognized pension cost (200) 56 (144) Unrealized Gains on Cash Flow Hedge: Unrealized holding gains arising during the year 1,548 (433) 1,115 Total other comprehensive loss $ (16,309) $ 4,180 $ (12,129) |
Transactions with Officers and
Transactions with Officers and Directors (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Transactions with Officers and Directors | |
Schedule of related party loan transactions | The following table presents loan transactions with such related parties as of December 31 (in thousands): 2023 2022 Balance at beginning of the year $ 2,245 $ 2,683 New loans 3,150 — Repayments (2,002) (438) Balance at the end of the year $ 3,393 $ 2,245 |
Earnings Per Share ("EPS) (Tabl
Earnings Per Share ("EPS) (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share ("EPS) | |
Schedule of Earnings per share | (Dollars in thousands, except per share data) For the Year Ended December 31, 2023 Net income applicable to common shares $ 9,825 Average number of common shares outstanding 42,705,729 Less: average unallocated ESOP shares (687,500) Average number of common shares outstanding used to calculate basic EPS 42,018,229 Common stock equivalents - Average number of common shares outstanding used to calculate diluted EPS 42,018,229 Earnings per common share: Basic and diluted $ 0.23 |
Parent Company Only Financial_2
Parent Company Only Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Parent Company Only Financial Information | |
Schedule of condensed balance sheet | The following information presents the condensed balance sheet of NB Bancorp, Inc. as of December 31, 2023 (in thousands). December 31, 2023 Assets Cash and cash equivalents $ 207,685 Investment in consolidated subsidiary 576,480 Total assets 784,165 Liabilities and Shareholders' Equity Other liabilities 26,206 Total shareholders' equity 757,959 Total liabilities and shareholders' equity $ 784,165 |
Schedule of statement of income | The following information presents the statement of income and statement of cash flows of NB Bancorp, Inc. for the year ended December 31, 2023 (in thousands). Year ended December 31, 2023 Interest income $ 233 Charitable contribution expense 19,082 Other expenses 30 Loss before income taxes and equity in undistributed net income of subsidiary (18,879) Income taxes 5,318 Loss before equity in undistributed net income of subsidiary (13,561) Equity in undistributed net income of subsidiary 23,386 Net income $ 9,825 |
Schedule of statement of cash flows | Year ended December 31, 2023 Cash flows from operating activities: Net income $ 9,825 Adjustments to reconcile net income to net cash used in operating activities: Changes in other liabilities 26,206 Equity in undistributed net income of subsidiary (23,386) Net cash used in operating activities 12,645 Cash flows from investing activities: Investment in Needham Bank (208,643) Net cash used in investing activities (208,643) Cash flows from financing activities: Net proceeds from stock offering and issuance of common shares 417,457 Purchase of common shares by the ESOP (13,774) Net cash provided by financing activities: 403,683 Net increase in cash and cash equivalents 207,685 Cash and cash equivalents at beginning of the period - Cash and cash equivalents at end of the period $ 207,685 |
Organization, Activities and _4
Organization, Activities and Significant Accounting Policies - Conversion and Reorganization (Details) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 27, 2023 USD ($) $ / shares shares | Dec. 31, 2023 USD ($) shares | Dec. 31, 2022 shares | |
Organization, Activities and Significant Accounting Policies [Line Items] | |||
Number of shares under ESOP | 1,000,000 | ||
Issuance of common shares donated to Needham Bank Charitable Foundation (in shares) | 1,708,229 | ||
Common Stock, shares issued | 42,705,729 | 0 | |
Common stock, shares outstanding | 42,705,729 | 0 | |
Conversion costs | $ | $ 9.6 | ||
Public offering | |||
Organization, Activities and Significant Accounting Policies [Line Items] | |||
Percentage of transfer of common stock upon reorganization | 100 | ||
Number of shares sold pursuant to the plan | 40,997,500 | ||
Common stock, sale price per share | $ / shares | $ 10 | ||
Net proceeds received upon conversion | $ | $ 400.4 | ||
Donation in cash to Needham Bank Charitable Foundation | $ | $ 2 |
Organization, Activities and _5
Organization, Activities and Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2023 USD ($) segment | |
Organization, Activities and Significant Accounting Policies | |
Allowance for credit loss related to the available for sale portfolio | $ 0 |
Accrued interest receivable on available for sale debt securities | $ 1,200,000 |
Number of reportable segments | segment | 1 |
Organization, Activities and _6
Organization, Activities and Significant Accounting Policies - Impact of ASC 326 (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2023 | Jan. 01, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Assets | ||||
Loans receivable | $ 3,857,057,000 | |||
Loans receivable, net of deferred fees and costs | $ 3,015,445,000 | |||
Allowance for credit losses | (32,222,000) | (25,028,000) | ||
Allowance for credit losses | (25,028,000) | $ (18,415,000) | ||
Deferred income tax asset | 19,126,000 | 11,388,000 | ||
Provision for credit losses - allowance for unfunded commitments | 4,228,000 | |||
Liabilities: | ||||
Reserve for unfunded commitments | 6,014,000 | 0 | ||
Shareholders' equity | ||||
Retained earnings | 366,173,000 | 358,466,000 | ||
Impact of ASC 326 Adoption | ||||
Assets | ||||
Provision for credit losses - allowance for unfunded commitments | 4,200,000 | |||
ASU 2016-13 | ||||
Assets | ||||
Loans receivable, net of deferred fees and costs | 3,015,445,000 | |||
Allowance for credit losses | (25,028,000) | |||
Deferred income tax asset | 7,035,000 | |||
Shareholders' equity | ||||
Retained earnings | 358,466,000 | |||
ASU 2016-13 | January 1, 2023 Post-ASC 326 Adoption | ||||
Assets | ||||
Loans receivable | 3,015,445,000 | |||
Allowance for credit losses | (26,187,000) | |||
Deferred income tax asset | 7,862,000 | |||
Liabilities: | ||||
Reserve for unfunded commitments | (1,786,000) | |||
Shareholders' equity | ||||
Retained earnings | 356,348,000 | |||
ASU 2016-13 | Impact of ASC 326 Adoption | ||||
Assets | ||||
Allowance for credit losses | (1,159,000) | $ (1,159,000) | ||
Deferred income tax asset | 827,000 | 827,000 | ||
Provision for credit losses - allowance for unfunded commitments | 333,000 | |||
Liabilities: | ||||
Reserve for unfunded commitments | $ 1,786,000 | (1,786,000) | (1,800,000) | |
Shareholders' equity | ||||
Retained earnings | $ (2,118,000) | $ (2,100,000) |
Organization, Activities and _7
Organization, Activities and Significant Accounting Policies - Loans Receivable and Allowance for Credit Losses (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2023 | Jan. 01, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Organization, Activities and Significant Accounting Policies | ||||
Financing Receivable, Accrued Interest, after Allowance for Credit Loss | $ 16,100,000 | $ 9,700,000 | ||
Financing Receivable, Accrued Interest, after Allowance for Credit Loss, Statement of Financial Position [Extensible Enumeration] | Interest Receivable | |||
Peer group financial institution size | $ 10,000,000,000 | |||
Allowances for credit losses individual impairment threshold amount | $ 500,000 | |||
Loans to value percentage, excluded from individually evaluated loans | 75% | |||
Retained Earnings (Accumulated Deficit) | $ 366,173,000 | 358,466,000 | ||
Reserve for unfunded commitments | 6,014,000 | 0 | ||
Deferred income tax asset | 19,126,000 | 11,388,000 | ||
Reduced equity | 757,959,000 | 344,065,000 | $ 326,129,000 | |
Accounting Standards Update 2016-13 | ||||
Organization, Activities and Significant Accounting Policies | ||||
Retained Earnings (Accumulated Deficit) | 358,466,000 | |||
Deferred income tax asset | 7,035,000 | |||
Accounting Standards Update 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | ||||
Organization, Activities and Significant Accounting Policies | ||||
Retained Earnings (Accumulated Deficit) | $ (2,118,000) | (2,100,000) | ||
Reserve for unfunded commitments | 1,786,000 | (1,786,000) | (1,800,000) | |
Deferred income tax asset | $ 827,000 | 827,000 | ||
Accrued interest receivable on loans | $ 1,200,000 | |||
Reduced equity | $ (2,118,000) |
Organization, Activities and _8
Organization, Activities and Significant Accounting Policies - Available for Sale Securities (Details) | Dec. 31, 2023 USD ($) |
Organization, Activities and Significant Accounting Policies | |
Allowance for credit loss related to the available for sale portfolio | $ 0 |
Organization, Activities and _9
Organization, Activities and Significant Accounting Policies - Reserve for Unfunded Commitments (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Jan. 01, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Organization, Activities and Significant Accounting Policies | ||||
Allowance for credit losses | $ 32,222 | $ 25,028 | ||
Reduced equity | 757,959 | 344,065 | $ 326,129 | |
Accounting Standards Update 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | ||||
Organization, Activities and Significant Accounting Policies | ||||
Allowance for credit losses | 1,159 | $ 1,159 | ||
Reduced equity | $ (2,118) | |||
Unfunded Loan Commitment [Member] | Accounting Standards Update 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | ||||
Organization, Activities and Significant Accounting Policies | ||||
Allowance for credit losses | 1,800 | |||
Reduced equity | $ 1,300 |
Organization, Activities and_10
Organization, Activities and Significant Accounting Policies - Other Investments (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Organization, Activities and Significant Accounting Policies | ||
Allowance for credit losses related to other investments | $ 0 | $ 0 |
Organization, Activities and_11
Organization, Activities and Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Organization, Activities and Significant Accounting Policies [Line Items] | ||
Total | $ 7,817 | $ 5,138 |
ATM and interchange income, net of related expenses | ||
Organization, Activities and Significant Accounting Policies [Line Items] | ||
Total | 1,224 | 1,071 |
Non-sufficient funds ("NSF") and overdraft fees | ||
Organization, Activities and Significant Accounting Policies [Line Items] | ||
Total | 527 | 438 |
Other customer service fees | ||
Organization, Activities and Significant Accounting Policies [Line Items] | ||
Total | $ 6,066 | $ 3,629 |
Organization, Activities and_12
Organization, Activities and Significant Accounting Policies - Advertising Costs (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Organization, Activities and Significant Accounting Policies | ||
Advertising expenses | $ 2.7 | $ 2.3 |
Investment Securities (Details)
Investment Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Amortized cost and estimated fair values of securities classified as Available-for-Sale | ||
Amortized Cost | $ 204,269 | |
Unrealized gain | 37 | $ 46 |
Unrealized loss | (14,841) | (18,590) |
Fair Value | 189,465 | |
Amortized cost and estimated fair values of securities classified as Available-for-Sale (Prior to ASU adoption) | ||
Amortized cost | 264,024 | |
Unrealized gain | 37 | 46 |
Unrealized loss | (14,841) | (18,590) |
Approximate fair value | 245,480 | |
Federal Home Loan Bank Advances [Member] | Asset Pledged as Collateral [Member] | ||
Amortized cost and estimated fair values of securities classified as Available-for-Sale | ||
Fair Value | 49,600 | |
Amortized cost and estimated fair values of securities classified as Available-for-Sale (Prior to ASU adoption) | ||
Approximate fair value | 0 | |
U.S. Treasury securities | ||
Amortized cost and estimated fair values of securities classified as Available-for-Sale | ||
Amortized Cost | 66,874 | |
Unrealized gain | 27 | 43 |
Unrealized loss | (2,549) | (5,195) |
Fair Value | 64,352 | |
Amortized cost and estimated fair values of securities classified as Available-for-Sale (Prior to ASU adoption) | ||
Amortized cost | 111,953 | |
Unrealized gain | 27 | 43 |
Unrealized loss | (2,549) | (5,195) |
Approximate fair value | 106,801 | |
Agency mortgage-backed securities | ||
Amortized cost and estimated fair values of securities classified as Available-for-Sale | ||
Amortized Cost | 13,154 | |
Unrealized gain | 5 | 3 |
Unrealized loss | (1,729) | (1,985) |
Fair Value | 11,430 | |
Amortized cost and estimated fair values of securities classified as Available-for-Sale (Prior to ASU adoption) | ||
Amortized cost | 14,123 | |
Unrealized gain | 5 | 3 |
Unrealized loss | (1,729) | (1,985) |
Approximate fair value | 12,141 | |
Agency collateralized mortgage obligations | ||
Amortized cost and estimated fair values of securities classified as Available-for-Sale | ||
Amortized Cost | 2,987 | |
Unrealized loss | (569) | (676) |
Fair Value | 2,418 | |
Amortized cost and estimated fair values of securities classified as Available-for-Sale (Prior to ASU adoption) | ||
Amortized cost | 3,749 | |
Unrealized loss | (569) | (676) |
Approximate fair value | 3,073 | |
Corporate bonds | ||
Amortized cost and estimated fair values of securities classified as Available-for-Sale | ||
Amortized Cost | 101,244 | |
Unrealized gain | 5 | |
Unrealized loss | (9,014) | (9,079) |
Fair Value | 92,235 | |
Amortized cost and estimated fair values of securities classified as Available-for-Sale (Prior to ASU adoption) | ||
Amortized cost | 110,886 | |
Unrealized gain | 5 | |
Unrealized loss | (9,014) | (9,079) |
Approximate fair value | 101,807 | |
Municipal obligations | ||
Amortized cost and estimated fair values of securities classified as Available-for-Sale | ||
Amortized Cost | 20,010 | |
Unrealized loss | (980) | (1,655) |
Fair Value | 19,030 | |
Amortized cost and estimated fair values of securities classified as Available-for-Sale (Prior to ASU adoption) | ||
Amortized cost | 23,313 | |
Unrealized loss | $ (980) | (1,655) |
Approximate fair value | $ 21,658 |
Investment Securities - Narrati
Investment Securities - Narratives (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Investment Securities | ||
Available-for-sale securities, at fair value | $ 189,465,000 | |
Proceeds from sale of AFS securities | 0 | $ 0 |
Investment securities pledged | Borrowings with the Federal Reserve Bank | ||
Investment Securities | ||
Available-for-sale securities, at fair value | $ 49,600,000 |
Investment Securities - Net Unr
Investment Securities - Net Unrealized Gain (Loss) (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Investment Securities | ||
Unrealized losses, net | $ (14,804) | $ (18,544) |
Deferred income tax asset | 3,876 | 4,805 |
Unrealized losses, net of deferred income tax assets | $ (10,928) | $ (13,739) |
Investment Securities - Maturit
Investment Securities - Maturities of Debt Securities (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Amortized Cost | |
Within one year | $ 57,476 |
Over one year to five years | 95,163 |
Over five years to ten years | 35,489 |
Total Maturities | 188,128 |
Amortized Cost | 204,269 |
Fair Value | |
Within one year | 56,824 |
Over one year to five years | 88,905 |
Over five years to ten years | 29,888 |
Total Maturities | 175,617 |
Fair Value | 189,465 |
Agency mortgage-backed securities | |
Amortized Cost | |
Without single maturity securities | 13,154 |
Amortized Cost | 13,154 |
Fair Value | |
Without single maturity securities | 11,430 |
Fair Value | 11,430 |
Agency collateralized mortgage obligations | |
Amortized Cost | |
Without single maturity securities | 2,987 |
Amortized Cost | 2,987 |
Fair Value | |
Without single maturity securities | 2,418 |
Fair Value | $ 2,418 |
Investment Securities - Credit
Investment Securities - Credit Loss Evaluation (Details) $ in Thousands | Dec. 31, 2023 USD ($) security | Dec. 31, 2022 USD ($) security |
Number of Securities | ||
Number of Securities | security | 84 | 99 |
Gross Unrealized Losses | ||
Less than 12 months | $ (1,411) | $ (5,078) |
12 months or more | (13,431) | (13,512) |
Total | (14,842) | (18,590) |
Fair Value | ||
Less than 12 months | 16,569 | 79,284 |
12 months or more | 155,633 | 151,803 |
Total | $ 172,202 | $ 231,087 |
U. S. Treasuries | ||
Number of Securities | ||
Number of Securities | security | 15 | 20 |
Gross Unrealized Losses | ||
Less than 12 months | $ (95) | $ (47) |
12 months or more | (2,454) | (5,148) |
Total | (2,549) | (5,195) |
Fair Value | ||
Less than 12 months | 7,884 | 19,958 |
12 months or more | 46,515 | 83,759 |
Total | $ 54,399 | $ 103,717 |
U.S. Government Agencies | ||
Number of Securities | ||
Number of Securities | security | 18 | |
Gross Unrealized Losses | ||
12 months or more | $ (1,730) | |
Total | (1,730) | |
Fair Value | ||
12 months or more | 11,124 | |
Total | $ 11,124 | |
Taxable municipals | ||
Number of Securities | ||
Number of Securities | security | 5 | 14 |
Gross Unrealized Losses | ||
Less than 12 months | $ (382) | |
12 months or more | $ (569) | (1,273) |
Total | (569) | (1,655) |
Fair Value | ||
Less than 12 months | 10,841 | |
12 months or more | 2,418 | 10,817 |
Total | $ 2,418 | $ 21,658 |
Mortgage backed securities | ||
Number of Securities | ||
Number of Securities | security | 13 | 25 |
Gross Unrealized Losses | ||
Less than 12 months | $ (181) | $ (263) |
12 months or more | (799) | (1,722) |
Total | (980) | (1,985) |
Fair Value | ||
Less than 12 months | 1,819 | 2,900 |
12 months or more | 17,211 | 8,932 |
Total | $ 19,030 | $ 11,832 |
Agency collateralized mortgage obligations | ||
Number of Securities | ||
Number of Securities | security | 6 | |
Gross Unrealized Losses | ||
Less than 12 months | $ (54) | |
12 months or more | (622) | |
Total | (676) | |
Fair Value | ||
Less than 12 months | 1,048 | |
12 months or more | 2,025 | |
Total | $ 3,073 | |
Corporate bonds | ||
Number of Securities | ||
Number of Securities | security | 33 | 34 |
Gross Unrealized Losses | ||
Less than 12 months | $ (1,135) | $ (4,332) |
12 months or more | (7,879) | (4,747) |
Total | (9,014) | (9,079) |
Fair Value | ||
Less than 12 months | 6,866 | 44,537 |
12 months or more | 78,365 | 46,270 |
Total | $ 85,231 | $ 90,807 |
Investment Securities - Corpora
Investment Securities - Corporate Bond (Details) - Corporate Bond Securities [Member] $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) security | |
Investment Securities | |
Number of securities without third-party investment grade available | security | 14 |
Securities with a market value | $ | $ 37.9 |
Investment Securities - Deposit
Investment Securities - Depositors Insurance Fund (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Investment Securities | ||
Depositors Insurance Fund stock | $ 139,000 | $ 139,000 |
Investment Securities - Federal
Investment Securities - Federal Home Loan Bank Stock, Federal Reserve Bank Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Investment Securities | ||
Investment account balance in FHLB | $ 14,558 | $ 13,182 |
Shares to be maintained in Federal Reserve Bank | 50% | |
Stock par value (in $ per share) | $ 100 | |
Stock par value to be paid at purchase (i $ per share) | $ 50 | |
Dividends at the statutory rate (in %) | 6% | |
Dividend per share (in $ per share) | $ 1.50 | |
Federal Reserve Stock holdings requirement Change percentage (in %) | 15% | |
Federal Reserve Stock holdings requirement Change in shares (in shares) | 100 | |
Federal Reserve Bank Stock, shares (in shares) | 195,936 | 162,072 |
Federal Reserve Bank stock | $ 10,323 | $ 8,104 |
Investment Securities - Non-Pub
Investment Securities - Non-Public Investments (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||||
Jul. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Apr. 21, 2021 | Feb. 29, 2020 | Oct. 31, 2019 | |
Investment Securities | |||||||
Notes receivable | $ 3,015,956,000 | ||||||
Loan to Holdco to fund the project | $ 3,889,279,000 | ||||||
Commercial | |||||||
Investment Securities | |||||||
Notes receivable | $ 1,811,759,000 | ||||||
Connecticut On-Line Computer Center, Inc. ("COCC") | Common stock | |||||||
Investment Securities | |||||||
Investment shares held | 47 | 43 | |||||
Investment amount | $ 195,000 | $ 175,000 | |||||
Connecticut On-Line Computer Center, Inc. ("COCC") | Series A Preferred stock | |||||||
Investment Securities | |||||||
Investment shares held | 5 | 5 | |||||
Investment amount | $ 75,000 | $ 75,000 | |||||
Jassby Inc | Convertible preferred stock | |||||||
Investment Securities | |||||||
Investment shares held | 320,000 | ||||||
Investment amount | 1,000,000 | 1,000,000 | |||||
Jassby Inc | Convertible debt securities | |||||||
Investment Securities | |||||||
Notes receivable | $ 1,000,000 | ||||||
Interest rate | 5% | ||||||
Reinventure Capital Fund I LP | |||||||
Investment Securities | |||||||
Investment amount | 1,500,000 | 1,000,000 | |||||
Investment cost | 2,000,000 | ||||||
Distributions from investments | $ 1,000,000 | ||||||
Additional capital call / amount invested | 500,000 | ||||||
Massachusetts Housing Equity Fund XXII LLC | |||||||
Investment Securities | |||||||
Investment amount | $ 1,000,000 | 1,000,000 | |||||
Investment percentage | 1.15% | ||||||
Accumulated share of losses and tax credits | $ 662,000 | 662,000 | |||||
Sunwealth Project Pool 20 LLC | |||||||
Investment Securities | |||||||
Investment percentage | 99% | ||||||
Sunwealth Project Pool 20 LLC | Subsidiary, 1892 Investments | |||||||
Investment Securities | |||||||
Investment amount | 1,900,000 | 2,300,000 | |||||
Additional capital call / amount invested | $ 2,500,000 | ||||||
Loan to Holdco to fund the project | 2,500,000 | 2,500,000 | |||||
Sunwealth Project Pool 26 LLC | Subsidiary, 1892 Investments | |||||||
Investment Securities | |||||||
Investment amount | 3,400,000 | 5,000,000 | |||||
Additional capital call / amount invested | 4,200,000 | ||||||
Amount committed | 5,000,000 | ||||||
Refundable advance | 800,000 | ||||||
Patriot Renewable Energy Capital, LLC - Bertoline Project | Subsidiary, 1892 Investments | |||||||
Investment Securities | |||||||
Investment amount | 535,000 | 623,000 | |||||
Investment cost | 656,000 | ||||||
Additional capital call / amount invested | 26,000 | $ 623,000 | |||||
Patriot Renewable Energy Capital, LLC - Maple Crest Project | Subsidiary, 1892 Investments | |||||||
Investment Securities | |||||||
Investment amount | 5,000,000 | ||||||
Additional capital call / amount invested | 1,000,000 | ||||||
LearnLaunch Fund III L.P | |||||||
Investment Securities | |||||||
Investment amount | 650,000 | ||||||
Additional capital call / amount invested | $ 455,000 |
Loans Receivable and ACL (Detai
Loans Receivable and ACL (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Loans Receivable and ACL | |||
Total loans | $ 3,894,209 | ||
Deferred fees, net | (4,930) | ||
Allowance for credit losses | (32,222) | $ (25,028) | |
Net loans | 3,857,057 | ||
Loans Receivable and ACL | |||
Total loans, gross | 3,015,956 | ||
Deferred (fees) costs, net | (511) | ||
Allowance for credit losses | (25,028) | $ (18,415) | |
Net loans | 2,990,417 | ||
Interest income recognized on these PPP loans | 211,973 | 113,760 | |
Reversal of interest income | 37 | ||
Cannabis industry | |||
Loans Receivable and ACL | |||
Total loans | $ 320,500 | $ 58,300 | |
Loans Receivable and ACL | |||
Percentage of loan collateralized by real estate | 80% | 91% | |
Loans collateralized by cannabis | $ 0 | ||
Residential real estate | |||
Loans Receivable and ACL | |||
Total loans | 1,194,745 | ||
Loans Receivable and ACL | |||
Total loans, gross | $ 1,007,662 | ||
Residential real estate | One to four-family residential | |||
Loans Receivable and ACL | |||
Total loans | 1,097,475 | ||
Allowance for credit losses | (1,835) | (3,485) | |
Loans Receivable and ACL | |||
Total loans, gross | 932,436 | ||
Allowance for credit losses | (3,485) | (3,016) | |
Residential real estate | Home equity | |||
Loans Receivable and ACL | |||
Total loans | 97,270 | ||
Allowance for credit losses | (117) | (258) | |
Loans Receivable and ACL | |||
Total loans, gross | 75,226 | ||
Allowance for credit losses | (258) | (175) | |
Commercial | |||
Loans Receivable and ACL | |||
Total loans | 2,494,593 | ||
Loans Receivable and ACL | |||
Total loans, gross | 1,811,759 | ||
Commercial | Commercial real estate | |||
Loans Receivable and ACL | |||
Total loans | 1,174,020 | ||
Loans Receivable and ACL | |||
Total loans, gross | 822,744 | ||
Commercial | Multi-family residential | |||
Loans Receivable and ACL | |||
Total loans | 209,982 | ||
Loans Receivable and ACL | |||
Total loans, gross | 189,279 | ||
Commercial | Commercial real estate | |||
Loans Receivable and ACL | |||
Total loans | 1,384,002 | ||
Allowance for credit losses | (6,076) | (6,538) | |
Loans Receivable and ACL | |||
Total loans, gross | 1,012,023 | ||
Allowance for credit losses | (6,538) | (4,449) | |
Commercial | Construction & Land Development | |||
Loans Receivable and ACL | |||
Total loans | 622,713 | ||
Allowance for credit losses | (7,630) | (3,846) | |
Loans Receivable and ACL | |||
Total loans, gross | 552,375 | ||
Allowance for credit losses | (3,846) | (3,467) | |
Commercial | Commercial and industrial | |||
Loans Receivable and ACL | |||
Total loans | 487,878 | ||
Allowance for credit losses | (10,878) | (8,255) | |
Loans Receivable and ACL | |||
Total loans, gross | 247,361 | ||
Allowance for credit losses | (8,255) | (5,749) | |
Consumer | |||
Loans Receivable and ACL | |||
Total loans | 204,871 | ||
Allowance for credit losses | $ (5,686) | (1,403) | |
Loans Receivable and ACL | |||
Total loans, gross | 196,535 | ||
Allowance for credit losses | $ (1,403) | $ (109) |
Loans Receivable and ACL - Cons
Loans Receivable and ACL - Consumer loan pools (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Loans Receivable and ACL | ||
Loans receivable | $ 3,889,279 | |
Consumer | ||
Loans Receivable and ACL | ||
Loans purchased | 34,200 | $ 187,300 |
Gross Loan | 196,784 | 198,587 |
Premium (Discount) | 3,998 | 4,972 |
Loans receivable | 192,786 | 193,615 |
Consumer | Student loans | ||
Loans Receivable and ACL | ||
Gross Loan | 8,989 | 11,679 |
Premium (Discount) | (49) | (61) |
Loans receivable | 9,038 | 11,740 |
Consumer | Boat and RV loans | ||
Loans Receivable and ACL | ||
Gross Loan | 58,483 | 40,270 |
Premium (Discount) | (1,422) | (925) |
Loans receivable | 59,905 | 41,195 |
Consumer | Automobile loans | ||
Loans Receivable and ACL | ||
Gross Loan | 14,662 | 15,498 |
Loans receivable | 14,662 | 15,498 |
Consumer | Solar panel loans | ||
Loans Receivable and ACL | ||
Gross Loan | 61,430 | 67,994 |
Premium (Discount) | 5,443 | 5,914 |
Loans receivable | 55,987 | 62,080 |
Consumer | Home improvement loans | ||
Loans Receivable and ACL | ||
Gross Loan | 53,220 | 63,146 |
Premium (Discount) | 26 | 44 |
Loans receivable | $ 53,194 | $ 63,102 |
Loans Receivable and ACL - Agin
Loans Receivable and ACL - Aging of the Amortized Cost of Loans Receivables (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Loans Receivable and ACL | ||
Total loans, gross | $ 3,894,209 | |
Nonaccrual | 10,798 | |
Total loans, gross | $ 3,015,956 | |
Loans on Nonaccrual | 13,022 | |
Current Loans | ||
Loans Receivable and ACL | ||
Total loans, gross | 3,873,400 | |
Total loans, gross | 3,003,122 | |
30-59 Days Past Due | ||
Loans Receivable and ACL | ||
Total loans, gross | 8,937 | |
Total loans, gross | 7,957 | |
60-89 Days Past Due | ||
Loans Receivable and ACL | ||
Total loans, gross | 1,074 | |
Total loans, gross | 926 | |
90 Days or More | ||
Loans Receivable and ACL | ||
Total loans, gross | 3,951 | |
Residential real estate | ||
Loans Receivable and ACL | ||
Total loans, gross | 1,194,745 | |
Total loans, gross | 1,007,662 | |
Residential real estate | One to four-family residential | ||
Loans Receivable and ACL | ||
Total loans, gross | 1,097,475 | |
Nonaccrual | 4,100 | |
Total loans, gross | 932,436 | |
Loans on Nonaccrual | 5,579 | |
Residential real estate | One to four-family residential | Current Loans | ||
Loans Receivable and ACL | ||
Total loans, gross | 1,091,472 | |
Total loans, gross | 929,323 | |
Residential real estate | One to four-family residential | 30-59 Days Past Due | ||
Loans Receivable and ACL | ||
Total loans, gross | 1,903 | |
Total loans, gross | 1,449 | |
Residential real estate | One to four-family residential | 90 Days or More | ||
Loans Receivable and ACL | ||
Total loans, gross | 1,664 | |
Residential real estate | Home equity | ||
Loans Receivable and ACL | ||
Total loans, gross | 97,270 | |
Nonaccrual | 590 | |
Total loans, gross | 75,226 | |
Loans on Nonaccrual | 818 | |
Residential real estate | Home equity | Current Loans | ||
Loans Receivable and ACL | ||
Total loans, gross | 96,327 | |
Total loans, gross | 74,008 | |
Residential real estate | Home equity | 30-59 Days Past Due | ||
Loans Receivable and ACL | ||
Total loans, gross | 288 | |
Total loans, gross | 728 | |
Residential real estate | Home equity | 60-89 Days Past Due | ||
Loans Receivable and ACL | ||
Total loans, gross | 65 | |
Total loans, gross | 490 | |
Commercial | ||
Loans Receivable and ACL | ||
Total loans, gross | 2,494,593 | |
Total loans, gross | 1,811,759 | |
Commercial | Commercial real estate | ||
Loans Receivable and ACL | ||
Total loans, gross | 1,384,002 | |
Nonaccrual | 422 | |
Total loans, gross | 1,012,023 | |
Loans on Nonaccrual | 670 | |
Commercial | Commercial real estate | Current Loans | ||
Loans Receivable and ACL | ||
Total loans, gross | 1,380,845 | |
Total loans, gross | 1,007,110 | |
Commercial | Commercial real estate | 30-59 Days Past Due | ||
Loans Receivable and ACL | ||
Total loans, gross | 2,735 | |
Total loans, gross | 4,243 | |
Commercial | Commercial real estate | 90 Days or More | ||
Loans Receivable and ACL | ||
Total loans, gross | 670 | |
Commercial | Construction & land development | ||
Loans Receivable and ACL | ||
Total loans, gross | 622,713 | |
Nonaccrual | 10 | |
Total loans, gross | 552,375 | |
Loans on Nonaccrual | 10 | |
Commercial | Construction & land development | Current Loans | ||
Loans Receivable and ACL | ||
Total loans, gross | 622,703 | |
Total loans, gross | 552,375 | |
Commercial | Commercial and industrial | ||
Loans Receivable and ACL | ||
Total loans, gross | 487,878 | |
Nonaccrual | 4,138 | |
Total loans, gross | 247,361 | |
Loans on Nonaccrual | 5,086 | |
Commercial | Commercial and industrial | Current Loans | ||
Loans Receivable and ACL | ||
Total loans, gross | 483,737 | |
Total loans, gross | 246,523 | |
Commercial | Commercial and industrial | 30-59 Days Past Due | ||
Loans Receivable and ACL | ||
Total loans, gross | 2 | |
Total loans, gross | 38 | |
Commercial | Commercial and industrial | 60-89 Days Past Due | ||
Loans Receivable and ACL | ||
Total loans, gross | 1 | |
Commercial | Commercial and industrial | 90 Days or More | ||
Loans Receivable and ACL | ||
Total loans, gross | 800 | |
Consumer | ||
Loans Receivable and ACL | ||
Total loans, gross | 204,871 | |
Nonaccrual | 1,538 | |
Total loans, gross | 196,535 | |
Loans on Nonaccrual | 859 | |
Consumer | Current Loans | ||
Loans Receivable and ACL | ||
Total loans, gross | 198,316 | |
Total loans, gross | 193,783 | |
Consumer | 30-59 Days Past Due | ||
Loans Receivable and ACL | ||
Total loans, gross | 4,009 | |
Total loans, gross | 1,499 | |
Consumer | 60-89 Days Past Due | ||
Loans Receivable and ACL | ||
Total loans, gross | $ 1,008 | |
Total loans, gross | 436 | |
Consumer | 90 Days or More | ||
Loans Receivable and ACL | ||
Total loans, gross | $ 817 |
Loans Receivable and ACL - Nona
Loans Receivable and ACL - Nonaccrual Loans (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Loans Receivable and ACL | ||
Nonaccrual Loans with No ACL | $ 7,036 | |
Nonaccrual Loans with an ACL | 3,762 | |
Total Nonaccrual Loans | 10,798 | |
Incurred Loss Model - Nonaccrual Loans | $ 13,022 | |
Residential real estate | One to four-family residential | ||
Loans Receivable and ACL | ||
Nonaccrual Loans with No ACL | 4,100 | |
Total Nonaccrual Loans | 4,100 | |
Incurred Loss Model - Nonaccrual Loans | 5,579 | |
Residential real estate | Home equity | ||
Loans Receivable and ACL | ||
Nonaccrual Loans with No ACL | 590 | |
Total Nonaccrual Loans | 590 | |
Incurred Loss Model - Nonaccrual Loans | 818 | |
Commercial | Commercial | ||
Loans Receivable and ACL | ||
Nonaccrual Loans with No ACL | 422 | |
Total Nonaccrual Loans | 422 | |
Incurred Loss Model - Nonaccrual Loans | 670 | |
Commercial | Construction & land development | ||
Loans Receivable and ACL | ||
Nonaccrual Loans with No ACL | 10 | |
Total Nonaccrual Loans | 10 | |
Incurred Loss Model - Nonaccrual Loans | 10 | |
Commercial | Commercial and industrial | ||
Loans Receivable and ACL | ||
Nonaccrual Loans with No ACL | 376 | |
Nonaccrual Loans with an ACL | 3,762 | |
Total Nonaccrual Loans | 4,138 | |
Incurred Loss Model - Nonaccrual Loans | 5,086 | |
Consumer | ||
Loans Receivable and ACL | ||
Nonaccrual Loans with No ACL | 1,538 | |
Total Nonaccrual Loans | $ 1,538 | |
Incurred Loss Model - Nonaccrual Loans | $ 859 |
Loans Receivable and ACL - Accr
Loans Receivable and ACL - Accrued Interest Receivables Written Off (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Loans Receivable and ACL | |
Loans to value percentage, excluded from individually evaluated loans | 75% |
Loans Receivable and ACL - Loan
Loans Receivable and ACL - Loans Receivable by Internal Risk Grade by Year of Origination (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Term Loans Amortized Cost Basis by Origination Year | |
2023 | $ 793,786 |
2022 | 1,171,431 |
2021 | 565,913 |
2020 | 291,477 |
2019 | 251,400 |
Prior | 390,104 |
Revolving Loans | 430,098 |
Total | 3,894,209 |
Current period gross charge-offs | |
2023 | 42 |
2022 | 1,524 |
2021 | 1,163 |
2020 | 311 |
2019 | 789 |
Prior | 709 |
Revolving Loans | 7 |
Total | 4,545 |
Pass | |
Term Loans Amortized Cost Basis by Origination Year | |
2023 | 793,786 |
2022 | 1,171,431 |
2021 | 565,663 |
2020 | 291,477 |
2019 | 245,098 |
Prior | 379,245 |
Revolving Loans | 425,433 |
Total | 3,872,133 |
Special Mention | |
Term Loans Amortized Cost Basis by Origination Year | |
2021 | 250 |
2019 | 6,183 |
Prior | 6,189 |
Total | 12,622 |
Substandard | |
Term Loans Amortized Cost Basis by Origination Year | |
2019 | 119 |
Prior | 4,660 |
Revolving Loans | 4,665 |
Total | 9,444 |
Doubtful | |
Term Loans Amortized Cost Basis by Origination Year | |
Prior | 10 |
Total | 10 |
Residential real estate | |
Term Loans Amortized Cost Basis by Origination Year | |
2023 | 152,824 |
2022 | 272,448 |
2021 | 256,666 |
2020 | 128,181 |
2019 | 78,739 |
Prior | 175,552 |
Revolving Loans | 130,335 |
Total | 1,194,745 |
Current period gross charge-offs | |
Prior | 379 |
Total | 379 |
Residential real estate | Pass | |
Term Loans Amortized Cost Basis by Origination Year | |
2023 | 152,824 |
2022 | 272,448 |
2021 | 256,666 |
2020 | 128,181 |
2019 | 78,739 |
Prior | 174,654 |
Revolving Loans | 130,256 |
Total | 1,193,768 |
Residential real estate | Substandard | |
Term Loans Amortized Cost Basis by Origination Year | |
Prior | 898 |
Revolving Loans | 79 |
Total | 977 |
Commercial | |
Term Loans Amortized Cost Basis by Origination Year | |
Total | 2,494,593 |
Commercial | Commercial | |
Term Loans Amortized Cost Basis by Origination Year | |
2023 | 388,563 |
2022 | 421,419 |
2021 | 81,913 |
2020 | 124,461 |
2019 | 148,275 |
Prior | 185,427 |
Revolving Loans | 33,944 |
Total | 1,384,002 |
Commercial | Commercial | Pass | |
Term Loans Amortized Cost Basis by Origination Year | |
2023 | 388,563 |
2022 | 421,419 |
2021 | 81,913 |
2020 | 124,461 |
2019 | 142,092 |
Prior | 179,713 |
Revolving Loans | 33,944 |
Total | 1,372,105 |
Commercial | Commercial | Special Mention | |
Term Loans Amortized Cost Basis by Origination Year | |
2019 | 6,183 |
Prior | 5,714 |
Total | 11,897 |
Commercial | Construction & Land Development | |
Term Loans Amortized Cost Basis by Origination Year | |
2023 | 157,270 |
2022 | 305,558 |
2021 | 127,720 |
2020 | 20,929 |
2019 | 10,333 |
Prior | 10 |
Revolving Loans | 893 |
Total | 622,713 |
Commercial | Construction & Land Development | Pass | |
Term Loans Amortized Cost Basis by Origination Year | |
2023 | 157,270 |
2022 | 305,558 |
2021 | 127,720 |
2020 | 20,929 |
2019 | 10,333 |
Revolving Loans | 893 |
Total | 622,703 |
Commercial | Construction & Land Development | Doubtful | |
Term Loans Amortized Cost Basis by Origination Year | |
Prior | 10 |
Total | 10 |
Commercial | Commercial and industrial | |
Term Loans Amortized Cost Basis by Origination Year | |
2023 | 58,676 |
2022 | 88,286 |
2021 | 46,210 |
2020 | 8,080 |
2019 | 3,157 |
Prior | 20,415 |
Revolving Loans | 263,054 |
Total | 487,878 |
Current period gross charge-offs | |
2019 | 570 |
Prior | 109 |
Total | 679 |
Commercial | Commercial and industrial | Pass | |
Term Loans Amortized Cost Basis by Origination Year | |
2023 | 58,676 |
2022 | 88,286 |
2021 | 45,960 |
2020 | 8,080 |
2019 | 3,038 |
Prior | 16,178 |
Revolving Loans | 258,468 |
Total | 478,686 |
Commercial | Commercial and industrial | Special Mention | |
Term Loans Amortized Cost Basis by Origination Year | |
2021 | 250 |
Prior | 475 |
Total | 725 |
Commercial | Commercial and industrial | Substandard | |
Term Loans Amortized Cost Basis by Origination Year | |
2019 | 119 |
Prior | 3,762 |
Revolving Loans | 4,586 |
Total | 8,467 |
Consumer | |
Term Loans Amortized Cost Basis by Origination Year | |
2023 | 36,453 |
2022 | 83,720 |
2021 | 53,404 |
2020 | 9,826 |
2019 | 10,896 |
Prior | 8,700 |
Revolving Loans | 1,872 |
Total | 204,871 |
Current period gross charge-offs | |
2023 | 42 |
2022 | 1,524 |
2021 | 1,163 |
2020 | 311 |
2019 | 219 |
Prior | 221 |
Revolving Loans | 7 |
Total | 3,487 |
Consumer | Pass | |
Term Loans Amortized Cost Basis by Origination Year | |
2023 | 36,453 |
2022 | 83,720 |
2021 | 53,404 |
2020 | 9,826 |
2019 | 10,896 |
Prior | 8,700 |
Revolving Loans | 1,872 |
Total | $ 204,871 |
Loans Receivable and ACL - Chan
Loans Receivable and ACL - Change in the ACL (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Jan. 01, 2023 | |
Change in the ACL by major loan segment | |||
Beginning balance | $ 25,028 | ||
Allowance for credit losses | 32,222 | $ 25,028 | |
Provision for credit losses | 9,657 | 6,700 | |
Charge offs | (4,545) | ||
Recoveries of loans previously charged off | 923 | ||
Ending balance | 32,222 | 25,028 | |
Adoption of ASU 2016-13 | ASU 2016-13 | |||
Change in the ACL by major loan segment | |||
Allowance for credit losses | 1,159 | $ 1,159 | |
Ending balance | 1,159 | ||
Residential real estate | |||
Change in the ACL by major loan segment | |||
Charge offs | (379) | ||
Residential real estate | One to four-family residential | |||
Change in the ACL by major loan segment | |||
Beginning balance | 3,485 | ||
Allowance for credit losses | 1,835 | 3,485 | |
Provision for credit losses | (1,537) | ||
Charge offs | (379) | ||
Ending balance | 1,835 | 3,485 | |
Residential real estate | One to four-family residential | Adoption of ASU 2016-13 | ASU 2016-13 | |||
Change in the ACL by major loan segment | |||
Allowance for credit losses | 266 | ||
Ending balance | 266 | ||
Residential real estate | Home equity | |||
Change in the ACL by major loan segment | |||
Beginning balance | 258 | ||
Allowance for credit losses | 117 | 258 | |
Provision for credit losses | (154) | ||
Ending balance | 117 | 258 | |
Residential real estate | Home equity | Adoption of ASU 2016-13 | ASU 2016-13 | |||
Change in the ACL by major loan segment | |||
Allowance for credit losses | 13 | ||
Ending balance | 13 | ||
Commercial | Commercial real estate | |||
Change in the ACL by major loan segment | |||
Beginning balance | 6,538 | ||
Allowance for credit losses | 6,076 | 6,538 | |
Provision for credit losses | (1,332) | ||
Recoveries of loans previously charged off | 48 | ||
Ending balance | 6,076 | 6,538 | |
Commercial | Commercial real estate | Adoption of ASU 2016-13 | ASU 2016-13 | |||
Change in the ACL by major loan segment | |||
Allowance for credit losses | 822 | ||
Ending balance | 822 | ||
Commercial | Construction & Land Development | |||
Change in the ACL by major loan segment | |||
Beginning balance | 3,846 | ||
Allowance for credit losses | 7,630 | 3,846 | |
Provision for credit losses | 4,030 | ||
Ending balance | 7,630 | 3,846 | |
Commercial | Construction & Land Development | Adoption of ASU 2016-13 | ASU 2016-13 | |||
Change in the ACL by major loan segment | |||
Allowance for credit losses | (246) | ||
Ending balance | (246) | ||
Commercial | Commercial and industrial | |||
Change in the ACL by major loan segment | |||
Beginning balance | 8,255 | ||
Allowance for credit losses | 10,878 | 8,255 | |
Provision for credit losses | 2,370 | ||
Charge offs | (679) | ||
Ending balance | 10,878 | 8,255 | |
Commercial | Commercial and industrial | Adoption of ASU 2016-13 | ASU 2016-13 | |||
Change in the ACL by major loan segment | |||
Allowance for credit losses | 932 | ||
Ending balance | 932 | ||
Consumer | |||
Change in the ACL by major loan segment | |||
Beginning balance | 1,403 | ||
Allowance for credit losses | 5,686 | 1,403 | |
Provision for credit losses | 6,280 | ||
Charge offs | (3,487) | ||
Recoveries of loans previously charged off | 875 | ||
Ending balance | 5,686 | 1,403 | |
Consumer | Adoption of ASU 2016-13 | ASU 2016-13 | |||
Change in the ACL by major loan segment | |||
Allowance for credit losses | 615 | ||
Ending balance | 615 | ||
Unallocated | |||
Change in the ACL by major loan segment | |||
Beginning balance | 1,243 | ||
Allowance for credit losses | 1,243 | ||
Ending balance | $ 1,243 | ||
Unallocated | Adoption of ASU 2016-13 | ASU 2016-13 | |||
Change in the ACL by major loan segment | |||
Allowance for credit losses | (1,243) | ||
Ending balance | $ (1,243) |
Loans Receivable and ACL - Coll
Loans Receivable and ACL - Collateral-Dependent Loans (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Loans Receivable and ACL | |
Amortized cost of collateral-dependent loans | $ 9,430 |
Residential real estate | One to four-family residential | |
Loans Receivable and ACL | |
Amortized cost of collateral-dependent loans | 977 |
Commercial | Commercial and industrial | |
Loans Receivable and ACL | |
Amortized cost of collateral-dependent loans | 10 |
Consumer | |
Loans Receivable and ACL | |
Amortized cost of collateral-dependent loans | $ 8,443 |
Loans Receivable and ACL - Allo
Loans Receivable and ACL - Allowance for Credit Losses - Unfunded Commitments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Jan. 01, 2023 | |
Allowance for credit losses for unfunded loan commitments | ||
Allowance for credit losses for unfunded loan commitments | $ 6,014 | |
Activity in the allowance for credit losses for unfunded loan commitments | ||
Beginning balance | 0 | |
(Reversal of) provision for unfunded commitments | 4,228 | |
Ending balance | 6,014 | |
Adoption of ASU 2016-13 | ||
Activity in the allowance for credit losses for unfunded loan commitments | ||
(Reversal of) provision for unfunded commitments | 4,200 | |
Adoption of ASU 2016-13 | ASU 2016-13 | ||
Allowance for credit losses for unfunded loan commitments | ||
Allowance for credit losses for unfunded loan commitments | 1,786 | $ (1,786) |
Activity in the allowance for credit losses for unfunded loan commitments | ||
Beginning balance | (1,800) | |
(Reversal of) provision for unfunded commitments | 333 | |
Ending balance | $ 1,786 |
Loans Receivable and ACL - Al_2
Loans Receivable and ACL - Allowance for Credit Losses - Loan Portfolio Individually and Collectively Evaluated for Impairment (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Loans Receivable and ACL | ||
Allowance for loans individually evaluated for impairment | $ 5,420 | |
Allowance for loans collectively evaluated for impairment | 19,608 | |
Total Allowance for Loan Loss | 25,028 | $ 18,415 |
Loans individually evaluated for impairment | 14,380 | |
Loans collectively evaluated for impairment | 3,001,576 | |
Net Loan | 3,015,956 | |
Residential Portfolio Segment [Member] | ||
Loans Receivable and ACL | ||
Net Loan | 1,007,662 | |
Residential Portfolio Segment [Member] | One to Four Family Residential | ||
Loans Receivable and ACL | ||
Allowance for loans individually evaluated for impairment | 422 | |
Allowance for loans collectively evaluated for impairment | 3,063 | |
Total Allowance for Loan Loss | 3,485 | 3,016 |
Loans individually evaluated for impairment | 1,809 | |
Loans collectively evaluated for impairment | 930,627 | |
Net Loan | 932,436 | |
Residential Portfolio Segment [Member] | Home Equity | ||
Loans Receivable and ACL | ||
Allowance for loans collectively evaluated for impairment | 258 | |
Total Allowance for Loan Loss | 258 | 175 |
Loans individually evaluated for impairment | 80 | |
Loans collectively evaluated for impairment | 75,146 | |
Net Loan | 75,226 | |
Commercial | ||
Loans Receivable and ACL | ||
Net Loan | 1,811,759 | |
Commercial | Commercial Real Estate | ||
Loans Receivable and ACL | ||
Allowance for loans collectively evaluated for impairment | 6,538 | |
Total Allowance for Loan Loss | 6,538 | |
Loans individually evaluated for impairment | 3,360 | |
Loans collectively evaluated for impairment | 1,008,663 | |
Net Loan | 1,012,023 | |
Commercial | Construction & Land Development | ||
Loans Receivable and ACL | ||
Allowance for loans collectively evaluated for impairment | 3,846 | |
Total Allowance for Loan Loss | 3,846 | 3,467 |
Loans individually evaluated for impairment | 10 | |
Loans collectively evaluated for impairment | 552,365 | |
Net Loan | 552,375 | |
Commercial | Commercial loans | ||
Loans Receivable and ACL | ||
Allowance for loans individually evaluated for impairment | 4,998 | |
Allowance for loans collectively evaluated for impairment | 3,257 | |
Total Allowance for Loan Loss | 8,255 | 5,749 |
Loans individually evaluated for impairment | 9,121 | |
Loans collectively evaluated for impairment | 238,240 | |
Net Loan | 247,361 | |
Consumer Portfolio Segment [Member] | ||
Loans Receivable and ACL | ||
Allowance for loans collectively evaluated for impairment | 1,403 | |
Total Allowance for Loan Loss | 1,403 | 109 |
Loans collectively evaluated for impairment | 196,535 | |
Net Loan | 196,535 | |
Unallocated Financing Receivables [Member] | ||
Loans Receivable and ACL | ||
Allowance for loans collectively evaluated for impairment | 1,243 | |
Total Allowance for Loan Loss | $ 1,243 | $ 1,450 |
Loans Receivable and ACL - Summ
Loans Receivable and ACL - Summary of Impaired Loans (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Impaired loans with no related allowance recorded: | |
Recorded Investment in Impaired Loans | $ 5,711 |
Unpaid Principal Balance | 14,479 |
Net Impaired Loan Balance | 5,711 |
Impaired loans with an allowance recorded: | |
Recorded Investment in Impaired Loans | 8,669 |
Unpaid Principal Balance | 8,669 |
Related Allowance for Loan Losses | 5,420 |
Net Impaired Loan Balance | 3,249 |
Total impaired loans: | |
Recorded Investment in Impaired Loans | 14,380 |
Unpaid Principal Balance | 23,148 |
Related Allowance for Loan Losses | 5,420 |
Net Impaired Loan Balance | 8,960 |
Residential Portfolio Segment [Member] | One to four-family residential | |
Impaired loans with no related allowance recorded: | |
Recorded Investment in Impaired Loans | 1,387 |
Unpaid Principal Balance | 1,912 |
Net Impaired Loan Balance | 1,387 |
Impaired loans with an allowance recorded: | |
Recorded Investment in Impaired Loans | 422 |
Unpaid Principal Balance | 422 |
Related Allowance for Loan Losses | 422 |
Total impaired loans: | |
Recorded Investment in Impaired Loans | 1,809 |
Unpaid Principal Balance | 2,334 |
Related Allowance for Loan Losses | 422 |
Net Impaired Loan Balance | 1,387 |
Residential Portfolio Segment [Member] | Home equity | |
Impaired loans with no related allowance recorded: | |
Recorded Investment in Impaired Loans | 80 |
Unpaid Principal Balance | 80 |
Net Impaired Loan Balance | 80 |
Total impaired loans: | |
Recorded Investment in Impaired Loans | 80 |
Unpaid Principal Balance | 80 |
Net Impaired Loan Balance | 80 |
Commercial | Commercial real estate | |
Impaired loans with no related allowance recorded: | |
Recorded Investment in Impaired Loans | 3,360 |
Unpaid Principal Balance | 9,178 |
Net Impaired Loan Balance | 3,360 |
Total impaired loans: | |
Recorded Investment in Impaired Loans | 3,360 |
Unpaid Principal Balance | 9,178 |
Net Impaired Loan Balance | 3,360 |
Commercial | Construction & land development | |
Impaired loans with no related allowance recorded: | |
Recorded Investment in Impaired Loans | 10 |
Unpaid Principal Balance | 640 |
Net Impaired Loan Balance | 10 |
Total impaired loans: | |
Recorded Investment in Impaired Loans | 10 |
Unpaid Principal Balance | 640 |
Net Impaired Loan Balance | 10 |
Commercial | Commercial and industrial | |
Impaired loans with no related allowance recorded: | |
Recorded Investment in Impaired Loans | 874 |
Unpaid Principal Balance | 2,669 |
Net Impaired Loan Balance | 874 |
Impaired loans with an allowance recorded: | |
Recorded Investment in Impaired Loans | 8,247 |
Unpaid Principal Balance | 8,247 |
Related Allowance for Loan Losses | 4,998 |
Net Impaired Loan Balance | 3,249 |
Total impaired loans: | |
Recorded Investment in Impaired Loans | 9,121 |
Unpaid Principal Balance | 10,916 |
Related Allowance for Loan Losses | 4,998 |
Net Impaired Loan Balance | $ 4,123 |
Loans Receivable and ACL - Addi
Loans Receivable and ACL - Additional Information about Impaired Loans (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Loans Receivable and ACL | |
Average recorded investment in impaired loans during the period | $ 13,874 |
Related amount of interest income recognized during the period that the loans were impaired: | |
Total recognized | 683 |
Amount recognized using a cash-basis method of accounting | 367 |
Residential Portfolio Segment [Member] | One to four-family residential | |
Loans Receivable and ACL | |
Average recorded investment in impaired loans during the period | 1,633 |
Residential Portfolio Segment [Member] | Home equity | |
Loans Receivable and ACL | |
Average recorded investment in impaired loans during the period | 16 |
Commercial | Commercial real estate | |
Loans Receivable and ACL | |
Average recorded investment in impaired loans during the period | 3,413 |
Commercial | Construction & land development | |
Loans Receivable and ACL | |
Average recorded investment in impaired loans during the period | 10 |
Commercial | Commercial and industrial | |
Loans Receivable and ACL | |
Average recorded investment in impaired loans during the period | $ 8,802 |
Loans Receivable and ACL - Trou
Loans Receivable and ACL - Troubled Debt Restructurings (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Loans Receivable and ACL | |
Troubled debt restructurings (TDRs) | $ 12,066 |
Loans modified as TDRs | 0 |
TDRs that defaulted in the first twelve months after restructuring | 0 |
Performing Financial Instruments [Member] | |
Loans Receivable and ACL | |
Troubled debt restructurings (TDRs) | $ 8,304 |
Nonperforming Financial Instruments [Member] | |
Loans Receivable and ACL | |
Troubled debt restructurings (TDRs) | $ 3,762 |
Loans Receivable and ACL - Ch_2
Loans Receivable and ACL - Change in the Allowance for Loan Losses by Loan Type (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Change in the allowance for loan losses by loan type | |
Beginning balance | $ 18,415 |
Provision for loan losses | 6,700 |
Charge offs | (322) |
Recoveries of loans previously charged off | 235 |
Ending balance | 25,028 |
Residential real estate | One to four-family residential | |
Change in the allowance for loan losses by loan type | |
Beginning balance | 3,016 |
Provision for loan losses | 471 |
Charge offs | (35) |
Recoveries of loans previously charged off | 33 |
Ending balance | 3,485 |
Residential real estate | Home equity | |
Change in the allowance for loan losses by loan type | |
Beginning balance | 175 |
Provision for loan losses | 83 |
Ending balance | 258 |
Commercial | Commercial | |
Change in the allowance for loan losses by loan type | |
Beginning balance | 4,449 |
Provision for loan losses | 2,041 |
Recoveries of loans previously charged off | 48 |
Ending balance | 6,538 |
Commercial | Construction & land development | |
Change in the allowance for loan losses by loan type | |
Beginning balance | 3,467 |
Provision for loan losses | 379 |
Ending balance | 3,846 |
Commercial | Commercial and industrial | |
Change in the allowance for loan losses by loan type | |
Beginning balance | 5,749 |
Provision for loan losses | 2,506 |
Ending balance | 8,255 |
Consumer | |
Change in the allowance for loan losses by loan type | |
Beginning balance | 109 |
Provision for loan losses | 1,427 |
Charge offs | (287) |
Recoveries of loans previously charged off | 154 |
Ending balance | 1,403 |
Unallocated | |
Change in the allowance for loan losses by loan type | |
Beginning balance | 1,450 |
Provision for loan losses | (207) |
Ending balance | $ 1,243 |
Loans Receivable and ACL - Lo_2
Loans Receivable and ACL - Loans by Risk Rating Category (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Loans Receivable and ACL | |
Notes receivable | $ 3,015,956 |
Pass | |
Loans Receivable and ACL | |
Notes receivable | 2,986,705 |
Special Mention | |
Loans Receivable and ACL | |
Notes receivable | 18,709 |
Substandard | |
Loans Receivable and ACL | |
Notes receivable | 10,532 |
Doubtful | |
Loans Receivable and ACL | |
Notes receivable | 10 |
Residential real estate | |
Loans Receivable and ACL | |
Notes receivable | 1,007,662 |
Residential real estate | Pass | |
Loans Receivable and ACL | |
Notes receivable | 1,006,275 |
Residential real estate | Substandard | |
Loans Receivable and ACL | |
Notes receivable | 1,387 |
Consumer | |
Loans Receivable and ACL | |
Notes receivable | 196,535 |
Consumer | Pass | |
Loans Receivable and ACL | |
Notes receivable | 196,535 |
Commercial | |
Loans Receivable and ACL | |
Notes receivable | 1,811,759 |
Commercial | Commercial real estate | |
Loans Receivable and ACL | |
Notes receivable | 822,744 |
Commercial | Commercial real estate | |
Loans Receivable and ACL | |
Notes receivable | 1,012,023 |
Commercial | Commercial real estate | Pass | |
Loans Receivable and ACL | |
Notes receivable | 998,788 |
Commercial | Commercial real estate | Special Mention | |
Loans Receivable and ACL | |
Notes receivable | 13,235 |
Commercial | Construction & land development | |
Loans Receivable and ACL | |
Notes receivable | 552,375 |
Commercial | Construction & land development | Pass | |
Loans Receivable and ACL | |
Notes receivable | 552,365 |
Commercial | Construction & land development | Doubtful | |
Loans Receivable and ACL | |
Notes receivable | 10 |
Commercial | Commercial and industrial | |
Loans Receivable and ACL | |
Notes receivable | 247,361 |
Commercial | Commercial and industrial | Pass | |
Loans Receivable and ACL | |
Notes receivable | 232,742 |
Commercial | Commercial and industrial | Special Mention | |
Loans Receivable and ACL | |
Notes receivable | 5,474 |
Commercial | Commercial and industrial | Substandard | |
Loans Receivable and ACL | |
Notes receivable | $ 9,145 |
Mortgage Banking - Loan Sales_3
Mortgage Banking - Loan Sales and Servicing (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Mortgage Banking - Loan Sales and Servicing | ||
Aggregate outstanding unpaid principal balance of mortgage loans | $ 215,700 | $ 231,400 |
Gains on loans sold, including recognition of mortgage servicing rights | 29,000 | 60,000 |
Schedule of mortgage servicing assets, including the final carrying value | ||
Balance at the beginning of the year | 2,298 | 2,735 |
Servicing obligations that result from transfers of financial assets | 25 | 14 |
Amortization | (273) | (451) |
Balance at the end of the year | 2,050 | $ 2,298 |
Impairment | $ 0 |
Premises and Equipment - Summar
Premises and Equipment - Summary of Premises and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Premises and Equipment | ||
Premises and Equipment, Gross | $ 62,064 | $ 59,214 |
Less accumulated depreciation | (26,533) | (23,870) |
Total | 35,531 | 35,344 |
Depreciation expense | 2,700 | 2,400 |
Land | ||
Premises and Equipment | ||
Premises and Equipment, Gross | 4,631 | 4,631 |
Land improvements | ||
Premises and Equipment | ||
Premises and Equipment, Gross | $ 2,727 | 2,727 |
Land improvements | Minimum | ||
Premises and Equipment | ||
Expected Useful Lives | 7 years | |
Land improvements | Maximum | ||
Premises and Equipment | ||
Expected Useful Lives | 20 years | |
Leasehold improvements | ||
Premises and Equipment | ||
Premises and Equipment, Gross | $ 13,017 | 12,308 |
Property, Plant, and Equipment, Useful Life, Term, Description [Extensible Enumeration] | us-gaap:UsefulLifeTermOfLeaseMember | |
Buildings and improvements | ||
Premises and Equipment | ||
Premises and Equipment, Gross | $ 22,478 | 21,171 |
Buildings and improvements | Minimum | ||
Premises and Equipment | ||
Expected Useful Lives | 20 years | |
Buildings and improvements | Maximum | ||
Premises and Equipment | ||
Expected Useful Lives | 50 years | |
Furniture, fixtures, and equipment | ||
Premises and Equipment | ||
Premises and Equipment, Gross | $ 19,211 | $ 18,377 |
Furniture, fixtures, and equipment | Minimum | ||
Premises and Equipment | ||
Expected Useful Lives | 3 years | |
Furniture, fixtures, and equipment | Maximum | ||
Premises and Equipment | ||
Expected Useful Lives | 10 years |
Lease Commitments - Narratives
Lease Commitments - Narratives (Details) | 12 Months Ended |
Dec. 31, 2023 item | |
Lease Commitments | |
Number of building and land lease agreements | 7 |
Options to extend the leases | true |
Minimum | |
Lease Commitments | |
Operating leases, remaining lease terms | 12 years |
Maximum | |
Lease Commitments | |
Operating leases, remaining lease terms | 25 years |
Renewal term of lease | 10 years |
Lease Commitments - Lease Right
Lease Commitments - Lease Right-of-Use Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Lease Commitments | ||
Operating lease right-of-use assets | $ 11,540 | $ 11,540 |
Less accumulated amortization | (992) | (563) |
Operating lease right-of-use assets, net | 10,548 | 10,977 |
Operating lease liabilities | $ 10,773 | $ 11,049 |
Weighted average remaining term (years) | 19 years | 20 years |
Weighted average discount rate | 4.38% | 4.38% |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Prepaid Expense and Other Assets | Prepaid Expense and Other Assets |
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Accrued Liabilities and Other Liabilities | Accrued Liabilities and Other Liabilities |
Lease Commitments - Future Mini
Lease Commitments - Future Minimum Lease Payments Under the Terms of the Above Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Future minimum lease payments under terms of leases | ||
2024 | $ 765 | |
2025 | 787 | |
2026 | 808 | |
2027 | 825 | |
2028 and thereafter | 835 | |
Thereafter | 12,846 | |
Lease obligations | 16,866 | |
Less unamortized discount | (6,093) | |
Recorded present value of lease obligations | $ 10,773 | $ 11,049 |
Lease Commitments - Discount Ra
Lease Commitments - Discount Rates and Total Lease Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Lease Commitments | ||
Total lease expense | $ 938,000 | $ 630,000 |
Minimum | ||
Lease Commitments | ||
Discount rates imputed on the lease obligations | 3.01% | |
Maximum | ||
Lease Commitments | ||
Discount rates imputed on the lease obligations | 5.29% |
Deposits - Summary of Deposits
Deposits - Summary of Deposits (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Transactional accounts: | ||
Noninterest-bearing demand deposits | $ 528,409 | $ 445,518 |
Savings accounts | 127,640 | 163,257 |
NOW accounts | 345,753 | 408,894 |
Money market accounts | 888,511 | 659,455 |
Total transactional accounts | 1,890,313 | 1,677,124 |
Time deposits: | ||
Greater than $250,000 | 544,246 | 415,860 |
Less than or equal to $250,000 | 952,789 | 793,759 |
Total time deposits | 1,497,035 | 1,209,619 |
Total deposits | $ 3,387,348 | $ 2,886,743 |
Deposits - Contractual Maturiti
Deposits - Contractual Maturities of Time Deposits (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Contractual maturities of time deposits | ||
Within 1 year | $ 1,472,067 | $ 1,022,891 |
Over 1 year to 2 years | 13,360 | 160,545 |
Over 2 years to 3 years | 3,434 | 11,137 |
Over 3 years to 4 years | 6,159 | 5,937 |
Over 4 years to 5 years | 2,015 | 9,109 |
Total time deposits | $ 1,497,035 | $ 1,209,619 |
Deposits - Narratives (Details)
Deposits - Narratives (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Brokered certificates of deposit | $ 183,600 | $ 250,000 |
Deposits | $ 3,387,348 | $ 2,886,743 |
Customer Concentration Risk [Member] | Deposits [Member] | ||
Concentration risk threshold percentage | 5% | 5% |
Concentration Risk, customer | There are no customers that exceed 5% of total deposits as of December 31, 2023 and 2022 | |
Cannabis Industry [Member] | ||
Deposits | $ 316,000 | $ 234,900 |
Percentage of deposits with cannabis industry to total deposits | 9.30% | 8.10% |
Borrowings (Details)
Borrowings (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Borrowings | ||
FHLB Borrowings | $ 283,338 | $ 293,082 |
Borrowings with the Federal Reserve Bank | Investment securities pledged | ||
Borrowings | ||
FHLB Borrowings | 1,330,000 | |
Additional borrowing capacity | $ 608,600 |
Borrowings - Maturities on Outs
Borrowings - Maturities on Outstanding Borrowings from the FHLB (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Advances maturing within: | ||
One year | $ 282,503 | $ 293,075 |
One to two years | 7 | |
Four to five years | 560 | |
Five to ten years | 275 | |
Total amount | $ 283,063 | $ 293,082 |
Weighted Average Rate | ||
One year | 5.53% | 4.27% |
One to two years | 2.80% | |
Four to five years | 0% | |
Five to ten years | 0% | |
Weighted Average Rate | 5.53% | 4.27% |
Borrowings - Federal Home Loan
Borrowings - Federal Home Loan Bank (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Borrowings | ||
Interest expense on FHLB borrowings | $ 14,100 | $ 2,900 |
Line of credit | FHLB Ideal Way | ||
Borrowings | ||
Line of credit | 6,100 | 6,100 |
Borrowings outstanding | $ 0 | $ 0 |
Borrowings - The Federal Reserv
Borrowings - The Federal Reserve Bank (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Line of credit | Federal Reserve Bank of Boston | ||
Borrowings | ||
Borrowings outstanding | $ 0 | $ 0 |
Borrowings - Interest Rate Swap
Borrowings - Interest Rate Swap Contracts (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Borrowings | ||
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Prepaid Expense and Other Assets | Prepaid Expense and Other Assets |
Charge to interest expense | $ 14,100,000 | $ 2,900,000 |
FHLB | ||
Borrowings | ||
Amount of hedged item | 50,000,000 | |
Brokered certificates of deposit | ||
Borrowings | ||
Amount of hedged item | 50,000,000 | |
Interest rate products | ||
Borrowings | ||
Aggregate notional amount | $ 50,000,000 | |
Fixed interest rate | 2.53% | |
Fair value of swap contract estimated to be an asset | 321,000 | |
Unrealized gain on the swap contract, net of income tax effects | 231,000 | |
Collateral deposits with counterparty required to maintain | 500,000 | |
Credit to interest expense | $ 321,000 | |
Charge to interest expense | $ 496,000 |
Employee Benefits - Employee Pe
Employee Benefits - Employee Pension Plan (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Employee Benefits | ||
Employee benefit contribution amount | $ 2,000,000 | $ 1,900,000 |
Employee Pension Plan | ||
Employee Benefits | ||
Company contributions for the plan | $ 3,476,667 | $ 2,000,000 |
Minimum percentage of the contribution made by employer | 5% | 5% |
Employee Pension Plan | Pension Plan | ||
Employee Benefits | ||
Defined benefit plan, amounts for asset (Liability) recognized in statement of financial position | $ 403,600,000 | |
Defined benefit plan, benefit obligation, contributions by plan participant | $ 8,600,000 |
Employee Benefits - Deferred Co
Employee Benefits - Deferred Compensation Plans (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Deferred Compensation Plans | ||
Deferred Compensation Plans | ||
Obligation under the plan | $ 2,400,000 | $ 2,100,000 |
Expenses under the plan | 355,000 | 336,000 |
Long-Term Incentive Plan | ||
Deferred Compensation Plans | ||
Obligation under the plan | 11,100,000 | 4,900,000 |
Expenses under the plan | $ 7,800,000 | $ 3,300,000 |
Incentive plan vesting period | 3 years | |
Minimum | Deferred Compensation Plans | ||
Deferred Compensation Plans | ||
Percentage of employee's then current base salary being credited to the participant's account annually | 5% | |
Maximum | Deferred Compensation Plans | ||
Deferred Compensation Plans | ||
Percentage of employee's then current base salary being credited to the participant's account annually | 20% |
Employee Benefits - Director Pe
Employee Benefits - Director Pension Plan, Comparison of the Actuarial Estimates of the Benefit Obligations to the Recorded Obligations (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Comparison of the actuarial estimates of the benefit obligations to the recorded obligations | |||
Projected benefit obligations | $ (5,744) | $ (4,998) | |
Pension Plan | Director Pension Plan | |||
Comparison of the actuarial estimates of the benefit obligations to the recorded obligations | |||
Projected benefit obligations | (5,744) | (4,998) | $ (4,549) |
Funded status | $ (5,744) | $ (4,998) |
Employee Benefits - Director _2
Employee Benefits - Director Pension Plan, Amounts Recognized on the Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Amounts recognized on the consolidated balance sheet | ||
Accrued retirement liabilities | $ (5,744) | $ 4,998 |
Accumulated other comprehensive loss in equity, before taxes | (1,347) | (1,241) |
Pension Plan | ||
Amounts recognized on the consolidated balance sheet | ||
Accrued retirement liabilities | 6,326 | |
Pension Plan | Director Pension Plan | ||
Amounts recognized on the consolidated balance sheet | ||
Accumulated other comprehensive loss in equity, before taxes | (1,347) | (1,241) |
Net amount recognized | $ (7,091) | $ 3,757 |
Employee Benefits - Director _3
Employee Benefits - Director Pension Plan Amounts Included in "Accumulated Other Comprehensive Income (Loss)" that have not yet been Recognized (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Amounts included in "Accumulated Other Comprehensive Income (Loss)" that have not yet been recognized | ||
Unrecognized amounts included in accumulated other comprehensive income (loss) | $ (1,347) | $ (1,241) |
Pension Plan | Director Pension Plan | ||
Amounts included in "Accumulated Other Comprehensive Income (Loss)" that have not yet been recognized | ||
Unrecognized prior service cost | (258) | (315) |
Unrecognized net loss | (1,089) | (926) |
Unrecognized amounts included in accumulated other comprehensive income (loss) | $ (1,347) | $ (1,241) |
Employee Benefits - Director _4
Employee Benefits - Director Pension Plan, Weighted Average Actuarial Assumptions used to Determine the Director Pension Plan Projected Benefit Obligations and Net Periodic Pension Cost (Details) - Pension Plan - Director Pension Plan | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Weighted average actuarial assumptions used to determine the director pension plan projected benefit obligations and net periodic pension cost | ||
Pre-retirement discount rate for net periodic pension cost | 5.03% | 2.35% |
Pre-retirement discount rate for projected benefit obligation | 4.81% | 5.03% |
Post-retirement discount rate for projected benefit obligation | 4.81% | 5.03% |
Rate of compensation increase | 0% | 0% |
Employee Benefits - Director _5
Employee Benefits - Director Pension Plan, Changes in Components of Projected Net Periodic Pension Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Changes in components of projected net periodic pension cost | ||
Benefit obligation at beginning of the year | $ 4,998 | |
Benefit obligation at end of the year | 5,744 | $ 4,998 |
Director Pension Plan | ||
Changes in components of projected net periodic pension cost | ||
Service cost | 260 | 232 |
Interest cost | 261 | 114 |
Pension Plan | Director Pension Plan | ||
Changes in components of projected net periodic pension cost | ||
Benefit obligation at beginning of the year | 4,998 | 4,549 |
Service cost | 260 | 232 |
Interest cost | 261 | 114 |
Plan amendments | 430 | 372 |
Actuarial loss (gain) | 244 | (30) |
Benefits paid | (449) | (239) |
Benefit obligation at end of the year | $ 5,744 | $ 4,998 |
Employee Benefits - Director _6
Employee Benefits - Director Pension Plan (Details) - Director Pension Plan - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Employee Benefits | ||
Service cost | $ 260 | $ 232 |
Interest cost | 261 | 114 |
Amortization of net actuarial losses | 81 | 85 |
Amortization of prior service costs | 487 | 57 |
Net periodic pension cost | 1,089 | 488 |
Employer contribution | 449 | 239 |
Benefits paid | $ 449 | $ 239 |
Employee Benefits - Director _7
Employee Benefits - Director Pension Plan, Estimated Benefit Payments (Details) - Pension Plan $ in Thousands | Dec. 31, 2023 USD ($) |
Estimated benefit payments | |
2024 | $ 480 |
2025 | 526 |
2026 | 547 |
2027 | 528 |
2028 | 563 |
2029 and thereafter | 3,682 |
Total | $ 6,326 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Current tax expense | ||
Federal | $ 5,216 | $ 3,625 |
State | 4,523 | 3,951 |
Current tax expense | 9,739 | 7,576 |
Deferred tax expense (credits) | ||
Federal | (5,704) | (458) |
State | (2,016) | (795) |
Deferred tax expense (credits) | (7,720) | (1,253) |
Total income tax expense | $ 2,019 | $ 6,323 |
Income Taxes - Effective Tax Ra
Income Taxes - Effective Tax Rate Differs from that Computed at the Statutory Federal Income Tax Rate (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Taxes | ||
Statutory federal tax rate | 21% | 21% |
State taxes, net of federal tax benefit | 6.80% | 6.90% |
Tax-exempt income | (0.70%) | (0.90%) |
Disallowed compensation under 162(m) | 31.10% | |
Federal solar tax credits | (39.80%) | (10.10%) |
Income from bank-owned life insurance | (3.60%) | (0.90%) |
Bargain purchase gain | 0% | (0.90%) |
Other, net | 2.30% | 2.30% |
Effective tax rate | 17.10% | 17.40% |
Income Taxes - Deferred Income
Income Taxes - Deferred Income Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred income tax assets: | ||
Allowance for credit losses | $ 9,058 | $ 7,035 |
Reserve for off balance sheet commitments | 1,691 | |
Loan impairment charges | 478 | 491 |
Director retirement plans | 1,236 | 1,056 |
Deferred compensation | 1,760 | 1,963 |
Charitable contribution carryforward | 5,363 | |
Non-accrual interest on loans | 205 | 184 |
Accumulated OCI on director pension plan | 377 | 348 |
Unrealized loss on investment securities available for sale | 3,876 | 4,805 |
Other | 55 | 29 |
Gross deferred income tax assets | 24,099 | 15,911 |
Deferred income tax liabilities: | ||
Mortgage servicing rights | (576) | (646) |
Depreciation | (1,752) | (1,777) |
Unrealized gain on cash flow hedge | (90) | |
Solar tax credit investment | (2,300) | (1,623) |
Bargain purchase gain | (345) | (387) |
Gross deferred income tax liabilities | (4,973) | (4,523) |
Net deferred income tax asset | $ 19,126 | $ 11,388 |
Income Taxes - Narratives (Deta
Income Taxes - Narratives (Details) | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Income Taxes | |
Investment tax credits recognized | $ 5,100,000 |
Amortization of carrying basis in non-public investment | 1,400,000 |
Valuation allowance | 0 |
Bad debt reserve for federal income tax purposes for which no deferred income tax liabilities is recognized | $ 13,806,000 |
Regulatory Capital Requiremen_3
Regulatory Capital Requirements (Details) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 USD ($) |
Total Capital (to Risk-Weighted Assets) | ||
Total Capital (to Risk-Weighted Assets), Actual Amount | $ 382,417 | |
Total Capital (to Risk-Weighted Assets), Actual Ratio | 0.113 | |
Total Capital (to Risk-Weighted Assets), For minimum capital adequacy purposes, Amount | $ 271,323 | |
Total Capital (to Risk-Weighted Assets), For minimum capital adequacy purposes, Ratio | 0.080 | |
Total Capital (to Risk-Weighted Assets), To be well capitalized under prompt corrective action provisions, Amount | $ 339,153 | |
Total Capital (to Risk-Weighted Assets), To be well capitalized under prompt corrective action provisions, Ratio | 0.100 | |
Tier I Capital (to Risk-Weighted Assets) | ||
Tier I Capital (to Risk-Weighted Assets), Actual Amount | $ 357,389 | |
Tier I Capital (to Risk-Weighted Assets), Actual Ratio | 0.105 | |
Tier I Capital (to Risk-Weighted Assets), For minimum capital adequacy purposes, Amount | $ 203,492 | |
Tier I Capital (to Risk-Weighted Assets), For minimum capital adequacy purposes, Ratio | 0.060 | |
Tier I Capital (to Risk-Weighted Assets), To be well capitalized under prompt corrective action provisions, Amount | $ 271,323 | |
Tier I Capital (to Risk-Weighted Assets), To be well capitalized under prompt corrective action provisions, Ratio | 0.080 | |
Common Equity Tier I Capital (to Risk-Weighted Assets) | ||
Common Equity Tier I Capital (to Risk-Weighted Assets), Actual Amount | $ 357,389 | |
Common Equity Tier I Capital (to Risk-Weighted Assets), Actual Ratio | 0.105 | |
Common Equity Tier I Capital (to Risk-Weighted Assets), For minimum capital adequacy purposes, Amount | $ 152,619 | |
Common Equity Tier I Capital (to Risk-Weighted Assets), For minimum capital adequacy purposes, Ratio | 0.045 | |
Common Equity Tier I Capital (to Risk-Weighted Assets), To be well capitalized under prompt corrective action provisions, Amount | $ 220,450 | |
Common Equity Tier I Capital (to Risk-Weighted Assets), To be well capitalized under prompt corrective action provisions, Ratio | 0.065 | |
Tier I Capital (to Total Average Assets) | ||
Tier I Capital (to Total Average Assets), Actual Amount | $ 357,389 | |
Tier I Capital (to Total Average Assets), Actual Ratio | 0.136 | 0.105 |
Tier I Capital (to Total Average Assets), For minimum capital adequacy purposes, Amount | $ 136,311 | |
Tier I Capital (to Total Average Assets), For minimum capital adequacy purposes, Ratio | 0.040 | |
Tier I Capital (to Total Average Assets), To be well capitalized under prompt corrective action provisions, Amount | $ 170,389 | |
Tier I Capital (to Total Average Assets), To be well capitalized under prompt corrective action provisions, Ratio | 0.050 |
Financial Instruments with Of_3
Financial Instruments with Off-Balance Sheet Risk and Concentrations of Credit Risk (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Unused commitments to extend credit | ||
Financial Instruments with Off-Balance Sheet Risk and Concentrations of Credit Risk | ||
Amount of financial instruments represents off-balance sheet credit risk | $ 1,112,931 | $ 723,175 |
Letters of credit | ||
Financial Instruments with Off-Balance Sheet Risk and Concentrations of Credit Risk | ||
Amount of financial instruments represents off-balance sheet credit risk | $ 7,471 | $ 6,106 |
Financial Instruments with Of_4
Financial Instruments with Off-Balance Sheet Risk and Concentrations of Credit Risk - Additional information (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) loan item borrower | |
Financial Instruments with Off-Balance Sheet Risk and Concentrations of Credit Risk | |
Amount of deposit in excess of federal-insured limits | no |
Amount of uninsured investments | $ 182,100 |
Marketable securities available for sale | 189,465 |
Amount of loan portfolio | 3,890,000 |
Cash surrender values of bank owned life insurance policy | $ 50,500 |
Policies maintained with number of reputable and sound life insurance companies | item | 4 |
Amount of deposit obligations with customers in the cannabis industry | $ 316,000 |
Percentage of total deposits obligations with customers in the cannabis industry | 9.33% |
Amount of borrowings with the FHLB | $ 283,300 |
Borrowings with FHLB on percentage of total liabilities | 7.50% |
Loan Portfolio [Member] | Assets, Total [Member] | Product Concentration Risk [Member] | |
Financial Instruments with Off-Balance Sheet Risk and Concentrations of Credit Risk | |
Concentration risk, percentage | 85% |
Commercial loans | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | |
Financial Instruments with Off-Balance Sheet Risk and Concentrations of Credit Risk | |
Number of borrowers | borrower | 15 |
Commercial loans | Revenue, Segment Benchmark [Member] | Customer Concentration Risk [Member] | |
Financial Instruments with Off-Balance Sheet Risk and Concentrations of Credit Risk | |
Concentration risk, percentage | 19.20% |
Number of loans | loan | 20 |
Commercial loans | Revenue, Segment Benchmark [Member] | Product Concentration Risk [Member] | |
Financial Instruments with Off-Balance Sheet Risk and Concentrations of Credit Risk | |
Concentration risk, percentage | 64% |
Commercial loans | Accounts Receivable [Member] | Credit Concentration Risk [Member] | |
Financial Instruments with Off-Balance Sheet Risk and Concentrations of Credit Risk | |
Concentration risk, percentage | 39.90% |
Residential real estate loans | Revenue, Segment Benchmark [Member] | Product Concentration Risk [Member] | |
Financial Instruments with Off-Balance Sheet Risk and Concentrations of Credit Risk | |
Concentration risk, percentage | 30.70% |
Fair Value Measurements - Asset
Fair Value Measurements - Assets Measured and Reported at Estimated Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Assets | ||
Available-for-sale securities, at fair value | $ 189,465 | |
Available-for-sale securities, at fair value | $ 245,480 | |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Prepaid Expense and Other Assets | Prepaid Expense and Other Assets |
Liabilities: | ||
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Accrued Liabilities and Other Liabilities | Accrued Liabilities and Other Liabilities |
U.S. Treasury securities | ||
Assets | ||
Available-for-sale securities, at fair value | $ 64,352 | |
Available-for-sale securities, at fair value | $ 106,801 | |
Agency mortgage-backed securities | ||
Assets | ||
Available-for-sale securities, at fair value | 11,430 | |
Available-for-sale securities, at fair value | 12,141 | |
Agency collateralized mortgage obligations | ||
Assets | ||
Available-for-sale securities, at fair value | 2,418 | |
Available-for-sale securities, at fair value | 3,073 | |
Municipal obligations | ||
Assets | ||
Available-for-sale securities, at fair value | 19,030 | |
Available-for-sale securities, at fair value | 21,658 | |
Recurring | ||
Assets | ||
Available-for-sale securities, at fair value | 189,465 | |
Available-for-sale securities, at fair value | 245,480 | |
Interest rate swap (cash flow hedge) | 321 | |
Derivative assets | 27,769 | 31,483 |
Liabilities: | ||
Derivative liabilities | 27,786 | 31,492 |
Recurring | U.S. Treasury securities | ||
Assets | ||
Available-for-sale securities, at fair value | 64,352 | |
Available-for-sale securities, at fair value | 106,801 | |
Recurring | Agency mortgage-backed securities | ||
Assets | ||
Available-for-sale securities, at fair value | 11,430 | |
Available-for-sale securities, at fair value | 12,141 | |
Recurring | Agency collateralized mortgage obligations | ||
Assets | ||
Available-for-sale securities, at fair value | 2,418 | |
Available-for-sale securities, at fair value | 3,073 | |
Recurring | Corporate bonds | ||
Assets | ||
Available-for-sale securities, at fair value | 92,235 | |
Available-for-sale securities, at fair value | 101,807 | |
Recurring | Municipal obligations | ||
Assets | ||
Available-for-sale securities, at fair value | 19,030 | |
Available-for-sale securities, at fair value | 21,658 | |
Recurring | Level 1 | ||
Assets | ||
Available-for-sale securities, at fair value | 64,352 | |
Available-for-sale securities, at fair value | 106,801 | |
Recurring | Level 1 | U.S. Treasury securities | ||
Assets | ||
Available-for-sale securities, at fair value | 64,352 | |
Available-for-sale securities, at fair value | 106,801 | |
Recurring | Level 2 | ||
Assets | ||
Available-for-sale securities, at fair value | 115,245 | |
Available-for-sale securities, at fair value | 129,679 | |
Interest rate swap (cash flow hedge) | 321 | |
Derivative assets | 27,769 | 31,483 |
Liabilities: | ||
Derivative liabilities | 27,786 | 31,492 |
Recurring | Level 2 | Agency mortgage-backed securities | ||
Assets | ||
Available-for-sale securities, at fair value | 11,430 | |
Available-for-sale securities, at fair value | 12,141 | |
Recurring | Level 2 | Agency collateralized mortgage obligations | ||
Assets | ||
Available-for-sale securities, at fair value | 2,418 | |
Available-for-sale securities, at fair value | 3,073 | |
Recurring | Level 2 | Corporate bonds | ||
Assets | ||
Available-for-sale securities, at fair value | 82,367 | |
Available-for-sale securities, at fair value | 92,807 | |
Recurring | Level 2 | Municipal obligations | ||
Assets | ||
Available-for-sale securities, at fair value | 19,030 | |
Available-for-sale securities, at fair value | 21,658 | |
Recurring | Level 3 | ||
Assets | ||
Available-for-sale securities, at fair value | 9,868 | |
Available-for-sale securities, at fair value | 9,000 | |
Recurring | Level 3 | Corporate bonds | ||
Assets | ||
Available-for-sale securities, at fair value | $ 9,868 | |
Available-for-sale securities, at fair value | $ 9,000 |
Fair Value Measurements - Narra
Fair Value Measurements - Narratives (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Fair Value Measurements | ||
Purchase in level 3 subordinated debentures | $ 0 | $ 3,000 |
Sale in level 3 assets | 0 | 0 |
Transfers in level 3 assets | $ 0 | $ 0 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value on a Non-Recurring Basis (Details) - Non-recurring - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Fair Value Measurements | ||
Liabilities | $ 0 | |
Collateral-dependent loans | ||
Fair Value Measurements | ||
Assets | 4,432 | |
Collateral-dependent loans | Level 3 | ||
Fair Value Measurements | ||
Assets | 4,432 | |
Impaired Loans - Pre-ASC 326 | ||
Fair Value Measurements | ||
Assets | $ 8,960 | |
Impaired Loans - Pre-ASC 326 | Level 3 | ||
Fair Value Measurements | ||
Assets | 8,960 | |
Mortgage servicing rights | ||
Fair Value Measurements | ||
Assets | 2,640 | 2,781 |
Mortgage servicing rights | Level 3 | ||
Fair Value Measurements | ||
Assets | $ 2,640 | $ 2,781 |
Fair Value Measurements - Signi
Fair Value Measurements - Significant Unobservable Inputs Used in the Fair Value Measurements (Details) | Dec. 31, 2023 | Dec. 31, 2022 |
Appraisal Value/ Comparison Sales | Appraisals and/or sales of comparable properties | Minimum | ||
Fair Value Measurements | ||
Collateral-dependent (previously known as impaired loans) | 5 | 5 |
Appraisal Value/ Comparison Sales | Appraisals and/or sales of comparable properties | Maximum | ||
Fair Value Measurements | ||
Collateral-dependent (previously known as impaired loans) | 20 | 20 |
Discounted Cash Flows | Appraisals and/or sales of comparable properties | ||
Fair Value Measurements | ||
Mortgage servicing rights | 8 | |
Discounted Cash Flows | Appraisals and/or sales of comparable properties | Weighted average | ||
Fair Value Measurements | ||
Mortgage servicing rights | 5 | |
Discounted Cash Flows | Discount rate | Weighted average | ||
Fair Value Measurements | ||
Mortgage servicing rights | 8 | 8 |
Discounted Cash Flows | Constant prepayment rate | ||
Fair Value Measurements | ||
Mortgage servicing rights | 5 | 5 |
Fair Value Measurements - Estim
Fair Value Measurements - Estimated Fair Values, Related Carrying Amounts, and Valuation Level of the Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Level 1 | ||
Financial Assets | ||
Cash and cash equivalents | $ 272,591 | $ 156,545 |
Financial Liabilities | ||
Noninterest-bearing demand deposits | 528,409 | 445,518 |
Level 2 | ||
Financial Assets | ||
Accrued interest receivable | 17,284 | 10,837 |
Bank owned life insurance ("BOLI") | 50,516 | 49,006 |
Financial Liabilities | ||
Savings, NOW and money markets | 1,361,904 | 1,231,606 |
FHLB borrowings | 283,172 | 293,056 |
Level 3 | ||
Financial Assets | ||
Non-public investments | 13,713 | 10,592 |
Loans receivable, net | 3,732,361 | 2,928,734 |
Financial Liabilities | ||
Time deposits | 1,495,008 | 1,194,871 |
Carrying Value | ||
Financial Assets | ||
Cash and cash equivalents | 272,591 | 156,545 |
Non-public investments | 13,713 | 10,592 |
Loans receivable, net | 3,857,057 | 2,990,417 |
Accrued interest receivable | 17,284 | 10,837 |
Bank owned life insurance ("BOLI") | 50,516 | 49,006 |
Financial Liabilities | ||
Noninterest-bearing demand deposits | 528,409 | 445,518 |
Savings, NOW and money markets | 1,361,904 | 1,231,606 |
Time deposits | 1,497,035 | 1,209,619 |
FHLB borrowings | 283,338 | 293,082 |
Fair Value | ||
Financial Assets | ||
Cash and cash equivalents | 272,591 | 156,545 |
Non-public investments | 13,713 | 10,592 |
Loans receivable, net | 3,732,361 | 2,928,734 |
Accrued interest receivable | 17,284 | 10,837 |
Bank owned life insurance ("BOLI") | 50,516 | 49,006 |
Financial Liabilities | ||
Noninterest-bearing demand deposits | 528,409 | 445,518 |
Savings, NOW and money markets | 1,361,904 | 1,231,606 |
Time deposits | 1,495,008 | 1,194,871 |
FHLB borrowings | $ 283,172 | $ 293,056 |
Derivatives and Hedging Activ_3
Derivatives and Hedging Activities (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Sep. 30, 2021 USD ($) | Dec. 31, 2023 USD ($) agreement item | Dec. 31, 2022 USD ($) agreement | |
Derivatives and Hedging Activities | |||
Number of last of layer hedges previously entered | item | 2 | ||
Payments for termination of hedge | $ 2,150 | ||
Unamortized amount of this cost basis adjustment | $ 1,000 | $ 1,200 | |
Non-designated Hedges | |||
Derivatives and Hedging Activities | |||
Number of agreements held | agreement | 52 | 36 | |
Aggregate notional amount | $ 338,580 | $ 263,900 | |
Interest rate cap agreement | Non-designated Hedges | |||
Derivatives and Hedging Activities | |||
Number of agreements held | agreement | 1 | ||
Risk Participation Agreements | |||
Derivatives and Hedging Activities | |||
Number of agreements held | agreement | 16 | 8 | |
Aggregate notional amount | $ 44,500 | $ 31,400 | |
Risk Participation Agreements | Minimum | |||
Derivatives and Hedging Activities | |||
Agreement term | 5 years | ||
Risk Participation Agreements | Maximum | |||
Derivatives and Hedging Activities | |||
Agreement term | 10 years |
Derivatives and Hedging Activ_4
Derivatives and Hedging Activities - Derivative Instruments on the Balance Sheet (Details) - Non-designated Hedges - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Prepaid expenses and other assets | ||
Derivatives and Hedging Activities | ||
Asset Derivatives | $ 27,769 | $ 31,483 |
Prepaid expenses and other assets | Interest rate products | ||
Derivatives and Hedging Activities | ||
Asset Derivatives | 27,769 | 31,483 |
Accrued expenses and other liabilities | ||
Derivatives and Hedging Activities | ||
Liability Derivatives | 27,786 | 31,492 |
Accrued expenses and other liabilities | Interest rate products | ||
Derivatives and Hedging Activities | ||
Liability Derivatives | 27,769 | 31,483 |
Accrued expenses and other liabilities | RPA credit contracts | ||
Derivatives and Hedging Activities | ||
Liability Derivatives | $ 17 | $ 9 |
Derivatives and Hedging Activ_5
Derivatives and Hedging Activities - Consolidated Statements of Income (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Derivatives and Hedging Activities | ||
Swap contract fees, net of brokerage costs | $ 2,200 | $ 1,300 |
Collateral deposit accounts require to maintain to mitigate counterparty default risk | 9,100 | 8,600 |
Non-designated Hedges | RPA credit contracts | ||
Derivatives and Hedging Activities | ||
Derivative gain (loss) | $ (8) | $ 19 |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Noninterest Expense | Noninterest Expense |
Other Comprehensive Income (Det
Other Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Other Comprehensive Income | ||
Balance at the beginning | $ 344,065 | $ 326,129 |
Other comprehensive (losses) income, net of taxes | 2,504 | (12,129) |
Balance at the end | 757,959 | 344,065 |
Unrealized Gain (Loss) on AFS Securities | ||
Other Comprehensive Income | ||
Balance at the beginning | (13,739) | (639) |
Other comprehensive (losses) income, net of taxes | 2,811 | (13,100) |
Balance at the end | (10,928) | (13,739) |
Director Pension Plan | ||
Other Comprehensive Income | ||
Balance at the beginning | (893) | (749) |
Other comprehensive (losses) income, net of taxes | (76) | (144) |
Balance at the end | (969) | (893) |
Unrealized Gain (Loss) on Cash Flow Hedge | ||
Other Comprehensive Income | ||
Balance at the beginning | 231 | (884) |
Other comprehensive (losses) income, net of taxes | (231) | 1,115 |
Balance at the end | 231 | |
Accumulated Other Comprehensive Income (Loss) | ||
Other Comprehensive Income | ||
Balance at the beginning | (14,401) | (2,272) |
Other comprehensive (losses) income, net of taxes | 2,504 | (12,129) |
Balance at the end | $ (11,897) | $ (14,401) |
Other Comprehensive Income - Re
Other Comprehensive Income - Reconciliation of the Changes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Other Comprehensive Income | ||
Other Comprehensive Income (Loss), Before-Tax Amount | $ 3,313 | $ (16,309) |
Other Comprehensive Income (Loss), Tax (Expense) Benefit | (809) | 4,180 |
Other Comprehensive Income (Loss), After-Tax Amount | 2,504 | (12,129) |
Unrealized Gain (Loss) on AFS Securities | ||
Other Comprehensive Income | ||
Other Comprehensive Income (Loss), Before-Tax Amount | 3,740 | (17,657) |
Other Comprehensive Income (Loss), Tax (Expense) Benefit | (929) | 4,557 |
Other Comprehensive Income (Loss), After-Tax Amount | 2,811 | (13,100) |
Director Pension Plan | ||
Other Comprehensive Income | ||
Other Comprehensive Income (Loss), Before-Tax Amount | (106) | (200) |
Other Comprehensive Income (Loss), Tax (Expense) Benefit | 30 | 56 |
Other Comprehensive Income (Loss), After-Tax Amount | (76) | (144) |
Net actuarial gains arising during the year | ||
Other Comprehensive Income | ||
Other Comprehensive Income (Loss), Before-Tax Amount | (244) | 30 |
Other Comprehensive Income (Loss), Tax (Expense) Benefit | 69 | (8) |
Other Comprehensive Income (Loss), After-Tax Amount | (175) | 22 |
Net actuarial gains arising during the year | Reclassification adjustments | ||
Other Comprehensive Income | ||
Other Comprehensive Income (Loss), Before-Tax Amount | 81 | 85 |
Other Comprehensive Income (Loss), Tax (Expense) Benefit | (23) | (24) |
Other Comprehensive Income (Loss), After-Tax Amount | 58 | 61 |
New prior service costs related to plan amendments | ||
Other Comprehensive Income | ||
Other Comprehensive Income (Loss), Before-Tax Amount | (430) | (372) |
Other Comprehensive Income (Loss), Tax (Expense) Benefit | 123 | 104 |
Other Comprehensive Income (Loss), After-Tax Amount | (307) | (268) |
New prior service costs related to plan amendments | Reclassification adjustments | ||
Other Comprehensive Income | ||
Other Comprehensive Income (Loss), Before-Tax Amount | 487 | 57 |
Other Comprehensive Income (Loss), Tax (Expense) Benefit | (139) | (16) |
Other Comprehensive Income (Loss), After-Tax Amount | 348 | 41 |
Unrealized Gain (Loss) on Cash Flow Hedge | ||
Other Comprehensive Income | ||
Other Comprehensive Income (Loss), Before-Tax Amount | (321) | 1,548 |
Other Comprehensive Income (Loss), Tax (Expense) Benefit | 90 | (433) |
Other Comprehensive Income (Loss), After-Tax Amount | $ (231) | $ 1,115 |
Transactions with Officers an_2
Transactions with Officers and Directors (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Transactions with Officers and Directors | ||
Beginning | $ 2,245 | $ 2,683 |
Other Liability, Related Party, Type [Extensible Enumeration] | us-gaap:RelatedPartyMember | us-gaap:RelatedPartyMember |
New loans | $ 3,150 | |
Repayments | (2,002) | $ (438) |
Ending | $ 3,393 | $ 2,245 |
Transactions with Officers an_3
Transactions with Officers and Directors - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Transactions with Officers and Directors | ||
Related party deposit | $ 1.6 | $ 3 |
Earnings Per Share ("EPS) - Nar
Earnings Per Share ("EPS) - Narratives (Details) - shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Earnings Per Share ("EPS) | ||
Dilutive securities | 0 | |
Common stock, shares outstanding | 42,705,729 | 0 |
Earnings Per Share ("EPS) - Com
Earnings Per Share ("EPS) - Computation of EPS (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Earnings Per Share ("EPS) | ||
Net Income (Loss) | $ 9,825 | $ 30,065 |
Average number of common shares outstanding | 42,705,729 | |
Less: average unallocated ESOP shares | (687,500) | |
Average number of common shares outstanding used to calculate basic EPS | 42,018,229 | |
Common stock equivalents | 0 | |
Average number of common shares outstanding used to calculate diluted EPS | 42,018,229 | |
Earnings per common share: | ||
Basic (in dollars per share) | $ 0.23 | |
Diluted (in dollars per share) | $ 0.23 |
Parent Company Only Financial_3
Parent Company Only Financial Information - Condensed Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Assets | |||
Cash and cash equivalents | $ 272,591 | $ 156,545 | |
Total assets | 4,533,412 | 3,592,335 | |
Liabilities and Shareholders' Equity | |||
Other Liabilities | 3,393 | 2,245 | $ 2,683 |
Total shareholders' equity | 757,959 | 344,065 | $ 326,129 |
Total liabilities and shareholders' equity | 4,533,412 | $ 3,592,335 | |
Parent | |||
Assets | |||
Cash and cash equivalents | 207,685 | ||
Investment in consolidated subsidiary | 576,480 | ||
Total assets | 784,165 | ||
Liabilities and Shareholders' Equity | |||
Other Liabilities | 26,206 | ||
Total shareholders' equity | 757,959 | ||
Total liabilities and shareholders' equity | $ 784,165 |
Parent Company Only Financial_4
Parent Company Only Financial Information - Statement of Income (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Parent Company Only Financial Information | ||
Interest income | $ 220,501 | $ 120,512 |
Charitable contribution expense | 20,335 | 1,066 |
Income taxes | (2,019) | (6,323) |
NET INCOME | 9,825 | $ 30,065 |
Parent | ||
Parent Company Only Financial Information | ||
Interest income | 233 | |
Charitable contribution expense | 19,082 | |
Other expenses | 30 | |
Loss before income taxes and equity in undistributed net income of subsidiary | (18,879) | |
Income taxes | 5,318 | |
Loss before equity in undistributed net income of subsidiary | (13,561) | |
Equity in undistributed net income of subsidiary | 23,386 | |
NET INCOME | $ 9,825 |
Parent Company Only Financial_5
Parent Company Only Financial Information - Statement of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 9,825 | $ 30,065 |
Adjustments to reconcile net income to net cash from operating activities: | ||
NET CASH PROVIDED FROM OPERATING ACTIVITIES | 52,959 | 39,714 |
Cash flows from investing activities: | ||
NET CASH USED IN INVESTING ACTIVITIES | (831,622) | (667,993) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Net proceeds from stock offering and issuance of common shares | 417,457 | |
Purchase of common shares by the ESOP | (13,774) | |
NET CASH PROVIDED FROM FINANCING ACTIVITIES | 894,709 | 317,774 |
RESULTING IN A NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 116,046 | (310,505) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 156,545 | 467,050 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 272,591 | $ 156,545 |
Parent | ||
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | 9,825 | |
Adjustments to reconcile net income to net cash from operating activities: | ||
Changes in other liabilities | 26,206 | |
Equity in undistributed net income of subsidiary | (23,386) | |
NET CASH PROVIDED FROM OPERATING ACTIVITIES | 12,645 | |
Cash flows from investing activities: | ||
Investment in Needham Bank | (208,643) | |
NET CASH USED IN INVESTING ACTIVITIES | (208,643) | |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Net proceeds from stock offering and issuance of common shares | 417,457 | |
Purchase of common shares by the ESOP | (13,774) | |
NET CASH PROVIDED FROM FINANCING ACTIVITIES | 403,683 | |
RESULTING IN A NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 207,685 | |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 207,685 |
Purchase and Assumption Agree_2
Purchase and Assumption Agreement (Details) - USD ($) | 12 Months Ended | ||
Jan. 14, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Purchase and Assumption Agreement | |||
After-tax bargain purchase gain | $ 1,070,000 | ||
Amortization expense | $ 149,000 | 111,000 | |
Eastern Bank | Needham Bank | |||
Purchase and Assumption Agreement | |||
Deposits recognized | $ 297,700,000 | ||
Core deposit intangible recognized | 1,500,000 | ||
After-tax bargain purchase gain | $ 1,100,000 | ||
Period of amortization for core deposit intangibles recognized | 10 years | ||
Amortization expense | $ 149,000 | $ 112,000 |
Employee Retention Tax Credit_2
Employee Retention Tax Credit Claims (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Employee Retention Tax Credit Claims | |
Claimed refund from employee retention tax credits | $ 3.5 |
Period for audit of employee retention tax credits claims | 3 years |
Extended period for audit of employee retention tax credits claims | 5 years |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ 9,825 | $ 30,065 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
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 |