10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022 or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from __________ to __________

Commission File Number 000-29480 

HERITAGE FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter) 

Washington			91-1857900
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
201 Fifth Avenue SW,	Olympia	WA	98501
(Address of principal executive offices)			(Zip Code)

(360) 943-1500

(Registrant’s telephone number, including area code) 

 Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol	Name of each exchange on which registered
Common stock, no par value	HFWA	NASDAQ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes  ☐    No  ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the last practicable date:

As of August 1, 2022, there were 35,103,929 shares of the registrant's common stock, no par value per share, outstanding.

HERITAGE FINANCIAL CORPORATION AND SUBSIDIARIES

FORM 10-Q

June 30, 2022

TABLE OF CONTENTS

			Page
GLOSSARY OF ACRONYMS, ABBREVIATIONS AND TERMS			3
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS			3
PART I.	FINANCIAL INFORMATION		5
ITEM 1.	FINANCIAL STATEMENTS		5
	CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED) AS OF JUNE 30, 2022 AND DECEMBER 31, 2021		5
	CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021		6
	CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED) FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021		7
	CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021		8
	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021		10
	NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)		12
	NOTE 1.	DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, SIGNIFICANT ACCOUNTING POLICIES AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS	12
	NOTE 2.	INVESTMENT SECURITIES	13
	NOTE 3.	LOANS RECEIVABLE	15
	NOTE 4.	ALLOWANCE FOR CREDIT LOSSES ON LOANS	23
	NOTE 5.	GOODWILL AND OTHER INTANGIBLE ASSETS	25
	NOTE 6.	DERIVATIVE FINANCIAL INSTRUMENTS	25
	NOTE 7.	STOCKHOLDERS’ EQUITY	26
	NOTE 8.	FAIR VALUE MEASUREMENTS	27
	NOTE 9.	CASH RESTRICTION	31
	NOTE 10.	COMMITMENTS AND CONTINGENCIES	32
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		32
	OVERVIEW		32
	RESULTS OF OPERATIONS		33
		AVERAGE BALANCES, YIELDS AND RATES PAID	34
		NET INTEREST INCOME AND MARGIN OVERVIEW	34
		PROVISION FOR CREDIT LOSSES OVERVIEW	37
		NONINTEREST INCOME OVERVIEW	38
		NONINTEREST EXPENSE OVERVIEW	39
		INCOME TAX EXPENSE OVERVIEW	40
	FINANCIAL CONDITION OVERVIEW		40
		INVESTMENT ACTIVITIES OVERVIEW	41
		LOAN PORTFOLIO OVERVIEW	42
		ALLOWANCE FOR CREDIT LOSSES ON LOANS OVERVIEW	43
		DEPOSITS OVERVIEW	44
		STOCKHOLDERS' EQUITY OVERVIEW	44
	REGULATORY REQUIREMENTS OVERVIEW		44
	LIQUIDITY AND CAPITAL RESOURCES		45
	CRITICAL ACCOUNTING POLICIES		45
	RECONCILIATIONS OF NON-GAAP MEASURES		45
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		46
ITEM 4.	CONTROLS AND PROCEDURES		46

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PART II.	OTHER INFORMATION	47
ITEM 1.	LEGAL PROCEEDINGS	47
ITEM 1A.	RISK FACTORS	47
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	47
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	47
ITEM 4.	MINE SAFETY DISCLOSURES	47
ITEM 5.	OTHER INFORMATION	47
ITEM 6.	EXHIBITS	47
	SIGNATURES	48

GLOSSARY OF ACRONYMS, ABBREVIATIONS, AND TERMS

The acronyms, abbreviations, and terms listed below are used in various sections of this Form 10-Q. As used throughout this report, the terms “we”, “our”, or “us” refer to Heritage Financial Corporation and its consolidated subsidiaries, unless the context otherwise requires.

2021 Annual Form 10-K	Company's Annual Report on Form 10-K for the year ended December 31, 2021
ACL	Allowance for credit losses
AOCI	Accumulated other comprehensive income (loss), net
ASU	Accounting Standards Update
Bank	Heritage Bank
CECL	Current Expected Credit Loss
CMO	Collateralized Mortgage Obligation
Company	Heritage Financial Corporation
COVID-19 Pandemic	Coronavirus Disease of 2019 pandemic
CRE	Commercial real estate
FASB	Financial Accounting Standards Board
FDIC	Federal Deposit Insurance Corporation
Federal Reserve	Board of Governors of the Federal Reserve System
Federal Reserve Bank	Federal Reserve Bank of San Francisco
GAAP	U.S. Generally Accepted Accounting Principles
LIBOR	London Interbank Offering Rate
LIHTC	Low-Income Housing Tax Credit
MBS	Mortgage-backed security
PPP	Paycheck Protection Program
SBA	Small Business Administration
SEC	Securities and Exchange Commission
SM	Special Mention
SS	Substandard
TDR	Troubled debt restructured

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Form 10-Q may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often include the words “believes,” “expects,” “anticipates,” “estimates,” “forecasts,” “intends,” “plans,” “targets,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future or conditional verbs such as “may,” “will,” “should,” “would” and “could.” The Company cautions readers not to place undue reliance on any forward-looking statements. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to the Company. The Company does not undertake and specifically disclaims any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. These risks could cause our actual results for future periods to differ materially from those expressed in

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any forward-looking statements by, or on behalf of, us, and could negatively affect the Company’s operating results and stock price performance including, but not limited to:

•the effect of the COVID-19 pandemic, including on the Company’s credit quality and business operations, as well as its impact on general economic and financial market conditions and other uncertainties resulting from the COVID-19 pandemic, such as the extent and duration of the impact on public health, the U.S. and global economies, and consumer and corporate customers, including economic activity, employment levels and market liquidity;

•the credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs and changes in our ACL on loans and provision for credit losses on loans that may be affected by deterioration in the housing and CRE markets, which may lead to increased losses and nonperforming assets in our loan portfolio, and may result in our ACL on loans no longer being adequate to cover actual losses, and require us to increase our ACL on loans;

•changes in general economic conditions, either nationally or in our market areas, including the risks of inflation;

•changes in the levels of general interest rates, and the relative differences between short-term and long-term interest rates, deposit interest rates, our net interest margin and funding sources;

•risks related to acquiring assets in or entering markets in which we have not previously operated and may not be familiar;

•fluctuations in the demand for loans, the number of unsold homes and other properties and fluctuations in real estate values in our market areas;

•results of examinations of us by the bank regulators, including the possibility that any such regulatory authority may, among other things, initiate an enforcement action against the Company or our bank subsidiary which could require us to increase our ACL on loans, write-down assets, change our regulatory capital position, affect our ability to borrow funds or maintain or increase deposits, or impose additional requirements on us, any of which could affect our ability to continue our growth through mergers, acquisitions or similar transactions and adversely affect our liquidity and earnings;

•legislative or regulatory changes that adversely affect our business, including as a result of the COVID-19 Pandemic;

•implementing regulations, changes in regulatory policies and principles, or the interpretation of regulatory capital or other rules;

•our ability to control operating costs and expenses;

•increases in premiums for deposit insurance;

•the use of estimates in determining fair value of certain of our assets, which estimates may prove to be incorrect and result in significant declines in valuation;

•difficulties in reducing risk associated with our loans;

•staffing fluctuations in response to product demand or the implementation of corporate strategies that affect our workforce and potential associated charges;

•disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on the third-party vendors who perform several of our critical processing functions;

•our ability to retain key members of our senior management team;

•costs and effects of litigation, including settlements and judgments;

•our ability to implement our growth strategies;

•our ability to successfully integrate any assets, liabilities, customers, systems, and management personnel we may acquire into our operations and our ability to realize related revenue synergies and cost savings within expected time frames or at all, and any goodwill charges related thereto and costs or difficulties relating to integration matters, including but not limited to customer and employee retention, which might be greater than expected;

•increased competitive pressures among financial service companies;

•changes in consumer spending, borrowing and savings habits;

•the availability of resources to address changes in laws, rules, or regulations or to respond to regulatory actions;

•adverse changes in the securities markets;

•inability of key third-party providers to perform their obligations to us;

•changes in accounting policies and practices, as may be adopted by the financial institution regulatory agencies or the FASB, including additional guidance and interpretation on accounting issues and details of the implementation of new accounting methods; and

•other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services, and the other risks detailed from time to time in our filings with the SEC including our 2021 Annual Form 10-K.

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PART I.     FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS

HERITAGE FINANCIAL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)

(In thousands, except shares)

	June 30, 2022		December 31, 2021
ASSETS
Cash on hand and in banks	$	93,675	$	61,377
Interest earning deposits	900,380		1,661,915
Cash and cash equivalents	994,055		1,723,292
Investment securities available for sale, at fair value, net (amortized cost of $1,267,715 and $883,832, respectively)	1,187,588		894,335
Investment securities held to maturity, at amortized cost, net (fair value of $559,312 and $376,331, respectively)	615,653		383,393
Total investment securities	1,803,241		1,277,728
Loans held for sale	1,311		1,476
Loans receivable	3,874,064		3,815,662
Allowance for credit losses on loans	(39,696)		(42,361)
Loans receivable, net	3,834,368		3,773,301
Premises and equipment, net	77,164		79,370
Federal Home Loan Bank stock, at cost	8,916		7,933
Bank owned life insurance	120,646		120,196
Accrued interest receivable	15,908		14,657
Prepaid expenses and other assets	211,350		183,543
Other intangible assets, net	8,569		9,977
Goodwill	240,939		240,939
Total assets	$	7,316,467	$	7,432,412
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits	$	6,330,190	$	6,394,290
Junior subordinated debentures	21,326		21,180
Securities sold under agreement to repurchase	41,827		50,839
Accrued expenses and other liabilities	117,758		111,671
Total liabilities	6,511,101		6,577,980
Commitments and contingencies (Note 12)
Stockholders’ equity:
Preferred stock, no par value, 2,500,000 shares authorized; no shares issued and outstanding, respectively	—		—
Common stock, no par value, 50,000,000 shares authorized; 35,103,929 and 35,105,779 shares issued and outstanding, respectively	550,417		551,798
Retained earnings	316,732		293,238
Accumulated other comprehensive (loss) income, net	(61,783)		9,396
Total stockholders’ equity	805,366		854,432
Total liabilities and stockholders’ equity	$	7,316,467	$	7,432,412

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

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HERITAGE FINANCIAL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(In thousands, except per share amounts and shares outstanding)

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
INTEREST INCOME:
Interest and fees on loans	$	40,890	$	50,750	$	81,915	$	100,274
Taxable interest on investment securities	7,607		4,050		13,610		7,584
Nontaxable interest on investment securities	893		947		1,753		1,905
Interest on interest earning deposits	2,342		263		3,048		438
Total interest income	51,732		56,010		100,326		110,201
INTEREST EXPENSE:
Deposits	1,413		1,524		2,837		3,252
Junior subordinated debentures	239		186		433		373
Other borrowings	32		35		64		73
Total interest expense	1,684		1,745		3,334		3,698
Net interest income	50,048		54,265		96,992		106,503
Reversal of provision for credit losses	(1,204)		(13,987)		(4,781)		(21,186)
Net interest income after reversal of provision for credit losses	51,252		68,252		101,773		127,689
NONINTEREST INCOME:
Service charges and other fees	2,391		2,067		4,687		3,959
Card revenue	2,332		2,338		4,773		4,435
Gain on sale of investment securities, net	—		—		—		29
Gain on sale of loans, net	219		1,003		460		2,373
Interest rate swap fees	26		209		305		361
Bank owned life insurance income	764		717		2,459		1,373
Gain on sale of other assets, net	—		724		204		746
Other income	1,284		1,239		2,666		3,272
Total noninterest income	7,016		8,297		15,554		16,548
NONINTEREST EXPENSE:
Compensation and employee benefits	21,778		21,803		43,030		44,004
Occupancy and equipment	4,171		4,091		8,502		8,545
Data processing	4,185		3,998		8,246		7,810
Marketing	344		567		610		1,080
Professional services	529		1,037		1,228		2,307
State/municipal business and use taxes	867		991		1,663		1,963
Federal deposit insurance premium	425		339		1,025		928
Amortization of intangible assets	704		797		1,408		1,594
Other expense	2,704		2,773		5,715		5,407
Total noninterest expense	35,707		36,396		71,427		73,638
Income before income taxes	22,561		40,153		45,900		70,599
Income tax expense	3,977		7,451		7,559		12,553
Net income	$	18,584	$	32,702	$	38,341	$	58,046
Basic earnings per share	$	0.53	$	0.91	$	1.09	$	1.61
Diluted earnings per share	$	0.52	$	0.90	$	1.08	$	1.60
Dividends declared per share	$	0.21	$	0.20	$	0.42	$	0.40
Average number of basic shares outstanding	35,110,334		35,994,740		35,102,572		35,961,032
Average number of diluted shares outstanding	35,409,524		36,289,464		35,412,722		36,268,861

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

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HERITAGE FINANCIAL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Unaudited)

(In thousands)

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net Income	$	18,584	$	32,702	$	38,341	$	58,046
Change in fair value of investment securities available for sale, net of tax of $(7,638), $722, $(19,751) and $(2,482), respectively	(27,397)		2,600		(70,879)		(8,934)
Amortization of net unrealized gain for the reclassification of investment securities available for sale to held to maturity, net of tax of $(44), $0, $(83) and $0, respectively	(158)		—		(300)		—
Reclassification adjustment for net gain from sale of investment securities available for sale included in income, net of tax of $0, $0, $0 and $(6), respectively	—		—		—		(23)
Other comprehensive (loss) income	(27,555)		2,600		(71,179)		(8,957)
Comprehensive (loss) income	$	(8,971)	$	35,302	$	(32,838)	$	49,089

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

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HERITAGE FINANCIAL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)

(In thousands, except shares and per share amounts)

	Three Months Ended June 30, 2022
	Number of common shares	Common stock		Retained earnings		AOCI		Total stockholders’ equity
Balance at March 31, 2022	35,102,372	$	550,096	$	305,581	$	(34,228)	$	821,449
Restricted stock units vested	22,737	—		—		—		—
Stock-based compensation expense	—	843		—		—		843
Common stock repurchased	(21,180)	(522)		—		—		(522)
Net income	—	—		18,584		—		18,584
Other comprehensive loss, net of tax	—	—		—		(27,555)		(27,555)
Cash dividends declared on common stock ($0.21 per share)	—	—		(7,433)		—		(7,433)
Balance at June 30, 2022	35,103,929	$	550,417	$	316,732	$	(61,783)	$	805,366

	Six Months Ended June 30, 2022
	Number of common shares	Common stock		Retained earnings		AOCI		Total stockholders’ equity
Balance at December 31, 2021	35,105,779	$	551,798	$	293,238	$	9,396	$	854,432
Restricted stock units vested	124,420	—		—		—		—
Stock-based compensation expense	—	1,793		—		—		1,793
Common stock repurchased	(126,270)	(3,174)		—		—		(3,174)
Net income	—	—		38,341		—		38,341
Other comprehensive loss, net of tax	—	—		—		(71,179)		(71,179)
Cash dividends declared on common stock ($0.42 per share)	—	—		(14,847)		—		(14,847)
Balance at June 30, 2022	35,103,929	$	550,417	$	316,732	$	(61,783)	$	805,366

	Three Months Ended June 30, 2021
	Number of common shares	Common stock		Retained earnings		AOCI		Total stockholders’ equity
Balance at March 31, 2021	35,981,317	$	571,204	$	242,486	$	13,461	$	827,151
Restricted stock units vested	27,800	—		—		—		—
Stock-based compensation expense	—	926		—		—		926
Common stock repurchased	(2,557)	(70)		—		—		(70)
Net income	—	—		32,702		—		32,702
Other comprehensive income, net of tax	—	—		—		2,600		2,600
Cash dividends declared on common stock ($0.20 per share)	—	—		(7,325)		—		(7,325)
Balance at June 30, 2021	36,006,560	$	572,060	$	267,863	$	16,061	$	855,984

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	Six Months Ended June 30, 2021
	Number of common shares	Common stock		Retained earnings		AOCI		Total stockholders’ equity
Balance at December 31, 2020	35,912,243	$	571,021	$	224,400	$	25,018	$	820,439
Restricted stock units vested	120,120	—		—		—		—
Stock-based compensation expense	—	1,796		—		—		1,796
Common stock repurchased	(25,803)	(757)		—		—		(757)
Net income	—	—		58,046		—		58,046
Other comprehensive loss, net of tax	—	—		—		(8,957)		(8,957)
Cash dividends declared on common stock ($0.40 per share)	—	—		(14,583)		—		(14,583)
Balance at June 30, 2021	36,006,560	$	572,060	$	267,863	$	16,061	$	855,984

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

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HERITAGE FINANCIAL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)

	Six Months Ended June 30,
	2022		2021
Cash flows from operating activities:
Net income	$	38,341	$	58,046
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion	(1,654)		(13,901)
Reversal of provision for credit losses	(4,781)		(21,186)
Stock-based compensation expense	1,793		1,796
Amortization of intangible assets	1,408		1,594
Origination of mortgage loans held for sale	(12,396)		(53,807)
Proceeds from sale of mortgage loans held for sale	13,021		58,373
Bank owned life insurance income	(2,459)		(1,373)
Valuation adjustment on interest rate swaps	(64)		(254)
Gain on sale of mortgage loans held for sale, net	(460)		(2,373)
Gain on sale of investment securities available for sale, net	—		(29)
Gain on sale of assets held for sale	(204)		(746)
Other	1,360		3,630
Net cash provided by operating activities	33,905		29,770
Cash flows from investing activities:
Loan originations and purchases, net of payments	(51,198)		295,618
Maturities and repayments of investment securities available for sale	86,678		126,669
Maturities and repayments of investment securities held to maturity	11,767		—
Purchase of investment securities available for sale	(472,361)		(388,636)
Purchase of investment securities held to maturity	(244,911)		—
Purchase of premises and equipment	(1,191)		(1,748)
Purchases of bank owned life insurance	(105)		(105)
Purchases of Federal Home Loan Bank stock	(985)		(1,272)
Proceeds from sales of investment securities available for sale	—		1,248
Proceeds from redemption of Federal Home Loan Bank stock	2		—
Proceeds from sales of assets held for sale	1,173		3,730
Proceeds from sales of premises and equipment	—		10
Capital contributions to low-income housing tax credit partnerships	(978)		(12,637)
Cash received from return of New Market Tax Credit equity method investment	—		9,642
Net cash (used) provided by investing activities	(672,109)		32,519
Cash flows from financing activities:
Net (decrease) increase in deposits	(64,100)		463,716
Federal Home Loan Bank advances	50		10
Repayment of Federal Home Loan Bank advances	(50)		(10)
Common stock cash dividends paid	(14,747)		(14,383)
Net (decrease) increase in securities sold under agreement to repurchase	(9,012)		10,746
Repurchase of common stock	(3,174)		(757)
Net cash (used) provided by financing activities	(91,033)		459,322
Net (decrease) increase in cash and cash equivalents	(729,237)		521,611
Cash and cash equivalents at beginning of period	1,723,292		743,322
Cash and cash equivalents at end of period	$	994,055	$	1,264,933

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	Six Months Ended June 30,
	2022		2021
Supplemental disclosures of cash flow information:
Cash paid for interest	$	3,188	$	3,571
Cash paid for income taxes, net of refunds	167		7,967
Supplemental non-cash disclosures of cash flow information:
Investment in LIHTC partnership and related funding commitment	11,284		—
Right of use assets obtained in exchange for new operating lease liabilities	2,222		8,393
Transfer of bank owned life insurance to prepaid expenses and other assets due to death benefit accrued	2,114		—
Transfers of properties classified as held for sale to prepaid expenses and other assets from premises and equipment, net	730		1,685
Loans received from return of New Market Tax Credit equity method investment	—		15,596

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

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HERITAGE FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(1)Description of Business, Basis of Presentation, Significant Accounting Policies and Recently Issued Accounting Pronouncements

(a) Description of Business

The Company is primarily engaged in the business of planning, directing and coordinating the business activities of its wholly-owned subsidiary, the Bank. The Bank is headquartered in Olympia, Washington and conducts business from its 50 branch offices located throughout Washington State, the greater Portland, Oregon area, and Eugene, Oregon. The Bank’s business consists primarily of commercial lending and deposit relationships with small and medium-sized businesses and their owners in its market areas and attracting deposits from the general public. The Bank also makes real estate construction and land development loans, consumer loans and originates first mortgage loans on residential properties primarily located in its market areas. The Bank's deposits are insured by the FDIC.

(b) Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with GAAP for interim financial information and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. It is recommended these unaudited Condensed Consolidated Financial Statements and accompanying Notes be read with the audited Consolidated Financial Statements and the accompanying Notes included in the 2021 Annual Form 10-K. In management's opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

To prepare unaudited Condensed Consolidated Financial Statements in conformity with GAAP, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided. Management believes the judgments, estimates and assumptions used in the preparation of the unaudited Condensed Consolidated Financial Statements are appropriate based on the facts and circumstances at the time. Actual results, however, could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change relate to management's estimate of the ACL on investment securities, management's estimate of the ACL on loans, management's estimate of the ACL on unfunded commitments, management's evaluation of goodwill impairment and management's estimate of the fair value of financial instruments.

The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiary, the Bank. All significant intercompany balances and transactions among the Company and the Bank have been eliminated in consolidation.

There have been reclassifications in certain prior year amounts in the unaudited Condensed Consolidated Statements of Financial Condition, the unaudited Condensed Consolidated Statements of Income and the unaudited Condensed Consolidated Statements of Cash Flows. Reclassifications had no effect on the prior year's net income or stockholders’ equity.

(c) Significant Accounting Policies

The significant accounting policies used in preparation of the unaudited Condensed Consolidated Financial Statements are disclosed in greater detail in the 2021 Annual Form 10-K. There have not been any material changes in the Company's significant accounting policies from those contained in the 2021 Annual Form 10-K during the six months ended June 30, 2022.

(d) Recently Issued or Adopted Accounting Pronouncements

FASB ASU 2020-04, Reference Rate Reform (Topic 848), as amended by ASU 2021-01, was issued in March 2020 and provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2022. The amendments are elective, apply to all entities, and provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The Bank’s interest rate swap-related transactions are the majority of the Company's LIBOR exposure. Effective January 25, 2021, the Company adhered to the Interbank Offered Rate Fallbacks Protocol as published by the International Swaps and Derivatives Association, Inc. and recommended by the Alternative Reference Rates Committee. Additionally, effective January 1, 2022, the Bank is no longer initiating or renewing loans using LIBOR as an index. The Company does not expect this ASU to have a material impact on its business operations and the Consolidated Financial Statements.

FASB ASU 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, was issued in March 2022. The ASU eliminates the accounting guidance for TDR loans by creditors while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Additionally, the ASU requires public business entities to disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases. These amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, since Heritage previously adopted the amendments in ASU 2016-13, which is commonly referred to as the current expected credit loss methodology, on January 1, 2020. Early adoption is permitted and should be applied prospectively; however, the transition method related to the recognition and

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measurement of TDR loans may be applied under a modified retrospective transition method. The Company is evaluating the effect this ASU will have on its Consolidated Financial Statements and related disclosures.

(2)Investment Securities

The Company’s investment policy is designed primarily to provide and maintain liquidity, generate a favorable return on assets without incurring undue interest rate and credit risk, and complement the Bank’s lending activities.

There were no investment securities classified as trading at June 30, 2022 or December 31, 2021.

(a) Investment Securities by Classification, Type and Maturity

The following tables present the amortized cost and fair value of investment securities at the dates indicated and the corresponding amounts of gross unrealized gains and losses, including the corresponding amounts of gross unrealized gains and losses on investment securities available for sale recognized in AOCI:

	June 30, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In thousands)
Investment securities available for sale:
U.S. government and agency securities	$	68,912	$	—	$	(3,244)	$	65,668
Municipal securities	213,402		977		(14,369)		200,010
Residential CMO and MBS	433,903		70		(35,817)		398,156
Commercial CMO and MBS	520,772		466		(27,618)		493,620
Corporate obligations	6,003		—		(25)		5,978
Other asset-backed securities	24,723		6		(573)		24,156
Total	$	1,267,715	$	1,519	$	(81,646)	$	1,187,588
Investment securities held to maturity:
U.S. government and agency securities	$	150,960	$	—	$	(23,416)	$	127,544
Residential CMO and MBS	159,007		257		(5,774)		153,490
Commercial CMO and MBS	305,686		—		(27,408)		278,278
Total	$	615,653	$	257	$	(56,598)	$	559,312

	December 31, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In thousands)
Investment securities available for sale:
U.S. government and agency securities	$	21,494	$	55	$	(176)	$	21,373
Municipal securities	213,158		8,908		(854)		221,212
Residential CMO and MBS	307,366		2,111		(2,593)		306,884
Commercial CMO and MBS	313,169		3,891		(1,199)		315,861
Corporate obligations	2,007		7		—		2,014
Other asset-backed securities	26,638		369		(16)		26,991
Total	$	883,832	$	15,341	$	(4,838)	$	894,335
Investment securities held to maturity:
U.S. government and agency securities	$	141,011	$	120	$	(1,768)	$	139,363
Residential CMO and MBS	24,529		—		(153)		24,376
Commercial CMO and MBS	217,853		—		(5,261)		212,592
Total	$	383,393	$	120	$	(7,182)	$	376,331

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The amortized cost and fair value of investment securities at June 30, 2022, by contractual maturity, are set forth below. Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

	Securities Available for Sale				Securities Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
Due in one year or less	$	8,283	$	8,306	$	—	$	—
Due after one year through five years	82,106		80,881		—		—
Due after five years through ten years	67,161		65,321		83,210		72,516
Due after ten years	130,767		117,148		67,750		55,028
Total investment securities due at a single maturity date	288,317		271,656		150,960		127,544
Mortgage-backed securities (1)	979,398		915,932		464,693		431,768
Total investment securities	$	1,267,715	$	1,187,588	$	615,653	$	559,312

(1) Mortgage-backed securities, which have prepayment provisions, are not assigned to maturity categories due to fluctuations in their payment speed.

There were no holdings of investment securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of stockholders’ equity at June 30, 2022 and December 31, 2021.

(b) Unrealized Losses on Investment Securities Available for Sale

The following tables show the gross unrealized losses and fair value of the Company’s investment securities available for sale for which an ACL on investment securities available for sale has not been recorded, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position at the dates indicated:

	June 30, 2022
	Less than 12 Months				12 Months or Longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)
U.S. government and agency securities	$	64,200	$	(2,995)	$	1,468	$	(249)	$	65,668	$	(3,244)
Municipal securities	106,205		(11,287)		15,712		(3,082)		121,917		(14,369)
Residential CMO and MBS	352,074		(32,446)		31,008		(3,371)		383,082		(35,817)
Commercial CMO and MBS	406,835		(27,145)		8,711		(473)		415,546		(27,618)
Corporate obligations	5,978		(25)		—		—		5,978		(25)
Other asset-backed securities	19,054		(552)		921		(21)		19,975		(573)
Total	$	954,346	$	(74,450)	$	57,820	$	(7,196)	$	1,012,166	$	(81,646)

	December 31, 2021
	Less than 12 Months				12 Months or Longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)
U.S. government and agency securities	$	14,828	$	(176)	$	—	$	—	$	14,828	$	(176)
Municipal securities	29,774		(619)		9,351		(235)		39,125		(854)
Residential CMO and MBS	204,039		(2,470)		19,862		(123)		223,901		(2,593)
Commercial CMO and MBS	83,283		(1,161)		1,936		(38)		85,219		(1,199)
Other asset-backed securities	2,763		(9)		1,118		(7)		3,881		(16)
Total	$	334,687	$	(4,435)	$	32,267	$	(403)	$	366,954	$	(4,838)

(c) ACL on Investment Securities

The Company evaluated investment securities available for sale as of June 30, 2022 and December 31, 2021 and determined that any declines in fair value were attributable to changes in interest rates relative to where these investments fall within the yield curve and individual characteristics. Management monitors published credit ratings for adverse changes for all

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rated investment securities and none of these securities had a below investment grade credit rating as of both June 30, 2022 and December 31, 2021. In addition, the Company does not intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of the amortized cost basis, which may be upon maturity. Therefore, no ACL on investment securities available for sale was recorded as of June 30, 2022 and December 31, 2021.

The Company also evaluated investment securities held to maturity for current expected credit losses as of June 30, 2022 and December 31, 2021. There were no investment securities held to maturity classified as nonaccrual or past due as of June 30, 2022 and December 31, 2021 and all were issued by the U.S. government and its agencies and either explicitly or implicitly guaranteed by the U.S. government, highly rated by major credit rating agencies and had a long history of no credit losses. Accordingly, the Company did not measure expected credit losses on investment securities held to maturity since the historical credit loss information adjusted for current conditions and reasonable and supportable forecasts results in an expectation that nonpayment of the amortized cost basis is zero. Therefore, no ACL on investment securities held to maturity was recorded as of June 30, 2022 and December 31, 2021.

(d) Realized Gains and Losses

The following table presents the gross realized gains and losses on the sale of investment securities available for sale during the following periods:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Gross realized gains	$	—	$	—	$	—	$	29

(e) Pledged Securities

The following table summarizes the amortized cost and fair value of investment securities that are pledged as collateral for the following obligations at the dates indicated:

	June 30, 2022				December 31, 2021
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
Washington and Oregon state public deposits	$	139,868	$	128,842	$	128,216	$	130,217
Federal Reserve Bank credit facility	60,865		52,530		61,057		59,674
Securities sold under agreement to repurchase	69,358		62,647		59,887		59,655
Other securities pledged	49,941		45,739		56,419		55,633
Total	$	320,032	$	289,758	$	305,579	$	305,179

(f) Accrued Interest Receivable

Accrued interest receivable excluded from the amortized cost of investment securities available for sale totaled $4.6 million and $3.5 million at June 30, 2022 and December 31, 2021, respectively. Accrued interest receivable excluded from the amortized cost on investment securities held to maturity totaled $1.8 million and $1.1 million at June 30, 2022 and December 31, 2021, respectively.

No amounts of accrued interest receivable on investment securities available for sale or held to maturity were reversed against interest income on investment securities during the three or six months ended June 30, 2022 and 2021.

(3)Loans Receivable

The Bank originates loans in the ordinary course of business and has also acquired loans through mergers and acquisitions. Accrued interest receivable was excluded from disclosures presenting the Bank's amortized cost of loans receivable as it was deemed insignificant.

(a) Loan Origination/Risk Management

The Bank categorizes the individual loans in the total loan portfolio into four segments: commercial business; residential real estate; real estate construction and land development; and consumer. Within these segments are classes of loans for which management monitors and assesses credit risk in the loan portfolios. A detailed description of the portfolio segments and classes is contained in the 2021 Annual Form 10-K.

The Bank has certain lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk. Management reviews and approves these policies and procedures on a regular basis. A reporting system supplements the review process by providing management with frequent reports related to loan production, loan quality, concentrations of credit, loan delinquencies and nonperforming and criticized loans. The Bank also conducts internal loan reviews and validates the credit risk assessment on a periodic basis and presents the results of these reviews to management.

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The loan review process complements and reinforces the risk identification and assessment decisions made by loan officers and credit personnel.

The amortized cost of loans receivable, net of ACL on loans, consisted of the following portfolio segments and classes at the dates indicated:

	June 30, 2022		December 31, 2021
	(In thousands)
Commercial business:
Commercial and industrial	$	698,828	$	621,567
SBA PPP	11,334		145,840
Owner-occupied CRE	950,699		931,150
Non-owner occupied CRE	1,515,796		1,493,099
Total commercial business	3,176,657		3,191,656
Residential real estate	265,382		164,582
Real estate construction and land development:
Residential	90,546		85,547
Commercial and multifamily	128,060		141,336
Total real estate construction and land development	218,606		226,883
Consumer	213,419		232,541
Loans receivable	3,874,064		3,815,662
Allowance for credit losses on loans	(39,696)		(42,361)
Loans receivable, net	$	3,834,368	$	3,773,301
Balances included in the amortized cost of loans receivable:
Unamortized net discount on acquired loans	$	3,084	$	3,938
Unamortized net deferred fee	$	4,947	$	7,954

(b) Concentrations of Credit

Most of the Bank’s lending activity occurs within its primary market areas which are concentrated along the I-5 corridor from Whatcom County to Clark County in Washington State, Multnomah County and Washington County in Oregon, as well as other contiguous markets and represents a geographic concentration. Additionally, the Bank's loan portfolio is concentrated in commercial loans, including commercial business loans and commercial and multifamily real estate construction and land development loans. Commercial loans are generally considered as having more inherent risk of default than residential real estate loans or other consumer loans. Also, the commercial loan balance per borrower is typically larger than that for residential real estate loans and consumer loans, implying higher potential losses on an individual loan basis.

(c) Credit Quality Indicators

As part of the on-going monitoring of the credit quality of the Bank’s loan portfolio, management tracks certain credit quality indicators including trends related to (i) the risk grade of the loans, (ii) the level of classified loans, (iii) net charge-offs, (iv) nonperforming loans, (v) past due status, and (vi) the general economic conditions of the United States of America, and specifically the states of Washington and Oregon.

The Bank utilizes a risk grading matrix to assign a risk grade to each of its loans. Loans are graded on a scale of 1 to 10. Risk grades are aggregated to create the risk categories of Pass for grades 1 to 6, Special Mention or "SM" for grade 7, Substandard or "SS" for grade 8, Doubtful for grade 9 and Loss for grade 10. Descriptions of the general characteristics of the risk grades, including qualitative information on how the risk grades relate to the risk of loss, are contained in the 2021 Annual Form 10-K. Numerical loan grades for loans are established at the origination of the loan. Changes to loan grades are considered at the time new information about the performance of a loan becomes available, including the receipt of updated financial information from the borrower, results of annual term loan reviews and scheduled loan reviews. For consumer loans, the Bank follows the FDIC’s Uniform Retail Credit Classification and Account Management Policy for subsequent classification in the event of payment delinquencies or default. Typically, an individual loan grade will not be changed from the prior period unless there is a specific indication of credit deterioration or improvement. Credit deterioration is evidenced by delinquency, direct communications with the borrower or other borrower information that becomes known to management. Credit improvements are evidenced by known facts regarding the borrower or the collateral property.

Loan grades relate to the likelihood of losses in that the higher the grade, the greater the loss potential. Loans with a pass grade may have some estimated inherent losses, but to a lesser extent than the other loan grades. The SM loan grade is transitory in that the Bank is waiting on additional information to determine the likelihood and extent of any potential loss. The

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likelihood of loss for SM graded loans, however, is greater than Watch graded loans because there has been measurable credit deterioration. Loans with a SS grade are generally accrual loans at risk of being classified as nonaccrual loans and includes all of our loans classified as nonaccrual. For Doubtful and Loss graded loans, the Bank is almost certain of the losses and the outstanding principal balances are generally charged off to the realizable value.

The following table presents the amortized cost of loans receivable by risk grade at the dates indicated:

	June 30, 2022
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans		Revolving Loans Converted (2)		Loans Receivable
	2022		2021(1)		2020		2019		2018		Prior
	(In thousands)
Commercial business:
Commercial and industrial
Pass	$	96,128	$	101,302	$	93,475	$	73,299	$	38,742	$	90,980	$	168,030	$	45	$	662,001
SM	234		253		729		4,842		8,764		2,981		1,619		—		19,422
SS	882		169		696		4,581		1,163		6,866		2,171		877		17,405
Total	97,244		101,724		94,900		82,722		48,669		100,827		171,820		922		698,828
SBA PPP
Pass	—		11,175		159		—		—		—		—		—		11,334
Owner-occupied CRE
Pass	78,387		171,470		91,633		180,596		73,797		316,424		—		—		912,307
SM	—		—		—		1,698		2,573		12,042		—		—		16,313
SS	—		261		679		—		3,755		17,384		—		—		22,079
Total	78,387		171,731		92,312		182,294		80,125		345,850		—		—		950,699
Non-owner occupied CRE
Pass	125,451		185,105		166,150		240,396		139,626		578,421		—		—		1,435,149
SM	—		8,435		—		3,652		—		16,655		—		—		28,742
SS	—		—		—		—		3,626		48,279		—		—		51,905
Total	125,451		193,540		166,150		244,048		143,252		643,355		—		—		1,515,796
Total commercial business
Pass	299,966		469,052		351,417		494,291		252,165		985,825		168,030		45		3,020,791
SM	234		8,688		729		10,192		11,337		31,678		1,619		—		64,477
SS	882		430		1,375		4,581		8,544		72,529		2,171		877		91,389
Total	301,082		478,170		353,521		509,064		272,046		1,090,032		171,820		922		3,176,657
Residential real estate
Pass(1)	60,870		140,448		24,564		17,699		4,716		16,907		—		—		265,204
SS	—		—		—		—		—		178		—		—		178
Total	60,870		140,448		24,564		17,699		4,716		17,085		—		—		265,382
Real estate construction and land development:
Residential
Pass	21,664		43,877		10,330		12,002		1,005		1,668		—		—		90,546
Commercial and multifamily
Pass	8,832		75,096		23,991		6,952		3,186		2,013		—		—		120,070
SM	—		—		1,871		5,714		—		—		—		—		7,585
SS	—		—		—		—		—		405		—		—		405
Total	8,832		75,096		25,862		12,666		3,186		2,418		—		—		128,060
Total real estate construction and land development
Pass	30,496		118,973		34,321		18,954		4,191		3,681		—		—		210,616
SM	—		—		1,871		5,714		—		—		—		—		7,585
SS	—		—		—		—		—		405		—		—		405
Total	30,496		118,973		36,192		24,668		4,191		4,086		—		—		218,606

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	June 30, 2022
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans		Revolving Loans Converted (2)		Loans Receivable
	2022		2021(1)		2020		2019		2018		Prior
Consumer
Pass	2,475		770		12,451		35,722		21,337		19,062		118,826		329		210,972
SS	—		—		169		558		366		1,346		8		—		2,447
Total	2,475		770		12,620		36,280		21,703		20,408		118,834		329		213,419
Loans receivable
Pass	393,807		729,243		422,753		566,666		282,409		1,025,475		286,856		374		3,707,583
SM	234		8,688		2,600		15,906		11,337		31,678		1,619		—		72,062
SS	882		430		1,544		5,139		8,910		74,458		2,179		877		94,419
Total	$	394,923	$	738,361	$	426,897	$	587,711	$	302,656	$	1,131,611	$	290,654	$	1,251	$	3,874,064

(1) The 2021 origination year includes $42.2 million of pass grade residential real estate loans purchased during the six months ended June 30, 2022 which were originated during the year ended December 31, 2021.

(2) Represents the loans receivable balance at June 30, 2022 which was converted from a revolving loan to an amortizing loan during the six months ended June 30, 2022.

	December 31, 2021
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans		Revolving Loans Converted (1)		Loans Receivable
	2021		2020		2019		2018		2017		Prior
	(In thousands)
Commercial business:
Commercial and industrial
Pass	$	95,960	$	100,193	$	94,657	$	54,707	$	28,558	$	77,294	$	127,651	$	1,035	$	580,055
SM	326		884		5,998		1,425		2,223		2,401		2,048		353		15,658
SS	1,443		1,287		5,912		2,809		2,526		6,907		4,402		568		25,854
Total	97,729		102,364		106,567		58,941		33,307		86,602		134,101		1,956		621,567
SBA PPP
Pass	139,253		6,587		—		—		—		—		—		—		145,840
Owner-occupied CRE
Pass	182,742		90,609		188,380		73,714		66,039		273,518		—		72		875,074
SM	264		—		3,079		7,521		3,937		16,724		—		—		31,525
SS	—		1,332		—		3,787		3,014		16,418		—		—		24,551
Total	183,006		91,941		191,459		85,022		72,990		306,660		—		72		931,150
Non-owner-occupied CRE
Pass	187,860		185,650		244,863		149,090		144,896		499,486		—		—		1,411,845
SM	—		—		5,674		—		15,482		2,400		—		—		23,556
SS	—		—		—		3,379		—		54,319		—		—		57,698
Total	187,860		185,650		250,537		152,469		160,378		556,205		—		—		1,493,099
Total commercial business
Pass	605,815		383,039		527,900		277,511		239,493		850,298		127,651		1,107		3,012,814
SM	590		884		14,751		8,946		21,642		21,525		2,048		353		70,739
SS	1,443		2,619		5,912		9,975		5,540		77,644		4,402		568		108,103
Total	607,848		386,542		548,563		296,432		266,675		949,467		134,101		2,028		3,191,656
Residential real estate
Pass	85,089		27,090		23,295		5,672		6,141		16,891		—		—		164,178
SS	—		—		—		—		—		404		—		—		404
Total	85,089		27,090		23,295		5,672		6,141		17,295		—		—		164,582

18

	December 31, 2021
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans		Revolving Loans Converted (1)		Loans Receivable
	2021		2020		2019		2018		2017		Prior
	(In thousands)
Real estate construction and land development:
Residential
Pass	44,892		23,728		12,266		2,921		389		1,351		—		—		85,547
Commercial and multifamily
Pass	56,448		41,616		34,117		5,794		710		1,379		—		—		140,064
SM	—		—		68		—		—		213		—		—		281
SS	—		571		—		—		—		420		—		—		991
Total	56,448		42,187		34,185		5,794		710		2,012		—		—		141,336
Total real estate construction and land development
Pass	101,340		65,344		46,383		8,715		1,099		2,730		—		—		225,611
SM	—		—		68		—		—		213		—		—		281
SS	—		571		—		—		—		420		—		—		991
Total	101,340		65,915		46,451		8,715		1,099		3,363		—		—		226,883
Consumer
Pass	1,286		15,737		46,041		29,819		15,068		13,026		108,492		120		229,589
SS	—		181		657		476		542		1,043		36		17		2,952
Total	1,286		15,918		46,698		30,295		15,610		14,069		108,528		137		232,541
Loans receivable
Pass	793,530		491,210		643,619		321,717		261,801		882,945		236,143		1,227		3,632,192
SM	590		884		14,819		8,946		21,642		21,738		2,048		353		71,020
SS	1,443		3,371		6,569		10,451		6,082		79,511		4,438		585		112,450
Total	$	795,563	$	495,465	$	665,007	$	341,114	$	289,525	$	984,194	$	242,629	$	2,165	$	3,815,662

(1) Represents the loans receivable balance at December 31, 2021 which was converted from a revolving loan to an amortizing loan during the year ended December 31, 2021.

(d) Nonaccrual Loans

The following tables present the amortized cost of nonaccrual loans for the dates indicated:

	June 30, 2022
	Nonaccrual without ACL		Nonaccrual with ACL		Total Nonaccrual
	(In thousands)
Commercial business:
Commercial and industrial	$	5,604	$	569	$	6,173
Owner-occupied CRE	—		4,302		4,302
Total	$	5,604	$	4,871	$	10,475

	December 31, 2021
	Nonaccrual without ACL		Nonaccrual with ACL		Total Nonaccrual
	(In thousands)
Commercial business:
Commercial and industrial	$	6,454	$	3,827	$	10,281
Owner-occupied CRE	3,036		5,138		8,174
Non-owner occupied CRE	1,273		3,379		4,652
Total commercial business	10,763		12,344		23,107
Residential real estate	—		47		47

19

	December 31, 2021
	Nonaccrual without ACL		Nonaccrual with ACL		Total Nonaccrual
	(In thousands)
Real estate construction and land development:
Commercial and multifamily	—		571		571
Consumer	—		29		29
Total	$	10,763	$	12,991	$	23,754

The following table presents the reversal of interest income on loans due to the write-off of accrued interest receivable upon the initial classification of loans as nonaccrual loans and the interest income recognized due to payment in full or sale of previously classified nonaccrual loans during the following periods:

	Three Months Ended June 30, 2022				Three Months Ended June 30, 2021
	Interest Income Reversed		Interest Income Recognized		Interest Income Reversed		Interest Income Recognized
	(In thousands)
Commercial business:
Commercial and industrial	$	(12)	$	90	$	(5)	$	1,981
Owner-occupied CRE	—		—		—		3
Total	$	(12)	$	90	$	(5)	$	1,984

	Six Months Ended June 30, 2022				Six Months Ended June 30, 2021
	Interest Income Reversed		Interest Income Recognized		Interest Income Reversed		Interest Income Recognized
	(in thousands)
Commercial business:
Commercial and industrial	$	(14)	$	229	$	(10)	$	2,044
Owner-occupied CRE	—		53		—		117
Non-owner occupied CRE	—		774		—		313
Total commercial business	(14)		1,056		(10)		2,474
Residential real estate	—		19		—		—
Real estate construction and land development:
Residential	—		—		—		73
Consumer	—		68		—		—
Total	$	(14)	$	1,143	$	(10)	$	2,547

For the three and six months ended June 30, 2022 and 2021, no interest income was recognized subsequent to a loan’s classification as nonaccrual, except as indicated in the tables above due to payment in full or sale.

(e) Past due loans

The Bank performs an aging analysis of past due loans using policies consistent with regulatory reporting requirements with categories of 30-89 days past due and 90 or more days past due. The amortized cost of past due loans as of June 30, 2022 and December 31, 2021 were as follows:

	June 30, 2022
	30-89 Days		90 Days or Greater		Total Past  Due		Current		Loans Receivable
	(In thousands)
Commercial business:
Commercial and industrial	$	259	$	7,190	$	7,449	$	691,379	$	698,828
SBA PPP	—		—		—		11,334		11,334
Owner-occupied CRE	1,056		189		1,245		949,454		950,699
Non-owner occupied CRE	—		—		—		1,515,796		1,515,796

20

	June 30, 2022
	30-89 Days		90 Days or Greater		Total Past  Due		Current		Loans Receivable
	(In thousands)
Total commercial business	1,315		7,379		8,694		3,167,963		3,176,657
Residential real estate	—		—		—		265,382		265,382
Real estate construction and land development:
Residential	—		—		—		90,546		90,546
Commercial and multifamily	—		—		—		128,060		128,060
Total real estate construction and land development	—		—		—		218,606		218,606
Consumer	651		199		850		212,569		213,419
Total	$	1,966	$	7,578	$	9,544	$	3,864,520	$	3,874,064

	December 31, 2021
	30-89 Days		90 Days or Greater		Total Past  Due		Current		Loans Receivable
	(In thousands)
Commercial business:
Commercial and industrial	$	1,858	$	6,821	$	8,679	$	612,888	$	621,567
SBA PPP	223		293		516		145,324		145,840
Owner-occupied CRE	2,397		112		2,509		928,641		931,150
Non-owner occupied CRE	—		—		—		1,493,099		1,493,099
Total commercial business	4,478		7,226		11,704		3,179,952		3,191,656
Residential real estate	420		10		430		164,152		164,582
Real estate construction and land development:
Residential	792		—		792		84,755		85,547
Commercial and multifamily	3,474		571		4,045		137,291		141,336
Total real estate construction and land development	4,266		571		4,837		222,046		226,883
Consumer	1,026		—		1,026		231,515		232,541
Total	$	10,190	$	7,807	$	17,997	$	3,797,665	$	3,815,662

Loans 90 days or more past due and still accruing interest were $2.0 million and $293,000 as of June 30, 2022 and December 31, 2021, respectively.

(f) Collateral-dependent Loans

The type of collateral securing loans individually evaluated for credit losses and for which the repayment was expected to be provided substantially through the operation or sale of the collateral as of June 30, 2022 and December 31, 2021 was as follows, with balances representing the amortized cost of the loan classified by the primary collateral category of each loan if multiple collateral sources secure the loan:

	June 30, 2022
	CRE		Farmland		Residential Real Estate		Total
	(In thousands)
Commercial business:
Commercial and industrial	$	1,239	$	2,492	$	1,316	$	5,047
Owner-occupied CRE	189		—		—		189
Total	$	1,428	$	2,492	$	1,316	$	5,236

	December 31, 2021
	CRE	Farmland	Residential Real Estate	Other	Total
	(In thousands)
Commercial business:

21

	December 31, 2021
	CRE		Farmland		Residential Real Estate		Other		Total
	(In thousands)
Commercial and industrial	$	1,499	$	4,362	$	1,036	$	245	$	7,142
Owner-occupied CRE	3,035		—		—		—		3,035
Non-owner occupied CRE	1,273		—		—		—		1,273
Total commercial business	5,807		4,362		1,036		245		11,450
Real estate construction and land development:
Commercial and multifamily	571		—		—		—		571
Total	$	6,378	$	4,362	$	1,036	$	245	$	12,021

There have been no significant changes to the collateral securing loans individually evaluated for credit losses and for which repayment was expected to be provided substantially through the operation or sale of the collateral during the six months ended June 30, 2022, except changes due to additions or removals of loans from this classification.

(g) Troubled Debt Restructured Loans

Loans that were modified as TDR loans are set forth in the following table for the periods indicated:

	Three Months Ended June 30,
	2022			2021
	Number of Contracts	Amortized Cost (1) (2)		Number of Contracts	Amortized Cost (1) (2)
	(Dollars in thousands)
Commercial business:
Commercial and industrial	3	$	1,727	18	$	5,673
Owner-occupied CRE	—	—		1	2,200
Non-owner occupied CRE	—	—		1	251
Total commercial business	3	1,727		20	8,124
Real estate construction and land development:
Commercial and multifamily	—	—		1	443
Consumer	3	44		6	146
Total	6	$	1,771	27	$	8,713

	Six Months Ended June 30,
	2022			2021
	Number of Contracts	Amortized Cost (1) (2)		Number of Contracts	Amortized Cost (1) (2)
	(Dollars in thousands)
Commercial business:
Commercial and industrial	4	$	2,610	31	$	8,713
Owner-occupied CRE	—	—		2	5,857
Non-owner occupied CRE	—	—		2	2,222
Total commercial business	4	2,610		35	16,792
Residential real estate	—	—		1	181
Real estate construction and land development:
Commercial and multifamily	—	—		1	443
Consumer	8	95		21	511
Total	12	$	2,705	58	$	17,927

(1) Number of contracts and amortized cost represent loans which have balances as of period end, net of subsequent payments after modifications. Certain TDR loans may have been paid-down or charged-off during the six months ended June 30, 2022 and 2021.

(2) As the Bank did not forgive any principal or interest balance as part of the loan modifications, the Bank’s amortized cost in each loan at the date of modification (pre-modification) did not change as a result of the modification (post-modification).

The Bank had an ACL on loans of $4,000 and $1.7 million at June 30, 2022 and June 30, 2021, respectively, related to these TDR loans which were restructured during the six months ended June 30, 2022 and June 30, 2021, respectively.

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The unfunded commitment to borrowers related to TDR loans was $3.4 million and $5.7 million at June 30, 2022 and December 31, 2021, respectively.

The following table presents loans that were modified in a TDR and subsequently defaulted within twelve months from the modification date during the periods indicated:

	Three Months Ended June 30,
	2022			2021
	Number of Contracts (1)	Amortized Cost (1)		Number of Contracts (1)	Amortized Cost (1)
	(Dollars in thousands)
Commercial business:
Commercial and industrial	—	$	—	1	$	46

	Six Months Ended June 30,
	2022			2021
	Number of Contracts (1)	Amortized Cost (1)		Number of Contracts (1)	Amortized Cost (1)
	(Dollars in thousands)
Commercial business:
Commercial and industrial	—	$	—	2	$	789
Owner-occupied CRE	1	189		—	—

(1) Number of contracts and amortized cost represent TDR loans which have balances as of period end, net of subsequent payments after modifications. Certain TDR loans may have been paid-down or charged-off during the six months ended June 30, 2022 and 2021.

The Bank had $3,000 ACL on loans at June 30, 2022 and $7,000 at June 30, 2021 related to these TDR loans which defaulted during the six months ended June 30, 2022 and 2021.

(h) Accrued interest receivable on loans receivable

Accrued interest receivable on loans receivable totaled $9.5 million and $10.1 million at June 30, 2022 and December 31, 2021, respectively. It is excluded from the calculation of the ACL on loans as interest accrued, but not received, is reversed timely.

(i) Foreclosure proceedings in process

At June 30, 2022, there were no consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process.

(4)Allowance for Credit Losses on Loans

The baseline loss rates used to calculate the ACL on loans at June 30, 2022 utilized the Bank's average quarterly historical loss information from December 31, 2012 through the balance sheet date. There were no changes to this assumption during the six months ended June 30, 2022. The Bank believes the historic loss rates are viable inputs to the current CECL model as the Bank's lending practice and business has remained relatively stable throughout the periods. While the Bank's assets have grown, the credit culture has stayed relatively consistent.

Prepayments included in the CECL model at June 30, 2022 were based on the 48-month rolling historical averages for each segment, which management believes is an accurate representation of future prepayment activity. There were no changes to this assumption during the six months ended June 30, 2022.

The reasonable and supportable period and subsequent reversion period used in the CECL model was five quarters and two quarters, respectively, at December 31, 2021. There were no changes to these assumptions during the six months ended June 30, 2022. Management believes forecasts beyond this seven quarter time period tend to diverge in economic assumptions and may be less comparable to actual future events. As the length of the reasonable and supportable period increases, the degree of judgment involved in estimating the allowance increases.

During the six months ended June 30, 2022, the ACL on loans decreased $2.7 million, or 6.3%, due primarily to a reversal of provision for credit losses on loans of $3.2 million driven by a $2.9 million reduction in the ACL on loans individually evaluated for losses and their related ACL as well as changes in the loan mix and continued improvement in forecasted economic indicators used to calculate credit losses. The ACL on loans at June 30, 2022 and December 31, 2021 did not include a reserve for SBA PPP loans as these loans are fully guaranteed by the SBA.

23

A summary of the changes in the ACL on loans during the six months ended June 30, 2022 and 2021 is as follows:

	Six Months Ended June 30,
	2022		2021
	(In thousands)
Beginning balance	$	42,361	$	70,185
Charge-offs	(604)		(320)
Recoveries of loans previously charged-off	1,110		653
Reversal of provision for credit losses on loans	(3,171)		(18,956)
Ending balance	$	39,696	$	51,562

The following tables detail the activity in the ACL on loans by segment and class for the periods indicated:

	Three Months Ended June 30, 2022
	Beginning Balance		Charge-offs		Recoveries		(Reversal of) Provision for Credit Losses		Ending Balance
	(In thousands)
Commercial business:
Commercial and industrial	$	15,265	$	(117)	$	149	$	(1,264)	$	14,033
Owner-occupied CRE	7,085		—		—		1,077		8,162
Non-owner occupied CRE	9,582		—		—		(70)		9,512
Total commercial business	31,932		(117)		149		(257)		31,707
Residential real estate	1,803		—		—		334		2,137
Real estate construction and land development:
Residential	1,124		—		6		(49)		1,081
Commercial and multifamily	3,175		—		53		(1,025)		2,203
Total real estate construction and land development	4,299		—		59		(1,074)		3,284
Consumer	2,299		(132)		53		348		2,568
Total	$	40,333	$	(249)	$	261	$	(649)	$	39,696

	Six Months Ended June 30, 2022
	Beginning Balance		Charge-offs		Recoveries		(Reversal of) Provision for Credit Losses		Ending Balance
	(In thousands)
Commercial business:
Commercial and industrial	$	17,777	$	(280)	$	421	$	(3,885)	$	14,033
Owner-occupied CRE	6,411		(36)		—		1,787		8,162
Non-owner occupied CRE	8,861		—		—		651		9,512
Total commercial business	33,049		(316)		421		(1,447)		31,707
Residential real estate	1,409		(30)		3		755		2,137
Real estate construction and land development:
Residential	1,304		—		14		(237)		1,081
Commercial and multifamily	3,972		—		53		(1,822)		2,203
Total real estate construction and land development	5,276		—		67		(2,059)		3,284
Consumer	2,627		(258)		619		(420)		2,568
Total	$	42,361	$	(604)	$	1,110	$	(3,171)	$	39,696

24

	Three Months Ended June 30, 2021
	Beginning Balance		Charge-offs		Recoveries		(Reversal of) Provision for Credit Losses		Ending Balance
	(In thousands)
Commercial business:
Commercial and industrial	$	21,770	$	(13)	$	132	$	(4,404)	$	17,485
Owner-occupied CRE	10,464		—		11		(1,913)		8,562
Non-owner occupied CRE	12,970		—		—		(2,340)		10,630
Total commercial business	45,204		(13)		143		(8,657)		36,677
Residential real estate	1,402		—		—		(249)		1,153
Real estate construction and land development:
Residential	2,048		—		4		(416)		1,636
Commercial and multifamily	11,223		—		—		(2,388)		8,835
Total real estate construction and land development	13,271		—		4		(2,804)		10,471
Consumer	4,348		(120)		144		(1,111)		3,261
Total	$	64,225	$	(133)	$	291	$	(12,821)	$	51,562

	Six Months Ended June 30, 2021
	Beginning Balance		Charge-offs		Recoveries		(Reversal of) Provision for Credit Losses		Ending Balance
	(In thousands)
Commercial business:
Commercial and industrial	$	30,010	$	(14)	$	337	$	(12,848)	$	17,485
Owner-occupied CRE	9,486		—		13		(937)		8,562
Non-owner occupied CRE	10,112		—		—		518		10,630
Total commercial business	49,608		(14)		350		(13,267)		36,677
Residential real estate	1,591		—		—		(438)		1,153
Real estate construction and land development:
Residential	1,951		—		20		(335)		1,636
Commercial and multifamily	11,141		(1)		—		(2,305)		8,835
Total real estate construction and land development	13,092		(1)		20		(2,640)		10,471
Consumer	5,894		(305)		283		(2,611)		3,261
Total	$	70,185	$	(320)	$	653	$	(18,956)	$	51,562

(5)Goodwill and Other Intangible Assets

(a) Goodwill

There were no additions to goodwill during the three and six months ended June 30, 2022 and 2021. Additionally, management analyzes its goodwill on an annual basis on December 31 and between annual tests in certain circumstances such as material adverse changes in legal, business, regulatory and economic factors. An impairment loss is recorded to the extent the carrying amount of goodwill exceeds its implied fair value. The Company performed an annual impairment assessment as of December 31, 2021 and concluded that there was no impairment.

(b) Other Intangible Assets

Other intangible assets represent core deposit intangible acquired in business combinations with estimated useful lives of ten years. There were no additions to other intangible assets during the three and six months ended June 30, 2022 and 2021.

(6)Derivative Financial Instruments

The Company utilizes interest rate swap derivative contracts to facilitate the needs of its commercial customers whereby it enters into an interest rate swap with a customer while at the same time entering into an offsetting interest rate swap with another financial institution. The transaction allows the Company’s customer to effectively convert a variable rate loan to a

25

fixed rate and the Company recognizes immediate income based upon the difference in the bid/ask spread of the underlying transactions with its customers and the third-party. These interest rate swaps are not designated as hedging instruments.

The Company is exposed to interest rate risk as part of the transaction. However, the Company acts as an intermediary for its customer therefore changes in the fair value of the underlying derivative contracts for the most part offset each other and do not significantly impact the Company’s results of operations.

Fee income related to interest rate swap derivative contract transactions is recorded in Interest rate swap fees on the unaudited Condensed Consolidated Statements of Income. The fair value of derivative positions outstanding is included in Prepaid expenses and other assets and Accrued expenses and other liabilities in the unaudited Condensed Consolidated Statements of Financial Condition. The gains and losses due to changes in fair value and all cash flows are included in Other income in the unaudited Condensed Consolidated Statements of Income, but typically net to zero based on the identical back-to-back interest rate swap derivative contracts unless a credit valuation adjustment is recorded to appropriately reflect nonperformance risk in the fair value measurement. Various factors impact changes in the credit valuation adjustments over time, including changes in the risk ratings of the parties to the contracts, as well as changes in market rates and volatilities, which affect the total expected exposure of the derivative instruments.

The following table presents the notional amounts and estimated fair values of interest rate derivative contracts outstanding at the dates indicated:

	June 30, 2022			December 31, 2021
	Notional Amounts		Estimated Fair Value	Notional Amounts		Estimated Fair Value
	(In thousands)
Non-hedging interest rate derivatives
Interest rate swap asset (1)	$	305,902	19,842	$	322,726	$	15,219
Interest rate swap liability (1)	305,902		(19,842)	322,726		(15,286)

 (1) The estimated fair value of derivatives with customers was $(19.0) million and $9.8 million as of June 30, 2022 and December 31, 2021, respectively. The estimated fair value of derivatives with third-parties was $19.0 million and $(9.8) million as of June 30, 2022 and December 31, 2021, respectively.

The Company is exposed to credit-related losses in the event of nonperformance by the counterparty to these agreements. Credit risk for derivatives with the customer is controlled through the credit approval process, amount limits, and monitoring procedures and is concentrated within our primary market areas. Credit risk for derivatives with third-parties is concentrated among four well-known broker dealers.

(7)Stockholders’ Equity

(a) Earnings Per Common Share

The following table illustrates the calculation of weighted average shares used for earnings per common share computations for the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands, except shares)
Net income	$	18,584	$	32,702	$	38,341	$	58,046
Basic:
Weighted average common shares outstanding	35,110,334		35,994,740		35,102,572		35,961,032
Diluted:
Basic weighted average common shares outstanding	35,110,334		35,994,740		35,102,572		35,961,032
Effect of potentially dilutive common shares (1)	299,190		294,724		310,150		307,829
Total diluted weighted average common shares outstanding	35,409,524		36,289,464		35,412,722		36,268,861
Potentially dilutive shares that were excluded from the computation of diluted earnings per share because to do so would be anti-dilutive (2)	16,978		7,065		14,334		4,766

(1)Represents the effect of the vesting of restricted stock units.

(2) Anti-dilution occurs when the unrecognized compensation cost per share of a restricted stock unit exceeds the market price of the Company’s stock.

(b) Dividends

The timing and amount of cash dividends paid on the Company's common stock depends on the Company’s earnings, capital requirements, financial condition and other relevant factors. Dividends on common stock from the Company depend

26

substantially upon receipt of dividends from the Bank, which is the Company’s predominant source of income.

The following table summarizes the dividend activity during the six months ended June 30, 2022 and the calendar year 2021:

Declared	Cash Dividend per Share	Record Date	Paid Date
January 27, 2021	$0.20	February 10, 2021	February 24, 2021
April 21, 2021	$0.20	May 5, 2021	May 19, 2021
July 21, 2021	$0.20	August 4, 2021	August 18, 2021
October 20, 2021	$0.21	November 3, 2021	November 17, 2021
January 26, 2022	$0.21	February 9, 2022	February 23, 2022
April 20, 2022	$0.21	May 4, 2022	May 18, 2022

The FDIC and the Washington State Department of Financial Institutions, Division of Banks have the authority under their supervisory powers to prohibit the payment of dividends by the Bank to the Company. Additionally, current guidance from the Federal Reserve provides, among other things, that dividends per share on the Company’s common stock generally should not exceed earnings per share, measured over the previous four fiscal quarters. Current regulations allow the Company and the Bank to pay dividends on their common stock if the Company’s or the Bank’s regulatory capital would not be reduced below the statutory capital requirements set by the Federal Reserve and the FDIC.

(c) Stock Repurchase Program

The Company has had various stock repurchase programs since March 1999. On March 12, 2020, the Company's Board of Directors authorized the repurchase of up to 5% of the Company's outstanding common shares, or 1,799,054 shares, under the twelfth stock repurchase plan. The number, timing and price of shares repurchased under the twelfth stock repurchase plan will depend on business and market conditions and other factors, including opportunities to deploy the Company's capital.

The following table provides total repurchased shares and average share prices under the plan for the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021		Plan Total(1)
Repurchased shares	19,531		—		100,090		—		1,160,840
Stock repurchase average share price	$	24.63	$	—	$	25.07	$	—	$	23.94

(1)Represents shares repurchased and average price per share paid during the duration of the plan.

In addition to the stock repurchases under a stock repurchase plan, the Company repurchases shares to pay withholding taxes on the vesting of restricted stock awards and units. The following table provides total shares repurchased to pay withholding taxes during the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Repurchased shares to pay withholding taxes	1,649		2,557		26,180		25,803
Stock repurchase to pay withholding taxes average share price	$	24.43	$	27.47	$	25.40	$	29.33

(8)Fair Value Measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1: Valuations for assets and liabilities traded in active exchange markets, or interest in open-end mutual funds that allow the Company to sell its ownership interest back to the fund at net asset value on a daily basis. Valuations are obtained from readily available pricing sources for market transactions involving identical assets, liabilities, or funds.

Level 2: Valuations for assets and liabilities traded in less active dealer or broker markets, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or valuations using methodologies with observable inputs.

Level 3: Valuations for assets and liabilities that are derived from other valuation methodologies, such as option pricing models, discounted cash flow models and similar techniques using unobservable inputs, and not based on market exchange, dealer, or broker traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities.

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(a) Recurring and Nonrecurring Basis

The Company used the following methods and significant assumptions to measure the fair value of certain assets on a recurring and nonrecurring basis:

Investment Securities:

The fair values of all investment securities are based upon the assumptions that market participants would use in pricing the security. If available, fair values of investment securities are determined by quoted market prices (Level 1). For investment securities where quoted market prices are not available, fair values are calculated based on market prices on similar securities (Level 2). For investment securities where quoted prices or market prices of similar securities are not available, fair values are calculated by using observable and unobservable inputs such as discounted cash flows or other market indicators (Level 3). Investment security valuations are obtained from third-party pricing services.

Collateral-Dependent Loans:

Collateral-dependent loans are identified for the calculation of the ACL on loans. The fair value used to measure credit loss for this type of loan is commonly based on recent real estate appraisals which are generally obtained at least every 18 months or earlier if there are changes to risk characteristics of the underlying loan. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by independent appraisers to adjust for differences between the comparable sales and income data available. The Bank also incorporates an estimate of cost to sell the collateral when the sale is probable. Such adjustments may be significant and result in a Level 3 classification of the inputs for determining fair value. Non-real estate collateral may be valued using an appraisal, net book value based on the borrower’s financial statements or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation and management’s expertise and knowledge of the customer and customer’s business (Level 3). Individually evaluated loans are analyzed for credit loss on a quarterly basis and the ACL on loans is adjusted as required based on the results.

Appraisals on collateral-dependent loans are performed by certified general appraisers for commercial properties or certified residential appraisers for residential properties whose qualifications and licenses have been reviewed and verified by the Bank. Once received, the Bank's internal appraisal department reviews and approves the assumptions and approaches utilized in the appraisal as well as the resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics.

Derivative Financial Instruments:

The Bank obtains broker or dealer quotes to value its interest rate derivative contracts, which use valuation models using observable market data as of the measurement date (Level 2), and incorporates credit valuation adjustments to reflect nonperformance risk in the measurement of fair value (Level 3). Although the Bank has determined that the majority of the inputs used to value its interest rate swap derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as borrower risk ratings, to evaluate the likelihood of default by itself and its counterparties. As of June 30, 2022 and December 31, 2021, the Bank assessed the significance of the impact of the credit valuation adjustment on the overall valuation of its interest rate swap derivatives and determined the credit valuation adjustment was not significant to the overall valuation of its interest rate swap derivatives. As a result, the Bank has classified its interest rate swap derivative valuations in Level 2 of the fair value hierarchy.

Branches held for sale:

Branches held for sale are recorded at fair value less costs to sell when transferred from premises and equipment, net to prepaid expenses and other assets on the unaudited Condensed Consolidated Statements of Financial Condition with any valuation adjustment recorded within other noninterest expense on the unaudited Condensed Consolidated Statements of Income. The fair value of branches held for sale is determined based on a real estate appraisal or broker price opinion. Adjustments are routinely made in the appraisal and broker price opinion process by independent appraisers and commercial real estate brokers, respectively, to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in Level 3 classification of the inputs for determining fair value. Additionally, the fair value of branches held for sale can be adjusted based on executed agreements of sale to be completed at a future date.

Recurring Basis

The following tables summarize the balances of assets and liabilities measured at fair value on a recurring basis at the dates indicated:

	June 30, 2022
	Total		Level 1		Level 2		Level 3
	(In thousands)
Assets
Investment securities available for sale:
U.S. government and agency securities	$	65,668	$	19,939	$	45,729	$	—
Municipal securities	200,010		—		200,010		—
Residential CMO and MBS	398,156		—		398,156		—

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	June 30, 2022
	Total		Level 1		Level 2		Level 3
	(In thousands)
Commercial CMO and MBS	493,620		—		493,620		—
Corporate obligations	5,978		—		5,978		—
Other asset-backed securities	24,156		—		24,156		—
Total investment securities available for sale	1,187,588		19,939		1,167,649		—
Equity security	186		186		—		—
Derivative assets - interest rate swaps	19,842		—		19,842		—
Liabilities
Derivative liabilities - interest rate swaps	$	19,842	$	—	$	19,842	$	—

	December 31, 2021
	Total		Level 1		Level 2		Level 3
	(In thousands)
Assets
Investment securities available for sale:
U.S. government and agency securities	$	21,373	$	—	$	21,373	$	—
Municipal securities	221,212		—		221,212		—
Residential CMO and MBS	306,884		—		306,884		—
Commercial CMO and MBS	315,861		—		315,861		—
Corporate obligations	2,014		—		2,014		—
Other asset-backed securities	26,991		—		26,991		—
Total investment securities available for sale	894,335		—		894,335		—
Equity security	240		240		—		—
Derivative assets - interest rate swaps	15,219		—		15,219		—
Liabilities
Derivative liabilities - interest rate swaps	$	15,286	$	—	$	15,286	$	—

Nonrecurring Basis

The Company may be required to measure certain financial assets and liabilities at fair value on a nonrecurring basis. These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets. The following tables represent assets measured at fair value on a nonrecurring basis at the dates indicated:

			Fair Value at June 30, 2022
	Basis(1)		Total		Level 1		Level 2		Level 3
	(In thousands)
Collateral-dependent loans:
Commercial business:
Commercial and industrial	$	1,054	$	969	$	—	$	—	$	969
Owner-occupied CRE	613		186		—		—		186
Total assets measured at fair value on a nonrecurring basis	$	1,667	$	1,155	$	—	$	—	$	1,155

(1) Basis represents the outstanding principal balance of collateral-dependent loans.

			Fair Value at December 31, 2021
	Basis(1)		Total		Level 1		Level 2		Level 3
	(In thousands)
Collateral-dependent loans:
Commercial business:
Commercial and industrial	$	1,911	$	1,049	$	—	$	—	$	1,049
Owner-occupied CRE	613		189		—		—		189
Total commercial business	2,524		1,238		—		—		1,238

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Real estate construction and land development:
Commercial and multifamily	991		$	534	—		—		534
Total	3,515		1,772		—		—		1,772
Prepaid expenses and other assets:
Branch held for sale (2)	698		698		—		—		698
Total assets measured at fair value on a nonrecurring basis	$	4,213	$	2,470	$	—	$	—	$	2,470

(1) Basis represents the outstanding principal balance of collateral-dependent loans and the carrying value of the branch held for sale.

(2) In December 2021, one branch was written down to its net realizable value concurrent with the signing of an agreement for sale at a future date.

The following table represents the net (loss) gain recorded in earnings as a result of nonrecurring fair value adjustments recorded during the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Collateral-dependent loans:
Commercial business:
Commercial and industrial	$	35	$	6	$	23	$	(28)
Owner-occupied CRE	(3)		(76)		(3)		(76)
Total commercial business	32		(70)		20		(104)
Real estate construction and land development:
Commercial and multifamily	—		(23)		—		(38)
Net loss from nonrecurring fair value adjustments	$	32	$	(93)	$	20	$	(142)

The following tables present quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at the dates indicated:

	June 30, 2022
	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range of Inputs; Weighted Average
	(Dollars in thousands)
Collateral-dependent loans	$	1,155	Market approach	Adjustment for differences between the comparable sales	N/A(1)

(1)Quantitative disclosures are not provided for collateral-dependent loans because there were no adjustments made to the appraisal or stated values during the current period.

	December 31, 2021
	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range of Inputs; Weighted Average
	(Dollars in thousands)
Collateral-dependent loans	$	1,772	Market approach	Adjustment for differences between the comparable sales	35.0% - (11.0%); 13.8%
Branch held for sale	$	698	Market approach	Sale agreement	Not applicable

(b) Fair Value of Financial Instruments

Broadly traded markets do not exist for most of the Company’s financial instruments; therefore, the fair value calculations attempt to incorporate the effect of current market conditions at a specific time. These determinations are subjective in nature, involve uncertainties and matters of significant judgment and do not include tax ramifications; therefore, the results cannot be determined with precision, substantiated by comparison to independent markets and may not be realized in an actual sale or immediate settlement of the instruments. There may be inherent weaknesses in any calculation technique and changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results. For all of these reasons, the aggregation of the fair value calculations presented herein do not represent, and should not be construed to represent, the underlying value of the Company.

The following tables present the carrying value amount of the Company’s financial instruments and their corresponding

30

estimated fair values at the dates indicated:

	June 30, 2022
	Carrying Value		Fair Value		Fair Value Measurements Using:
					Level 1		Level 2		Level 3
	(In thousands)
Financial Assets:
Cash and cash equivalents	$	994,055	$	994,055	$	994,055	$	—	$	—
Investment securities available for sale	1,187,588		1,187,588		19,939		1,167,649		—
Investment securities held to maturity	615,653		559,312		—		559,312		—
Loans held for sale	1,311		1,353		—		1,353		—
Loans receivable, net	3,834,368		3,760,294		—		—		3,760,294
Accrued interest receivable	15,908		15,908		272		6,185		9,451
Derivative assets - interest rate swaps	19,842		19,842		—		19,842		—
Equity security	186		186		186		—		—
Financial Liabilities:
Non-maturity deposits	$	6,019,421	$	6,019,421	$	6,019,421	$	—	$	—
Certificates of deposit	310,769		311,481		—		311,481		—
Securities sold under agreement to repurchase	41,827		41,827		41,827		—		—
Junior subordinated debentures	21,326		19,250		—		—		19,250
Accrued interest payable	83		83		31		16		36
Derivative liabilities - interest rate swaps	19,842		19,842		—		19,842		—

	December 31, 2021
	Carrying Value		Fair Value		Fair Value Measurements Using:
					Level 1		Level 2		Level 3
	(In thousands)
Financial Assets:
Cash and cash equivalents	$	1,723,292	$	1,723,292	$	1,723,292	$	—	$	—
Investment securities available for sale	894,335		894,335		—		894,335		—
Investment securities held to maturity	383,393		376,331		—		376,331		—
Loans held for sale	1,476		1,527		—		1,527		—
Loans receivable, net	3,773,301		3,849,602		—		—		3,849,602
Accrued interest receivable	14,657		14,657		14		4,582		10,061
Derivative assets - interest rate swaps	15,219		15,219		—		15,219		—
Equity security	240		240		240		—		—
Financial Liabilities:
Non-maturity deposits	$	6,038,498	$	6,038,498	$	6,038,498	$	—	$	—
Certificates of deposit	342,839		344,025		—		344,025		—
Securities sold under agreement to repurchase	50,839		50,839		50,839		—		—
Junior subordinated debentures	21,180		18,750		—		—		18,750
Accrued interest payable	73		73		33		19		21
Derivative liabilities - interest rate swaps	15,286		15,286		—		15,286		—

(9)Cash Restriction

The Bank had no cash restrictions at June 30, 2022 and had restricted cash included in interest earning deposits of $9.8 million at December 31, 2021 relating to collateral required on interest rate swaps from third-parties as discussed in Note (6) Derivative Financial Instruments. The Bank does not have a collateral requirement with customers.

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(10)Commitments and Contingencies

In the ordinary course of business, the Bank may enter into various types of transactions that include commitments to extend credit that are not included in its unaudited Condensed Consolidated Financial Statements. The Bank applies the same credit standards to these commitments as it uses in all its lending activities and has included these commitments in its lending risk evaluations. The majority of the commitments presented below are variable rate. Loan commitments can be either revolving or non-revolving. The Bank’s exposure to credit and market risk under commitments to extend credit is represented by the amount of these commitments.

The following table presents outstanding commitments to extend credit, including letters of credit, at the dates indicated:

	June 30, 2022		December 31, 2021
	(In thousands)
Commercial business:
Commercial and industrial	$	553,134	$	570,156
Owner-occupied CRE	3,612		2,252
Non-owner occupied CRE	13,310		7,487
Total commercial business	570,056		579,895
Real estate construction and land development:
Residential	52,374		51,838
Commercial and multifamily	217,177		209,217
Total real estate construction and land development	269,551		261,055
Consumer	307,906		285,010
Total outstanding commitments	$	1,147,513	$	1,125,960

The following table details the activity in the ACL on unfunded commitments during the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Balance, beginning of period	$	1,552	$	3,617	$	2,607	$	4,681
Reversal of provision for credit losses on unfunded commitments	(555)		(1,166)		(1,610)		(2,230)
Balance, end of period	$	997	$	2,451	$	997	$	2,451

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion is intended to assist in understanding the financial condition and results of operations of the Company as of and for the three and six months ended June 30, 2022. The information contained in this section should be read together with the unaudited Condensed Consolidated Financial Statements and the accompanying Notes included herein, the Forward-Looking Statements included herein and the December 31, 2021 audited Consolidated Financial Statements and the accompanying Notes included in our 2021 Annual Form 10-K.

Overview

Heritage Financial Corporation is a bank holding company which primarily engages in the business activities of our wholly-owned financial institution subsidiary, Heritage Bank. We provide financial services to our local communities with an ongoing strategic focus on our commercial banking relationships, market expansion and asset quality. The Company’s business activities generally are limited to passive investment activities and oversight of its investment in the Bank. Accordingly, the information set forth in this report relates primarily to the Bank’s operations.

Our business consists primarily of commercial lending and deposit relationships with small to medium sized businesses and their owners in our market areas and attracting deposits from the general public. We also make real estate construction and land development loans and consumer loans. We additionally originate for sale or for investment purposes residential real estate loans on single family properties located primarily in our markets. During the three months ended March 31, 2020, we ceased indirect auto loan originations, included in our consumer loan portfolio.

Our core profitability depends primarily on our net interest income. Net interest income is the difference between interest income, which is the income that we earn on interest earning assets, comprised primarily of loans and investment securities, and interest expense, which is the amount we pay on our interest bearing liabilities, consisting primarily of deposits.

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Management manages the repricing characteristics of the Company's interest earning assets and interest bearing liabilities to protect net interest income from changes in market interest rates and changes in the shape of the yield curve. Like most financial institutions, our net interest income is significantly affected by general and local economic conditions, particularly changes in market interest rates including most recently significant changes as a result of inflation, and by governmental policies and actions of regulatory agencies. Net interest income is additionally affected by changes in the volume and mix of interest earning assets, interest earned on these assets, the volume and mix of interest bearing liabilities and interest paid on these liabilities.

Our net income is affected by many factors, including the provision for credit losses on loans. The provision for credit losses on loans is dependent on changes in the loan portfolio and management’s assessment of the collectability of the loan portfolio as well as prevailing economic and market conditions. Management believes that the ACL on loans reflects the amount that is appropriate to provide for current expected credit losses in our loan portfolio based on our methodology.

Net income is also affected by noninterest income and noninterest expense. Noninterest income primarily consists of service charges and other fees, card revenue and other income. Noninterest expense consists primarily of compensation and employee benefits, occupancy and equipment, data processing and professional services. Compensation and employee benefits consist primarily of the salaries and wages paid to our employees, payroll taxes, expenses for retirement and other employee benefits. Occupancy and equipment expenses are the fixed and variable costs of buildings and equipment and consists primarily of lease expenses, depreciation charges, maintenance and utilities. Data processing consists primarily of processing and network services related to the Bank’s core operating system, including the account processing system, electronic payments processing of products and services, internet and mobile banking channels and software-as-a-service providers. Professional services consists primarily of third-party service providers such as auditors, consultants and lawyers.

Results of operations may also be significantly affected by general and local economic and competitive conditions, governmental policies and actions of regulatory authorities, including changes resulting from the COVID-19 Pandemic and inflation and the governmental actions taken to address these issues. Net income is also impacted by growth of operations through organic growth or acquisitions.

COVID-19 Pandemic Response

The Company maintains its commitment to supporting its community and customers during the COVID-19 Pandemic and remains focused on keeping its employees safe and the Bank running effectively to serve its customers. The Bank will continue to monitor branch access and occupancy levels in relation to cases and close contact scenarios and follow governmental restrictions and public health authority guidelines.

Branch Consolidation Plan

The Company reduced the branch count to 49 from 61 branches during the year ended December 31, 2021, including the consolidation of eight branches and four branches during the three months ended March 31, 2021 and December 31, 2021, respectively. The Company integrated these locations into other branches within its network. These actions were the result of the Company’s increased focus on balancing physical locations and digital banking channels, driven by increased customer usage of online and mobile banking and a commitment to improve digital banking technology.

Results of Operations

Comparison of quarter ended June 30, 2022 to the comparable quarter in the prior year

Net income was $18.6 million, or $0.52 per diluted common share, for the three months ended June 30, 2022 compared to $32.7 million, or $0.90 per diluted common share, for the same period in 2021. Net income decreased $14.1 million, or 43.2%, due primarily to a lower reversal of provision for credit losses and secondarily due to lower interest and fees on loans. The Company’s efficiency ratio was 62.57% for the three months ended June 30, 2022 compared to 58.18% for the same period in 2021.

Comparison of six months ended June 30, 2022 to the comparable period in the prior year.

Net income was $38.3 million, or $1.08 per diluted common share, for the six months ended June 30, 2022 compared to $58.0 million, or $1.60 per diluted common share, for the six months ended June 30, 2021. Net income decreased $19.7 million, or 33.9%, also due primarily to lower reversal of provision for credit losses and secondarily due to lower interest and fees on loans. The Company’s efficiency ratio was 63.46% for the six months ended June 30, 2022 compared to 59.84% for the same period in 2021.

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Average Balances, Yields and Rates Paid

The following table provides relevant net interest income information for the periods indicated:

	Three Months Ended June 30,
	2022						2021						Change
	Average Balance(1)		Interest Earned/ Paid		Average Yield/ Rate		Average Balance(1)		Interest Earned/ Paid		Average Yield/ Rate		Average Balance(1)		Interest Earned/ Paid		Average Yield/ Rate
	(Dollars in thousands)
Interest Earning Assets:
Loans receivable, net (2)(3)	$	3,812,045	$	40,890	4.30	%	$	4,402,868	$	50,750	4.62	%	$	(590,823)	$	(9,860)	(0.32)	%
Taxable securities	1,450,328		7,607		2.10		799,023		4,050		2.03		651,305		3,557		0.07
Nontaxable securities (3)	137,429		893		2.61		160,489		947		2.37		(23,060)		(54)		0.24
Interest earning deposits	1,213,156		2,342		0.77		964,791		263		0.11		248,365		2,079		0.66
Total interest earning assets	6,612,958		51,732		3.14	%	6,327,171		56,010		3.55	%	285,787		(4,278)		(0.41)	%
Noninterest earning assets	772,658						752,034						20,624
Total assets	$	7,385,616					$	7,079,205					$	306,411
Interest Bearing Liabilities:
Certificates of Deposit	$	321,926	$	324	0.40	%	$	381,417	$	481	0.51	%	$	(59,491)	$	(157)	(0.11)	%
Savings accounts	652,407		88		0.05		591,616		89		0.06		60,791		(1)		(0.01)
Interest bearing demand and money market accounts	3,067,373		1,001		0.13		2,836,717		954		0.13		230,656		47		—
Total interest bearing deposits	4,041,706		1,413		0.14		3,809,750		1,524		0.16		231,956		(111)		(0.02)
Junior subordinated debentures	21,287		239		4.50		20,986		186		3.55		301		53		0.95
Securities sold under agreement to repurchase	48,272		32		0.27		43,259		35		0.32		5,013		(3)		(0.05)
Total interest bearing liabilities	4,111,265		1,684		0.16	%	3,873,995		1,745		0.18	%	237,270		(61)		(0.02)	%
Noninterest bearing demand deposits	2,349,746						2,261,373						88,373
Other noninterest bearing liabilities	113,644						108,076						5,568
Stockholders’ equity	810,961						835,761						(24,800)
Total liabilities and stock-holders’ equity	$	7,385,616					$	7,079,205					$	306,411
Net interest income and spread			$	50,048	2.98	%			$	54,265	3.37	%			$	(4,217)	(0.39)	%
Net interest margin					3.04	%					3.44	%					(0.40)	%

(1) Average balances are calculated using daily balances.

(2) Average loan receivable, net includes loans held for sale and loans classified as nonaccrual, which carry a zero yield. Interest earned on loans receivable, net includes the amortization of net deferred loan fees of $2.4 million and $8.2 million for the three months ended June 30, 2022 and 2021, respectively.

(3) Yields on tax-exempt loans and securities have not been stated on a tax-equivalent basis.

Net Interest Income and Margin Overview

One of the Company's key sources of earnings is net interest income. There are several factors that affect net interest income, including, but not limited to, the volume, pricing, mix and maturity of interest earning assets and interest bearing liabilities; the volume of noninterest earning assets, noninterest bearing demand deposits, other noninterest bearing liabilities and stockholders' equity; market interest rate fluctuations; and asset quality.

The following table provides the changes in net interest income for the three months ended June 30, 2022 compared to the three months ended June 30, 2021 due to changes in average asset and liability balances (volume), changes in average rates (rate) and changes attributable to the combined effect of volume and interest rates allocated proportionately to the absolute value of changes due to volume and changes due to interest rates:

	Increase (Decrease) Due to Changes In:
	Volume		Yield/Rate		Total		% Change
	(Dollars in thousands)
Interest Earning Assets:
Loans receivable, net	$	(6,499)	$	(3,361)	$	(9,860)	(19.4)	%

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	Increase (Decrease) Due to Changes In:
	Volume		Yield/Rate		Total		% Change
	(Dollars in thousands)
Taxable securities	3,411		146		3,557		87.8
Nontaxable securities	(144)		90		(54)		(5.7)
Interest earning deposits	84		1,995		2,079		790.5
Total interest income	$	(3,148)	$	(1,130)	$	(4,278)	(7.6)	%
Interest Bearing Liabilities:
Certificates of deposit	$	(68)	$	(89)	$	(157)	(32.6)	%
Savings accounts	9		(10)		(1)		(1.1)
Interest bearing demand and money market accounts	76		(29)		47		4.9
Total interest bearing deposits	17		(128)		(111)		(7.3)
Junior subordinated debentures	3		50		53		28.5
Securities sold under agreement to repurchase	4		(7)		(3)		(8.6)
Total interest expense	$	24	$	(85)	$	(61)	(3.5)	%
Net interest income	$	(3,172)	$	(1,045)	$	(4,217)	(7.8)	%

Comparison of quarter ended June 30, 2022 to the comparable quarter in the prior year

Net interest income decreased primarily as a result of the decrease in deferred SBA PPP loan fees recognized due to a decrease in the volume of forgiven SBA PPP loans, offset partially by a higher average balance of taxable investment securities and higher yield earned on interest earning deposits.

Net interest margin decreased due primarily to the change in the mix of total interest earning assets into a higher proportion of lower yielding investment securities and interest earning deposits, resulting mostly from a significant decrease in SBA PPP loan balances.

The following table presents the loan yield and the impacts of SBA PPP loans and the incremental accretion on acquired loans on this financial measure for the periods presented below:

	Three Months Ended
	June 30, 2022		June 30, 2021
Loan yield (GAAP)	4.30	%	4.62	%
Exclude impact from SBA PPP loans	(0.15)		(0.12)
Exclude impact from incremental accretion on acquired loans	(0.03)		(0.05)
Loan yield, excluding SBA PPP loans and incremental accretion on acquired loans (non-GAAP) (1)	4.12	%	4.45	%

(1) For additional information, see the "Reconciliations of Non-GAAP Measures" section below.

The impact to loan yield from recoveries of interest and fees on loans classified as nonaccrual was one basis point during the three months ended June 30, 2022 compared to 18 basis points during the same period in 2021.

Comparison of six months ended June 30, 2022 to the comparable period in the prior year

The following table provides relevant net interest income information for the periods indicated:

	Six Months Ended June 30,
	2022						2021						Change
	Average Balance(1)		Interest Earned/ Paid		Average Yield/ Rate		Average Balance(1)		Interest Earned/ Paid		Average Yield/ Rate		Average Balance(1)		Interest Earned/ Paid		Average Yield/ Rate
	(Dollars in thousands)
Interest Earning Assets:
Loans receivable, net (2)(3)	$	3,792,792	$	81,915	4.36	%	$	4,446,442	$	100,274	4.55	%	$	(653,650)	$	(18,359)	(0.19)	%
Taxable securities	1,361,437		13,610		2.02		736,990		7,584		2.08		624,447		6,026		(0.06)
Nontaxable securities (3)	141,894		1,753		2.49		162,192		1,905		2.37		(20,298)		(152)		0.12
Interest earning deposits	1,357,420		3,048		0.45		840,030		438		0.11		517,390		2,610		0.34
Total interest earning assets	6,653,543		100,326		3.04	%	6,185,654		110,201		3.59	%	467,889		(9,875)		(0.55)	%

35

	Six Months Ended June 30,
	2022						2021						Change
	Average Balance(1)		Interest Earned/ Paid		Average Yield/ Rate		Average Balance(1)		Interest Earned/ Paid		Average Yield/ Rate		Average Balance(1)		Interest Earned/ Paid		Average Yield/ Rate
	(Dollars in thousands)
Noninterest earning assets	756,523						754,533						1,990
Total assets	$	7,410,066					$	6,940,187					$	469,879
Interest Bearing Liabilities:
Certificates of Deposit	$	329,100	$	662	0.41	%	$	387,310	$	1,040	0.54	%	$	(58,210)	$	(378)	(0.13)	%
Savings accounts	649,562		175		0.05		575,942		184		0.06		73,620		(9)		(0.01)
Interest bearing demand and money market accounts	3,066,849		2,000		0.13		2,784,714		2,028		0.15		282,135		(28)		(0.02)
Total interest bearing deposits	4,045,511		2,837		0.14		3,747,966		3,252		0.17		297,545		(415)		(0.03)
Junior subordinated debentures	21,250		433		4.11		20,950		373		3.59		300		60		0.52
Securities sold under agreement to repurchase	49,140		64		0.26		41,676		73		0.35		7,464		(9)		(0.09)
Total interest bearing liabilities	4,115,901		3,334		0.16	%	3,810,592		3,698		0.20	%	305,309		(364)		(0.04)	%
Noninterest bearing demand deposits	2,354,571						2,183,638						170,933
Other noninterest bearing liabilities	111,167						114,542						(3,375)
Stockholders’ equity	828,427						831,415						(2,988)
Total liabilities and stock-holders’ equity	$	7,410,066					$	6,940,187					$	469,879
Net interest income and spread			$	96,992	2.88	%			$	106,503	3.39	%			$	(9,511)	(0.51)	%
Net interest margin					2.94	%					3.47	%					(0.53)	%

(1) Average balances are calculated using daily balances.

(2) Average loan receivable, net includes loans held for sale and loans classified as nonaccrual, which carry a zero yield. Interest earned on loans receivable, net includes the amortization of net deferred loan fees of $5.8 million and $15.4 million for the six months ended June 30, 2022 and 2021, respectively.

(3) Yields on tax-exempt loans and securities have not been stated on a tax-equivalent basis.

Net Interest Income and Margin Overview

The following table provides the changes in net interest income for the six months ended June 30, 2022 compared to the six months ended June 30, 2021 due to changes in average asset and liability balances (volume), changes in average rates (rate) and changes attributable to the combined effect of volume and interest rates allocated proportionately to the absolute value of changes due to volume and changes due to interest rates:

	Increase (Decrease) Due to Changes In:
	Volume		Yield/Rate		Total		% Change
	(Dollars in thousands)
Interest Earning Assets:
Loans receivable, net	$	(14,257)	$	(4,102)	$	(18,359)	(18.3)	%
Taxable securities	6,248		(222)		6,026		79.5
Nontaxable securities	(247)		95		(152)		(8.0)
Interest earning deposits	410		2,200		2,610		595.9
Total interest income	$	(7,846)	$	(2,029)	$	(9,875)	(9.0)	%
Interest Bearing Liabilities:
Certificates of deposit	$	(142)	$	(236)	$	(378)	(36.3)	%
Savings accounts	22		(31)		(9)		(4.9)
Interest bearing demand and money market accounts	195		(223)		(28)		(1.4)
Total interest bearing deposits	75		(490)		(415)		(12.8)
Junior subordinated debentures	5		55		60		16.1
Securities sold under agreement to repurchase	12		(21)		(9)		(12.3)
Total interest expense	$	92	$	(456)	$	(364)	(9.8)	%
Net interest income	$	(7,938)	$	(1,573)	$	(9,511)	(8.9)	%

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Comparison of six months ended June 30, 2022 to the comparable period in the prior year

Net interest income decreased due primarily to a decrease in deferred SBA PPP loan fees recognized due to a decrease in the volume of forgiven SBA PPP loans, offset partially by a higher average balance of taxable investment securities and higher yield earned on interest earning deposits.

Net interest margin decreased due primarily to the change in the mix of total interest earning assets into a higher proportion of lower yielding investment securities and interest earning deposits.

The following table presents the loan yield and the impacts of SBA PPP loans and the incremental accretion on acquired loans on this financial measure for the periods presented below:

	Six Months Ended June 30,
	2022		2021
Loan yield (GAAP)	4.36	%	4.55	%
Exclude impact from SBA PPP loans	(0.18)		(0.05)
Exclude impact from incremental accretion on acquired loans	(0.05)		(0.09)
Loan yield, excluding SBA PPP loans and incremental accretion on acquired loans (non-GAAP) (1)	4.13	%	4.41	%

(1)    For additional information, see "Reconciliations of Non-GAAP Measures."

The impact to loan yield from recoveries of interest and fees on loans classified as nonaccrual was six basis points during the six months ended June 30, 2022 compared to 13 basis points during the same period in 2021.

Provision for Credit Losses Overview

The aggregate of the provision for credit losses on loans and the provision for credit losses on unfunded commitments is presented on the unaudited Condensed Consolidated Statements of Income as the (reversal of) provision for credit losses. The ACL on unfunded commitments is included on the unaudited Condensed Consolidated Statements of Financial Condition within accrued expenses and other liabilities.

Comparison of quarter ended June 30, 2022 to the comparable quarter in the prior year

The following table presents the reversal of provision for credit losses for the periods indicated:

	Three Months Ended June 30,
	2022		2021		Change		% Change
	(Dollars in thousands)
Reversal of provision for credit losses on loans	$	(649)	$	(12,821)	$	12,172	(94.9)	%
Reversal of provision for credit losses on unfunded commitments	(555)		(1,166)		611		(52.4)
Reversal of provision for credit losses	$	(1,204)	$	(13,987)	$	12,783	(91.4)	%

The reversal of provision for credit losses on loans recognized during the three months ended June 30, 2022 was due primarily to a reduction of loans individually evaluated for losses and as a result their related ACL. The reversal of provision for credit losses on unfunded commitments recognized during the three months ended June 30, 2022 was due primarily to higher utilization rates on commercial and industrial lines of credit.

The reversal of provision for credit losses on loans and unfunded commitments recognized during the three months ended June 30, 2021 was due primarily to continued improvements in the economic forecast at June 30, 2021 as compared to the forecast at March 31, 2021.

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Comparison of six months ended June 30, 2022 to the comparable period in the prior year

The following table presents the provision for credit losses for the periods indicated:

	Six Months Ended June 30,
	2022		2021		Change		Percentage Change
	(Dollars in thousands)
Reversal of provision for credit losses on loans	$	(3,171)	$	(18,956)	$	15,785	(83.3)	%
Reversal of provision for credit losses on unfunded commitments	(1,610)		(2,230)		620		(27.8)
Reversal of provision for credit losses	$	(4,781)	$	(21,186)	$	16,405	(77.4)	%

The reversal of provision for credit losses recognized during the six months ended June 30, 2022 was also due primarily to a reduction of loans individually evaluated for losses and as a result their related ACL.

The reversal of provision for credit losses recognized during the six months ended June 30, 2021 was also due substantially to continued improvements in the economic forecast at June 30, 2021 as compared to the forecast at December 31, 2020.

Noninterest Income Overview

Comparison of quarter ended June 30, 2022 to the comparable quarter in the prior year

The following table presents the change in the key components of noninterest income for the periods indicated:

	Three Months Ended June 30,
	2022		2021		Change		% Change
	(Dollars in thousands)
Service charges and other fees	$	2,391	$	2,067	$	324	15.7	%
Card revenue	2,332		2,338		(6)		(0.3)
Gain on sale of loans, net	219		1,003		(784)		(78.2)
Interest rate swap fees	26		209		(183)		(87.6)
Bank owned life insurance income	764		717		47		6.6
Gain on sale of other assets, net	—		724		(724)		(100.0)
Other income	1,284		1,239		45		3.6
Total noninterest income	$	7,016	$	8,297	$	(1,281)	(15.4)	%

Noninterest income decreased due primarily to reduced gain on sale of loans, net as sales volume of secondary market mortgage loans declined and secondarily due to gain on sale other assets, net reflecting the sale of of branches recognized during the second quarter of 2021.

Comparison of six months ended June 30, 2022 to the comparable period in the prior year

The following table presents the change in the key components of noninterest income for the periods indicated:

	Six Months Ended June 30,
	2022		2021		Change		% Change
	(Dollars in thousands)
Service charges and other fees	$	4,687	$	3,959	$	728	18.4	%
Card revenue	4,773		4,435		338		7.6
Gain on sale of investment securities, net	—		29		(29)		(100.0)
Gain on sale of loans, net	460		2,373		(1,913)		(80.6)
Interest rate swap fees	305		361		(56)		(15.5)
Bank owned life insurance income	2,459		1,373		1,086		79.1
Gain on sale of other assets, net	204		746		(542)		(72.7)

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	Six Months Ended June 30,
	2022		2021		Change		% Change
	(Dollars in thousands)
Other income	2,666		3,272		(606)		(18.5)
Total noninterest income	$	15,554	$	16,548	$	(994)	(6.0)	%

Noninterest income decreased due primarily to reduced gain on sale of loans, net as sales volume of secondary market mortgage loans declined and higher gain on sale of other assets, net reflecting the sale of branches recognized during the six months end June 30, 2021, offset partially by an increase in bank owned life insurance income due to the recognition of a death benefit of $1.0 million during the three months ended March 31, 2022 as well as increases in service charges and other fees and card revenue reflecting increased customer transactions as businesses reopened in our market areas.

Noninterest Expense Overview

Comparison of quarter ended June 30, 2022 to the comparable quarter in the prior year

The following table presents changes in the key components of noninterest expense for the periods indicated:

	Three Months Ended June 30,
	2022		2021		Change		% Change
	(Dollars in thousands)
Compensation and employee benefits	$	21,778	$	21,803	$	(25)	(0.1)	%
Occupancy and equipment	4,171		4,091		80		2.0
Data processing	4,185		3,998		187		4.7
Marketing	344		567		(223)		(39.3)
Professional services	529		1,037		(508)		(49.0)
State/municipal business and use tax	867		991		(124)		(12.5)
Federal deposit insurance premium	425		339		86		25.4
Amortization of intangible assets	704		797		(93)		(11.7)
Other expense	2,704		2,773		(69)		(2.5)
Total noninterest expense	$	35,707	$	36,396	$	(689)	(1.9)	%

Noninterest expense decreased due primarily to third-party expenses related to SBA PPP loan forgiveness and higher legal costs related to loan collection efforts included in professional services expense for the second quarter of 2021.

Comparison of six months ended June 30, 2022 to the comparable period in the prior year

The following table presents changes in the key components of noninterest expense for the periods indicated:

	Six Months Ended June 30,
	2022		2021		Change		% Change
	(Dollars in thousands)
Compensation and employee benefits	$	43,030	$	44,004	$	(974)	(2.2)	%
Occupancy and equipment	8,502		8,545		(43)		(0.5)
Data processing	8,246		7,810		436		5.6
Marketing	610		1,080		(470)		(43.5)
Professional services	1,228		2,307		(1,079)		(46.8)
State/municipal business and use tax	1,663		1,963		(300)		(15.3)
Federal deposit insurance premium	1,025		928		97		10.5
Amortization of intangible assets	1,408		1,594		(186)		(11.7)
Other expense	5,715		5,407		308		5.7
Total noninterest expense	$	71,427	$	73,638	$	(2,211)	(3.0)	%

Noninterest expense decreased due primarily to a decrease in professional services which was elevated during the six months ended June 30, 2021 due to costs associated with our participation in the SBA PPP as well as a decrease in

39

compensation and employee benefits from a lower headcount and a decrease in marketing expenses due to less activity offset partially by an increase in data processing as the Bank continues to invest in its technology platforms.

Income Tax Expense Overview

Comparison of quarter ended June 30, 2022 to the comparable quarter in the prior year

The following table presents the income tax expense, related metrics and their changes for the periods indicated:

	Three Months Ended June 30,
	2022			2021			Change			% Change
	(Dollars in thousands)
Income before income taxes	$	22,561		$	40,153		$	(17,592)		(43.8)	%
Income tax expense	$	3,977		$	7,451		$	(3,474)		(46.6)	%
Effective income tax rate	17.6		%	18.6		%	(1.0)		%	(5.4)	%

Income tax expense decreased due primarily to the change in income before income taxes earned between the periods and decreases in the effective income tax rate due primarily to lower estimated annual pre-tax income for the year ended December 31, 2022, which increased the impact of favorable permanent tax items such as tax-exempt investments, investments in bank owned life insurance, and LIHTC.

Comparison of six months ended June 30, 2022 to the comparable period in the prior year.

The following table presents the income tax expense and related metrics and the change for the periods indicated:

	Six Months Ended June 30,
	2022			2021			Change			% Change
	(Dollars in thousands)
Income before income taxes	$	45,900		$	70,599		$	(24,699)		(35.0)	%
Income tax expense	$	7,559		$	12,553		$	(4,994)		(39.8)	%
Effective income tax rate	16.5		%	17.8		%	(1.3)		%	(7.3)	%

Income tax expense decreased also due primarily to the change in income before income taxes earned between the periods and lower estimated annual pre-tax income for the year ended December 31, 2022.

Financial Condition Overview

The table below provides a comparison of the changes in the Company's financial condition at the periods indicated:

	June 30, 2022		December 31, 2021		Change		% Change
	(Dollars in thousands)
Assets
Cash and cash equivalents	$	994,055	$	1,723,292	$	(729,237)	(42.3)	%
Investment securities available for sale, at fair value, net	1,187,588		894,335		293,253		32.8
Investment securities held to maturity, at amortized cost, net	615,653		383,393		232,260		60.6
Loans held for sale	1,311		1,476		(165)		(11.2)
Loans receivable, net	3,834,368		3,773,301		61,067		1.6
Premises and equipment, net	77,164		79,370		(2,206)		(2.8)
Federal Home Loan Bank stock, at cost	8,916		7,933		983		12.4
Bank owned life insurance	120,646		120,196		450		0.4
Accrued interest receivable	15,908		14,657		1,251		8.5
Prepaid expenses and other assets	211,350		183,543		27,807		15.2
Other intangible assets, net	8,569		9,977		(1,408)		(14.1)
Goodwill	240,939		240,939		—		—
Total assets	$	7,316,467	$	7,432,412	$	(115,945)	(1.6)	%

40

	June 30, 2022		December 31, 2021		Change		% Change
	(Dollars in thousands)
Liabilities and Stockholders' Equity
Deposits	$	6,330,190	$	6,394,290	$	(64,100)	(1.0)	%
Junior subordinated debentures	21,326		21,180		146		0.7
Securities sold under agreement to repurchase	41,827		50,839		(9,012)		(17.7)
Accrued expenses and other liabilities	117,758		111,671		6,087		5.5
Total liabilities	6,511,101		6,577,980		(66,879)		(1.0)
Common stock	550,417		551,798		(1,381)		(0.3)
Retained earnings	316,732		293,238		23,494		8.0
Accumulated other comprehensive (loss) income, net	(61,783)		9,396		(71,179)		(757.5)
Total stockholders' equity	805,366		854,432		(49,066)		(5.7)
Total liabilities and stockholders' equity	$	7,316,467	$	7,432,412	$	(115,945)	(1.6)	%

Total assets decreased due primarily as a result of the decrease in cash and cash equivalents reflecting purchases to deploy excess liquidity into higher yielding investment securities and loans. Purchases of investment securities available for sale were partially offset by a decrease in AOCI as a result of the increase in market interest rates during the six months ended June 30, 2022 which negatively impacted the fair value of our investment securities available for sale at June 30, 2022.

Investment Activities Overview

The following table provides information regarding our investment securities at the dates indicated:

	June 30, 2022				December 31, 2021
	Balance		% of Total		Balance		% of Total		Change		% Change
	(Dollars in thousands)
Investment securities available for sale, at fair value:
U.S. government and agency securities	$	65,668	3.6	%	$	21,373	1.7	%	$	44,295	207.2	%
Municipal securities	200,010		11.1		221,212		17.3	%	(21,202)		(9.6)
Residential CMO and MBS	398,156		22.1		306,884		24.0	%	91,272		29.7
Commercial CMO and MBS	493,620		27.4		315,861		24.7	%	177,759		56.3
Corporate obligations	5,978		0.3		2,014		0.2	%	3,964		196.8
Other asset-backed securities	24,156		1.3		26,991		2.1	%	(2,835)		(10.5)
Total	$	1,187,588	65.8	%	$	894,335	70.0	%	$	293,253	32.8	%
Investment securities held to maturity, at amortized cost:
U.S. government and agency securities	$	150,960	8.4	%	$	141,011	11.0	%	$	9,949	7.1	%
Residential CMO and MBS	159,007		8.8		24,529		1.9		134,478		548.2
Commercial CMO and MBS	305,686		17.0		217,853		17.1		87,833		40.3
Total	$	615,653	34.2	%	$	383,393	30.0	%	$	232,260	60.6	%
Total investment securities	$	1,803,241	100.0	%	$	1,277,728	100.0	%	$	525,513	41.1	%

Total investment securities increased due primarily to purchases to deploy excess liquidity into higher yielding assets, offset partially by a $90.6 million decrease in the fair value of investment securities available for sale resulting in an unrealized loss at June 30, 2022 compared to an unrealized gain at December 31, 2021 as a result of an increase in market rates during the six months ended June 30, 2022.

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Loan Portfolio Overview

Changes by loan type

The Bank originates a wide variety of loans with a focus on commercial business loans. The following table provides information about our loan portfolio by type of loan at the dates indicated:

	June 30, 2022				December 31, 2021
	Amortized Cost		% of Loans Receivable		Amortized Cost		% of Loans Receivable		Change		% Change
	(Dollars in thousands)
Commercial business:
Commercial and industrial	$	698,828	18.0	%	$	621,567	16.3	%	$	77,261	12.4	%
SBA PPP	11,334		0.3		145,840		3.8		(134,506)		(92.2)
Owner-occupied CRE	950,699		24.6		931,150		24.4		19,549		2.1
Non-owner occupied CRE	1,515,796		39.1		1,493,099		39.2		22,697		1.5
Total commercial business	3,176,657		82.0		3,191,656		83.7		(14,999)		(0.5)
Residential real estate	265,382		6.9		164,582		4.3		100,800		61.2
Real estate construction and land development:
Residential	90,546		2.3		85,547		2.2		4,999		5.8
Commercial and multifamily	128,060		3.3		141,336		3.7		(13,276)		(9.4)
Total real estate construction and land development	218,606		5.6		226,883		5.9		(8,277)		(3.6)
Consumer	213,419		5.5		232,541		6.1		(19,122)		(8.2)
Total	$	3,874,064	100.0	%	$	3,815,662	100.0	%	$	58,402	1.5	%

Loans receivable increased due primarily to higher commercial and industrial loan demand including an increases usage of lines of credit and an increase in residential real estate loans, including $69.5 million of purchased residential real estate loans offset partially by repayments of SBA PPP loans. Loans classified as nonaccrual and performing TDR and nonperforming assets

The following table provides information about our nonaccrual loans, performing TDR loans and nonperforming assets for the dates indicated:

	June 30, 2022			December 31, 2021			Change			% Change
	(Dollars in thousands)
Nonaccrual loans: (1)
Commercial business	$	10,475		$	23,107		$	(12,632)		(54.7)	%
Residential real estate	—			47			(47)			(100.0)
Real estate construction and land development	—			571			(571)			(100.0)
Consumer	—			29			(29)			(100.0)
Total nonaccrual loans	10,475			23,754			(13,279)			(55.9)
Other real estate owned	—			—			—			n/a
Total nonperforming assets	$	10,475		$	23,754		$	(13,279)		(55.9)	%
Accruing loans past due 90 days or more	$	2,036		$	293		$	1,743		594.9	%
Credit quality ratios:
Nonaccrual loans to loans receivable	0.27		%	0.62		%	(0.35)		%	(56.5)	%
Nonaccrual loans to total assets	0.14			0.32			(0.18)			(56.3)
Performing TDR loans: (1)
Commercial business	$	62,316		$	57,142		$	5,174		9.1	%
Residential real estate	178			358			(180)			(50.3)
Real estate construction and land development	450			450			—			—

42

	June 30, 2022		December 31, 2021		Change		% Change
	(Dollars in thousands)
Consumer	750		1,160		(410)		(35.3)
Total performing TDR loans	$	63,694	$	59,110	$	4,584	7.8	%

(1) At June 30, 2022 and December 31, 2021, $2.0 million and $1.4 million of nonaccrual loans, respectively, and $2.3 million and $1.6 million of performing TDR loans, respectively, were guaranteed by government agencies.

The following table provides the changes in nonaccrual loans during the six months ended June 30, 2022:

	(In thousands)
Balance, beginning of period	$	23,754
Additions	720
Net principal payments, sales and transfers to accruing status	(9,768)
Payoffs	(4,060)
Charge-offs	(171)
Balance, end of period	$	10,475

Nonaccrual loans decreased $13.3 million, or 55.9%, due primarily to ongoing collection efforts, including the partial payoff of two large commercial and industrial loan relationships, the payoff of one non-owner occupied CRE relationship, and the transfer of four commercial business loan relationships totaling $6.7 million back to accruing status. The Bank also sold a pool of 14 nonaccrual loans totaling $1.0 million during the period ending March 31, 2022.

Allowance for Credit Losses on Loans Overview

The following table provides information regarding our ACL on loans for the periods indicated:

	At or For the Six Months Ended June 30,
	2022			2021			Change			% Change
	(Dollars in thousands)
ACL on loans at the end of period	$	39,696		$	51,562		$	(11,866)		(23.0)	%
Credit quality ratios:
ACL on loans to loans receivable	1.02		%	1.11		%	(0.09)		%	(8.1)	%
ACL on loans to loans receivable, excluding SBA PPP loans (1)	1.03			1.15			(0.12)			(10.4)
ACL on loans to nonaccrual loans	378.96		%	178.33		%	200.63		%	112.5	%
Net recoveries	(506)			(333)			(173)			52.0
Average loans receivable, net during the period (2)	3,792,792			4,446,442			(653,650)			(14.7)
Net recoveries on loans to average loans receivable, net (3)	(0.03)		%	(0.02)		%	(0.01)		%	50.0	%

(1) The ACL on loans does not include a reserve for SBA PPP loans as these loans are fully guaranteed by the SBA. See "Reconciliations of Non-GAAP Measures" section below.

(2) Average loan receivable, net includes loans held for sale.

(3) Annualized.

The ACL on loans decreased during the six months ended June 30, 2022 due primarily to a reduction of loans individually evaluated for losses and as a result, their related ACL.

43

The following table presents the ACL on loans by loan portfolio segment at the indicated dates:

	June 30, 2022				December 31, 2021
	ACL on loans		% of Total (1)		ACL on loans		% of Total (1)		Change		% Change
	(Dollars in thousands)
Commercial business	$	31,707	82.0	%	$	33,049	83.7	%	$	(1,342)	(4.1)	%
Residential real estate	2,137		6.9		1,409		4.3		728		51.7
Real estate construction and land development	3,284		5.6		5,276		5.9		(1,992)		(37.8)
Consumer	2,568		5.5		2,627		6.1		(59)		(2.2)
Total ACL on loans	$	39,696	100.0	%	$	42,361	100.0	%	$	(2,665)	(6.3)	%

(1) Represents the percent of loans receivable by loan category to loans receivable.

Deposits Overview

The following table summarizes the Company's deposits at the dates indicated:

	June 30, 2022				December 31, 2021
	Balance		% of Total		Balance		% of Total		Change		% Change
	(Dollars in thousands)
Noninterest demand deposits	$	2,325,139	36.7	%	$	2,343,909	36.7	%	$	(18,770)	(0.8)	%
Interest bearing demand deposits	1,977,527		31.3		1,946,605		30.4		30,922		1.6
Money market accounts	1,062,178		16.8		1,120,174		17.5		(57,996)		(5.2)
Savings accounts	654,577		10.3		640,763		10.0		13,814		2.2
Total non-maturity deposits	6,019,421		95.1		6,051,451		94.6		(32,030)		(0.5)
Certificates of deposit	310,769		4.9		342,839		5.4		(32,070)		(9.4)
Total deposits	$	6,330,190	100.0	%	$	6,394,290	100.0	%	$	(64,100)	(1.0)	%

Stockholders' Equity Overview

The Company’s stockholders' equity to assets ratio was 11.0% and 11.5% at June 30, 2022 and December 31, 2021, respectively, and decreased due primarily to a decrease in AOCI of $71.2 million following increases in market interest rates during the six months ended June 30, 2022, which negatively impacted the fair value of our investment securities available for sale. AOCI has no effect on our regulatory capital ratios as the Company opted to exclude it from our common equity tier 1 capital calculations as set forth below.

The Company has historically paid cash dividends to its common shareholders. Payments of future cash dividends, if any, will be at the discretion of our board of directors after taking into account various factors, including our business, operating results and financial condition, capital requirements, current and anticipated cash needs, plans for expansion, any legal or contractual limitation on our ability to pay dividends and other relevant factors. Dividends on common stock from the Company depend substantially upon receipt of dividends from the Bank, which is the Company’s predominant source of income. On July 20, 2022, the Company’s board of directors declared a regular quarterly dividend of $0.21 per common share payable on August 17, 2022 to shareholders of record on August 3, 2022.

Regulatory Requirements Overview

The Company is a bank holding company under the supervision of the Federal Reserve Bank. Bank holding companies are subject to capital adequacy requirements of the Federal Reserve under the Bank Holding Company Act of 1956, as amended, and the regulations of the Federal Reserve. Heritage Bank is a federally insured institution and thereby is subject to the capital requirements established by the FDIC. The Federal Reserve capital requirements generally parallel the FDIC requirements. 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 unaudited Condensed Consolidated Financial Statements. Additionally, the Company and the Bank are required to maintain a capital conservation buffer of common equity Tier 1 capital above 2.5% to avoid restrictions on certain activities including payment of dividends, stock repurchases and discretionary bonuses to executive officers. Management believes that as of June 30, 2022, the Company and the Bank met all capital adequacy requirements to which they are subject.

As of June 30, 2022 and December 31, 2021, the most recent regulatory notifications categorized the Bank as well-capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification

44

that management believes have changed the Bank's categories. The following table presents the actual capital ratios of the Company and the Bank at the periods indicated:

	Company				Heritage Bank
	June 30, 2022		December 31, 2021		June 30, 2022		December 31, 2021
Common equity Tier 1 capital to risk-weighted assets	13.2	%	13.5	%	13.4	%	13.8	%
Tier 1 leverage capital to average assets	8.9		8.7		8.8		8.6
Tier 1 capital to risk-weighted assets	13.6		13.9		13.4		13.8
Total capital to risk-weighted assets	14.4		14.8		14.1		14.7
Capital conservation buffer	6.4		6.8		6.1		6.7

As of both June 30, 2022 and December 31, 2021, the capital measures reflect the revised CECL capital transition provisions adopted by the Federal Reserve and the FDIC that allow the Bank the option to delay for two years until December 31, 2021 an estimate of CECL’s effect on regulatory capital, relative to the incurred loss methodology’s effect on regulatory capital, followed by a three-year transition period.

Liquidity and Capital Resources

We maintain sufficient cash and cash equivalents and investment securities to meet short-term liquidity needs and actively monitor our long-term liquidity position to ensure the availability of capital resources for contractual obligations, strategic loan growth objectives and to fund operations. Our funding strategy has been to acquire non-maturity deposits from our retail accounts, acquire noninterest bearing demand deposits from our commercial customers and use our borrowing availability to fund growth in assets. We may also acquire brokered deposits when the cost of funds is advantageous to other funding sources. Borrowings may be used on a short-term basis to compensate for reductions in other sources of funds (such as deposit inflows at less than projected levels). Borrowings may also be used on a longer-term basis to support expanded lending activities and match the maturity of repricing intervals of assets. While maturities and scheduled amortization of loans are a predictable source of funds, deposit flows and loan prepayments are greatly influenced by the level of interest rates, economic conditions and competition so we adhere to internal management targets assigned to the loan to deposit ratio, liquidity ratio, net short-term non-core funding ratio and non-core liabilities to total assets ratio to ensure an appropriate liquidity position.

Management believes the capital sources are adequate to meet all reasonably foreseeable short-term and long-term cash requirements and there has not been a material change in our liquidity and capital resources since the information disclosed in our 2021 Annual Form 10-K. We are not aware of any reasonably likely material changes in the mix and relative cost of such resources.

Critical Accounting Policies

Our critical accounting policies are described in detail in the "Critical Accounting Policies" section within Item 7 of our 2021 Annual Form the Form 10-K. The SEC defines "critical accounting policies" as those that require application of management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in future periods. The Company's critical accounting policies include estimates of the ACL on investment securities, the ACL on loans, the ACL on unfunded commitments and goodwill. There have been no material changes in these policies during the six months ended June 30, 2022.

Reconciliations of Non-GAAP Measures

This Form 10-Q contains certain financial measures not presented in accordance with GAAP in addition to financial measures presented in accordance with GAAP. The Company has presented these non-GAAP financial measures in this Form 10-Q because it believes they provide useful and comparative information to assess trends in the Company’s performance and asset quality and to facilitate comparison of its performance with the performance of its peers. These non-GAAP measures have inherent limitations, are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for financial measures presented in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of the GAAP and non-GAAP financial measures are presented below.

The Company believes presenting loan yield excluding the effect of discount accretion on acquired loans is useful in assessing the impact of acquisition accounting on loan yield as the effect of loan discount accretion is expected to decrease as the acquired loans mature or roll off its balance sheet. Incremental accretion on acquired loans represents the amount of interest income recorded on acquired loans in excess of the contractual stated interest rate in the individual loan notes due to incremental accretion of purchased discount or premium. Purchased discount or premium is the difference between the contractual loan balance and the fair value of acquired loans at the acquisition date, or as modified by the adoption of ASU 2016-13. The purchased discount is accreted into income over the remaining life of the loan. The impact of incremental accretion on loan yield will change during any period based on the volume of prepayments, but it is expected to decrease over time as the

45

balance of the acquired loans decreases. Similarly, presenting loan yield excluding the effect of SBA PPP loans is useful in assessing the impact of these special program loans that are anticipated to substantially decrease within a short time frame.

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
	(Dollars in thousands)
Loan yield, excluding SBA PPP Loans and Incremental Accretion on Acquired Loans, annualized:
Interest and fees on loans (GAAP)	$	40,890		$	50,750		$	81,915		$	100,274
Exclude interest and fees on SBA PPP loans	(1,782)			(10,003)			(4,863)			(19,139)
Exclude incremental accretion on acquired loans	(270)			(495)			(854)			(1,570)
Adjusted interest and fees on loans (non-GAAP)	$	38,838		$	40,252		$	76,198		$	79,565
Average loans receivable, net (GAAP)	$	3,812,045		$	4,402,868		$	3,792,792		$	4,446,442
Exclude average SBA PPP loans	(34,090)			(777,156)			(71,633)			(804,500)
Adjusted average loans receivable, net (non-GAAP)	$	3,777,955		$	3,625,712		$	3,721,159		$	3,641,942
Loan yield, annualized (GAAP)	4.30		%	4.62		%	4.36		%	4.55		%
Loan yield, excluding SBA PPP loans and incremental accretion on acquired loans, annualized (non-GAAP)	4.12		%	4.45		%	4.13		%	4.41		%

The Company considers presenting the ratio of ACL on loans to loans receivable, excluding SBA PPP loans, to be a useful measurement in evaluating the adequacy of the Company's ACL on loans as the balance of SBA PPP loans is significant to the loan portfolio, and since SBA PPP loans are guaranteed by the SBA, the Company has not provided an ACL on loans for SBA PPP loans.

	June 30, 2022			December 31, 2021
	(Dollars in thousands)
ACL on Loans to Loans Receivable, excluding SBA PPP Loans:
Allowance for credit losses on loans (GAAP)	$	39,696		$	42,361
Loans receivable (GAAP)	$	3,874,064		$	3,815,662
Exclude SBA PPP loans	(11,334)			(145,840)
Loans receivable, excluding SBA PPP (non-GAAP)	$	3,862,730		$	3,669,822
ACL on loans to loans receivable (GAAP)	1.02		%	1.11		%
ACL on loans to loans receivable, excluding SBA PPP loans (non-GAAP)	1.03		%	1.15		%

ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In our opinion, there has not been a material change in our interest rate risk exposure since the information disclosed in our 2021 Annual Form 10-K. Neither we, nor the Bank, maintain a trading account for any class of financial instrument, nor do we, or the Bank, engage in hedging activities or purchase high risk derivative instruments. Moreover, neither we, nor the Bank, are subject to foreign currency exchange rate risk or commodity price risk.

ITEM 4.     CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

An evaluation of the Company’s disclosure controls and procedures (as defined in Section 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934 (the “Act”)) was carried out under the supervision and with the participation of the Company’s Chief Executive Officer, Chief Financial Officer and the Company’s Disclosure Committee as of the end of the period covered by this quarterly report. Based on their evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures as of June 30, 2022 are effective in ensuring that the information required to be disclosed by the Company in the reports it files or submits under the Act is (i) accumulated and communicated to the Company’s management (including the Chief Executive Officer and Chief Financial Officer) in a timely manner, and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

46

(b) Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) of the Act) that occurred during the three months ended June 30, 2022, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II.    OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS

Neither the Company nor the Bank is a party to any material pending legal proceedings other than ordinary routine litigation incidental to the business of the Bank.

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors set forth in Item 1A of the Company’s 2021 Annual Form 10-K.

ITEM 2.     UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a) Not applicable.

(b) Not applicable.

(c) Repurchase Plans

The following table provides information about repurchases of common stock by the Company during the three months ended June 30, 2022:

Period	Total Number  of Shares  Purchased (1)	Average Price Paid Per  Share (1)		Total number of shares purchased as part of publicly announced plans or programs	Maximum number of shares that may yet be purchased under the plans or programs (2)
April 1, 2022— April 30, 2022	—	$	—	9,967,332	657,745
May 1, 2022— May 31, 2022	404	24.85		9,967,332	657,745
June 1, 2022— June 30, 2022	20,776	24.61		9,986,863	638,214
Total	21,180	$	24.62

(1)Of the common shares repurchased by the Company between April 1, 2022 and June 30, 2022, 1,649 shares represented the cancellation of stock to pay withholding taxes on vested restricted stock awards or units.

(2)On March 12, 2020 the Company's Board of Directors authorized the repurchase of up to 5% of the Company's outstanding common shares, or 1,799,054 shares, under the twelfth stock repurchase plan.

ITEM 3.     DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4.     MINE SAFETY DISCLOSURES

Not applicable

ITEM 5.    OTHER INFORMATION

None

ITEM 6.     EXHIBITS

		Incorporated by Reference
Exhibit No.	Description of Exhibit	Form	Exhibit	Filing Date/Period End Date
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (1)
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (1)
32.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (1)
101.INS	XBRL Instance Document (1)
101.SCH	XBRL Taxonomy Extension Schema Document (1)
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document (1)
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document (1)

47

101.LAB	XBRL Taxonomy Extension Label Linkbase Document (1)
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document (1)

(1) Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	HERITAGE FINANCIAL CORPORATION
Date:
August 9, 2022	/S/ JEFFREY J. DEUEL
	Jeffrey J. Deuel
	President and Chief Executive Officer
Date:
August 9, 2022	/S/ DONALD J. HINSON
	Donald J. Hinson
	Executive Vice President and Chief Financial Officer

48

EX-31.1

EXHIBIT 31.1

Certification of Principal Executive Officer

I, Jeffrey J. Deuel, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Heritage Financial Corporation;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of and for the periods presented in this report;

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.    designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.    designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.    evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.    disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.    all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.    any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 9, 2022

/s/ Jeffrey J. Deuel

Jeffrey J. Deuel

Chief Executive Officer
Principal Executive Officer

EX-31.2

EXHIBIT 31.2

Certification of Principal Financial Officer

I, Donald J. Hinson, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Heritage Financial Corporation;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of and for the periods presented in this report;

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.    designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.    designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.    evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.    disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.    all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.    any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 9, 2022

/s/ Donald J. Hinson

Donald J. Hinson

Executive Vice President and Chief Financial Officer
Principal Financial and Accounting Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

    In connection with the quarterly report of Heritage Financial Corporation (the “Company”) on Form 10-Q for the quarter ended June 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Jeffrey J. Deuel, Chief Executive Officer, and Donald J. Hinson, Executive Vice President and Chief Financial Officer of the Company, certify in our capacity as officers of the Company, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods presented in the financial statements included in such Report.

August 9, 2022	/s/ Jeffrey J. Deuel
	Jeffrey J. Deuel
	Chief Executive Officer Principal Executive Officer
August 9, 2022	/s/ Donald J. Hinson
	Donald J. Hinson
	Executive Vice President and Chief Financial Officer Principal Financial and Accounting Officer

XML

Cover Page - shares	6 Months Ended
	Jun. 30, 2022	Aug. 01, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2022
Document Transition Report	false
Entity File Number	000-29480
Entity Registrant Name	HERITAGE FINANCIAL CORP
Entity Incorporation, State or Country Code	WA
Entity Tax Identification Number	91-1857900
Entity Address, Address Line One	201 Fifth Avenue SW,
Entity Address, City or Town	Olympia
Entity Address, State or Province	WA
Entity Address, Postal Zip Code	98501
City Area Code	360
Local Phone Number	943-1500
Title of 12(b) Security	Common stock, no par value
Trading Symbol	HFWA
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		35,103,929
Entity Central Index Key	0001046025
Amendment Flag	false
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31

XML

Condensed Consolidated Statements of Financial Condition (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
ASSETS
Cash on hand and in banks	$ 93,675	$ 61,377
Interest earning deposits	900,380	1,661,915
Cash and cash equivalents	994,055	1,723,292
Investment securities available for sale, at fair value, net (amortized cost of $1,267,715 and $883,832, respectively)	1,187,588	894,335
Investment securities held to maturity, at amortized cost, net (fair value of $559,312 and $376,331, respectively)	615,653	383,393
Total investment securities	1,803,241	1,277,728
Loans held for sale	1,311	1,476
Loans receivable	3,874,064	3,815,662
Allowance for credit losses on loans	(39,696)	(42,361)
Loans receivable, net	3,834,368	3,773,301
Premises and equipment, net	77,164	79,370
Federal Home Loan Bank stock, at cost	8,916	7,933
Bank owned life insurance	120,646	120,196
Accrued interest receivable	15,908	14,657
Prepaid expenses and other assets	211,350	183,543
Other intangible assets, net	8,569	9,977
Goodwill	240,939	240,939
Total assets	7,316,467	7,432,412
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits	6,330,190	6,394,290
Junior subordinated debentures	21,326	21,180
Securities sold under agreement to repurchase	41,827	50,839
Accrued expenses and other liabilities	117,758	111,671
Total liabilities	6,511,101	6,577,980
Stockholders’ equity:
Preferred stock, no par value, 2,500,000 shares authorized; no shares issued and outstanding, respectively	0	0
Common stock, no par value, 50,000,000 shares authorized; 35,103,929 and 35,105,779 shares issued and outstanding, respectively	550,417	551,798
Retained earnings	316,732	293,238
Accumulated other comprehensive (loss) income, net	(61,783)	9,396
Total stockholders’ equity	805,366	854,432
Total liabilities and stockholders’ equity	$ 7,316,467	$ 7,432,412

XML

Condensed Consolidated Statements of Financial Condition (Unaudited) (Parenthetical) - USD ($)	Jun. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Amortized cost	$ 1,267,715,000
Total investment securities	$ 559,312,000	$ 376,331,000
Preferred Stock, No Par Value	$ 0	$ 0
Preferred stock, shares authorized (in shares)	2,500,000	2,500,000
Preferred Stock, Value, Outstanding	$ 0	$ 0
Common stock, no par value (in usd per share)	$ 0	$ 0
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	35,103,929	35,105,779
Common stock, shares outstanding (in shares)	35,103,929	35,105,779

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Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
INTEREST INCOME:
Interest and fees on loans	$ 40,890	$ 50,750	$ 81,915	$ 100,274
Taxable interest on investment securities	7,607	4,050	13,610	7,584
Nontaxable interest on investment securities	893	947	1,753	1,905
Interest on interest earning deposits	2,342	263	3,048	438
Total interest income	51,732	56,010	100,326	110,201
INTEREST EXPENSE:
Deposits	1,413	1,524	2,837	3,252
Junior subordinated debentures	239	186	433	373
Other borrowings	32	35	64	73
Total interest expense	1,684	1,745	3,334	3,698
Net interest income	50,048	54,265	96,992	106,503
Reversal of provision for credit losses	(1,204)	(13,987)	(4,781)	(21,186)
Net interest income after reversal of provision for credit losses	51,252	68,252	101,773	127,689
NONINTEREST INCOME:
Service charges and other fees	2,391	2,067	4,687	3,959
Card revenue	2,332	2,338	4,773	4,435
Gain on sale of investment securities, net	0	0	0	29
Gain on sale of loans, net	219	1,003	460	2,373
Interest rate swap fees	26	209	305	361
Bank owned life insurance income	764	717	2,459	1,373
Gain on sale of other assets, net	0	724	204	746
Other income	1,284	1,239	2,666	3,272
Total noninterest income	7,016	8,297	15,554	16,548
NONINTEREST EXPENSE:
Compensation and employee benefits	21,778	21,803	43,030	44,004
Occupancy and equipment	4,171	4,091	8,502	8,545
Data processing	4,185	3,998	8,246	7,810
Marketing	344	567	610	1,080
Professional services	529	1,037	1,228	2,307
State/municipal business and use taxes	867	991	1,663	1,963
Federal deposit insurance premium	425	339	1,025	928
Amortization of intangible assets	704	797	1,408	1,594
Other expense	2,704	2,773	5,715	5,407
Total noninterest expense	35,707	36,396	71,427	73,638
Income before income taxes	22,561	40,153	45,900	70,599
Income tax expense	3,977	7,451	7,559	12,553
Net income	$ 18,584	$ 32,702	$ 38,341	$ 58,046
Basic earnings per common share (in usd per share)	$ 0.53	$ 0.91	$ 1.09	$ 1.61
Diluted earnings per common share (in usd per share)	0.52	0.90	1.08	1.60
Dividends declared per common share (in usd per share)	$ 0.21	$ 0.20	$ 0.42	$ 0.40
Basic weighted average common shares outstanding (in shares)	35,110,334	35,994,740	35,102,572	35,961,032
Weighted Average Number of Shares Outstanding, Diluted	35,409,524	36,289,464	35,412,722	36,268,861

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Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Net Income	$ 18,584	$ 32,702	$ 38,341	$ 58,046
Other comprehensive (loss) income	(27,555)	2,600	(71,179)	(8,957)
Comprehensive (loss) income	(8,971)	35,302	(32,838)	49,089
AOCI Attributable to Parent [Member]
Change in fair value of investment securities available for sale, net of tax of $(7,638), $722, $(19,751) and $(2,482), respectively	(27,397)	2,600	(70,879)	(8,934)
Amortization of net unrealized gain for the reclassification of investment securities available for sale to held to maturity, net of tax of $(44), $0, $(83) and $0, respectively	(158)	0	(300)	0
Reclassification adjustment for net gain from sale of investment securities available for sale included in income, net of tax of $0, $0, $0 and $(6), respectively	0	0	0	(23)
Other comprehensive (loss) income	$ (27,555)	$ 2,600	$ (71,179)	$ (8,957)

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Condensed Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Statement of Comprehensive Income [Abstract]
Change in fair value of securities available for sale, tax	$ (7,638)	$ 722	$ (19,751)	$ (2,482)
OCI, Debt Securities, Available-for-Sale, Transfer to Held-to-Maturity, Adjustment from AOCI for Amortization of Gain (Loss), Tax	(44)	0	(83)	0
Reclassification adjustment of net gain from sale of investment securities included in income, tax	$ 0	$ 0	$ 0	$ (6)

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Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common stock	Retained earnings	Accumulated other comprehensive income (loss), net
Beginning balance, shares at Dec. 31, 2020		35,912,243,000
Beginning balance at Dec. 31, 2020	$ 820,439	$ 571,021	$ 224,400	$ 25,018
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Restricted stock awards forfeited, shares		120,120,000
Stock-based compensation expense	1,796	$ 1,796
Common stock repurchased, shares		(25,803,000)
Common stock repurchased	(757)	$ (757)
Net income	58,046		58,046
Other comprehensive income (loss), net of tax	(8,957)			(8,957)
Cash dividends declared on common stock	(14,583)		(14,583)
Ending balance, shares at Jun. 30, 2021		36,006,560,000
Ending balance at Jun. 30, 2021	855,984	$ 572,060	267,863	16,061
Beginning balance, shares at Mar. 31, 2021		35,981,317,000
Beginning balance at Mar. 31, 2021	827,151	$ 571,204	242,486	13,461
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Restricted stock awards forfeited, shares		27,800,000
Stock-based compensation expense	926	$ 926
Common stock repurchased, shares		(2,557,000)
Common stock repurchased	(70)	$ (70)
Net income	32,702		32,702
Other comprehensive income (loss), net of tax	2,600			2,600
Cash dividends declared on common stock	(7,325)		(7,325)
Ending balance, shares at Jun. 30, 2021		36,006,560,000
Ending balance at Jun. 30, 2021	855,984	$ 572,060	267,863	16,061
Beginning balance, shares at Dec. 31, 2021		35,105,779,000
Beginning balance at Dec. 31, 2021	854,432	$ 551,798	293,238	9,396
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Restricted stock awards forfeited, shares		124,420,000
Stock-based compensation expense	1,793	$ 1,793
Common stock repurchased, shares		(126,270,000)
Common stock repurchased	(3,174)	$ (3,174)
Net income	38,341		38,341
Other comprehensive income (loss), net of tax	(71,179)			(71,179)
Cash dividends declared on common stock	(14,847)		(14,847)
Ending balance, shares at Jun. 30, 2022		35,103,929,000
Ending balance at Jun. 30, 2022	805,366	$ 550,417	316,732	(61,783)
Beginning balance, shares at Mar. 31, 2022		35,102,372,000
Beginning balance at Mar. 31, 2022	821,449	$ 550,096	305,581	(34,228)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Restricted stock awards forfeited, shares		22,737,000
Exercise of stock options, shares		(21,180,000)
Exercise of stock options	(522)	$ (522)
Stock-based compensation expense	843	$ 843
Net income	18,584		18,584
Other comprehensive income (loss), net of tax	(27,555)			(27,555)
Cash dividends declared on common stock	(7,433)		(7,433)
Ending balance, shares at Jun. 30, 2022		35,103,929,000
Ending balance at Jun. 30, 2022	$ 805,366	$ 550,417	$ 316,732	$ (61,783)

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Condensed Consolidated Statements of Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares							3 Months Ended		6 Months Ended
	Apr. 20, 2022	Jan. 26, 2022	Oct. 20, 2021	Jul. 21, 2021	Apr. 21, 2021	Jan. 27, 2021	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Statement of Stockholders' Equity [Abstract]
Cash dividends declared on common stock (in usd per share)	$ 0.21	$ 0.21	$ 0.21	$ 0.20	$ 0.20	$ 0.20	$ 0.21	$ 0.20	$ 0.42	$ 0.40

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Cash flows from operating activities:
Net income	$ 38,341	$ 58,046
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion	(1,654)	(13,901)
Reversal of provision for credit losses	(4,781)	(21,186)
Stock-based compensation expense	1,793	1,796
Amortization of intangible assets	1,408	1,594
Origination of mortgage loans held for sale	(12,396)	(53,807)
Proceeds from sale of mortgage loans held for sale	13,021	58,373
Bank owned life insurance income	(2,459)	(1,373)
Valuation adjustment on interest rate swaps	(64)	(254)
Gain on sale of mortgage loans held for sale, net	(460)	(2,373)
Gain on sale of investment securities, net	0	(29)
Gain on sale of assets held for sale	(204)	(746)
Other	1,360	3,630
Net cash provided by operating activities	33,905	29,770
Cash flows from investing activities:
Loan originations and purchases, net of payments	(51,198)	295,618
Maturities and repayments of investment securities available for sale	86,678	126,669
Maturities and repayments of investment securities held to maturity	11,767	0
Purchase of investment securities available for sale	(472,361)	(388,636)
Purchase of investment securities held to maturity	(244,911)	0
Purchase of premises and equipment	(1,191)	(1,748)
Purchases of bank owned life insurance	(105)	(105)
Purchases of Federal Home Loan Bank stock	(985)	(1,272)
Proceeds from sales of investment securities available for sale	0	1,248
Proceeds from redemption of Federal Home Loan Bank stock	2	0
Proceeds from sales of assets held for sale	1,173	3,730
Proceeds from sales of premises and equipment	0	10
Capital contributions to low-income housing tax credit partnerships	(978)	(12,637)
Cash received from return of New Market Tax Credit equity method investment	0	9,642
Net cash (used) provided by investing activities	(672,109)	32,519
Cash flows from financing activities:
Net (decrease) increase in deposits	(64,100)	463,716
Federal Home Loan Bank advances	50	10
Repayment of Federal Home Loan Bank advances	(50)	(10)
Common stock cash dividends paid	(14,747)	(14,383)
Net (decrease) increase in securities sold under agreement to repurchase	(9,012)	10,746
Repurchase of common stock	(3,174)	(757)
Net cash (used) provided by financing activities	(91,033)	459,322
Net (decrease) increase in cash and cash equivalents	(729,237)	521,611
Cash and cash equivalents at beginning of period	1,723,292	743,322
Cash and cash equivalents at end of period	994,055	1,264,933
Supplemental disclosures of cash flow information:
Cash paid for interest	3,188	3,571
Cash paid for income taxes, net of refunds	167	7,967
Investment in LIHTC partnership and related funding commitment	11,284	0
Right of use assets obtained in exchange for new operating lease liabilities	2,222	8,393
Transfer of bank owned life insurance to prepaid expenses and other assets due to death benefit accrued	2,114
Transfers of properties classified as held for sale to prepaid expenses and other assets from premises and equipment, net	730	1,685
Loans received from return of New Market Tax Credit equity method investment	$ 0	$ 15,596

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Description of Business, Basis of Presentation and Significant Accounting Policies and Recently Issued Accounting Pronouncements

6 Months Ended

Jun. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business, Basis of Presentation and Significant Accounting Policies and Recently Issued Accounting Pronouncements

Description of Business, Basis of Presentation, Significant Accounting Policies and Recently Issued Accounting Pronouncements

(a) Description of Business

The Company is primarily engaged in the business of planning, directing and coordinating the business activities of its wholly-owned subsidiary, the Bank. The Bank is headquartered in Olympia, Washington and conducts business from its 50 branch offices located throughout Washington State, the greater Portland, Oregon area, and Eugene, Oregon. The Bank’s business consists primarily of commercial lending and deposit relationships with small and medium-sized businesses and their owners in its market areas and attracting deposits from the general public. The Bank also makes real estate construction and land development loans, consumer loans and originates first mortgage loans on residential properties primarily located in its market areas. The Bank's deposits are insured by the FDIC.

(b) Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with GAAP for interim financial information and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. It is recommended these unaudited Condensed Consolidated Financial Statements and accompanying Notes be read with the audited Consolidated Financial Statements and the accompanying Notes included in the 2021 Annual Form 10-K. In management's opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

To prepare unaudited Condensed Consolidated Financial Statements in conformity with GAAP, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided. Management believes the judgments, estimates and assumptions used in the preparation of the unaudited Condensed Consolidated Financial Statements are appropriate based on the facts and circumstances at the time. Actual results, however, could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change relate to management's estimate of the ACL on investment securities, management's estimate of the ACL on loans, management's estimate of the ACL on unfunded commitments, management's evaluation of goodwill impairment and management's estimate of the fair value of financial instruments.

The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiary, the Bank. All significant intercompany balances and transactions among the Company and the Bank have been eliminated in consolidation.

There have been reclassifications in certain prior year amounts in the unaudited Condensed Consolidated Statements of Financial Condition, the unaudited Condensed Consolidated Statements of Income and the unaudited Condensed Consolidated Statements of Cash Flows. Reclassifications had no effect on the prior year's net income or stockholders’ equity.

(c) Significant Accounting Policies

The significant accounting policies used in preparation of the unaudited Condensed Consolidated Financial Statements are disclosed in greater detail in the 2021 Annual Form 10-K. There have not been any material changes in the Company's significant accounting policies from those contained in the 2021 Annual Form 10-K during the six months ended June 30, 2022.

(d) Recently Issued or Adopted Accounting Pronouncements

FASB ASU 2020-04, Reference Rate Reform (Topic 848), as amended by ASU 2021-01, was issued in March 2020 and provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2022. The amendments are elective, apply to all entities, and provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The Bank’s interest rate swap-related transactions are the majority of the Company's LIBOR exposure. Effective January 25, 2021, the Company adhered to the Interbank Offered Rate Fallbacks Protocol as published by the International Swaps and Derivatives Association, Inc. and recommended by the Alternative Reference Rates Committee. Additionally, effective January 1, 2022, the Bank is no longer initiating or renewing loans using LIBOR as an index. The Company does not expect this ASU to have a material impact on its business operations and the Consolidated Financial Statements.

FASB ASU 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, was issued in March 2022. The ASU eliminates the accounting guidance for TDR loans by creditors while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Additionally, the ASU requires public business entities to disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases. These amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, since Heritage previously adopted the amendments in ASU 2016-13, which is commonly referred to as the current expected credit loss methodology, on January 1, 2020. Early adoption is permitted and should be applied prospectively; however, the transition method related to the recognition and

measurement of TDR loans may be applied under a modified retrospective transition method. The Company is evaluating the effect this ASU will have on its Consolidated Financial Statements and related disclosures.

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Investment Securities

6 Months Ended

Jun. 30, 2022

Investments, Debt and Equity Securities [Abstract]

Investment Securities

Investment Securities

The Company’s investment policy is designed primarily to provide and maintain liquidity, generate a favorable return on assets without incurring undue interest rate and credit risk, and complement the Bank’s lending activities.

There were no investment securities classified as trading at June 30, 2022 or December 31, 2021.

(a) Investment Securities by Classification, Type and Maturity

The following tables present the amortized cost and fair value of investment securities at the dates indicated and the corresponding amounts of gross unrealized gains and losses, including the corresponding amounts of gross unrealized gains and losses on investment securities available for sale recognized in AOCI:

	June 30, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In thousands)
Investment securities available for sale:
U.S. government and agency securities	$	68,912	$	—	$	(3,244)	$	65,668
Municipal securities	213,402		977		(14,369)		200,010
Residential CMO and MBS	433,903		70		(35,817)		398,156
Commercial CMO and MBS	520,772		466		(27,618)		493,620
Corporate obligations	6,003		—		(25)		5,978
Other asset-backed securities	24,723		6		(573)		24,156
Total	$	1,267,715	$	1,519	$	(81,646)	$	1,187,588
Investment securities held to maturity:
U.S. government and agency securities	$	150,960	$	—	$	(23,416)	$	127,544
Residential CMO and MBS	159,007		257		(5,774)		153,490
Commercial CMO and MBS	305,686		—		(27,408)		278,278
Total	$	615,653	$	257	$	(56,598)	$	559,312

	December 31, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In thousands)
Investment securities available for sale:
U.S. government and agency securities	$	21,494	$	55	$	(176)	$	21,373
Municipal securities	213,158		8,908		(854)		221,212
Residential CMO and MBS	307,366		2,111		(2,593)		306,884
Commercial CMO and MBS	313,169		3,891		(1,199)		315,861
Corporate obligations	2,007		7		—		2,014
Other asset-backed securities	26,638		369		(16)		26,991
Total	$	883,832	$	15,341	$	(4,838)	$	894,335
Investment securities held to maturity:
U.S. government and agency securities	$	141,011	$	120	$	(1,768)	$	139,363
Residential CMO and MBS	24,529		—		(153)		24,376
Commercial CMO and MBS	217,853		—		(5,261)		212,592
Total	$	383,393	$	120	$	(7,182)	$	376,331

The amortized cost and fair value of investment securities at June 30, 2022, by contractual maturity, are set forth below. Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

	Securities Available for Sale				Securities Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
Due in one year or less	$	8,283	$	8,306	$	—	$	—
Due after one year through five years	82,106		80,881		—		—
Due after five years through ten years	67,161		65,321		83,210		72,516
Due after ten years	130,767		117,148		67,750		55,028
Total investment securities due at a single maturity date	288,317		271,656		150,960		127,544
Mortgage-backed securities (1)	979,398		915,932		464,693		431,768
Total investment securities	$	1,267,715	$	1,187,588	$	615,653	$	559,312

(1) Mortgage-backed securities, which have prepayment provisions, are not assigned to maturity categories due to fluctuations in their payment speed.

There were no holdings of investment securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of stockholders’ equity at June 30, 2022 and December 31, 2021.

(b) Unrealized Losses on Investment Securities Available for Sale

The following tables show the gross unrealized losses and fair value of the Company’s investment securities available for sale for which an ACL on investment securities available for sale has not been recorded, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position at the dates indicated:

	June 30, 2022
	Less than 12 Months				12 Months or Longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)
U.S. government and agency securities	$	64,200	$	(2,995)	$	1,468	$	(249)	$	65,668	$	(3,244)
Municipal securities	106,205		(11,287)		15,712		(3,082)		121,917		(14,369)
Residential CMO and MBS	352,074		(32,446)		31,008		(3,371)		383,082		(35,817)
Commercial CMO and MBS	406,835		(27,145)		8,711		(473)		415,546		(27,618)
Corporate obligations	5,978		(25)		—		—		5,978		(25)
Other asset-backed securities	19,054		(552)		921		(21)		19,975		(573)
Total	$	954,346	$	(74,450)	$	57,820	$	(7,196)	$	1,012,166	$	(81,646)

	December 31, 2021
	Less than 12 Months				12 Months or Longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)
U.S. government and agency securities	$	14,828	$	(176)	$	—	$	—	$	14,828	$	(176)
Municipal securities	29,774		(619)		9,351		(235)		39,125		(854)
Residential CMO and MBS	204,039		(2,470)		19,862		(123)		223,901		(2,593)
Commercial CMO and MBS	83,283		(1,161)		1,936		(38)		85,219		(1,199)
Other asset-backed securities	2,763		(9)		1,118		(7)		3,881		(16)
Total	$	334,687	$	(4,435)	$	32,267	$	(403)	$	366,954	$	(4,838)

(c) ACL on Investment Securities

The Company evaluated investment securities available for sale as of June 30, 2022 and December 31, 2021 and determined that any declines in fair value were attributable to changes in interest rates relative to where these investments fall within the yield curve and individual characteristics. Management monitors published credit ratings for adverse changes for all

rated investment securities and none of these securities had a below investment grade credit rating as of both June 30, 2022 and December 31, 2021. In addition, the Company does not intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of the amortized cost basis, which may be upon maturity. Therefore, no ACL on investment securities available for sale was recorded as of June 30, 2022 and December 31, 2021.

The Company also evaluated investment securities held to maturity for current expected credit losses as of June 30, 2022 and December 31, 2021. There were no investment securities held to maturity classified as nonaccrual or past due as of June 30, 2022 and December 31, 2021 and all were issued by the U.S. government and its agencies and either explicitly or implicitly guaranteed by the U.S. government, highly rated by major credit rating agencies and had a long history of no credit losses. Accordingly, the Company did not measure expected credit losses on investment securities held to maturity since the historical credit loss information adjusted for current conditions and reasonable and supportable forecasts results in an expectation that nonpayment of the amortized cost basis is zero. Therefore, no ACL on investment securities held to maturity was recorded as of June 30, 2022 and December 31, 2021.

(d) Realized Gains and Losses

The following table presents the gross realized gains and losses on the sale of investment securities available for sale during the following periods:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Gross realized gains	$	—	$	—	$	—	$	29

(e) Pledged Securities

The following table summarizes the amortized cost and fair value of investment securities that are pledged as collateral for the following obligations at the dates indicated:

	June 30, 2022				December 31, 2021
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
Washington and Oregon state public deposits	$	139,868	$	128,842	$	128,216	$	130,217
Federal Reserve Bank credit facility	60,865		52,530		61,057		59,674
Securities sold under agreement to repurchase	69,358		62,647		59,887		59,655
Other securities pledged	49,941		45,739		56,419		55,633
Total	$	320,032	$	289,758	$	305,579	$	305,179

(f) Accrued Interest Receivable

Accrued interest receivable excluded from the amortized cost of investment securities available for sale totaled $4.6 million and $3.5 million at June 30, 2022 and December 31, 2021, respectively. Accrued interest receivable excluded from the amortized cost on investment securities held to maturity totaled $1.8 million and $1.1 million at June 30, 2022 and December 31, 2021, respectively.

No amounts of accrued interest receivable on investment securities available for sale or held to maturity were reversed against interest income on investment securities during the three or six months ended June 30, 2022 and 2021.

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Loans Receivable

6 Months Ended

Jun. 30, 2022

Loans and Leases Receivable Disclosure [Abstract]

Loans Receivable

Loans Receivable

The Bank originates loans in the ordinary course of business and has also acquired loans through mergers and acquisitions. Accrued interest receivable was excluded from disclosures presenting the Bank's amortized cost of loans receivable as it was deemed insignificant.

(a) Loan Origination/Risk Management

The Bank categorizes the individual loans in the total loan portfolio into four segments: commercial business; residential real estate; real estate construction and land development; and consumer. Within these segments are classes of loans for which management monitors and assesses credit risk in the loan portfolios. A detailed description of the portfolio segments and classes is contained in the 2021 Annual Form 10-K.

The Bank has certain lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk. Management reviews and approves these policies and procedures on a regular basis. A reporting system supplements the review process by providing management with frequent reports related to loan production, loan quality, concentrations of credit, loan delinquencies and nonperforming and criticized loans. The Bank also conducts internal loan reviews and validates the credit risk assessment on a periodic basis and presents the results of these reviews to management.

The loan review process complements and reinforces the risk identification and assessment decisions made by loan officers and credit personnel.

The amortized cost of loans receivable, net of ACL on loans, consisted of the following portfolio segments and classes at the dates indicated:

	June 30, 2022		December 31, 2021
	(In thousands)
Commercial business:
Commercial and industrial	$	698,828	$	621,567
SBA PPP	11,334		145,840
Owner-occupied CRE	950,699		931,150
Non-owner occupied CRE	1,515,796		1,493,099
Total commercial business	3,176,657		3,191,656
Residential real estate	265,382		164,582
Real estate construction and land development:
Residential	90,546		85,547
Commercial and multifamily	128,060		141,336
Total real estate construction and land development	218,606		226,883
Consumer	213,419		232,541
Loans receivable	3,874,064		3,815,662
Allowance for credit losses on loans	(39,696)		(42,361)
Loans receivable, net	$	3,834,368	$	3,773,301
Balances included in the amortized cost of loans receivable:
Unamortized net discount on acquired loans	$	3,084	$	3,938
Unamortized net deferred fee	$	4,947	$	7,954

(b) Concentrations of Credit

Most of the Bank’s lending activity occurs within its primary market areas which are concentrated along the I-5 corridor from Whatcom County to Clark County in Washington State, Multnomah County and Washington County in Oregon, as well as other contiguous markets and represents a geographic concentration. Additionally, the Bank's loan portfolio is concentrated in commercial loans, including commercial business loans and commercial and multifamily real estate construction and land development loans. Commercial loans are generally considered as having more inherent risk of default than residential real estate loans or other consumer loans. Also, the commercial loan balance per borrower is typically larger than that for residential real estate loans and consumer loans, implying higher potential losses on an individual loan basis.

(c) Credit Quality Indicators

As part of the on-going monitoring of the credit quality of the Bank’s loan portfolio, management tracks certain credit quality indicators including trends related to (i) the risk grade of the loans, (ii) the level of classified loans, (iii) net charge-offs, (iv) nonperforming loans, (v) past due status, and (vi) the general economic conditions of the United States of America, and specifically the states of Washington and Oregon.

The Bank utilizes a risk grading matrix to assign a risk grade to each of its loans. Loans are graded on a scale of 1 to 10. Risk grades are aggregated to create the risk categories of Pass for grades 1 to 6, Special Mention or "SM" for grade 7, Substandard or "SS" for grade 8, Doubtful for grade 9 and Loss for grade 10. Descriptions of the general characteristics of the risk grades, including qualitative information on how the risk grades relate to the risk of loss, are contained in the 2021 Annual Form 10-K. Numerical loan grades for loans are established at the origination of the loan. Changes to loan grades are considered at the time new information about the performance of a loan becomes available, including the receipt of updated financial information from the borrower, results of annual term loan reviews and scheduled loan reviews. For consumer loans, the Bank follows the FDIC’s Uniform Retail Credit Classification and Account Management Policy for subsequent classification in the event of payment delinquencies or default. Typically, an individual loan grade will not be changed from the prior period unless there is a specific indication of credit deterioration or improvement. Credit deterioration is evidenced by delinquency, direct communications with the borrower or other borrower information that becomes known to management. Credit improvements are evidenced by known facts regarding the borrower or the collateral property.

Loan grades relate to the likelihood of losses in that the higher the grade, the greater the loss potential. Loans with a pass grade may have some estimated inherent losses, but to a lesser extent than the other loan grades. The SM loan grade is transitory in that the Bank is waiting on additional information to determine the likelihood and extent of any potential loss. The

likelihood of loss for SM graded loans, however, is greater than Watch graded loans because there has been measurable credit deterioration. Loans with a SS grade are generally accrual loans at risk of being classified as nonaccrual loans and includes all of our loans classified as nonaccrual. For Doubtful and Loss graded loans, the Bank is almost certain of the losses and the outstanding principal balances are generally charged off to the realizable value.

The following table presents the amortized cost of loans receivable by risk grade at the dates indicated:

	June 30, 2022
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans		Revolving Loans Converted (2)		Loans Receivable
	2022		2021(1)		2020		2019		2018		Prior
	(In thousands)
Commercial business:
Commercial and industrial
Pass	$	96,128	$	101,302	$	93,475	$	73,299	$	38,742	$	90,980	$	168,030	$	45	$	662,001
SM	234		253		729		4,842		8,764		2,981		1,619		—		19,422
SS	882		169		696		4,581		1,163		6,866		2,171		877		17,405
Total	97,244		101,724		94,900		82,722		48,669		100,827		171,820		922		698,828
SBA PPP
Pass	—		11,175		159		—		—		—		—		—		11,334
Owner-occupied CRE
Pass	78,387		171,470		91,633		180,596		73,797		316,424		—		—		912,307
SM	—		—		—		1,698		2,573		12,042		—		—		16,313
SS	—		261		679		—		3,755		17,384		—		—		22,079
Total	78,387		171,731		92,312		182,294		80,125		345,850		—		—		950,699
Non-owner occupied CRE
Pass	125,451		185,105		166,150		240,396		139,626		578,421		—		—		1,435,149
SM	—		8,435		—		3,652		—		16,655		—		—		28,742
SS	—		—		—		—		3,626		48,279		—		—		51,905
Total	125,451		193,540		166,150		244,048		143,252		643,355		—		—		1,515,796
Total commercial business
Pass	299,966		469,052		351,417		494,291		252,165		985,825		168,030		45		3,020,791
SM	234		8,688		729		10,192		11,337		31,678		1,619		—		64,477
SS	882		430		1,375		4,581		8,544		72,529		2,171		877		91,389
Total	301,082		478,170		353,521		509,064		272,046		1,090,032		171,820		922		3,176,657
Residential real estate
Pass(1)	60,870		140,448		24,564		17,699		4,716		16,907		—		—		265,204
SS	—		—		—		—		—		178		—		—		178
Total	60,870		140,448		24,564		17,699		4,716		17,085		—		—		265,382
Real estate construction and land development:
Residential
Pass	21,664		43,877		10,330		12,002		1,005		1,668		—		—		90,546
Commercial and multifamily
Pass	8,832		75,096		23,991		6,952		3,186		2,013		—		—		120,070
SM	—		—		1,871		5,714		—		—		—		—		7,585
SS	—		—		—		—		—		405		—		—		405
Total	8,832		75,096		25,862		12,666		3,186		2,418		—		—		128,060
Total real estate construction and land development
Pass	30,496		118,973		34,321		18,954		4,191		3,681		—		—		210,616
SM	—		—		1,871		5,714		—		—		—		—		7,585
SS	—		—		—		—		—		405		—		—		405
Total	30,496		118,973		36,192		24,668		4,191		4,086		—		—		218,606

	June 30, 2022
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans		Revolving Loans Converted (2)		Loans Receivable
	2022		2021(1)		2020		2019		2018		Prior
Consumer
Pass	2,475		770		12,451		35,722		21,337		19,062		118,826		329		210,972
SS	—		—		169		558		366		1,346		8		—		2,447
Total	2,475		770		12,620		36,280		21,703		20,408		118,834		329		213,419
Loans receivable
Pass	393,807		729,243		422,753		566,666		282,409		1,025,475		286,856		374		3,707,583
SM	234		8,688		2,600		15,906		11,337		31,678		1,619		—		72,062
SS	882		430		1,544		5,139		8,910		74,458		2,179		877		94,419
Total	$	394,923	$	738,361	$	426,897	$	587,711	$	302,656	$	1,131,611	$	290,654	$	1,251	$	3,874,064

(1) The 2021 origination year includes $42.2 million of pass grade residential real estate loans purchased during the six months ended June 30, 2022 which were originated during the year ended December 31, 2021.

(2) Represents the loans receivable balance at June 30, 2022 which was converted from a revolving loan to an amortizing loan during the six months ended June 30, 2022.

	December 31, 2021
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans		Revolving Loans Converted (1)		Loans Receivable
	2021		2020		2019		2018		2017		Prior
	(In thousands)
Commercial business:
Commercial and industrial
Pass	$	95,960	$	100,193	$	94,657	$	54,707	$	28,558	$	77,294	$	127,651	$	1,035	$	580,055
SM	326		884		5,998		1,425		2,223		2,401		2,048		353		15,658
SS	1,443		1,287		5,912		2,809		2,526		6,907		4,402		568		25,854
Total	97,729		102,364		106,567		58,941		33,307		86,602		134,101		1,956		621,567
SBA PPP
Pass	139,253		6,587		—		—		—		—		—		—		145,840
Owner-occupied CRE
Pass	182,742		90,609		188,380		73,714		66,039		273,518		—		72		875,074
SM	264		—		3,079		7,521		3,937		16,724		—		—		31,525
SS	—		1,332		—		3,787		3,014		16,418		—		—		24,551
Total	183,006		91,941		191,459		85,022		72,990		306,660		—		72		931,150
Non-owner-occupied CRE
Pass	187,860		185,650		244,863		149,090		144,896		499,486		—		—		1,411,845
SM	—		—		5,674		—		15,482		2,400		—		—		23,556
SS	—		—		—		3,379		—		54,319		—		—		57,698
Total	187,860		185,650		250,537		152,469		160,378		556,205		—		—		1,493,099
Total commercial business
Pass	605,815		383,039		527,900		277,511		239,493		850,298		127,651		1,107		3,012,814
SM	590		884		14,751		8,946		21,642		21,525		2,048		353		70,739
SS	1,443		2,619		5,912		9,975		5,540		77,644		4,402		568		108,103
Total	607,848		386,542		548,563		296,432		266,675		949,467		134,101		2,028		3,191,656
Residential real estate
Pass	85,089		27,090		23,295		5,672		6,141		16,891		—		—		164,178
SS	—		—		—		—		—		404		—		—		404
Total	85,089		27,090		23,295		5,672		6,141		17,295		—		—		164,582

	December 31, 2021
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans		Revolving Loans Converted (1)		Loans Receivable
	2021		2020		2019		2018		2017		Prior
	(In thousands)
Real estate construction and land development:
Residential
Pass	44,892		23,728		12,266		2,921		389		1,351		—		—		85,547
Commercial and multifamily
Pass	56,448		41,616		34,117		5,794		710		1,379		—		—		140,064
SM	—		—		68		—		—		213		—		—		281
SS	—		571		—		—		—		420		—		—		991
Total	56,448		42,187		34,185		5,794		710		2,012		—		—		141,336
Total real estate construction and land development
Pass	101,340		65,344		46,383		8,715		1,099		2,730		—		—		225,611
SM	—		—		68		—		—		213		—		—		281
SS	—		571		—		—		—		420		—		—		991
Total	101,340		65,915		46,451		8,715		1,099		3,363		—		—		226,883
Consumer
Pass	1,286		15,737		46,041		29,819		15,068		13,026		108,492		120		229,589
SS	—		181		657		476		542		1,043		36		17		2,952
Total	1,286		15,918		46,698		30,295		15,610		14,069		108,528		137		232,541
Loans receivable
Pass	793,530		491,210		643,619		321,717		261,801		882,945		236,143		1,227		3,632,192
SM	590		884		14,819		8,946		21,642		21,738		2,048		353		71,020
SS	1,443		3,371		6,569		10,451		6,082		79,511		4,438		585		112,450
Total	$	795,563	$	495,465	$	665,007	$	341,114	$	289,525	$	984,194	$	242,629	$	2,165	$	3,815,662

(1) Represents the loans receivable balance at December 31, 2021 which was converted from a revolving loan to an amortizing loan during the year ended December 31, 2021.

(d) Nonaccrual Loans

The following tables present the amortized cost of nonaccrual loans for the dates indicated:

	June 30, 2022
	Nonaccrual without ACL		Nonaccrual with ACL		Total Nonaccrual
	(In thousands)
Commercial business:
Commercial and industrial	$	5,604	$	569	$	6,173
Owner-occupied CRE	—		4,302		4,302
Total	$	5,604	$	4,871	$	10,475

	December 31, 2021
	Nonaccrual without ACL		Nonaccrual with ACL		Total Nonaccrual
	(In thousands)
Commercial business:
Commercial and industrial	$	6,454	$	3,827	$	10,281
Owner-occupied CRE	3,036		5,138		8,174
Non-owner occupied CRE	1,273		3,379		4,652
Total commercial business	10,763		12,344		23,107
Residential real estate	—		47		47

	December 31, 2021
	Nonaccrual without ACL		Nonaccrual with ACL		Total Nonaccrual
	(In thousands)
Real estate construction and land development:
Commercial and multifamily	—		571		571
Consumer	—		29		29
Total	$	10,763	$	12,991	$	23,754

The following table presents the reversal of interest income on loans due to the write-off of accrued interest receivable upon the initial classification of loans as nonaccrual loans and the interest income recognized due to payment in full or sale of previously classified nonaccrual loans during the following periods:

	Three Months Ended June 30, 2022				Three Months Ended June 30, 2021
	Interest Income Reversed		Interest Income Recognized		Interest Income Reversed		Interest Income Recognized
	(In thousands)
Commercial business:
Commercial and industrial	$	(12)	$	90	$	(5)	$	1,981
Owner-occupied CRE	—		—		—		3
Total	$	(12)	$	90	$	(5)	$	1,984

	Six Months Ended June 30, 2022				Six Months Ended June 30, 2021
	Interest Income Reversed		Interest Income Recognized		Interest Income Reversed		Interest Income Recognized
	(in thousands)
Commercial business:
Commercial and industrial	$	(14)	$	229	$	(10)	$	2,044
Owner-occupied CRE	—		53		—		117
Non-owner occupied CRE	—		774		—		313
Total commercial business	(14)		1,056		(10)		2,474
Residential real estate	—		19		—		—
Real estate construction and land development:
Residential	—		—		—		73
Consumer	—		68		—		—
Total	$	(14)	$	1,143	$	(10)	$	2,547

For the three and six months ended June 30, 2022 and 2021, no interest income was recognized subsequent to a loan’s classification as nonaccrual, except as indicated in the tables above due to payment in full or sale.

(e) Past due loans

The Bank performs an aging analysis of past due loans using policies consistent with regulatory reporting requirements with categories of 30-89 days past due and 90 or more days past due. The amortized cost of past due loans as of June 30, 2022 and December 31, 2021 were as follows:

	June 30, 2022
	30-89 Days		90 Days or Greater		Total Past  Due		Current		Loans Receivable
	(In thousands)
Commercial business:
Commercial and industrial	$	259	$	7,190	$	7,449	$	691,379	$	698,828
SBA PPP	—		—		—		11,334		11,334
Owner-occupied CRE	1,056		189		1,245		949,454		950,699
Non-owner occupied CRE	—		—		—		1,515,796		1,515,796

	June 30, 2022
	30-89 Days		90 Days or Greater		Total Past  Due		Current		Loans Receivable
	(In thousands)
Total commercial business	1,315		7,379		8,694		3,167,963		3,176,657
Residential real estate	—		—		—		265,382		265,382
Real estate construction and land development:
Residential	—		—		—		90,546		90,546
Commercial and multifamily	—		—		—		128,060		128,060
Total real estate construction and land development	—		—		—		218,606		218,606
Consumer	651		199		850		212,569		213,419
Total	$	1,966	$	7,578	$	9,544	$	3,864,520	$	3,874,064

	December 31, 2021
	30-89 Days		90 Days or Greater		Total Past  Due		Current		Loans Receivable
	(In thousands)
Commercial business:
Commercial and industrial	$	1,858	$	6,821	$	8,679	$	612,888	$	621,567
SBA PPP	223		293		516		145,324		145,840
Owner-occupied CRE	2,397		112		2,509		928,641		931,150
Non-owner occupied CRE	—		—		—		1,493,099		1,493,099
Total commercial business	4,478		7,226		11,704		3,179,952		3,191,656
Residential real estate	420		10		430		164,152		164,582
Real estate construction and land development:
Residential	792		—		792		84,755		85,547
Commercial and multifamily	3,474		571		4,045		137,291		141,336
Total real estate construction and land development	4,266		571		4,837		222,046		226,883
Consumer	1,026		—		1,026		231,515		232,541
Total	$	10,190	$	7,807	$	17,997	$	3,797,665	$	3,815,662

Loans 90 days or more past due and still accruing interest were $2.0 million and $293,000 as of June 30, 2022 and December 31, 2021, respectively.

(f) Collateral-dependent Loans

The type of collateral securing loans individually evaluated for credit losses and for which the repayment was expected to be provided substantially through the operation or sale of the collateral as of June 30, 2022 and December 31, 2021 was as follows, with balances representing the amortized cost of the loan classified by the primary collateral category of each loan if multiple collateral sources secure the loan:

	June 30, 2022
	CRE		Farmland		Residential Real Estate		Total
	(In thousands)
Commercial business:
Commercial and industrial	$	1,239	$	2,492	$	1,316	$	5,047
Owner-occupied CRE	189		—		—		189
Total	$	1,428	$	2,492	$	1,316	$	5,236

	December 31, 2021
	CRE	Farmland	Residential Real Estate	Other	Total
	(In thousands)
Commercial business:

	December 31, 2021
	CRE		Farmland		Residential Real Estate		Other		Total
	(In thousands)
Commercial and industrial	$	1,499	$	4,362	$	1,036	$	245	$	7,142
Owner-occupied CRE	3,035		—		—		—		3,035
Non-owner occupied CRE	1,273		—		—		—		1,273
Total commercial business	5,807		4,362		1,036		245		11,450
Real estate construction and land development:
Commercial and multifamily	571		—		—		—		571
Total	$	6,378	$	4,362	$	1,036	$	245	$	12,021

There have been no significant changes to the collateral securing loans individually evaluated for credit losses and for which repayment was expected to be provided substantially through the operation or sale of the collateral during the six months ended June 30, 2022, except changes due to additions or removals of loans from this classification.

(g) Troubled Debt Restructured Loans

Loans that were modified as TDR loans are set forth in the following table for the periods indicated:

	Three Months Ended June 30,
	2022			2021
	Number of Contracts	Amortized Cost (1) (2)		Number of Contracts	Amortized Cost (1) (2)
	(Dollars in thousands)
Commercial business:
Commercial and industrial	3	$	1,727	18	$	5,673
Owner-occupied CRE	—	—		1	2,200
Non-owner occupied CRE	—	—		1	251
Total commercial business	3	1,727		20	8,124
Real estate construction and land development:
Commercial and multifamily	—	—		1	443
Consumer	3	44		6	146
Total	6	$	1,771	27	$	8,713

	Six Months Ended June 30,
	2022			2021
	Number of Contracts	Amortized Cost (1) (2)		Number of Contracts	Amortized Cost (1) (2)
	(Dollars in thousands)
Commercial business:
Commercial and industrial	4	$	2,610	31	$	8,713
Owner-occupied CRE	—	—		2	5,857
Non-owner occupied CRE	—	—		2	2,222
Total commercial business	4	2,610		35	16,792
Residential real estate	—	—		1	181
Real estate construction and land development:
Commercial and multifamily	—	—		1	443
Consumer	8	95		21	511
Total	12	$	2,705	58	$	17,927

(1) Number of contracts and amortized cost represent loans which have balances as of period end, net of subsequent payments after modifications. Certain TDR loans may have been paid-down or charged-off during the six months ended June 30, 2022 and 2021.

(2) As the Bank did not forgive any principal or interest balance as part of the loan modifications, the Bank’s amortized cost in each loan at the date of modification (pre-modification) did not change as a result of the modification (post-modification).

The Bank had an ACL on loans of $4,000 and $1.7 million at June 30, 2022 and June 30, 2021, respectively, related to these TDR loans which were restructured during the six months ended June 30, 2022 and June 30, 2021, respectively.

The unfunded commitment to borrowers related to TDR loans was $3.4 million and $5.7 million at June 30, 2022 and December 31, 2021, respectively.

The following table presents loans that were modified in a TDR and subsequently defaulted within twelve months from the modification date during the periods indicated:

	Three Months Ended June 30,
	2022			2021
	Number of Contracts (1)	Amortized Cost (1)		Number of Contracts (1)	Amortized Cost (1)
	(Dollars in thousands)
Commercial business:
Commercial and industrial	—	$	—	1	$	46

	Six Months Ended June 30,
	2022			2021
	Number of Contracts (1)	Amortized Cost (1)		Number of Contracts (1)	Amortized Cost (1)
	(Dollars in thousands)
Commercial business:
Commercial and industrial	—	$	—	2	$	789
Owner-occupied CRE	1	189		—	—

(1) Number of contracts and amortized cost represent TDR loans which have balances as of period end, net of subsequent payments after modifications. Certain TDR loans may have been paid-down or charged-off during the six months ended June 30, 2022 and 2021.

The Bank had $3,000 ACL on loans at June 30, 2022 and $7,000 at June 30, 2021 related to these TDR loans which defaulted during the six months ended June 30, 2022 and 2021.

(h) Accrued interest receivable on loans receivable

Accrued interest receivable on loans receivable totaled $9.5 million and $10.1 million at June 30, 2022 and December 31, 2021, respectively. It is excluded from the calculation of the ACL on loans as interest accrued, but not received, is reversed timely.

(i) Foreclosure proceedings in process

At June 30, 2022, there were no consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process.

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Allowance for Credit Losses on Loans

6 Months Ended

Jun. 30, 2022

Receivables [Abstract]

Allowance for Credit Losses on Loans

Allowance for Credit Losses on Loans

The baseline loss rates used to calculate the ACL on loans at June 30, 2022 utilized the Bank's average quarterly historical loss information from December 31, 2012 through the balance sheet date. There were no changes to this assumption during the six months ended June 30, 2022. The Bank believes the historic loss rates are viable inputs to the current CECL model as the Bank's lending practice and business has remained relatively stable throughout the periods. While the Bank's assets have grown, the credit culture has stayed relatively consistent.

Prepayments included in the CECL model at June 30, 2022 were based on the 48-month rolling historical averages for each segment, which management believes is an accurate representation of future prepayment activity. There were no changes to this assumption during the six months ended June 30, 2022.

The reasonable and supportable period and subsequent reversion period used in the CECL model was five quarters and two quarters, respectively, at December 31, 2021. There were no changes to these assumptions during the six months ended June 30, 2022. Management believes forecasts beyond this seven quarter time period tend to diverge in economic assumptions and may be less comparable to actual future events. As the length of the reasonable and supportable period increases, the degree of judgment involved in estimating the allowance increases.

During the six months ended June 30, 2022, the ACL on loans decreased $2.7 million, or 6.3%, due primarily to a reversal of provision for credit losses on loans of $3.2 million driven by a $2.9 million reduction in the ACL on loans individually evaluated for losses and their related ACL as well as changes in the loan mix and continued improvement in forecasted economic indicators used to calculate credit losses. The ACL on loans at June 30, 2022 and December 31, 2021 did not include a reserve for SBA PPP loans as these loans are fully guaranteed by the SBA.

A summary of the changes in the ACL on loans during the six months ended June 30, 2022 and 2021 is as follows:

	Six Months Ended June 30,
	2022		2021
	(In thousands)
Beginning balance	$	42,361	$	70,185
Charge-offs	(604)		(320)
Recoveries of loans previously charged-off	1,110		653
Reversal of provision for credit losses on loans	(3,171)		(18,956)
Ending balance	$	39,696	$	51,562

The following tables detail the activity in the ACL on loans by segment and class for the periods indicated:

	Three Months Ended June 30, 2022
	Beginning Balance		Charge-offs		Recoveries		(Reversal of) Provision for Credit Losses		Ending Balance
	(In thousands)
Commercial business:
Commercial and industrial	$	15,265	$	(117)	$	149	$	(1,264)	$	14,033
Owner-occupied CRE	7,085		—		—		1,077		8,162
Non-owner occupied CRE	9,582		—		—		(70)		9,512
Total commercial business	31,932		(117)		149		(257)		31,707
Residential real estate	1,803		—		—		334		2,137
Real estate construction and land development:
Residential	1,124		—		6		(49)		1,081
Commercial and multifamily	3,175		—		53		(1,025)		2,203
Total real estate construction and land development	4,299		—		59		(1,074)		3,284
Consumer	2,299		(132)		53		348		2,568
Total	$	40,333	$	(249)	$	261	$	(649)	$	39,696

	Six Months Ended June 30, 2022
	Beginning Balance		Charge-offs		Recoveries		(Reversal of) Provision for Credit Losses		Ending Balance
	(In thousands)
Commercial business:
Commercial and industrial	$	17,777	$	(280)	$	421	$	(3,885)	$	14,033
Owner-occupied CRE	6,411		(36)		—		1,787		8,162
Non-owner occupied CRE	8,861		—		—		651		9,512
Total commercial business	33,049		(316)		421		(1,447)		31,707
Residential real estate	1,409		(30)		3		755		2,137
Real estate construction and land development:
Residential	1,304		—		14		(237)		1,081
Commercial and multifamily	3,972		—		53		(1,822)		2,203
Total real estate construction and land development	5,276		—		67		(2,059)		3,284
Consumer	2,627		(258)		619		(420)		2,568
Total	$	42,361	$	(604)	$	1,110	$	(3,171)	$	39,696

	Three Months Ended June 30, 2021
	Beginning Balance		Charge-offs		Recoveries		(Reversal of) Provision for Credit Losses		Ending Balance
	(In thousands)
Commercial business:
Commercial and industrial	$	21,770	$	(13)	$	132	$	(4,404)	$	17,485
Owner-occupied CRE	10,464		—		11		(1,913)		8,562
Non-owner occupied CRE	12,970		—		—		(2,340)		10,630
Total commercial business	45,204		(13)		143		(8,657)		36,677
Residential real estate	1,402		—		—		(249)		1,153
Real estate construction and land development:
Residential	2,048		—		4		(416)		1,636
Commercial and multifamily	11,223		—		—		(2,388)		8,835
Total real estate construction and land development	13,271		—		4		(2,804)		10,471
Consumer	4,348		(120)		144		(1,111)		3,261
Total	$	64,225	$	(133)	$	291	$	(12,821)	$	51,562

	Six Months Ended June 30, 2021
	Beginning Balance		Charge-offs		Recoveries		(Reversal of) Provision for Credit Losses		Ending Balance
	(In thousands)
Commercial business:
Commercial and industrial	$	30,010	$	(14)	$	337	$	(12,848)	$	17,485
Owner-occupied CRE	9,486		—		13		(937)		8,562
Non-owner occupied CRE	10,112		—		—		518		10,630
Total commercial business	49,608		(14)		350		(13,267)		36,677
Residential real estate	1,591		—		—		(438)		1,153
Real estate construction and land development:
Residential	1,951		—		20		(335)		1,636
Commercial and multifamily	11,141		(1)		—		(2,305)		8,835
Total real estate construction and land development	13,092		(1)		20		(2,640)		10,471
Consumer	5,894		(305)		283		(2,611)		3,261
Total	$	70,185	$	(320)	$	653	$	(18,956)	$	51,562

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Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

(a) Goodwill

There were no additions to goodwill during the three and six months ended June 30, 2022 and 2021. Additionally, management analyzes its goodwill on an annual basis on December 31 and between annual tests in certain circumstances such as material adverse changes in legal, business, regulatory and economic factors. An impairment loss is recorded to the extent the carrying amount of goodwill exceeds its implied fair value. The Company performed an annual impairment assessment as of December 31, 2021 and concluded that there was no impairment.

(b) Other Intangible Assets

Other intangible assets represent core deposit intangible acquired in business combinations with estimated useful lives of ten years. There were no additions to other intangible assets during the three and six months ended June 30, 2022 and 2021.

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Derivative Financial Instruments

6 Months Ended

Jun. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial InstrumentsThe Company utilizes interest rate swap derivative contracts to facilitate the needs of its commercial customers whereby it enters into an interest rate swap with a customer while at the same time entering into an offsetting interest rate swap with another financial institution. The transaction allows the Company’s customer to effectively convert a variable rate loan to a

fixed rate and the Company recognizes immediate income based upon the difference in the bid/ask spread of the underlying transactions with its customers and the third-party. These interest rate swaps are not designated as hedging instruments.

The Company is exposed to interest rate risk as part of the transaction. However, the Company acts as an intermediary for its customer therefore changes in the fair value of the underlying derivative contracts for the most part offset each other and do not significantly impact the Company’s results of operations.

Fee income related to interest rate swap derivative contract transactions is recorded in Interest rate swap fees on the unaudited Condensed Consolidated Statements of Income. The fair value of derivative positions outstanding is included in Prepaid expenses and other assets and Accrued expenses and other liabilities in the unaudited Condensed Consolidated Statements of Financial Condition. The gains and losses due to changes in fair value and all cash flows are included in Other income in the unaudited Condensed Consolidated Statements of Income, but typically net to zero based on the identical back-to-back interest rate swap derivative contracts unless a credit valuation adjustment is recorded to appropriately reflect nonperformance risk in the fair value measurement. Various factors impact changes in the credit valuation adjustments over time, including changes in the risk ratings of the parties to the contracts, as well as changes in market rates and volatilities, which affect the total expected exposure of the derivative instruments.

The following table presents the notional amounts and estimated fair values of interest rate derivative contracts outstanding at the dates indicated:

	June 30, 2022			December 31, 2021
	Notional Amounts		Estimated Fair Value	Notional Amounts		Estimated Fair Value
	(In thousands)
Non-hedging interest rate derivatives
Interest rate swap asset (1)	$	305,902	19,842	$	322,726	$	15,219
Interest rate swap liability (1)	305,902		(19,842)	322,726		(15,286)

 (1) The estimated fair value of derivatives with customers was $(19.0) million and $9.8 million as of June 30, 2022 and December 31, 2021, respectively. The estimated fair value of derivatives with third-parties was $19.0 million and $(9.8) million as of June 30, 2022 and December 31, 2021, respectively.

The Company is exposed to credit-related losses in the event of nonperformance by the counterparty to these agreements. Credit risk for derivatives with the customer is controlled through the credit approval process, amount limits, and monitoring procedures and is concentrated within our primary market areas. Credit risk for derivatives with third-parties is concentrated among four well-known broker dealers.

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Stockholders' Equity

6 Months Ended

Jun. 30, 2022

Stockholders' Equity Note [Abstract]

Stockholders' Equity

Stockholders’ Equity

(a) Earnings Per Common Share

The following table illustrates the calculation of weighted average shares used for earnings per common share computations for the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands, except shares)
Net income	$	18,584	$	32,702	$	38,341	$	58,046
Basic:
Weighted average common shares outstanding	35,110,334		35,994,740		35,102,572		35,961,032
Diluted:
Basic weighted average common shares outstanding	35,110,334		35,994,740		35,102,572		35,961,032
Effect of potentially dilutive common shares (1)	299,190		294,724		310,150		307,829
Total diluted weighted average common shares outstanding	35,409,524		36,289,464		35,412,722		36,268,861
Potentially dilutive shares that were excluded from the computation of diluted earnings per share because to do so would be anti-dilutive (2)	16,978		7,065		14,334		4,766

(1)Represents the effect of the vesting of restricted stock units.

(2) Anti-dilution occurs when the unrecognized compensation cost per share of a restricted stock unit exceeds the market price of the Company’s stock.

(b) Dividends

The timing and amount of cash dividends paid on the Company's common stock depends on the Company’s earnings, capital requirements, financial condition and other relevant factors. Dividends on common stock from the Company depend

substantially upon receipt of dividends from the Bank, which is the Company’s predominant source of income.

The following table summarizes the dividend activity during the six months ended June 30, 2022 and the calendar year 2021:

Declared	Cash Dividend per Share	Record Date	Paid Date
January 27, 2021	$0.20	February 10, 2021	February 24, 2021
April 21, 2021	$0.20	May 5, 2021	May 19, 2021
July 21, 2021	$0.20	August 4, 2021	August 18, 2021
October 20, 2021	$0.21	November 3, 2021	November 17, 2021
January 26, 2022	$0.21	February 9, 2022	February 23, 2022
April 20, 2022	$0.21	May 4, 2022	May 18, 2022

The FDIC and the Washington State Department of Financial Institutions, Division of Banks have the authority under their supervisory powers to prohibit the payment of dividends by the Bank to the Company. Additionally, current guidance from the Federal Reserve provides, among other things, that dividends per share on the Company’s common stock generally should not exceed earnings per share, measured over the previous four fiscal quarters. Current regulations allow the Company and the Bank to pay dividends on their common stock if the Company’s or the Bank’s regulatory capital would not be reduced below the statutory capital requirements set by the Federal Reserve and the FDIC.

(c) Stock Repurchase Program

The Company has had various stock repurchase programs since March 1999. On March 12, 2020, the Company's Board of Directors authorized the repurchase of up to 5% of the Company's outstanding common shares, or 1,799,054 shares, under the twelfth stock repurchase plan. The number, timing and price of shares repurchased under the twelfth stock repurchase plan will depend on business and market conditions and other factors, including opportunities to deploy the Company's capital.

The following table provides total repurchased shares and average share prices under the plan for the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021		Plan Total(1)
Repurchased shares	19,531		—		100,090		—		1,160,840
Stock repurchase average share price	$	24.63	$	—	$	25.07	$	—	$	23.94

(1)Represents shares repurchased and average price per share paid during the duration of the plan.

In addition to the stock repurchases under a stock repurchase plan, the Company repurchases shares to pay withholding taxes on the vesting of restricted stock awards and units. The following table provides total shares repurchased to pay withholding taxes during the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Repurchased shares to pay withholding taxes	1,649		2,557		26,180		25,803
Stock repurchase to pay withholding taxes average share price	$	24.43	$	27.47	$	25.40	$	29.33

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Fair Value Measurements

6 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1: Valuations for assets and liabilities traded in active exchange markets, or interest in open-end mutual funds that allow the Company to sell its ownership interest back to the fund at net asset value on a daily basis. Valuations are obtained from readily available pricing sources for market transactions involving identical assets, liabilities, or funds.

Level 2: Valuations for assets and liabilities traded in less active dealer or broker markets, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or valuations using methodologies with observable inputs.

Level 3: Valuations for assets and liabilities that are derived from other valuation methodologies, such as option pricing models, discounted cash flow models and similar techniques using unobservable inputs, and not based on market exchange, dealer, or broker traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities.

(a) Recurring and Nonrecurring Basis

The Company used the following methods and significant assumptions to measure the fair value of certain assets on a recurring and nonrecurring basis:

Investment Securities:

The fair values of all investment securities are based upon the assumptions that market participants would use in pricing the security. If available, fair values of investment securities are determined by quoted market prices (Level 1). For investment securities where quoted market prices are not available, fair values are calculated based on market prices on similar securities (Level 2). For investment securities where quoted prices or market prices of similar securities are not available, fair values are calculated by using observable and unobservable inputs such as discounted cash flows or other market indicators (Level 3). Investment security valuations are obtained from third-party pricing services.

Collateral-Dependent Loans:

Collateral-dependent loans are identified for the calculation of the ACL on loans. The fair value used to measure credit loss for this type of loan is commonly based on recent real estate appraisals which are generally obtained at least every 18 months or earlier if there are changes to risk characteristics of the underlying loan. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by independent appraisers to adjust for differences between the comparable sales and income data available. The Bank also incorporates an estimate of cost to sell the collateral when the sale is probable. Such adjustments may be significant and result in a Level 3 classification of the inputs for determining fair value. Non-real estate collateral may be valued using an appraisal, net book value based on the borrower’s financial statements or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation and management’s expertise and knowledge of the customer and customer’s business (Level 3). Individually evaluated loans are analyzed for credit loss on a quarterly basis and the ACL on loans is adjusted as required based on the results.

Appraisals on collateral-dependent loans are performed by certified general appraisers for commercial properties or certified residential appraisers for residential properties whose qualifications and licenses have been reviewed and verified by the Bank. Once received, the Bank's internal appraisal department reviews and approves the assumptions and approaches utilized in the appraisal as well as the resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics.

Derivative Financial Instruments:

The Bank obtains broker or dealer quotes to value its interest rate derivative contracts, which use valuation models using observable market data as of the measurement date (Level 2), and incorporates credit valuation adjustments to reflect nonperformance risk in the measurement of fair value (Level 3). Although the Bank has determined that the majority of the inputs used to value its interest rate swap derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as borrower risk ratings, to evaluate the likelihood of default by itself and its counterparties. As of June 30, 2022 and December 31, 2021, the Bank assessed the significance of the impact of the credit valuation adjustment on the overall valuation of its interest rate swap derivatives and determined the credit valuation adjustment was not significant to the overall valuation of its interest rate swap derivatives. As a result, the Bank has classified its interest rate swap derivative valuations in Level 2 of the fair value hierarchy.

Branches held for sale:

Branches held for sale are recorded at fair value less costs to sell when transferred from premises and equipment, net to prepaid expenses and other assets on the unaudited Condensed Consolidated Statements of Financial Condition with any valuation adjustment recorded within other noninterest expense on the unaudited Condensed Consolidated Statements of Income. The fair value of branches held for sale is determined based on a real estate appraisal or broker price opinion. Adjustments are routinely made in the appraisal and broker price opinion process by independent appraisers and commercial real estate brokers, respectively, to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in Level 3 classification of the inputs for determining fair value. Additionally, the fair value of branches held for sale can be adjusted based on executed agreements of sale to be completed at a future date.

Recurring Basis

The following tables summarize the balances of assets and liabilities measured at fair value on a recurring basis at the dates indicated:

	June 30, 2022
	Total		Level 1		Level 2		Level 3
	(In thousands)
Assets
Investment securities available for sale:
U.S. government and agency securities	$	65,668	$	19,939	$	45,729	$	—
Municipal securities	200,010		—		200,010		—
Residential CMO and MBS	398,156		—		398,156		—

	June 30, 2022
	Total		Level 1		Level 2		Level 3
	(In thousands)
Commercial CMO and MBS	493,620		—		493,620		—
Corporate obligations	5,978		—		5,978		—
Other asset-backed securities	24,156		—		24,156		—
Total investment securities available for sale	1,187,588		19,939		1,167,649		—
Equity security	186		186		—		—
Derivative assets - interest rate swaps	19,842		—		19,842		—
Liabilities
Derivative liabilities - interest rate swaps	$	19,842	$	—	$	19,842	$	—

	December 31, 2021
	Total		Level 1		Level 2		Level 3
	(In thousands)
Assets
Investment securities available for sale:
U.S. government and agency securities	$	21,373	$	—	$	21,373	$	—
Municipal securities	221,212		—		221,212		—
Residential CMO and MBS	306,884		—		306,884		—
Commercial CMO and MBS	315,861		—		315,861		—
Corporate obligations	2,014		—		2,014		—
Other asset-backed securities	26,991		—		26,991		—
Total investment securities available for sale	894,335		—		894,335		—
Equity security	240		240		—		—
Derivative assets - interest rate swaps	15,219		—		15,219		—
Liabilities
Derivative liabilities - interest rate swaps	$	15,286	$	—	$	15,286	$	—

Nonrecurring Basis

The Company may be required to measure certain financial assets and liabilities at fair value on a nonrecurring basis. These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets. The following tables represent assets measured at fair value on a nonrecurring basis at the dates indicated:

			Fair Value at June 30, 2022
	Basis(1)		Total		Level 1		Level 2		Level 3
	(In thousands)
Collateral-dependent loans:
Commercial business:
Commercial and industrial	$	1,054	$	969	$	—	$	—	$	969
Owner-occupied CRE	613		186		—		—		186
Total assets measured at fair value on a nonrecurring basis	$	1,667	$	1,155	$	—	$	—	$	1,155

(1) Basis represents the outstanding principal balance of collateral-dependent loans.

			Fair Value at December 31, 2021
	Basis(1)		Total		Level 1		Level 2		Level 3
	(In thousands)
Collateral-dependent loans:
Commercial business:
Commercial and industrial	$	1,911	$	1,049	$	—	$	—	$	1,049
Owner-occupied CRE	613		189		—		—		189
Total commercial business	2,524		1,238		—		—		1,238

Real estate construction and land development:
Commercial and multifamily	991		$	534	—		—		534
Total	3,515		1,772		—		—		1,772
Prepaid expenses and other assets:
Branch held for sale (2)	698		698		—		—		698
Total assets measured at fair value on a nonrecurring basis	$	4,213	$	2,470	$	—	$	—	$	2,470

(1) Basis represents the outstanding principal balance of collateral-dependent loans and the carrying value of the branch held for sale.

(2) In December 2021, one branch was written down to its net realizable value concurrent with the signing of an agreement for sale at a future date.

The following table represents the net (loss) gain recorded in earnings as a result of nonrecurring fair value adjustments recorded during the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Collateral-dependent loans:
Commercial business:
Commercial and industrial	$	35	$	6	$	23	$	(28)
Owner-occupied CRE	(3)		(76)		(3)		(76)
Total commercial business	32		(70)		20		(104)
Real estate construction and land development:
Commercial and multifamily	—		(23)		—		(38)
Net loss from nonrecurring fair value adjustments	$	32	$	(93)	$	20	$	(142)

The following tables present quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at the dates indicated:

	June 30, 2022
	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range of Inputs; Weighted Average
	(Dollars in thousands)
Collateral-dependent loans	$	1,155	Market approach	Adjustment for differences between the comparable sales	N/A(1)

(1)Quantitative disclosures are not provided for collateral-dependent loans because there were no adjustments made to the appraisal or stated values during the current period.

	December 31, 2021
	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range of Inputs; Weighted Average
	(Dollars in thousands)
Collateral-dependent loans	$	1,772	Market approach	Adjustment for differences between the comparable sales	35.0% - (11.0%); 13.8%
Branch held for sale	$	698	Market approach	Sale agreement	Not applicable

(b) Fair Value of Financial Instruments

Broadly traded markets do not exist for most of the Company’s financial instruments; therefore, the fair value calculations attempt to incorporate the effect of current market conditions at a specific time. These determinations are subjective in nature, involve uncertainties and matters of significant judgment and do not include tax ramifications; therefore, the results cannot be determined with precision, substantiated by comparison to independent markets and may not be realized in an actual sale or immediate settlement of the instruments. There may be inherent weaknesses in any calculation technique and changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results. For all of these reasons, the aggregation of the fair value calculations presented herein do not represent, and should not be construed to represent, the underlying value of the Company.

The following tables present the carrying value amount of the Company’s financial instruments and their corresponding

estimated fair values at the dates indicated:

	June 30, 2022
	Carrying Value		Fair Value		Fair Value Measurements Using:
					Level 1		Level 2		Level 3
	(In thousands)
Financial Assets:
Cash and cash equivalents	$	994,055	$	994,055	$	994,055	$	—	$	—
Investment securities available for sale	1,187,588		1,187,588		19,939		1,167,649		—
Investment securities held to maturity	615,653		559,312		—		559,312		—
Loans held for sale	1,311		1,353		—		1,353		—
Loans receivable, net	3,834,368		3,760,294		—		—		3,760,294
Accrued interest receivable	15,908		15,908		272		6,185		9,451
Derivative assets - interest rate swaps	19,842		19,842		—		19,842		—
Equity security	186		186		186		—		—
Financial Liabilities:
Non-maturity deposits	$	6,019,421	$	6,019,421	$	6,019,421	$	—	$	—
Certificates of deposit	310,769		311,481		—		311,481		—
Securities sold under agreement to repurchase	41,827		41,827		41,827		—		—
Junior subordinated debentures	21,326		19,250		—		—		19,250
Accrued interest payable	83		83		31		16		36
Derivative liabilities - interest rate swaps	19,842		19,842		—		19,842		—

	December 31, 2021
	Carrying Value		Fair Value		Fair Value Measurements Using:
					Level 1		Level 2		Level 3
	(In thousands)
Financial Assets:
Cash and cash equivalents	$	1,723,292	$	1,723,292	$	1,723,292	$	—	$	—
Investment securities available for sale	894,335		894,335		—		894,335		—
Investment securities held to maturity	383,393		376,331		—		376,331		—
Loans held for sale	1,476		1,527		—		1,527		—
Loans receivable, net	3,773,301		3,849,602		—		—		3,849,602
Accrued interest receivable	14,657		14,657		14		4,582		10,061
Derivative assets - interest rate swaps	15,219		15,219		—		15,219		—
Equity security	240		240		240		—		—
Financial Liabilities:
Non-maturity deposits	$	6,038,498	$	6,038,498	$	6,038,498	$	—	$	—
Certificates of deposit	342,839		344,025		—		344,025		—
Securities sold under agreement to repurchase	50,839		50,839		50,839		—		—
Junior subordinated debentures	21,180		18,750		—		—		18,750
Accrued interest payable	73		73		33		19		21
Derivative liabilities - interest rate swaps	15,286		15,286		—		15,286		—

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Cash Restriction	6 Months Ended
	Jun. 30, 2022
Banking and Thrift, Other Disclosures [Abstract]
Cash Restriction	Cash RestrictionThe Bank had no cash restrictions at June 30, 2022 and had restricted cash included in interest earning deposits of $9.8 million at December 31, 2021 relating to collateral required on interest rate swaps from third-parties as discussed in Note (6) Derivative Financial Instruments. The Bank does not have a collateral requirement with customers.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

In the ordinary course of business, the Bank may enter into various types of transactions that include commitments to extend credit that are not included in its unaudited Condensed Consolidated Financial Statements. The Bank applies the same credit standards to these commitments as it uses in all its lending activities and has included these commitments in its lending risk evaluations. The majority of the commitments presented below are variable rate. Loan commitments can be either revolving or non-revolving. The Bank’s exposure to credit and market risk under commitments to extend credit is represented by the amount of these commitments.

The following table presents outstanding commitments to extend credit, including letters of credit, at the dates indicated:

	June 30, 2022		December 31, 2021
	(In thousands)
Commercial business:
Commercial and industrial	$	553,134	$	570,156
Owner-occupied CRE	3,612		2,252
Non-owner occupied CRE	13,310		7,487
Total commercial business	570,056		579,895
Real estate construction and land development:
Residential	52,374		51,838
Commercial and multifamily	217,177		209,217
Total real estate construction and land development	269,551		261,055
Consumer	307,906		285,010
Total outstanding commitments	$	1,147,513	$	1,125,960

The following table details the activity in the ACL on unfunded commitments during the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Balance, beginning of period	$	1,552	$	3,617	$	2,607	$	4,681
Reversal of provision for credit losses on unfunded commitments	(555)		(1,166)		(1,610)		(2,230)
Balance, end of period	$	997	$	2,451	$	997	$	2,451

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Description of Business, Basis of Presentation and Significant Accounting Policies and Recently Issued Accounting Pronouncements (Policies)

6 Months Ended

Jun. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business

Description of BusinessThe Company is primarily engaged in the business of planning, directing and coordinating the business activities of its wholly-owned subsidiary, the Bank. The Bank is headquartered in Olympia, Washington and conducts business from its 50 branch offices located throughout Washington State, the greater Portland, Oregon area, and Eugene, Oregon. The Bank’s business consists primarily of commercial lending and deposit relationships with small and medium-sized businesses and their owners in its market areas and attracting deposits from the general public. The Bank also makes real estate construction and land development loans, consumer loans and originates first mortgage loans on residential properties primarily located in its market areas. The Bank's deposits are insured by the FDIC.

Basis of Presentation

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with GAAP for interim financial information and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. It is recommended these unaudited Condensed Consolidated Financial Statements and accompanying Notes be read with the audited Consolidated Financial Statements and the accompanying Notes included in the 2021 Annual Form 10-K. In management's opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

To prepare unaudited Condensed Consolidated Financial Statements in conformity with GAAP, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided. Management believes the judgments, estimates and assumptions used in the preparation of the unaudited Condensed Consolidated Financial Statements are appropriate based on the facts and circumstances at the time. Actual results, however, could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change relate to management's estimate of the ACL on investment securities, management's estimate of the ACL on loans, management's estimate of the ACL on unfunded commitments, management's evaluation of goodwill impairment and management's estimate of the fair value of financial instruments.

The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiary, the Bank. All significant intercompany balances and transactions among the Company and the Bank have been eliminated in consolidation.

There have been reclassifications in certain prior year amounts in the unaudited Condensed Consolidated Statements of Financial Condition, the unaudited Condensed Consolidated Statements of Income and the unaudited Condensed Consolidated Statements of Cash Flows. Reclassifications had no effect on the prior year's net income or stockholders’ equity.

Recently Issued or Adopted Accounting Pronouncements

Recently Issued or Adopted Accounting Pronouncements

FASB ASU 2020-04, Reference Rate Reform (Topic 848), as amended by ASU 2021-01, was issued in March 2020 and provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2022. The amendments are elective, apply to all entities, and provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The Bank’s interest rate swap-related transactions are the majority of the Company's LIBOR exposure. Effective January 25, 2021, the Company adhered to the Interbank Offered Rate Fallbacks Protocol as published by the International Swaps and Derivatives Association, Inc. and recommended by the Alternative Reference Rates Committee. Additionally, effective January 1, 2022, the Bank is no longer initiating or renewing loans using LIBOR as an index. The Company does not expect this ASU to have a material impact on its business operations and the Consolidated Financial Statements.

FASB ASU 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, was issued in March 2022. The ASU eliminates the accounting guidance for TDR loans by creditors while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Additionally, the ASU requires public business entities to disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases. These amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, since Heritage previously adopted the amendments in ASU 2016-13, which is commonly referred to as the current expected credit loss methodology, on January 1, 2020. Early adoption is permitted and should be applied prospectively; however, the transition method related to the recognition and

measurement of TDR loans may be applied under a modified retrospective transition method. The Company is evaluating the effect this ASU will have on its Consolidated Financial Statements and related disclosures.

ACL on Investment Securities

ACL on Investment SecuritiesThe Company evaluated investment securities available for sale as of June 30, 2022 and December 31, 2021 and determined that any declines in fair value were attributable to changes in interest rates relative to where these investments fall within the yield curve and individual characteristics. Management monitors published credit ratings for adverse changes for all

rated investment securities and none of these securities had a below investment grade credit rating as of both June 30, 2022 and December 31, 2021. In addition, the Company does not intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of the amortized cost basis, which may be upon maturity. Therefore, no ACL on investment securities available for sale was recorded as of June 30, 2022 and December 31, 2021.

The Company also evaluated investment securities held to maturity for current expected credit losses as of June 30, 2022 and December 31, 2021. There were no investment securities held to maturity classified as nonaccrual or past due as of June 30, 2022 and December 31, 2021 and all were issued by the U.S. government and its agencies and either explicitly or implicitly guaranteed by the U.S. government, highly rated by major credit rating agencies and had a long history of no credit losses. Accordingly, the Company did not measure expected credit losses on investment securities held to maturity since the historical credit loss information adjusted for current conditions and reasonable and supportable forecasts results in an expectation that nonpayment of the amortized cost basis is zero. Therefore, no ACL on investment securities held to maturity was recorded as of June 30, 2022 and December 31, 2021.

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Investment Securities (Tables)

6 Months Ended

Jun. 30, 2022

Investments, Debt and Equity Securities [Abstract]

Schedule of securities available for sale

The following tables present the amortized cost and fair value of investment securities at the dates indicated and the corresponding amounts of gross unrealized gains and losses, including the corresponding amounts of gross unrealized gains and losses on investment securities available for sale recognized in AOCI:

	June 30, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In thousands)
Investment securities available for sale:
U.S. government and agency securities	$	68,912	$	—	$	(3,244)	$	65,668
Municipal securities	213,402		977		(14,369)		200,010
Residential CMO and MBS	433,903		70		(35,817)		398,156
Commercial CMO and MBS	520,772		466		(27,618)		493,620
Corporate obligations	6,003		—		(25)		5,978
Other asset-backed securities	24,723		6		(573)		24,156
Total	$	1,267,715	$	1,519	$	(81,646)	$	1,187,588
Investment securities held to maturity:
U.S. government and agency securities	$	150,960	$	—	$	(23,416)	$	127,544
Residential CMO and MBS	159,007		257		(5,774)		153,490
Commercial CMO and MBS	305,686		—		(27,408)		278,278
Total	$	615,653	$	257	$	(56,598)	$	559,312

	December 31, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In thousands)
Investment securities available for sale:
U.S. government and agency securities	$	21,494	$	55	$	(176)	$	21,373
Municipal securities	213,158		8,908		(854)		221,212
Residential CMO and MBS	307,366		2,111		(2,593)		306,884
Commercial CMO and MBS	313,169		3,891		(1,199)		315,861
Corporate obligations	2,007		7		—		2,014
Other asset-backed securities	26,638		369		(16)		26,991
Total	$	883,832	$	15,341	$	(4,838)	$	894,335
Investment securities held to maturity:
U.S. government and agency securities	$	141,011	$	120	$	(1,768)	$	139,363
Residential CMO and MBS	24,529		—		(153)		24,376
Commercial CMO and MBS	217,853		—		(5,261)		212,592
Total	$	383,393	$	120	$	(7,182)	$	376,331

Schedule of maturities of investment securities

The amortized cost and fair value of investment securities at June 30, 2022, by contractual maturity, are set forth below. Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

	Securities Available for Sale				Securities Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
Due in one year or less	$	8,283	$	8,306	$	—	$	—
Due after one year through five years	82,106		80,881		—		—
Due after five years through ten years	67,161		65,321		83,210		72,516
Due after ten years	130,767		117,148		67,750		55,028
Total investment securities due at a single maturity date	288,317		271,656		150,960		127,544
Mortgage-backed securities (1)	979,398		915,932		464,693		431,768
Total investment securities	$	1,267,715	$	1,187,588	$	615,653	$	559,312

(1) Mortgage-backed securities, which have prepayment provisions, are not assigned to maturity categories due to fluctuations in their payment speed.

Schedule of fair value and unrealized losses of available for sale investment securities

The following tables show the gross unrealized losses and fair value of the Company’s investment securities available for sale for which an ACL on investment securities available for sale has not been recorded, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position at the dates indicated:

	June 30, 2022
	Less than 12 Months				12 Months or Longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)
U.S. government and agency securities	$	64,200	$	(2,995)	$	1,468	$	(249)	$	65,668	$	(3,244)
Municipal securities	106,205		(11,287)		15,712		(3,082)		121,917		(14,369)
Residential CMO and MBS	352,074		(32,446)		31,008		(3,371)		383,082		(35,817)
Commercial CMO and MBS	406,835		(27,145)		8,711		(473)		415,546		(27,618)
Corporate obligations	5,978		(25)		—		—		5,978		(25)
Other asset-backed securities	19,054		(552)		921		(21)		19,975		(573)
Total	$	954,346	$	(74,450)	$	57,820	$	(7,196)	$	1,012,166	$	(81,646)

	December 31, 2021
	Less than 12 Months				12 Months or Longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)
U.S. government and agency securities	$	14,828	$	(176)	$	—	$	—	$	14,828	$	(176)
Municipal securities	29,774		(619)		9,351		(235)		39,125		(854)
Residential CMO and MBS	204,039		(2,470)		19,862		(123)		223,901		(2,593)
Commercial CMO and MBS	83,283		(1,161)		1,936		(38)		85,219		(1,199)
Other asset-backed securities	2,763		(9)		1,118		(7)		3,881		(16)
Total	$	334,687	$	(4,435)	$	32,267	$	(403)	$	366,954	$	(4,838)

Schedule of realized gains and losses on sale of securities available for sale

The following table presents the gross realized gains and losses on the sale of investment securities available for sale during the following periods:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Gross realized gains	$	—	$	—	$	—	$	29

Scheduled of amortized cost and fair value of securities pledged as collateral

The following table summarizes the amortized cost and fair value of investment securities that are pledged as collateral for the following obligations at the dates indicated:

	June 30, 2022				December 31, 2021
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
Washington and Oregon state public deposits	$	139,868	$	128,842	$	128,216	$	130,217
Federal Reserve Bank credit facility	60,865		52,530		61,057		59,674
Securities sold under agreement to repurchase	69,358		62,647		59,887		59,655
Other securities pledged	49,941		45,739		56,419		55,633
Total	$	320,032	$	289,758	$	305,579	$	305,179

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Loans Receivable (Tables)

6 Months Ended

Jun. 30, 2022

Loans and Leases Receivable Disclosure [Abstract]

Financing Receivable Credit Quality Indicators [Table Text Block]

The amortized cost of loans receivable, net of ACL on loans, consisted of the following portfolio segments and classes at the dates indicated:

	June 30, 2022		December 31, 2021
	(In thousands)
Commercial business:
Commercial and industrial	$	698,828	$	621,567
SBA PPP	11,334		145,840
Owner-occupied CRE	950,699		931,150
Non-owner occupied CRE	1,515,796		1,493,099
Total commercial business	3,176,657		3,191,656
Residential real estate	265,382		164,582
Real estate construction and land development:
Residential	90,546		85,547
Commercial and multifamily	128,060		141,336
Total real estate construction and land development	218,606		226,883
Consumer	213,419		232,541
Loans receivable	3,874,064		3,815,662
Allowance for credit losses on loans	(39,696)		(42,361)
Loans receivable, net	$	3,834,368	$	3,773,301
Balances included in the amortized cost of loans receivable:
Unamortized net discount on acquired loans	$	3,084	$	3,938
Unamortized net deferred fee	$	4,947	$	7,954

The following table presents the amortized cost of loans receivable by risk grade at the dates indicated:

	June 30, 2022
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans		Revolving Loans Converted (2)		Loans Receivable
	2022		2021(1)		2020		2019		2018		Prior
	(In thousands)
Commercial business:
Commercial and industrial
Pass	$	96,128	$	101,302	$	93,475	$	73,299	$	38,742	$	90,980	$	168,030	$	45	$	662,001
SM	234		253		729		4,842		8,764		2,981		1,619		—		19,422
SS	882		169		696		4,581		1,163		6,866		2,171		877		17,405
Total	97,244		101,724		94,900		82,722		48,669		100,827		171,820		922		698,828
SBA PPP
Pass	—		11,175		159		—		—		—		—		—		11,334
Owner-occupied CRE
Pass	78,387		171,470		91,633		180,596		73,797		316,424		—		—		912,307
SM	—		—		—		1,698		2,573		12,042		—		—		16,313
SS	—		261		679		—		3,755		17,384		—		—		22,079
Total	78,387		171,731		92,312		182,294		80,125		345,850		—		—		950,699
Non-owner occupied CRE
Pass	125,451		185,105		166,150		240,396		139,626		578,421		—		—		1,435,149
SM	—		8,435		—		3,652		—		16,655		—		—		28,742
SS	—		—		—		—		3,626		48,279		—		—		51,905
Total	125,451		193,540		166,150		244,048		143,252		643,355		—		—		1,515,796
Total commercial business
Pass	299,966		469,052		351,417		494,291		252,165		985,825		168,030		45		3,020,791
SM	234		8,688		729		10,192		11,337		31,678		1,619		—		64,477
SS	882		430		1,375		4,581		8,544		72,529		2,171		877		91,389
Total	301,082		478,170		353,521		509,064		272,046		1,090,032		171,820		922		3,176,657
Residential real estate
Pass(1)	60,870		140,448		24,564		17,699		4,716		16,907		—		—		265,204
SS	—		—		—		—		—		178		—		—		178
Total	60,870		140,448		24,564		17,699		4,716		17,085		—		—		265,382
Real estate construction and land development:
Residential
Pass	21,664		43,877		10,330		12,002		1,005		1,668		—		—		90,546
Commercial and multifamily
Pass	8,832		75,096		23,991		6,952		3,186		2,013		—		—		120,070
SM	—		—		1,871		5,714		—		—		—		—		7,585
SS	—		—		—		—		—		405		—		—		405
Total	8,832		75,096		25,862		12,666		3,186		2,418		—		—		128,060
Total real estate construction and land development
Pass	30,496		118,973		34,321		18,954		4,191		3,681		—		—		210,616
SM	—		—		1,871		5,714		—		—		—		—		7,585
SS	—		—		—		—		—		405		—		—		405
Total	30,496		118,973		36,192		24,668		4,191		4,086		—		—		218,606

	June 30, 2022
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans		Revolving Loans Converted (2)		Loans Receivable
	2022		2021(1)		2020		2019		2018		Prior
Consumer
Pass	2,475		770		12,451		35,722		21,337		19,062		118,826		329		210,972
SS	—		—		169		558		366		1,346		8		—		2,447
Total	2,475		770		12,620		36,280		21,703		20,408		118,834		329		213,419
Loans receivable
Pass	393,807		729,243		422,753		566,666		282,409		1,025,475		286,856		374		3,707,583
SM	234		8,688		2,600		15,906		11,337		31,678		1,619		—		72,062
SS	882		430		1,544		5,139		8,910		74,458		2,179		877		94,419
Total	$	394,923	$	738,361	$	426,897	$	587,711	$	302,656	$	1,131,611	$	290,654	$	1,251	$	3,874,064

(1) The 2021 origination year includes $42.2 million of pass grade residential real estate loans purchased during the six months ended June 30, 2022 which were originated during the year ended December 31, 2021.

(2) Represents the loans receivable balance at June 30, 2022 which was converted from a revolving loan to an amortizing loan during the six months ended June 30, 2022.

	December 31, 2021
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans		Revolving Loans Converted (1)		Loans Receivable
	2021		2020		2019		2018		2017		Prior
	(In thousands)
Commercial business:
Commercial and industrial
Pass	$	95,960	$	100,193	$	94,657	$	54,707	$	28,558	$	77,294	$	127,651	$	1,035	$	580,055
SM	326		884		5,998		1,425		2,223		2,401		2,048		353		15,658
SS	1,443		1,287		5,912		2,809		2,526		6,907		4,402		568		25,854
Total	97,729		102,364		106,567		58,941		33,307		86,602		134,101		1,956		621,567
SBA PPP
Pass	139,253		6,587		—		—		—		—		—		—		145,840
Owner-occupied CRE
Pass	182,742		90,609		188,380		73,714		66,039		273,518		—		72		875,074
SM	264		—		3,079		7,521		3,937		16,724		—		—		31,525
SS	—		1,332		—		3,787		3,014		16,418		—		—		24,551
Total	183,006		91,941		191,459		85,022		72,990		306,660		—		72		931,150
Non-owner-occupied CRE
Pass	187,860		185,650		244,863		149,090		144,896		499,486		—		—		1,411,845
SM	—		—		5,674		—		15,482		2,400		—		—		23,556
SS	—		—		—		3,379		—		54,319		—		—		57,698
Total	187,860		185,650		250,537		152,469		160,378		556,205		—		—		1,493,099
Total commercial business
Pass	605,815		383,039		527,900		277,511		239,493		850,298		127,651		1,107		3,012,814
SM	590		884		14,751		8,946		21,642		21,525		2,048		353		70,739
SS	1,443		2,619		5,912		9,975		5,540		77,644		4,402		568		108,103
Total	607,848		386,542		548,563		296,432		266,675		949,467		134,101		2,028		3,191,656
Residential real estate
Pass	85,089		27,090		23,295		5,672		6,141		16,891		—		—		164,178
SS	—		—		—		—		—		404		—		—		404
Total	85,089		27,090		23,295		5,672		6,141		17,295		—		—		164,582

	December 31, 2021
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans		Revolving Loans Converted (1)		Loans Receivable
	2021		2020		2019		2018		2017		Prior
	(In thousands)
Real estate construction and land development:
Residential
Pass	44,892		23,728		12,266		2,921		389		1,351		—		—		85,547
Commercial and multifamily
Pass	56,448		41,616		34,117		5,794		710		1,379		—		—		140,064
SM	—		—		68		—		—		213		—		—		281
SS	—		571		—		—		—		420		—		—		991
Total	56,448		42,187		34,185		5,794		710		2,012		—		—		141,336
Total real estate construction and land development
Pass	101,340		65,344		46,383		8,715		1,099		2,730		—		—		225,611
SM	—		—		68		—		—		213		—		—		281
SS	—		571		—		—		—		420		—		—		991
Total	101,340		65,915		46,451		8,715		1,099		3,363		—		—		226,883
Consumer
Pass	1,286		15,737		46,041		29,819		15,068		13,026		108,492		120		229,589
SS	—		181		657		476		542		1,043		36		17		2,952
Total	1,286		15,918		46,698		30,295		15,610		14,069		108,528		137		232,541
Loans receivable
Pass	793,530		491,210		643,619		321,717		261,801		882,945		236,143		1,227		3,632,192
SM	590		884		14,819		8,946		21,642		21,738		2,048		353		71,020
SS	1,443		3,371		6,569		10,451		6,082		79,511		4,438		585		112,450
Total	$	795,563	$	495,465	$	665,007	$	341,114	$	289,525	$	984,194	$	242,629	$	2,165	$	3,815,662

(1) Represents the loans receivable balance at December 31, 2021 which was converted from a revolving loan to an amortizing loan during the year ended December 31, 2021.

Schedule of nonaccrual loans

The following tables present the amortized cost of nonaccrual loans for the dates indicated:

	June 30, 2022
	Nonaccrual without ACL		Nonaccrual with ACL		Total Nonaccrual
	(In thousands)
Commercial business:
Commercial and industrial	$	5,604	$	569	$	6,173
Owner-occupied CRE	—		4,302		4,302
Total	$	5,604	$	4,871	$	10,475

	December 31, 2021
	Nonaccrual without ACL		Nonaccrual with ACL		Total Nonaccrual
	(In thousands)
Commercial business:
Commercial and industrial	$	6,454	$	3,827	$	10,281
Owner-occupied CRE	3,036		5,138		8,174
Non-owner occupied CRE	1,273		3,379		4,652
Total commercial business	10,763		12,344		23,107
Residential real estate	—		47		47

	December 31, 2021
	Nonaccrual without ACL		Nonaccrual with ACL		Total Nonaccrual
	(In thousands)
Real estate construction and land development:
Commercial and multifamily	—		571		571
Consumer	—		29		29
Total	$	10,763	$	12,991	$	23,754

The following table presents the reversal of interest income on loans due to the write-off of accrued interest receivable upon the initial classification of loans as nonaccrual loans and the interest income recognized due to payment in full or sale of previously classified nonaccrual loans during the following periods:

	Three Months Ended June 30, 2022				Three Months Ended June 30, 2021
	Interest Income Reversed		Interest Income Recognized		Interest Income Reversed		Interest Income Recognized
	(In thousands)
Commercial business:
Commercial and industrial	$	(12)	$	90	$	(5)	$	1,981
Owner-occupied CRE	—		—		—		3
Total	$	(12)	$	90	$	(5)	$	1,984

	Six Months Ended June 30, 2022				Six Months Ended June 30, 2021
	Interest Income Reversed		Interest Income Recognized		Interest Income Reversed		Interest Income Recognized
	(in thousands)
Commercial business:
Commercial and industrial	$	(14)	$	229	$	(10)	$	2,044
Owner-occupied CRE	—		53		—		117
Non-owner occupied CRE	—		774		—		313
Total commercial business	(14)		1,056		(10)		2,474
Residential real estate	—		19		—		—
Real estate construction and land development:
Residential	—		—		—		73
Consumer	—		68		—		—
Total	$	(14)	$	1,143	$	(10)	$	2,547

Financing Receivable, Past Due [Table Text Block]

The amortized cost of past due loans as of June 30, 2022 and December 31, 2021 were as follows:

	June 30, 2022
	30-89 Days		90 Days or Greater		Total Past  Due		Current		Loans Receivable
	(In thousands)
Commercial business:
Commercial and industrial	$	259	$	7,190	$	7,449	$	691,379	$	698,828
SBA PPP	—		—		—		11,334		11,334
Owner-occupied CRE	1,056		189		1,245		949,454		950,699
Non-owner occupied CRE	—		—		—		1,515,796		1,515,796

	June 30, 2022
	30-89 Days		90 Days or Greater		Total Past  Due		Current		Loans Receivable
	(In thousands)
Total commercial business	1,315		7,379		8,694		3,167,963		3,176,657
Residential real estate	—		—		—		265,382		265,382
Real estate construction and land development:
Residential	—		—		—		90,546		90,546
Commercial and multifamily	—		—		—		128,060		128,060
Total real estate construction and land development	—		—		—		218,606		218,606
Consumer	651		199		850		212,569		213,419
Total	$	1,966	$	7,578	$	9,544	$	3,864,520	$	3,874,064

	December 31, 2021
	30-89 Days		90 Days or Greater		Total Past  Due		Current		Loans Receivable
	(In thousands)
Commercial business:
Commercial and industrial	$	1,858	$	6,821	$	8,679	$	612,888	$	621,567
SBA PPP	223		293		516		145,324		145,840
Owner-occupied CRE	2,397		112		2,509		928,641		931,150
Non-owner occupied CRE	—		—		—		1,493,099		1,493,099
Total commercial business	4,478		7,226		11,704		3,179,952		3,191,656
Residential real estate	420		10		430		164,152		164,582
Real estate construction and land development:
Residential	792		—		792		84,755		85,547
Commercial and multifamily	3,474		571		4,045		137,291		141,336
Total real estate construction and land development	4,266		571		4,837		222,046		226,883
Consumer	1,026		—		1,026		231,515		232,541
Total	$	10,190	$	7,807	$	17,997	$	3,797,665	$	3,815,662

Loans and Lease Receivable Collateral for Secured Borrowings [Table Text Block]

The type of collateral securing loans individually evaluated for credit losses and for which the repayment was expected to be provided substantially through the operation or sale of the collateral as of June 30, 2022 and December 31, 2021 was as follows, with balances representing the amortized cost of the loan classified by the primary collateral category of each loan if multiple collateral sources secure the loan:

	June 30, 2022
	CRE		Farmland		Residential Real Estate		Total
	(In thousands)
Commercial business:
Commercial and industrial	$	1,239	$	2,492	$	1,316	$	5,047
Owner-occupied CRE	189		—		—		189
Total	$	1,428	$	2,492	$	1,316	$	5,236

	December 31, 2021
	CRE	Farmland	Residential Real Estate	Other	Total
	(In thousands)
Commercial business:

	December 31, 2021
	CRE		Farmland		Residential Real Estate		Other		Total
	(In thousands)
Commercial and industrial	$	1,499	$	4,362	$	1,036	$	245	$	7,142
Owner-occupied CRE	3,035		—		—		—		3,035
Non-owner occupied CRE	1,273		—		—		—		1,273
Total commercial business	5,807		4,362		1,036		245		11,450
Real estate construction and land development:
Commercial and multifamily	571		—		—		—		571
Total	$	6,378	$	4,362	$	1,036	$	245	$	12,021

Loans Receivable

Loans that were modified as TDR loans are set forth in the following table for the periods indicated:

	Three Months Ended June 30,
	2022			2021
	Number of Contracts	Amortized Cost (1) (2)		Number of Contracts	Amortized Cost (1) (2)
	(Dollars in thousands)
Commercial business:
Commercial and industrial	3	$	1,727	18	$	5,673
Owner-occupied CRE	—	—		1	2,200
Non-owner occupied CRE	—	—		1	251
Total commercial business	3	1,727		20	8,124
Real estate construction and land development:
Commercial and multifamily	—	—		1	443
Consumer	3	44		6	146
Total	6	$	1,771	27	$	8,713

	Six Months Ended June 30,
	2022			2021
	Number of Contracts	Amortized Cost (1) (2)		Number of Contracts	Amortized Cost (1) (2)
	(Dollars in thousands)
Commercial business:
Commercial and industrial	4	$	2,610	31	$	8,713
Owner-occupied CRE	—	—		2	5,857
Non-owner occupied CRE	—	—		2	2,222
Total commercial business	4	2,610		35	16,792
Residential real estate	—	—		1	181
Real estate construction and land development:
Commercial and multifamily	—	—		1	443
Consumer	8	95		21	511
Total	12	$	2,705	58	$	17,927

(1) Number of contracts and amortized cost represent loans which have balances as of period end, net of subsequent payments after modifications. Certain TDR loans may have been paid-down or charged-off during the six months ended June 30, 2022 and 2021.

(2) As the Bank did not forgive any principal or interest balance as part of the loan modifications, the Bank’s amortized cost in each loan at the date of modification (pre-modification) did not change as a result of the modification (post-modification).

Troubled debt restructuring loans, subsequently defaulted

The following table presents loans that were modified in a TDR and subsequently defaulted within twelve months from the modification date during the periods indicated:

	Three Months Ended June 30,
	2022			2021
	Number of Contracts (1)	Amortized Cost (1)		Number of Contracts (1)	Amortized Cost (1)
	(Dollars in thousands)
Commercial business:
Commercial and industrial	—	$	—	1	$	46

	Six Months Ended June 30,
	2022			2021
	Number of Contracts (1)	Amortized Cost (1)		Number of Contracts (1)	Amortized Cost (1)
	(Dollars in thousands)
Commercial business:
Commercial and industrial	—	$	—	2	$	789
Owner-occupied CRE	1	189		—	—

(1) Number of contracts and amortized cost represent TDR loans which have balances as of period end, net of subsequent payments after modifications. Certain TDR loans may have been paid-down or charged-off during the six months ended June 30, 2022 and 2021.

Troubled debt restructurings on financing receivables

Loans that were modified as TDR loans are set forth in the following table for the periods indicated:

	Three Months Ended June 30,
	2022			2021
	Number of Contracts	Amortized Cost (1) (2)		Number of Contracts	Amortized Cost (1) (2)
	(Dollars in thousands)
Commercial business:
Commercial and industrial	3	$	1,727	18	$	5,673
Owner-occupied CRE	—	—		1	2,200
Non-owner occupied CRE	—	—		1	251
Total commercial business	3	1,727		20	8,124
Real estate construction and land development:
Commercial and multifamily	—	—		1	443
Consumer	3	44		6	146
Total	6	$	1,771	27	$	8,713

	Six Months Ended June 30,
	2022			2021
	Number of Contracts	Amortized Cost (1) (2)		Number of Contracts	Amortized Cost (1) (2)
	(Dollars in thousands)
Commercial business:
Commercial and industrial	4	$	2,610	31	$	8,713
Owner-occupied CRE	—	—		2	5,857
Non-owner occupied CRE	—	—		2	2,222
Total commercial business	4	2,610		35	16,792
Residential real estate	—	—		1	181
Real estate construction and land development:
Commercial and multifamily	—	—		1	443
Consumer	8	95		21	511
Total	12	$	2,705	58	$	17,927

(1) Number of contracts and amortized cost represent loans which have balances as of period end, net of subsequent payments after modifications. Certain TDR loans may have been paid-down or charged-off during the six months ended June 30, 2022 and 2021.

(2) As the Bank did not forgive any principal or interest balance as part of the loan modifications, the Bank’s amortized cost in each loan at the date of modification (pre-modification) did not change as a result of the modification (post-modification).

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Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2022

Receivables [Abstract]

Schedule of changes in allowance for loan losses

A summary of the changes in the ACL on loans during the six months ended June 30, 2022 and 2021 is as follows:

	Six Months Ended June 30,
	2022		2021
	(In thousands)
Beginning balance	$	42,361	$	70,185
Charge-offs	(604)		(320)
Recoveries of loans previously charged-off	1,110		653
Reversal of provision for credit losses on loans	(3,171)		(18,956)
Ending balance	$	39,696	$	51,562

The following tables detail the activity in the ACL on loans by segment and class for the periods indicated:

	Three Months Ended June 30, 2022
	Beginning Balance		Charge-offs		Recoveries		(Reversal of) Provision for Credit Losses		Ending Balance
	(In thousands)
Commercial business:
Commercial and industrial	$	15,265	$	(117)	$	149	$	(1,264)	$	14,033
Owner-occupied CRE	7,085		—		—		1,077		8,162
Non-owner occupied CRE	9,582		—		—		(70)		9,512
Total commercial business	31,932		(117)		149		(257)		31,707
Residential real estate	1,803		—		—		334		2,137
Real estate construction and land development:
Residential	1,124		—		6		(49)		1,081
Commercial and multifamily	3,175		—		53		(1,025)		2,203
Total real estate construction and land development	4,299		—		59		(1,074)		3,284
Consumer	2,299		(132)		53		348		2,568
Total	$	40,333	$	(249)	$	261	$	(649)	$	39,696

	Six Months Ended June 30, 2022
	Beginning Balance		Charge-offs		Recoveries		(Reversal of) Provision for Credit Losses		Ending Balance
	(In thousands)
Commercial business:
Commercial and industrial	$	17,777	$	(280)	$	421	$	(3,885)	$	14,033
Owner-occupied CRE	6,411		(36)		—		1,787		8,162
Non-owner occupied CRE	8,861		—		—		651		9,512
Total commercial business	33,049		(316)		421		(1,447)		31,707
Residential real estate	1,409		(30)		3		755		2,137
Real estate construction and land development:
Residential	1,304		—		14		(237)		1,081
Commercial and multifamily	3,972		—		53		(1,822)		2,203
Total real estate construction and land development	5,276		—		67		(2,059)		3,284
Consumer	2,627		(258)		619		(420)		2,568
Total	$	42,361	$	(604)	$	1,110	$	(3,171)	$	39,696

	Three Months Ended June 30, 2021
	Beginning Balance		Charge-offs		Recoveries		(Reversal of) Provision for Credit Losses		Ending Balance
	(In thousands)
Commercial business:
Commercial and industrial	$	21,770	$	(13)	$	132	$	(4,404)	$	17,485
Owner-occupied CRE	10,464		—		11		(1,913)		8,562
Non-owner occupied CRE	12,970		—		—		(2,340)		10,630
Total commercial business	45,204		(13)		143		(8,657)		36,677
Residential real estate	1,402		—		—		(249)		1,153
Real estate construction and land development:
Residential	2,048		—		4		(416)		1,636
Commercial and multifamily	11,223		—		—		(2,388)		8,835
Total real estate construction and land development	13,271		—		4		(2,804)		10,471
Consumer	4,348		(120)		144		(1,111)		3,261
Total	$	64,225	$	(133)	$	291	$	(12,821)	$	51,562

	Six Months Ended June 30, 2021
	Beginning Balance		Charge-offs		Recoveries		(Reversal of) Provision for Credit Losses		Ending Balance
	(In thousands)
Commercial business:
Commercial and industrial	$	30,010	$	(14)	$	337	$	(12,848)	$	17,485
Owner-occupied CRE	9,486		—		13		(937)		8,562
Non-owner occupied CRE	10,112		—		—		518		10,630
Total commercial business	49,608		(14)		350		(13,267)		36,677
Residential real estate	1,591		—		—		(438)		1,153
Real estate construction and land development:
Residential	1,951		—		20		(335)		1,636
Commercial and multifamily	11,141		(1)		—		(2,305)		8,835
Total real estate construction and land development	13,092		(1)		20		(2,640)		10,471
Consumer	5,894		(305)		283		(2,611)		3,261
Total	$	70,185	$	(320)	$	653	$	(18,956)	$	51,562

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Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of notional amounts and estimated fair values of interest rate derivative contracts

The following table presents the notional amounts and estimated fair values of interest rate derivative contracts outstanding at the dates indicated:

	June 30, 2022			December 31, 2021
	Notional Amounts		Estimated Fair Value	Notional Amounts		Estimated Fair Value
	(In thousands)
Non-hedging interest rate derivatives
Interest rate swap asset (1)	$	305,902	19,842	$	322,726	$	15,219
Interest rate swap liability (1)	305,902		(19,842)	322,726		(15,286)

 (1) The estimated fair value of derivatives with customers was $(19.0) million and $9.8 million as of June 30, 2022 and December 31, 2021, respectively. The estimated fair value of derivatives with third-parties was $19.0 million and $(9.8) million as of June 30, 2022 and December 31, 2021, respectively.

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Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2022

Stockholders' Equity Note [Abstract]

Schedule of earnings per share reconciliation

The following table illustrates the calculation of weighted average shares used for earnings per common share computations for the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands, except shares)
Net income	$	18,584	$	32,702	$	38,341	$	58,046
Basic:
Weighted average common shares outstanding	35,110,334		35,994,740		35,102,572		35,961,032
Diluted:
Basic weighted average common shares outstanding	35,110,334		35,994,740		35,102,572		35,961,032
Effect of potentially dilutive common shares (1)	299,190		294,724		310,150		307,829
Total diluted weighted average common shares outstanding	35,409,524		36,289,464		35,412,722		36,268,861
Potentially dilutive shares that were excluded from the computation of diluted earnings per share because to do so would be anti-dilutive (2)	16,978		7,065		14,334		4,766

(1)Represents the effect of the vesting of restricted stock units.

(2) Anti-dilution occurs when the unrecognized compensation cost per share of a restricted stock unit exceeds the market price of the Company’s stock.

Schedule of dividends activity

The following table summarizes the dividend activity during the six months ended June 30, 2022 and the calendar year 2021:

Declared	Cash Dividend per Share	Record Date	Paid Date
January 27, 2021	$0.20	February 10, 2021	February 24, 2021
April 21, 2021	$0.20	May 5, 2021	May 19, 2021
July 21, 2021	$0.20	August 4, 2021	August 18, 2021
October 20, 2021	$0.21	November 3, 2021	November 17, 2021
January 26, 2022	$0.21	February 9, 2022	February 23, 2022
April 20, 2022	$0.21	May 4, 2022	May 18, 2022

Stock Repurchased During Period

The following table provides total repurchased shares and average share prices under the plan for the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021		Plan Total(1)
Repurchased shares	19,531		—		100,090		—		1,160,840
Stock repurchase average share price	$	24.63	$	—	$	25.07	$	—	$	23.94

(1)Represents shares repurchased and average price per share paid during the duration of the plan.

Schedule of repurchased shares

The following table provides total shares repurchased to pay withholding taxes during the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Repurchased shares to pay withholding taxes	1,649		2,557		26,180		25,803
Stock repurchase to pay withholding taxes average share price	$	24.43	$	27.47	$	25.40	$	29.33

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Fair value measurements of assets on a recurring basis

The following tables summarize the balances of assets and liabilities measured at fair value on a recurring basis at the dates indicated:

	June 30, 2022
	Total		Level 1		Level 2		Level 3
	(In thousands)
Assets
Investment securities available for sale:
U.S. government and agency securities	$	65,668	$	19,939	$	45,729	$	—
Municipal securities	200,010		—		200,010		—
Residential CMO and MBS	398,156		—		398,156		—

	June 30, 2022
	Total		Level 1		Level 2		Level 3
	(In thousands)
Commercial CMO and MBS	493,620		—		493,620		—
Corporate obligations	5,978		—		5,978		—
Other asset-backed securities	24,156		—		24,156		—
Total investment securities available for sale	1,187,588		19,939		1,167,649		—
Equity security	186		186		—		—
Derivative assets - interest rate swaps	19,842		—		19,842		—
Liabilities
Derivative liabilities - interest rate swaps	$	19,842	$	—	$	19,842	$	—

	December 31, 2021
	Total		Level 1		Level 2		Level 3
	(In thousands)
Assets
Investment securities available for sale:
U.S. government and agency securities	$	21,373	$	—	$	21,373	$	—
Municipal securities	221,212		—		221,212		—
Residential CMO and MBS	306,884		—		306,884		—
Commercial CMO and MBS	315,861		—		315,861		—
Corporate obligations	2,014		—		2,014		—
Other asset-backed securities	26,991		—		26,991		—
Total investment securities available for sale	894,335		—		894,335		—
Equity security	240		240		—		—
Derivative assets - interest rate swaps	15,219		—		15,219		—
Liabilities
Derivative liabilities - interest rate swaps	$	15,286	$	—	$	15,286	$	—

Fair value measurements of assets on a nonrecurring basis

The following tables represent assets measured at fair value on a nonrecurring basis at the dates indicated:

			Fair Value at June 30, 2022
	Basis(1)		Total		Level 1		Level 2		Level 3
	(In thousands)
Collateral-dependent loans:
Commercial business:
Commercial and industrial	$	1,054	$	969	$	—	$	—	$	969
Owner-occupied CRE	613		186		—		—		186
Total assets measured at fair value on a nonrecurring basis	$	1,667	$	1,155	$	—	$	—	$	1,155

(1) Basis represents the outstanding principal balance of collateral-dependent loans.

			Fair Value at December 31, 2021
	Basis(1)		Total		Level 1		Level 2		Level 3
	(In thousands)
Collateral-dependent loans:
Commercial business:
Commercial and industrial	$	1,911	$	1,049	$	—	$	—	$	1,049
Owner-occupied CRE	613		189		—		—		189
Total commercial business	2,524		1,238		—		—		1,238

Real estate construction and land development:
Commercial and multifamily	991		$	534	—		—		534
Total	3,515		1,772		—		—		1,772
Prepaid expenses and other assets:
Branch held for sale (2)	698		698		—		—		698
Total assets measured at fair value on a nonrecurring basis	$	4,213	$	2,470	$	—	$	—	$	2,470

(1) Basis represents the outstanding principal balance of collateral-dependent loans and the carrying value of the branch held for sale.

(2) In December 2021, one branch was written down to its net realizable value concurrent with the signing of an agreement for sale at a future date.

The following table represents the net (loss) gain recorded in earnings as a result of nonrecurring fair value adjustments recorded during the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Collateral-dependent loans:
Commercial business:
Commercial and industrial	$	35	$	6	$	23	$	(28)
Owner-occupied CRE	(3)		(76)		(3)		(76)
Total commercial business	32		(70)		20		(104)
Real estate construction and land development:
Commercial and multifamily	—		(23)		—		(38)
Net loss from nonrecurring fair value adjustments	$	32	$	(93)	$	20	$	(142)

Fair value measurements for financial instruments measured at fair value on a non-recurring basis

The following tables present quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at the dates indicated:

	June 30, 2022
	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range of Inputs; Weighted Average
	(Dollars in thousands)
Collateral-dependent loans	$	1,155	Market approach	Adjustment for differences between the comparable sales	N/A(1)

(1)Quantitative disclosures are not provided for collateral-dependent loans because there were no adjustments made to the appraisal or stated values during the current period.

	December 31, 2021
	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range of Inputs; Weighted Average
	(Dollars in thousands)
Collateral-dependent loans	$	1,772	Market approach	Adjustment for differences between the comparable sales	35.0% - (11.0%); 13.8%
Branch held for sale	$	698	Market approach	Sale agreement	Not applicable

Schedule of carrying value and fair value of financial instruments

The following tables present the carrying value amount of the Company’s financial instruments and their corresponding

estimated fair values at the dates indicated:

	June 30, 2022
	Carrying Value		Fair Value		Fair Value Measurements Using:
					Level 1		Level 2		Level 3
	(In thousands)
Financial Assets:
Cash and cash equivalents	$	994,055	$	994,055	$	994,055	$	—	$	—
Investment securities available for sale	1,187,588		1,187,588		19,939		1,167,649		—
Investment securities held to maturity	615,653		559,312		—		559,312		—
Loans held for sale	1,311		1,353		—		1,353		—
Loans receivable, net	3,834,368		3,760,294		—		—		3,760,294
Accrued interest receivable	15,908		15,908		272		6,185		9,451
Derivative assets - interest rate swaps	19,842		19,842		—		19,842		—
Equity security	186		186		186		—		—
Financial Liabilities:
Non-maturity deposits	$	6,019,421	$	6,019,421	$	6,019,421	$	—	$	—
Certificates of deposit	310,769		311,481		—		311,481		—
Securities sold under agreement to repurchase	41,827		41,827		41,827		—		—
Junior subordinated debentures	21,326		19,250		—		—		19,250
Accrued interest payable	83		83		31		16		36
Derivative liabilities - interest rate swaps	19,842		19,842		—		19,842		—

	December 31, 2021
	Carrying Value		Fair Value		Fair Value Measurements Using:
					Level 1		Level 2		Level 3
	(In thousands)
Financial Assets:
Cash and cash equivalents	$	1,723,292	$	1,723,292	$	1,723,292	$	—	$	—
Investment securities available for sale	894,335		894,335		—		894,335		—
Investment securities held to maturity	383,393		376,331		—		376,331		—
Loans held for sale	1,476		1,527		—		1,527		—
Loans receivable, net	3,773,301		3,849,602		—		—		3,849,602
Accrued interest receivable	14,657		14,657		14		4,582		10,061
Derivative assets - interest rate swaps	15,219		15,219		—		15,219		—
Equity security	240		240		240		—		—
Financial Liabilities:
Non-maturity deposits	$	6,038,498	$	6,038,498	$	6,038,498	$	—	$	—
Certificates of deposit	342,839		344,025		—		344,025		—
Securities sold under agreement to repurchase	50,839		50,839		50,839		—		—
Junior subordinated debentures	21,180		18,750		—		—		18,750
Accrued interest payable	73		73		33		19		21
Derivative liabilities - interest rate swaps	15,286		15,286		—		15,286		—

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Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Outstanding Commitments to Extend Credit and Letters of Credit [Table Text Block]

The following table presents outstanding commitments to extend credit, including letters of credit, at the dates indicated:

	June 30, 2022		December 31, 2021
	(In thousands)
Commercial business:
Commercial and industrial	$	553,134	$	570,156
Owner-occupied CRE	3,612		2,252
Non-owner occupied CRE	13,310		7,487
Total commercial business	570,056		579,895
Real estate construction and land development:
Residential	52,374		51,838
Commercial and multifamily	217,177		209,217
Total real estate construction and land development	269,551		261,055
Consumer	307,906		285,010
Total outstanding commitments	$	1,147,513	$	1,125,960

Allowance For Credit Losses And Allowance for Unfunded Commitments And Letters Of Credit

The following table details the activity in the ACL on unfunded commitments during the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Balance, beginning of period	$	1,552	$	3,617	$	2,607	$	4,681
Reversal of provision for credit losses on unfunded commitments	(555)		(1,166)		(1,610)		(2,230)
Balance, end of period	$	997	$	2,451	$	997	$	2,451

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Description of Business, Basis of Presentation and Significant Accounting Policies and Recently Issued Accounting Pronouncements (Details)	Jun. 30, 2022 branch
Heritage Bank [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of Branches Operating	50

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Investment Securities - Textual (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Total investment securities	$ 559,312		$ 376,331
Debt Securities, Available-for-sale, Allowance for Credit Loss	0		0
Debt Securities, Held-to-maturity, Allowance for Credit Loss	0
Debt Securities, Trading, and Equity Securities, FV-NI	0		$ 0
Debt Securities, Available-for-Sale, Accrued Interest Writeoff	0	$ 0
Debt Securities, Held-to-Maturity, Accrued Interest, Writeoff	$ 0	$ 0
Concentration, debt securities	0.00%		0.00%
Investment securities held to maturity, at amortized cost, net (fair value of $559,312 and $376,331, respectively)	$ 615,653		$ 383,393
Debt Securities, Held-to-maturity, Nonaccrual	0		0
Debt Securities, Held-to-maturity, 90 Days or More Past Due, Still Accruing	0		0
Total investment securities available for sale	1,187,588		894,335
Available-for-sale Securities [Member]
Accrued Investment Income Receivable	4,600		3,500
Held-to-maturity Securities
Accrued Investment Income Receivable	$ 1,800		$ 1,100

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Investment Securities - Amortized Cost, Gross Unrealized Gains and Losses and Fair Values (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Investment Holdings [Line Items]
Amortized cost	$ 1,267,715
Fair Value	1,187,588	$ 894,335
Investment securities held to maturity, at amortized cost, net (fair value of $559,312 and $376,331, respectively)	615,653	383,393
Total investment securities	559,312	376,331
Fair Value, Recurring [Member]
Investment Holdings [Line Items]
Fair Value	1,187,588	894,335
Level 2 | Fair Value, Recurring [Member]
Investment Holdings [Line Items]
Amortized cost	1,267,715	883,832
Gross Unrealized Gains	1,519	15,341
Gross Unrealized Losses	(81,646)	(4,838)
Fair Value	1,167,649	894,335
Investment securities held to maturity, at amortized cost, net (fair value of $559,312 and $376,331, respectively)	615,653	383,393
Debt Securities, Held-to-maturity, Accumulated Unrecognized Gain	257	120
Debt Securities, Held-to-maturity, Accumulated Unrecognized Loss	(56,598)	(7,182)
Total investment securities	559,312	376,331
U.S. government and agency securities | Fair Value, Recurring [Member]
Investment Holdings [Line Items]
Fair Value	65,668	21,373
U.S. government and agency securities | Level 2 | Fair Value, Recurring [Member]
Investment Holdings [Line Items]
Amortized cost	68,912	21,494
Gross Unrealized Gains	0	55
Gross Unrealized Losses	(3,244)	(176)
Fair Value	45,729	21,373
Investment securities held to maturity, at amortized cost, net (fair value of $559,312 and $376,331, respectively)	150,960	141,011
Debt Securities, Held-to-maturity, Accumulated Unrecognized Gain	0	120
Debt Securities, Held-to-maturity, Accumulated Unrecognized Loss	(23,416)	(1,768)
Total investment securities	127,544	139,363
Municipal securities | Fair Value, Recurring [Member]
Investment Holdings [Line Items]
Fair Value	200,010	221,212
Municipal securities | Level 2 | Fair Value, Recurring [Member]
Investment Holdings [Line Items]
Amortized cost	213,402	213,158
Gross Unrealized Gains	977	8,908
Gross Unrealized Losses	(14,369)	(854)
Fair Value	200,010	221,212
Residential CMO and MBS | Fair Value, Recurring [Member]
Investment Holdings [Line Items]
Fair Value	398,156	306,884
Residential CMO and MBS | Level 2 | Fair Value, Recurring [Member]
Investment Holdings [Line Items]
Amortized cost	433,903	307,366
Gross Unrealized Gains	70	2,111
Gross Unrealized Losses	(35,817)	(2,593)
Fair Value	398,156	306,884
Investment securities held to maturity, at amortized cost, net (fair value of $559,312 and $376,331, respectively)	159,007	24,529
Debt Securities, Held-to-maturity, Accumulated Unrecognized Gain	257	0
Debt Securities, Held-to-maturity, Accumulated Unrecognized Loss	(5,774)	(153)
Total investment securities	153,490	24,376
Commercial CMO and MBS | Fair Value, Recurring [Member]
Investment Holdings [Line Items]
Fair Value	493,620	315,861
Commercial CMO and MBS | Level 2 | Fair Value, Recurring [Member]
Investment Holdings [Line Items]
Amortized cost	520,772	313,169
Gross Unrealized Gains	466	3,891
Gross Unrealized Losses	(27,618)	(1,199)
Fair Value	493,620	315,861
Investment securities held to maturity, at amortized cost, net (fair value of $559,312 and $376,331, respectively)	305,686	217,853
Debt Securities, Held-to-maturity, Accumulated Unrecognized Gain	0	0
Debt Securities, Held-to-maturity, Accumulated Unrecognized Loss	(27,408)	(5,261)
Total investment securities	278,278	212,592
Corporate obligations | Fair Value, Recurring [Member]
Investment Holdings [Line Items]
Fair Value	5,978	2,014
Corporate obligations | Level 2 | Fair Value, Recurring [Member]
Investment Holdings [Line Items]
Amortized cost	6,003	2,007
Gross Unrealized Gains	0	7
Gross Unrealized Losses	(25)	0
Fair Value	5,978	2,014
Other asset-backed securities | Fair Value, Recurring [Member]
Investment Holdings [Line Items]
Fair Value	24,156	26,991
Other asset-backed securities | Level 2 | Fair Value, Recurring [Member]
Investment Holdings [Line Items]
Amortized cost	24,723	26,638
Gross Unrealized Gains	6	369
Gross Unrealized Losses	(573)	(16)
Fair Value	$ 24,156	$ 26,991

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Investment Securities - Contractual Maturities (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Amortized Cost
Due in one year or less	$ 8,283
Due after one year through five years	82,106
Due after five years through ten years	67,161
Due after ten years	130,767
Amortized cost	1,267,715
Fair Value
Due in one year or less	8,306
Due after one year through five years	80,881
Due after five years through ten years	65,321
Due after ten years	117,148
Fair Value	1,187,588	$ 894,335
Amortized Cost
Due in one year or less	0
Due after one year through five years	0
Due after five years through ten years	83,210
Due after ten years	67,750
Investment securities held to maturity, at amortized cost, net (fair value of $559,312 and $376,331, respectively)	615,653	383,393
Fair Value
Due in one year or less	0
Due after one year through five years	0
Due after five years through ten years	72,516
Due after ten years	55,028
Total investment securities	559,312	$ 376,331
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Amortized Cost	288,317
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Fair Value	271,656
Debt Securities, Held-to-Maturity, Amortized Cost, after Allowance for Credit Loss, Maturity, Allocated and Single Maturity Date	150,960
Debt Securities, Held-to-maturity, Maturity, Allocated and Single Maturity Date, Fair Value	127,544
Debt Securities, Available-for-sale, Maturity, without Single Maturity Date, Amortized Cost	979,398
Debt Securities, Available-for-sale, Maturity, without Single Maturity Date, Fair Value	915,932
Debt Securities, Held-to-Maturity, Amortized Cost, after Allowance for Credit Loss, Maturity, without Single Maturity Date	464,693
Debt Securities, Held-to-maturity, Maturity, without Single Maturity Date, Fair Value	$ 431,768

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Investment Securities - Unrealized Losses (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Fair Value
Less than 12 Months	$ 954,346	$ 334,687
12 Months or Longer	57,820	32,267
Total	1,012,166	366,954
Unrealized Losses
Less than 12 Months	(74,450)	(4,435)
12 Months or Longer	(7,196)	(403)
Total	(81,646)	(4,838)
US Treasury and Government [Member]
Fair Value
Less than 12 Months	64,200	14,828
12 Months or Longer	1,468	0
Total	65,668	14,828
Unrealized Losses
Less than 12 Months	(2,995)	(176)
12 Months or Longer	(249)	0
Total	(3,244)	(176)
Municipal securities
Fair Value
Less than 12 Months	106,205	29,774
12 Months or Longer	15,712	9,351
Total	121,917	39,125
Unrealized Losses
Less than 12 Months	(11,287)	(619)
12 Months or Longer	(3,082)	(235)
Total	(14,369)	(854)
Residential CMO and MBS
Fair Value
Less than 12 Months	352,074	204,039
12 Months or Longer	31,008	19,862
Total	383,082	223,901
Unrealized Losses
Less than 12 Months	(32,446)	(2,470)
12 Months or Longer	(3,371)	(123)
Total	(35,817)	(2,593)
Commercial CMO and MBS
Fair Value
Less than 12 Months	406,835	83,283
12 Months or Longer	8,711	1,936
Total	415,546	85,219
Unrealized Losses
Less than 12 Months	(27,145)	(1,161)
12 Months or Longer	(473)	(38)
Total	(27,618)	(1,199)
Corporate Debt Securities [Member]
Fair Value
Less than 12 Months	5,978
12 Months or Longer	0
Total	5,978
Unrealized Losses
Less than 12 Months	(25)
12 Months or Longer	0
Total	(25)
Other asset-backed securities
Fair Value
Less than 12 Months	19,054	2,763
12 Months or Longer	921	1,118
Total	19,975	3,881
Unrealized Losses
Less than 12 Months	(552)	(9)
12 Months or Longer	(21)	(7)
Total	$ (573)	$ (16)

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Investment Securities - Realized Gains and Losses (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Investments, Debt and Equity Securities [Abstract]
Gross realized gains	$ 0	$ 0	$ 0	$ 29

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Investment Securities - Amortized Cost and Fair Value (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Scheduled of amortized cost and fair value of securities pledged as collateral
Amortized Cost	$ 320,032	$ 305,579
Fair Value	289,758	305,179
Washington and Oregon State to Secure Public Deposits [Member]
Scheduled of amortized cost and fair value of securities pledged as collateral
Amortized Cost	139,868	128,216
Fair Value	128,842	130,217
Federal Reserve Bank Advances
Scheduled of amortized cost and fair value of securities pledged as collateral
Amortized Cost	60,865	61,057
Fair Value	52,530	59,674
Repurchase Agreements [Member]
Scheduled of amortized cost and fair value of securities pledged as collateral
Amortized Cost	69,358	59,887
Fair Value	62,647	59,655
Other securities pledged
Scheduled of amortized cost and fair value of securities pledged as collateral
Amortized Cost	49,941	56,419
Fair Value	$ 45,739	$ 55,633

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Loans Receivable - Loan Origination/Risk Management (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2022 USD ($) segment	Mar. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Jun. 30, 2021 USD ($)	Mar. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accrued interest receivable	$ 15,908		$ 14,657
Number of loan segments | segment	4
Loans receivable	$ 3,874,064		3,815,662
Allowance for credit losses on loans	39,696	$ 40,333	42,361	$ 51,562	$ 64,225	$ 70,185
Loans and Leases Receivable, Net Amount	3,834,368		3,773,301
Financing Receivable, Unamortized Purchase Premium (Discount)	3,084		3,938
Financing Receivable, Unamortized Loan Fee (Cost) and Purchase Premium (Discount)	4,947		7,954
Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accrued interest receivable	9,500		10,100
Commercial Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	3,176,657		3,191,656
Allowance for credit losses on loans	31,707	31,932	33,049	36,677	45,204	49,608
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	698,828		621,567
Allowance for credit losses on loans	14,033	15,265	17,777	17,485	21,770	30,010
Commercial Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	950,699		931,150
Allowance for credit losses on loans	8,162	7,085	6,411	8,562	10,464	9,486
Commercial Portfolio Segment [Member] | Non Owner Occupied Commercial Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	1,515,796		1,493,099
Allowance for credit losses on loans	9,512	9,582	8,861	10,630	12,970	10,112
Commercial Portfolio Segment [Member] | Paycheck Protection Program
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	11,334		145,840
Commercial Portfolio Segment [Member] | SBA PPP Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	11,334		145,840
Residential Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	265,382		164,582
Allowance for credit losses on loans	2,137	1,803	1,409	1,153	1,402	1,591
Real Estate Construction and Land Development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	218,606		226,883
Allowance for credit losses on loans	3,284	4,299	5,276	10,471	13,271	13,092
Real Estate Construction and Land Development | One-to-four Family Real Estate Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	90,546		85,547
Allowance for credit losses on loans	1,081	1,124	1,304	1,636	2,048	1,951
Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	128,060		141,336
Allowance for credit losses on loans	2,203	3,175	3,972	8,835	11,223	11,141
Consumer Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	213,419		232,541
Allowance for credit losses on loans	$ 2,568	$ 2,299	$ 2,627	$ 3,261	$ 4,348	$ 5,894

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Loans Receivable - Credit Quality Indicators (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Dec. 31, 2021
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	$ 394,923	$ 795,563
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	738,361	495,465
Financing Receivable, Originated Two Years before Latest Fiscal Year	426,897	665,007
Financing Receivable, Originated Three Years before Latest Fiscal Year	587,711	341,114
Financing Receivable, Originated Four Years before Latest Fiscal Year	302,656	289,525
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	1,131,611	984,194
Financing Receivable, Revolving	290,654	242,629
Financing Receivable revolving converted to Term Loans	1,251	2,165
Financing Receivable, before Allowance for Credit Loss	3,874,064	3,815,662
Commercial Portfolio Segment [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	301,082	607,848
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	478,170	386,542
Financing Receivable, Originated Two Years before Latest Fiscal Year	353,521	548,563
Financing Receivable, Originated Three Years before Latest Fiscal Year	509,064	296,432
Financing Receivable, Originated Four Years before Latest Fiscal Year	272,046	266,675
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	1,090,032	949,467
Financing Receivable, Revolving	171,820	134,101
Financing Receivable revolving converted to Term Loans	922	2,028
Financing Receivable, before Allowance for Credit Loss	3,176,657	3,191,656
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	97,244	97,729
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	101,724	102,364
Financing Receivable, Originated Two Years before Latest Fiscal Year	94,900	106,567
Financing Receivable, Originated Three Years before Latest Fiscal Year	82,722	58,941
Financing Receivable, Originated Four Years before Latest Fiscal Year	48,669	33,307
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	100,827	86,602
Financing Receivable, Revolving	171,820	134,101
Financing Receivable revolving converted to Term Loans	922	1,956
Financing Receivable, before Allowance for Credit Loss	698,828	621,567
Commercial Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	78,387	183,006
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	171,731	91,941
Financing Receivable, Originated Two Years before Latest Fiscal Year	92,312	191,459
Financing Receivable, Originated Three Years before Latest Fiscal Year	182,294	85,022
Financing Receivable, Originated Four Years before Latest Fiscal Year	80,125	72,990
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	345,850	306,660
Financing Receivable, Revolving	0	0
Financing Receivable revolving converted to Term Loans	0	72
Financing Receivable, before Allowance for Credit Loss	950,699	931,150
Commercial Portfolio Segment [Member] | Non Owner Occupied Commercial Real Estate [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	125,451	187,860
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	193,540	185,650
Financing Receivable, Originated Two Years before Latest Fiscal Year	166,150	250,537
Financing Receivable, Originated Three Years before Latest Fiscal Year	244,048	152,469
Financing Receivable, Originated Four Years before Latest Fiscal Year	143,252	160,378
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	643,355	556,205
Financing Receivable, Revolving	0	0
Financing Receivable revolving converted to Term Loans	0	0
Financing Receivable, before Allowance for Credit Loss	1,515,796	1,493,099
Commercial Portfolio Segment [Member] | Paycheck Protection Program
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, before Allowance for Credit Loss	11,334	145,840
Consumer Portfolio Segment [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	2,475	1,286
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	770	15,918
Financing Receivable, Originated Two Years before Latest Fiscal Year	12,620	46,698
Financing Receivable, Originated Three Years before Latest Fiscal Year	36,280	30,295
Financing Receivable, Originated Four Years before Latest Fiscal Year	21,703	15,610
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	20,408	14,069
Financing Receivable, Revolving	118,834	108,528
Financing Receivable revolving converted to Term Loans	329	137
Financing Receivable, before Allowance for Credit Loss	213,419	232,541
Residential Portfolio Segment [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	60,870	85,089
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	140,448	27,090
Financing Receivable, Originated Two Years before Latest Fiscal Year	24,564	23,295
Financing Receivable, Originated Three Years before Latest Fiscal Year	17,699	5,672
Financing Receivable, Originated Four Years before Latest Fiscal Year	4,716	6,141
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	17,085	17,295
Financing Receivable, Revolving	0	0
Financing Receivable revolving converted to Term Loans	0	0
Financing Receivable, before Allowance for Credit Loss	265,382	164,582
Real Estate Construction and Land Development [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	30,496	101,340
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	118,973	65,915
Financing Receivable, Originated Two Years before Latest Fiscal Year	36,192	46,451
Financing Receivable, Originated Three Years before Latest Fiscal Year	24,668	8,715
Financing Receivable, Originated Four Years before Latest Fiscal Year	4,191	1,099
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	4,086	3,363
Financing Receivable, Revolving	0	0
Financing Receivable revolving converted to Term Loans	0	0
Financing Receivable, before Allowance for Credit Loss	218,606	226,883
Real Estate Construction and Land Development [Member] | One to Four Family Real Estate Construction [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, before Allowance for Credit Loss	90,546	85,547
Real Estate Construction and Land Development [Member] | Five or More Family Residential and Commercial Properties [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	8,832	56,448
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	75,096	42,187
Financing Receivable, Originated Two Years before Latest Fiscal Year	25,862	34,185
Financing Receivable, Originated Three Years before Latest Fiscal Year	12,666	5,794
Financing Receivable, Originated Four Years before Latest Fiscal Year	3,186	710
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	2,418	2,012
Financing Receivable, Revolving	0	0
Financing Receivable revolving converted to Term Loans	0	0
Financing Receivable, before Allowance for Credit Loss	128,060	141,336
Pass [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	393,807	793,530
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	729,243	491,210
Financing Receivable, Originated Two Years before Latest Fiscal Year	422,753	643,619
Financing Receivable, Originated Three Years before Latest Fiscal Year	566,666	321,717
Financing Receivable, Originated Four Years before Latest Fiscal Year	282,409	261,801
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	1,025,475	882,945
Financing Receivable, Revolving	286,856	236,143
Financing Receivable revolving converted to Term Loans	374	1,227
Financing Receivable, before Allowance for Credit Loss	3,707,583	3,632,192
Pass [Member] | Commercial Portfolio Segment [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	299,966	605,815
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	469,052	383,039
Financing Receivable, Originated Two Years before Latest Fiscal Year	351,417	527,900
Financing Receivable, Originated Three Years before Latest Fiscal Year	494,291	277,511
Financing Receivable, Originated Four Years before Latest Fiscal Year	252,165	239,493
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	985,825	850,298
Financing Receivable, Revolving	168,030	127,651
Financing Receivable revolving converted to Term Loans	45	1,107
Financing Receivable, before Allowance for Credit Loss	3,020,791	3,012,814
Pass [Member] | Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	96,128	95,960
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	101,302	100,193
Financing Receivable, Originated Two Years before Latest Fiscal Year	93,475	94,657
Financing Receivable, Originated Three Years before Latest Fiscal Year	73,299	54,707
Financing Receivable, Originated Four Years before Latest Fiscal Year	38,742	28,558
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	90,980	77,294
Financing Receivable, Revolving	168,030	127,651
Financing Receivable revolving converted to Term Loans	45	1,035
Financing Receivable, before Allowance for Credit Loss	662,001	580,055
Pass [Member] | Commercial Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	78,387	182,742
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	171,470	90,609
Financing Receivable, Originated Two Years before Latest Fiscal Year	91,633	188,380
Financing Receivable, Originated Three Years before Latest Fiscal Year	180,596	73,714
Financing Receivable, Originated Four Years before Latest Fiscal Year	73,797	66,039
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	316,424	273,518
Financing Receivable, Revolving	0	0
Financing Receivable revolving converted to Term Loans	0	72
Financing Receivable, before Allowance for Credit Loss	912,307	875,074
Pass [Member] | Commercial Portfolio Segment [Member] | Non Owner Occupied Commercial Real Estate [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	125,451	187,860
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	185,105	185,650
Financing Receivable, Originated Two Years before Latest Fiscal Year	166,150	244,863
Financing Receivable, Originated Three Years before Latest Fiscal Year	240,396	149,090
Financing Receivable, Originated Four Years before Latest Fiscal Year	139,626	144,896
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	578,421	499,486
Financing Receivable, Revolving	0	0
Financing Receivable revolving converted to Term Loans	0	0
Financing Receivable, before Allowance for Credit Loss	1,435,149	1,411,845
Pass [Member] | Commercial Portfolio Segment [Member] | Paycheck Protection Program
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	0	139,253
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	11,175	6,587
Financing Receivable, Originated Two Years before Latest Fiscal Year	159	0
Financing Receivable, Originated Three Years before Latest Fiscal Year	0	0
Financing Receivable, Originated Four Years before Latest Fiscal Year	0	0
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	0	0
Financing Receivable, Revolving	0	0
Financing Receivable revolving converted to Term Loans	0	0
Financing Receivable, before Allowance for Credit Loss	11,334	145,840
Pass [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	2,475	1,286
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	770	15,737
Financing Receivable, Originated Two Years before Latest Fiscal Year	12,451	46,041
Financing Receivable, Originated Three Years before Latest Fiscal Year	35,722	29,819
Financing Receivable, Originated Four Years before Latest Fiscal Year	21,337	15,068
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	19,062	13,026
Financing Receivable, Revolving	118,826	108,492
Financing Receivable revolving converted to Term Loans	329	120
Financing Receivable, before Allowance for Credit Loss	210,972	229,589
Pass [Member] | Residential Portfolio Segment [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	60,870	85,089
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	140,448	27,090
Financing Receivable, Originated Two Years before Latest Fiscal Year	24,564	23,295
Financing Receivable, Originated Three Years before Latest Fiscal Year	17,699	5,672
Financing Receivable, Originated Four Years before Latest Fiscal Year	4,716	6,141
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	16,907	16,891
Financing Receivable, Revolving	0	0
Financing Receivable revolving converted to Term Loans	0	0
Financing Receivable, before Allowance for Credit Loss	265,204	164,178
Allowance for Loan and Lease Losses, Loans Acquired	42,200
Pass [Member] | Real Estate Construction and Land Development [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	30,496	101,340
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	118,973	65,344
Financing Receivable, Originated Two Years before Latest Fiscal Year	34,321	46,383
Financing Receivable, Originated Three Years before Latest Fiscal Year	18,954	8,715
Financing Receivable, Originated Four Years before Latest Fiscal Year	4,191	1,099
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	3,681	2,730
Financing Receivable, Revolving	0	0
Financing Receivable revolving converted to Term Loans	0	0
Financing Receivable, before Allowance for Credit Loss	210,616	225,611
Pass [Member] | Real Estate Construction and Land Development [Member] | One to Four Family Real Estate Construction [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	21,664	44,892
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	43,877	23,728
Financing Receivable, Originated Two Years before Latest Fiscal Year	10,330	12,266
Financing Receivable, Originated Three Years before Latest Fiscal Year	12,002	2,921
Financing Receivable, Originated Four Years before Latest Fiscal Year	1,005	389
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	1,668	1,351
Financing Receivable, Revolving	0	0
Financing Receivable revolving converted to Term Loans	0	0
Financing Receivable, before Allowance for Credit Loss	90,546	85,547
Pass [Member] | Real Estate Construction and Land Development [Member] | Five or More Family Residential and Commercial Properties [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	8,832	56,448
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	75,096	41,616
Financing Receivable, Originated Two Years before Latest Fiscal Year	23,991	34,117
Financing Receivable, Originated Three Years before Latest Fiscal Year	6,952	5,794
Financing Receivable, Originated Four Years before Latest Fiscal Year	3,186	710
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	2,013	1,379
Financing Receivable, Revolving	0	0
Financing Receivable revolving converted to Term Loans	0	0
Financing Receivable, before Allowance for Credit Loss	120,070	140,064
Special Mention [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	234	590
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	8,688	884
Financing Receivable, Originated Two Years before Latest Fiscal Year	2,600	14,819
Financing Receivable, Originated Three Years before Latest Fiscal Year	15,906	8,946
Financing Receivable, Originated Four Years before Latest Fiscal Year	11,337	21,642
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	31,678	21,738
Financing Receivable, Revolving	1,619	2,048
Financing Receivable revolving converted to Term Loans	0	353
Financing Receivable, before Allowance for Credit Loss	72,062	71,020
Special Mention [Member] | Commercial Portfolio Segment [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	234	590
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	8,688	884
Financing Receivable, Originated Two Years before Latest Fiscal Year	729	14,751
Financing Receivable, Originated Three Years before Latest Fiscal Year	10,192	8,946
Financing Receivable, Originated Four Years before Latest Fiscal Year	11,337	21,642
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	31,678	21,525
Financing Receivable, Revolving	1,619	2,048
Financing Receivable revolving converted to Term Loans	0	353
Financing Receivable, before Allowance for Credit Loss	64,477	70,739
Special Mention [Member] | Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	234	326
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	253	884
Financing Receivable, Originated Two Years before Latest Fiscal Year	729	5,998
Financing Receivable, Originated Three Years before Latest Fiscal Year	4,842	1,425
Financing Receivable, Originated Four Years before Latest Fiscal Year	8,764	2,223
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	2,981	2,401
Financing Receivable, Revolving	1,619	2,048
Financing Receivable revolving converted to Term Loans	0	353
Financing Receivable, before Allowance for Credit Loss	19,422	15,658
Special Mention [Member] | Commercial Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	0	264
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	0	0
Financing Receivable, Originated Two Years before Latest Fiscal Year	0	3,079
Financing Receivable, Originated Three Years before Latest Fiscal Year	1,698	7,521
Financing Receivable, Originated Four Years before Latest Fiscal Year	2,573	3,937
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	12,042	16,724
Financing Receivable, Revolving	0	0
Financing Receivable revolving converted to Term Loans	0	0
Financing Receivable, before Allowance for Credit Loss	16,313	31,525
Special Mention [Member] | Commercial Portfolio Segment [Member] | Non Owner Occupied Commercial Real Estate [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	0	0
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	8,435	0
Financing Receivable, Originated Two Years before Latest Fiscal Year	0	5,674
Financing Receivable, Originated Three Years before Latest Fiscal Year	3,652	0
Financing Receivable, Originated Four Years before Latest Fiscal Year	0	15,482
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	16,655	2,400
Financing Receivable, Revolving	0	0
Financing Receivable revolving converted to Term Loans	0	0
Financing Receivable, before Allowance for Credit Loss	28,742	23,556
Special Mention [Member] | Real Estate Construction and Land Development [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	0	0
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	0	0
Financing Receivable, Originated Two Years before Latest Fiscal Year	1,871	68
Financing Receivable, Originated Three Years before Latest Fiscal Year	5,714	0
Financing Receivable, Originated Four Years before Latest Fiscal Year	0	0
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	0	213
Financing Receivable, Revolving	0	0
Financing Receivable revolving converted to Term Loans	0	0
Financing Receivable, before Allowance for Credit Loss	7,585	281
Special Mention [Member] | Real Estate Construction and Land Development [Member] | Five or More Family Residential and Commercial Properties [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	0	0
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	0	0
Financing Receivable, Originated Two Years before Latest Fiscal Year	1,871	68
Financing Receivable, Originated Three Years before Latest Fiscal Year	5,714	0
Financing Receivable, Originated Four Years before Latest Fiscal Year	0	0
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	0	213
Financing Receivable, Revolving	0	0
Financing Receivable revolving converted to Term Loans	0	0
Financing Receivable, before Allowance for Credit Loss	7,585	281
Substandard [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	882	1,443
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	430	3,371
Financing Receivable, Originated Two Years before Latest Fiscal Year	1,544	6,569
Financing Receivable, Originated Three Years before Latest Fiscal Year	5,139	10,451
Financing Receivable, Originated Four Years before Latest Fiscal Year	8,910	6,082
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	74,458	79,511
Financing Receivable, Revolving	2,179	4,438
Financing Receivable revolving converted to Term Loans	877	585
Financing Receivable, before Allowance for Credit Loss	94,419	112,450
Substandard [Member] | Commercial Portfolio Segment [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	882	1,443
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	430	2,619
Financing Receivable, Originated Two Years before Latest Fiscal Year	1,375	5,912
Financing Receivable, Originated Three Years before Latest Fiscal Year	4,581	9,975
Financing Receivable, Originated Four Years before Latest Fiscal Year	8,544	5,540
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	72,529	77,644
Financing Receivable, Revolving	2,171	4,402
Financing Receivable revolving converted to Term Loans	877	568
Financing Receivable, before Allowance for Credit Loss	91,389	108,103
Substandard [Member] | Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	882	1,443
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	169	1,287
Financing Receivable, Originated Two Years before Latest Fiscal Year	696	5,912
Financing Receivable, Originated Three Years before Latest Fiscal Year	4,581	2,809
Financing Receivable, Originated Four Years before Latest Fiscal Year	1,163	2,526
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	6,866	6,907
Financing Receivable, Revolving	2,171	4,402
Financing Receivable revolving converted to Term Loans	877	568
Financing Receivable, before Allowance for Credit Loss	17,405	25,854
Substandard [Member] | Commercial Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	0	0
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	261	1,332
Financing Receivable, Originated Two Years before Latest Fiscal Year	679	0
Financing Receivable, Originated Three Years before Latest Fiscal Year	0	3,787
Financing Receivable, Originated Four Years before Latest Fiscal Year	3,755	3,014
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	17,384	16,418
Financing Receivable, Revolving	0	0
Financing Receivable revolving converted to Term Loans	0	0
Financing Receivable, before Allowance for Credit Loss	22,079	24,551
Substandard [Member] | Commercial Portfolio Segment [Member] | Non Owner Occupied Commercial Real Estate [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	0	0
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	0	0
Financing Receivable, Originated Two Years before Latest Fiscal Year	0	0
Financing Receivable, Originated Three Years before Latest Fiscal Year	0	3,379
Financing Receivable, Originated Four Years before Latest Fiscal Year	3,626	0
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	48,279	54,319
Financing Receivable, Revolving	0	0
Financing Receivable revolving converted to Term Loans	0	0
Financing Receivable, before Allowance for Credit Loss	51,905	57,698
Substandard [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	0	0
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	0	181
Financing Receivable, Originated Two Years before Latest Fiscal Year	169	657
Financing Receivable, Originated Three Years before Latest Fiscal Year	558	476
Financing Receivable, Originated Four Years before Latest Fiscal Year	366	542
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	1,346	1,043
Financing Receivable, Revolving	8	36
Financing Receivable revolving converted to Term Loans	0	17
Financing Receivable, before Allowance for Credit Loss	2,447	2,952
Substandard [Member] | Residential Portfolio Segment [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	0	0
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	0	0
Financing Receivable, Originated Two Years before Latest Fiscal Year	0	0
Financing Receivable, Originated Three Years before Latest Fiscal Year	0	0
Financing Receivable, Originated Four Years before Latest Fiscal Year	0	0
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	178	404
Financing Receivable, Revolving	0	0
Financing Receivable revolving converted to Term Loans	0	0
Financing Receivable, before Allowance for Credit Loss	178	404
Substandard [Member] | Real Estate Construction and Land Development [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	0	0
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	0	571
Financing Receivable, Originated Two Years before Latest Fiscal Year	0	0
Financing Receivable, Originated Three Years before Latest Fiscal Year	0	0
Financing Receivable, Originated Four Years before Latest Fiscal Year	0	0
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	405	420
Financing Receivable, Revolving	0	0
Financing Receivable revolving converted to Term Loans	0	0
Financing Receivable, before Allowance for Credit Loss	405	991
Substandard [Member] | Real Estate Construction and Land Development [Member] | Five or More Family Residential and Commercial Properties [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Originated in Current Fiscal Year	0	0
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	0	571
Financing Receivable, Originated Two Years before Latest Fiscal Year	0	0
Financing Receivable, Originated Three Years before Latest Fiscal Year	0	0
Financing Receivable, Originated Four Years before Latest Fiscal Year	0	0
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	405	420
Financing Receivable, Revolving	0	0
Financing Receivable revolving converted to Term Loans	0	0
Financing Receivable, before Allowance for Credit Loss	$ 405	$ 991

XML

Loans Receivable - Nonaccrual Loans (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2022 USD ($) contract	Jun. 30, 2021 USD ($) contract	Jun. 30, 2022 USD ($) contract	Jun. 30, 2021 USD ($) contract	Dec. 31, 2021 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross nonaccrual loans	$ 10,475,000		$ 10,475,000		$ 23,754,000
Financing Receivable, Nonaccrual, No Allowance	5,604,000		5,604,000		10,763,000
Financing Receivable, Nonaccrual, with Allowance	4,871,000		4,871,000		12,991,000
Financing Receivable, Originated in Current Fiscal Year	394,923,000		394,923,000		795,563,000
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	738,361,000		738,361,000		495,465,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	426,897,000		426,897,000		665,007,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	587,711,000		587,711,000		341,114,000
Interest and Fee Income, Loans and Leases	40,890,000	$ 50,750,000	81,915,000	$ 100,274,000
Financing Receivable, Troubled Debt Restructuring, Postmodification	1,771,000	$ 8,713,000	2,705,000	$ 17,927,000
Pass [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Originated in Current Fiscal Year	393,807,000		393,807,000		793,530,000
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	729,243,000		729,243,000		491,210,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	422,753,000		422,753,000		643,619,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	566,666,000		566,666,000		321,717,000
Special Mention [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Originated in Current Fiscal Year	234,000		234,000		590,000
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	8,688,000		8,688,000		884,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	2,600,000		2,600,000		14,819,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	15,906,000		15,906,000		8,946,000
Substandard [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Originated in Current Fiscal Year	882,000		882,000		1,443,000
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	430,000		430,000		3,371,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	1,544,000		1,544,000		6,569,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	5,139,000		5,139,000		10,451,000
Commercial Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross nonaccrual loans					23,107,000
Financing Receivable, Nonaccrual, No Allowance					10,763,000
Financing Receivable, Nonaccrual, with Allowance					12,344,000
Financing Receivable, Originated in Current Fiscal Year	301,082,000		301,082,000		607,848,000
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	478,170,000		478,170,000		386,542,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	353,521,000		353,521,000		548,563,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	$ 509,064,000		$ 509,064,000		296,432,000
Financing Receivable, Modifications, Number of Contracts | contract	3	20	4	35
Financing Receivable, Troubled Debt Restructuring, Postmodification	$ 1,727,000	$ 8,124,000	$ 2,610,000	$ 16,792,000
Commercial Portfolio Segment [Member] | Pass [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Originated in Current Fiscal Year	299,966,000		299,966,000		605,815,000
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	469,052,000		469,052,000		383,039,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	351,417,000		351,417,000		527,900,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	494,291,000		494,291,000		277,511,000
Commercial Portfolio Segment [Member] | Special Mention [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Originated in Current Fiscal Year	234,000		234,000		590,000
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	8,688,000		8,688,000		884,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	729,000		729,000		14,751,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	10,192,000		10,192,000		8,946,000
Commercial Portfolio Segment [Member] | Substandard [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Originated in Current Fiscal Year	882,000		882,000		1,443,000
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	430,000		430,000		2,619,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	1,375,000		1,375,000		5,912,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	4,581,000		4,581,000		9,975,000
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross nonaccrual loans	6,173,000		6,173,000		10,281,000
Financing Receivable, Nonaccrual, No Allowance	5,604,000		5,604,000		6,454,000
Financing Receivable, Nonaccrual, with Allowance	569,000		569,000		3,827,000
Financing Receivable, Originated in Current Fiscal Year	97,244,000		97,244,000		97,729,000
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	101,724,000		101,724,000		102,364,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	94,900,000		94,900,000		106,567,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	$ 82,722,000		$ 82,722,000		58,941,000
Financing Receivable, Modifications, Number of Contracts | contract	3	18	4	31
Financing Receivable, Troubled Debt Restructuring, Postmodification	$ 1,727,000	$ 5,673,000	$ 2,610,000	$ 8,713,000
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member] | Pass [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Originated in Current Fiscal Year	96,128,000		96,128,000		95,960,000
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	101,302,000		101,302,000		100,193,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	93,475,000		93,475,000		94,657,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	73,299,000		73,299,000		54,707,000
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member] | Special Mention [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Originated in Current Fiscal Year	234,000		234,000		326,000
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	253,000		253,000		884,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	729,000		729,000		5,998,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	4,842,000		4,842,000		1,425,000
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member] | Substandard [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Originated in Current Fiscal Year	882,000		882,000		1,443,000
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	169,000		169,000		1,287,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	696,000		696,000		5,912,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	4,581,000		4,581,000		2,809,000
Commercial Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross nonaccrual loans	4,302,000		4,302,000		8,174,000
Financing Receivable, Nonaccrual, No Allowance	0		0		3,036,000
Financing Receivable, Nonaccrual, with Allowance	4,302,000		4,302,000		5,138,000
Financing Receivable, Originated in Current Fiscal Year	78,387,000		78,387,000		183,006,000
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	171,731,000		171,731,000		91,941,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	92,312,000		92,312,000		191,459,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	$ 182,294,000		$ 182,294,000		85,022,000
Financing Receivable, Modifications, Number of Contracts | contract	0	1	0	2
Financing Receivable, Troubled Debt Restructuring, Postmodification	$ 0	$ 2,200,000	$ 0	$ 5,857,000
Commercial Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member] | Pass [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Originated in Current Fiscal Year	78,387,000		78,387,000		182,742,000
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	171,470,000		171,470,000		90,609,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	91,633,000		91,633,000		188,380,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	180,596,000		180,596,000		73,714,000
Commercial Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member] | Special Mention [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross nonaccrual loans					571,000
Financing Receivable, Nonaccrual, No Allowance					0
Financing Receivable, Nonaccrual, with Allowance					571,000
Financing Receivable, Originated in Current Fiscal Year	0		0		264,000
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	0		0		0
Financing Receivable, Originated Two Years before Latest Fiscal Year	0		0		3,079,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	1,698,000		1,698,000		7,521,000
Commercial Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member] | Substandard [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Originated in Current Fiscal Year	0		0		0
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	261,000		261,000		1,332,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	679,000		679,000		0
Financing Receivable, Originated Three Years before Latest Fiscal Year	0		0		3,787,000
Commercial Portfolio Segment [Member] | Non Owner Occupied Commercial Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross nonaccrual loans					4,652,000
Financing Receivable, Nonaccrual, No Allowance					1,273,000
Financing Receivable, Nonaccrual, with Allowance					3,379,000
Financing Receivable, Originated in Current Fiscal Year	125,451,000		125,451,000		187,860,000
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	193,540,000		193,540,000		185,650,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	166,150,000		166,150,000		250,537,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	$ 244,048,000		$ 244,048,000		152,469,000
Financing Receivable, Modifications, Number of Contracts | contract	0	1	0	2
Financing Receivable, Troubled Debt Restructuring, Postmodification	$ 0	$ 251,000	$ 0	$ 2,222,000
Commercial Portfolio Segment [Member] | Non Owner Occupied Commercial Real Estate [Member] | Pass [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Originated in Current Fiscal Year	125,451,000		125,451,000		187,860,000
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	185,105,000		185,105,000		185,650,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	166,150,000		166,150,000		244,863,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	240,396,000		240,396,000		149,090,000
Commercial Portfolio Segment [Member] | Non Owner Occupied Commercial Real Estate [Member] | Special Mention [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Originated in Current Fiscal Year	0		0		0
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	8,435,000		8,435,000		0
Financing Receivable, Originated Two Years before Latest Fiscal Year	0		0		5,674,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	3,652,000		3,652,000		0
Commercial Portfolio Segment [Member] | Non Owner Occupied Commercial Real Estate [Member] | Substandard [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Originated in Current Fiscal Year	0		0		0
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	0		0		0
Financing Receivable, Originated Two Years before Latest Fiscal Year	0		0		0
Financing Receivable, Originated Three Years before Latest Fiscal Year	0		0		3,379,000
Residential Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross nonaccrual loans					47,000
Financing Receivable, Nonaccrual, No Allowance					0
Financing Receivable, Nonaccrual, with Allowance					47,000
Financing Receivable, Originated in Current Fiscal Year	60,870,000		60,870,000		85,089,000
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	140,448,000		140,448,000		27,090,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	24,564,000		24,564,000		23,295,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	17,699,000		17,699,000		5,672,000
Residential Portfolio Segment [Member] | Pass [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Originated in Current Fiscal Year	60,870,000		60,870,000		85,089,000
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	140,448,000		140,448,000		27,090,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	24,564,000		24,564,000		23,295,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	17,699,000		17,699,000		5,672,000
Residential Portfolio Segment [Member] | Substandard [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Originated in Current Fiscal Year	0		0		0
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	0		0		0
Financing Receivable, Originated Two Years before Latest Fiscal Year	0		0		0
Financing Receivable, Originated Three Years before Latest Fiscal Year	0		0		0
Real Estate Construction and Land Development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Originated in Current Fiscal Year	30,496,000		30,496,000		101,340,000
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	118,973,000		118,973,000		65,915,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	36,192,000		36,192,000		46,451,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	24,668,000		24,668,000		8,715,000
Real Estate Construction and Land Development | Pass [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Originated in Current Fiscal Year	30,496,000		30,496,000		101,340,000
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	118,973,000		118,973,000		65,344,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	34,321,000		34,321,000		46,383,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	18,954,000		18,954,000		8,715,000
Real Estate Construction and Land Development | Special Mention [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Originated in Current Fiscal Year	0		0		0
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	0		0		0
Financing Receivable, Originated Two Years before Latest Fiscal Year	1,871,000		1,871,000		68,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	5,714,000		5,714,000		0
Real Estate Construction and Land Development | Substandard [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Originated in Current Fiscal Year	0		0		0
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	0		0		571,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	0		0		0
Financing Receivable, Originated Three Years before Latest Fiscal Year	0		0		0
Real Estate Construction and Land Development | One-to-four Family Real Estate Construction | Pass [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Originated in Current Fiscal Year	21,664,000		21,664,000		44,892,000
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	43,877,000		43,877,000		23,728,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	10,330,000		10,330,000		12,266,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	12,002,000		12,002,000		2,921,000
Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Originated in Current Fiscal Year	8,832,000		8,832,000		56,448,000
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	75,096,000		75,096,000		42,187,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	25,862,000		25,862,000		34,185,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	12,666,000		12,666,000		5,794,000
Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties [Member] | Pass [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Originated in Current Fiscal Year	8,832,000		8,832,000		56,448,000
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	75,096,000		75,096,000		41,616,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	23,991,000		23,991,000		34,117,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	6,952,000		6,952,000		5,794,000
Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties [Member] | Special Mention [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Originated in Current Fiscal Year	0		0		0
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	0		0		0
Financing Receivable, Originated Two Years before Latest Fiscal Year	1,871,000		1,871,000		68,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	5,714,000		5,714,000		0
Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties [Member] | Substandard [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Originated in Current Fiscal Year	0		0		0
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	0		0		571,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	0		0		0
Financing Receivable, Originated Three Years before Latest Fiscal Year	0		0		0
Consumer Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross nonaccrual loans					29,000
Financing Receivable, Nonaccrual, No Allowance					0
Financing Receivable, Nonaccrual, with Allowance					29,000
Financing Receivable, Originated in Current Fiscal Year	2,475,000		2,475,000		1,286,000
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	770,000		770,000		15,918,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	12,620,000		12,620,000		46,698,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	$ 36,280,000		$ 36,280,000		30,295,000
Financing Receivable, Modifications, Number of Contracts | contract	3	6	8	21
Financing Receivable, Troubled Debt Restructuring, Postmodification	$ 44,000	$ 146,000	$ 95,000	$ 511,000
Consumer Portfolio Segment [Member] | Pass [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Originated in Current Fiscal Year	2,475,000		2,475,000		1,286,000
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	770,000		770,000		15,737,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	12,451,000		12,451,000		46,041,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	35,722,000		35,722,000		29,819,000
Consumer Portfolio Segment [Member] | Substandard [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Originated in Current Fiscal Year	0		0		0
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	0		0		181,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	169,000		169,000		657,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	558,000		$ 558,000		$ 476,000
One-to-four Family Real Estate Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Modifications, Number of Contracts | contract			0	1
Financing Receivable, Troubled Debt Restructuring, Postmodification			$ 0	$ 181,000
Nonaccrual [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Impaired Financing Receivable, Interest Income, Accrual Method	90,000	1,984,000	1,143,000	2,547,000
Impaired Financing Receivable Interest Income Reversal Accrual Method	(12,000)	(5,000)	(14,000)	(10,000)
Interest and Fee Income, Loans and Leases	0	0	0	0
Nonaccrual [Member] | Commercial Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Impaired Financing Receivable, Interest Income, Accrual Method			1,056,000	2,474,000
Impaired Financing Receivable Interest Income Reversal Accrual Method			(14,000)	(10,000)
Nonaccrual [Member] | Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Impaired Financing Receivable, Interest Income, Accrual Method	90,000	1,981,000	229,000	2,044,000
Impaired Financing Receivable Interest Income Reversal Accrual Method	(12,000)	(5,000)	(14,000)	(10,000)
Nonaccrual [Member] | Commercial Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Impaired Financing Receivable, Interest Income, Accrual Method	0	3,000	53,000	117,000
Impaired Financing Receivable Interest Income Reversal Accrual Method	$ 0	$ 0	0	0
Nonaccrual [Member] | Commercial Portfolio Segment [Member] | Non Owner Occupied Commercial Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Impaired Financing Receivable, Interest Income, Accrual Method			774,000	313,000
Impaired Financing Receivable Interest Income Reversal Accrual Method			0	0
Nonaccrual [Member] | Residential Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Impaired Financing Receivable, Interest Income, Accrual Method			19,000	0
Impaired Financing Receivable Interest Income Reversal Accrual Method			0	0
Nonaccrual [Member] | Real Estate Construction and Land Development | One-to-four Family Real Estate Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Impaired Financing Receivable, Interest Income, Accrual Method			0	73,000
Impaired Financing Receivable Interest Income Reversal Accrual Method			0	0
Nonaccrual [Member] | Consumer Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Impaired Financing Receivable, Interest Income, Accrual Method			68,000	0
Impaired Financing Receivable Interest Income Reversal Accrual Method			$ 0	$ 0
Troubled Debt Restructured Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Modifications, Number of Contracts | contract	6	27	12	58
Troubled Debt Restructured Loans [Member] | Modified during the quarter [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Impaired Financing Receivable, Related Allowance	$ 4,000	$ 1,700,000	$ 4,000	$ 1,700,000
Troubled Debt Restructured Loans [Member] | Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Modifications, Number of Contracts | contract	0	1	0	1
Financing Receivable, Troubled Debt Restructuring, Postmodification	$ 0	$ 443,000	$ 0	$ 443,000

XML

Loans Receivable - Past Due Loans (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	$ 3,874,064		$ 3,874,064		$ 3,815,662
90 days or more and still accruing	2,000		2,000		293
Financing Receivable, Unamortized Purchase Premium (Discount)	3,084		3,084		3,938
Debt Securities, Held-to-maturity, Nonaccrual	0		0		0
Debt Securities, Held-to-maturity, 90 Days or More Past Due, Still Accruing	0		0		0
Nonaccrual [Member]
Financing Receivable, Past Due [Line Items]
Impaired Financing Receivable Interest Income Reversal Accrual Method	(12)	$ (5)	(14)	$ (10)
Impaired Financing Receivable, Interest Income, Accrual Method	90	1,984	1,143	2,547
Financing Receivables, 30 to 89 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	1,966		1,966		10,190
90 Days or Greater
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	7,578		7,578		7,807
Financial Asset, Past Due
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	9,544		9,544		17,997
Financial Asset, Not Past Due
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	3,864,520		3,864,520		3,797,665
Commercial Portfolio Segment [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	3,176,657		3,176,657		3,191,656
Commercial Portfolio Segment [Member] | Nonaccrual [Member]
Financing Receivable, Past Due [Line Items]
Impaired Financing Receivable Interest Income Reversal Accrual Method			(14)	(10)
Impaired Financing Receivable, Interest Income, Accrual Method			1,056	2,474
Commercial Portfolio Segment [Member] | Financing Receivables, 30 to 89 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	1,315		1,315		4,478
Commercial Portfolio Segment [Member] | 90 Days or Greater
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	7,379		7,379		7,226
Commercial Portfolio Segment [Member] | Financial Asset, Past Due
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	8,694		8,694		11,704
Commercial Portfolio Segment [Member] | Financial Asset, Not Past Due
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	3,167,963		3,167,963		3,179,952
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	698,828		698,828		621,567
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member] | Nonaccrual [Member]
Financing Receivable, Past Due [Line Items]
Impaired Financing Receivable Interest Income Reversal Accrual Method	(12)	(5)	(14)	(10)
Impaired Financing Receivable, Interest Income, Accrual Method	90	1,981	229	2,044
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member] | Financing Receivables, 30 to 89 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	259		259		1,858
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member] | 90 Days or Greater
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	7,190		7,190		6,821
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member] | Financial Asset, Past Due
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	7,449		7,449		8,679
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member] | Financial Asset, Not Past Due
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	691,379		691,379		612,888
Commercial Portfolio Segment [Member] | SBA PPP Loans [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	11,334		11,334		145,840
Commercial Portfolio Segment [Member] | SBA PPP Loans [Member] | Financing Receivables, 30 to 89 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0		0		223
Commercial Portfolio Segment [Member] | SBA PPP Loans [Member] | 90 Days or Greater
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0		0		293
Commercial Portfolio Segment [Member] | SBA PPP Loans [Member] | Financial Asset, Past Due
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0		0		516
Commercial Portfolio Segment [Member] | SBA PPP Loans [Member] | Financial Asset, Not Past Due
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	11,334		11,334		145,324
Commercial Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	950,699		950,699		931,150
Commercial Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member] | Nonaccrual [Member]
Financing Receivable, Past Due [Line Items]
Impaired Financing Receivable Interest Income Reversal Accrual Method	0	0	0	0
Impaired Financing Receivable, Interest Income, Accrual Method	0	$ 3	53	117
Commercial Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member] | Financing Receivables, 30 to 89 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	1,056		1,056		2,397
Commercial Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member] | 90 Days or Greater
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	189		189		112
Commercial Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member] | Financial Asset, Past Due
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	1,245		1,245		2,509
Commercial Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member] | Financial Asset, Not Past Due
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	949,454		949,454		928,641
Commercial Portfolio Segment [Member] | Non Owner Occupied Commercial Real Estate [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	1,515,796		1,515,796		1,493,099
Commercial Portfolio Segment [Member] | Non Owner Occupied Commercial Real Estate [Member] | Nonaccrual [Member]
Financing Receivable, Past Due [Line Items]
Impaired Financing Receivable Interest Income Reversal Accrual Method			0	0
Impaired Financing Receivable, Interest Income, Accrual Method			774	313
Commercial Portfolio Segment [Member] | Non Owner Occupied Commercial Real Estate [Member] | Financing Receivables, 30 to 89 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0		0		0
Commercial Portfolio Segment [Member] | Non Owner Occupied Commercial Real Estate [Member] | 90 Days or Greater
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0		0		0
Commercial Portfolio Segment [Member] | Non Owner Occupied Commercial Real Estate [Member] | Financial Asset, Past Due
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0		0		0
Commercial Portfolio Segment [Member] | Non Owner Occupied Commercial Real Estate [Member] | Financial Asset, Not Past Due
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	1,515,796		1,515,796		1,493,099
Residential Portfolio Segment [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	265,382		265,382		164,582
Residential Portfolio Segment [Member] | Nonaccrual [Member]
Financing Receivable, Past Due [Line Items]
Impaired Financing Receivable Interest Income Reversal Accrual Method			0	0
Impaired Financing Receivable, Interest Income, Accrual Method			19	0
Residential Portfolio Segment [Member] | Financing Receivables, 30 to 89 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0		0		420
Residential Portfolio Segment [Member] | 90 Days or Greater
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0		0		10
Residential Portfolio Segment [Member] | Financial Asset, Past Due
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0		0		430
Residential Portfolio Segment [Member] | Financial Asset, Not Past Due
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	265,382		265,382		164,152
Real Estate Construction and Land Development
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	218,606		218,606		226,883
Real Estate Construction and Land Development | Financing Receivables, 30 to 89 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0		0		4,266
Real Estate Construction and Land Development | 90 Days or Greater
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0		0		571
Real Estate Construction and Land Development | Financial Asset, Past Due
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0		0		4,837
Real Estate Construction and Land Development | Financial Asset, Not Past Due
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	218,606		218,606		222,046
Real Estate Construction and Land Development | One-to-four Family Real Estate Construction
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	90,546		90,546		85,547
Real Estate Construction and Land Development | One-to-four Family Real Estate Construction | Nonaccrual [Member]
Financing Receivable, Past Due [Line Items]
Impaired Financing Receivable Interest Income Reversal Accrual Method			0	0
Impaired Financing Receivable, Interest Income, Accrual Method			0	73
Real Estate Construction and Land Development | One-to-four Family Real Estate Construction | Financing Receivables, 30 to 89 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0		0		792
Real Estate Construction and Land Development | One-to-four Family Real Estate Construction | 90 Days or Greater
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0		0		0
Real Estate Construction and Land Development | One-to-four Family Real Estate Construction | Financial Asset, Past Due
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0		0		792
Real Estate Construction and Land Development | One-to-four Family Real Estate Construction | Financial Asset, Not Past Due
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	90,546		90,546		84,755
Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	128,060		128,060		141,336
Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties [Member] | Financing Receivables, 30 to 89 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0		0		3,474
Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties [Member] | 90 Days or Greater
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0		0		571
Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties [Member] | Financial Asset, Past Due
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0		0		4,045
Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties [Member] | Financial Asset, Not Past Due
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	128,060		128,060		137,291
Consumer Portfolio Segment [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	213,419		213,419		232,541
Consumer Portfolio Segment [Member] | Nonaccrual [Member]
Financing Receivable, Past Due [Line Items]
Impaired Financing Receivable Interest Income Reversal Accrual Method			0	0
Impaired Financing Receivable, Interest Income, Accrual Method			68	$ 0
Consumer Portfolio Segment [Member] | Financing Receivables, 30 to 89 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	651		651		1,026
Consumer Portfolio Segment [Member] | 90 Days or Greater
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	199		199		0
Consumer Portfolio Segment [Member] | Financial Asset, Past Due
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	850		850		1,026
Consumer Portfolio Segment [Member] | Financial Asset, Not Past Due
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	$ 212,569		$ 212,569		$ 231,515

XML

Loans Receivable - Modified TDRs (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022 USD ($) contract	Jun. 30, 2021 USD ($) contract	Jun. 30, 2022 USD ($) contract	Jun. 30, 2021 USD ($) contract Contract
Loans Modified as Troubled Debt Restructurings [Abstract]
Outstanding Principal Balance	$ 1,771	$ 8,713	$ 2,705	$ 17,927
Interest and Fee Income, Loans and Leases	$ 40,890	$ 50,750	$ 81,915	$ 100,274
Commercial Portfolio Segment [Member]
Loans Modified as Troubled Debt Restructurings [Abstract]
Number of Contracts | contract	3	20	4	35
Outstanding Principal Balance	$ 1,727	$ 8,124	$ 2,610	$ 16,792
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Loans Modified as Troubled Debt Restructurings [Abstract]
Number of Contracts | contract	3	18	4	31
Outstanding Principal Balance	$ 1,727	$ 5,673	$ 2,610	$ 8,713
Number of contracts modified | contract	0	1	0	2
Commercial Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member]
Loans Modified as Troubled Debt Restructurings [Abstract]
Number of Contracts | contract	0	1	0	2
Outstanding Principal Balance	$ 0	$ 2,200	$ 0	$ 5,857
Number of contracts modified			1	0
Commercial Portfolio Segment [Member] | Non Owner Occupied Commercial Real Estate [Member]
Loans Modified as Troubled Debt Restructurings [Abstract]
Number of Contracts | contract	0	1	0	2
Outstanding Principal Balance	$ 0	$ 251	$ 0	$ 2,222
Consumer Portfolio Segment [Member]
Loans Modified as Troubled Debt Restructurings [Abstract]
Number of Contracts | contract	3	6	8	21
Outstanding Principal Balance	$ 44	$ 146	$ 95	$ 511
One-to-four Family Real Estate Construction
Loans Modified as Troubled Debt Restructurings [Abstract]
Number of Contracts | contract			0	1
Outstanding Principal Balance			$ 0	$ 181
Troubled Debt Restructured Loans
Loans Modified as Troubled Debt Restructurings [Abstract]
Number of Contracts | contract	6	27	12	58
Troubled Debt Restructured Loans | Modified during the quarter [Member]
Loans Modified as Troubled Debt Restructurings [Abstract]
Related Specific Valuation Allowance	$ 4	$ 1,700	$ 4	$ 1,700
Troubled Debt Restructured Loans | Finance Receivable Modified Subsequent Default
Loans Modified as Troubled Debt Restructurings [Abstract]
Related Specific Valuation Allowance	$ 3	$ 7	$ 3	$ 7
Troubled Debt Restructured Loans | Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties [Member]
Loans Modified as Troubled Debt Restructurings [Abstract]
Number of Contracts | contract	0	1	0	1
Outstanding Principal Balance	$ 0	$ 443	$ 0	$ 443

XML

Loans Receivable - TDRs Subsequently Defaulted (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022 USD ($) contract	Jun. 30, 2021 USD ($) contract	Jun. 30, 2022 USD ($) contract	Jun. 30, 2021 USD ($) contract Contract	Dec. 31, 2021 USD ($)
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing Receivable, Troubled Debt Restructuring, Postmodification	$ 1,771	$ 8,713	$ 2,705	$ 17,927
Financing Receivable, Troubled Debt Restructuring, Commitment to Lend	3,400		3,400		$ 5,700
Interest and Fee Income, Loans and Leases	40,890	50,750	81,915	100,274
Commercial Portfolio Segment [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing Receivable, Troubled Debt Restructuring, Postmodification	$ 1,727	$ 8,124	$ 2,610	$ 16,792
Financing Receivable, Modifications, Number of Contracts | contract	3	20	4	35
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing Receivable, Troubled Debt Restructuring, Postmodification	$ 1,727	$ 5,673	$ 2,610	$ 8,713
Financing Receivable, Modifications, Number of Contracts | contract	3	18	4	31
Number of Contracts (1) | contract	0	1	0	2
Amortized Cost (1)	$ 0	$ 46	$ 0	$ 789
Commercial Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing Receivable, Troubled Debt Restructuring, Postmodification	$ 0	$ 2,200	$ 0	$ 5,857
Financing Receivable, Modifications, Number of Contracts | contract	0	1	0	2
Number of Contracts (1)			1	0
Amortized Cost (1)			$ 189	$ 0
Commercial Portfolio Segment [Member] | Non Owner Occupied Commercial Real Estate [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing Receivable, Troubled Debt Restructuring, Postmodification	$ 0	$ 251	$ 0	$ 2,222
Financing Receivable, Modifications, Number of Contracts | contract	0	1	0	2
Consumer Portfolio Segment [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing Receivable, Troubled Debt Restructuring, Postmodification	$ 44	$ 146	$ 95	$ 511
Financing Receivable, Modifications, Number of Contracts | contract	3	6	8	21
One-to-four Family Real Estate Construction
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing Receivable, Troubled Debt Restructuring, Postmodification			$ 0	$ 181
Financing Receivable, Modifications, Number of Contracts | contract			0	1
Troubled Debt Restructured Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing Receivable, Modifications, Number of Contracts | contract	6	27	12	58
Troubled Debt Restructured Loans | Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing Receivable, Troubled Debt Restructuring, Postmodification	$ 0	$ 443	$ 0	$ 443
Financing Receivable, Modifications, Number of Contracts | contract	0	1	0	1
Finance Receivable Modified Subsequent Default | Troubled Debt Restructured Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Related Specific Valuation Allowance	$ 3	$ 7	$ 3	$ 7

XML

Loans Receivable - Collateral Dependent (Details) - USD ($)	Jun. 30, 2022	Dec. 31, 2021	Jun. 30, 2021
Financial Instruments Owned and Pledged as Collateral [Line Items]
Loans and Leases Receivable, Collateral for Secured Borrowings	$ 5,236,000	$ 12,021,000
Accrued interest receivable	15,908,000	14,657,000
Other Real Estate, Foreclosed Assets, and Repossessed Assets	0
Finance Receivable Modified Subsequent Default | Troubled Debt Restructured Loans [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Impaired Financing Receivable, Related Allowance	3,000		$ 7,000
Loans Receivable [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Accrued interest receivable	9,500,000	10,100,000
Commercial Portfolio Segment [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Loans and Leases Receivable, Collateral for Secured Borrowings		11,450,000
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Loans and Leases Receivable, Collateral for Secured Borrowings	5,047,000	7,142,000
Commercial Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Loans and Leases Receivable, Collateral for Secured Borrowings	189,000	3,035,000
Commercial Portfolio Segment [Member] | Non Owner Occupied Commercial Real Estate [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Loans and Leases Receivable, Collateral for Secured Borrowings		1,273,000
Real Estate Construction and Land Development [Member] | Five or More Family Residential and Commercial Properties [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Loans and Leases Receivable, Collateral for Secured Borrowings		571,000
Farmland [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Loans and Leases Receivable, Collateral for Secured Borrowings	2,492,000	4,362,000
Farmland [Member] | Commercial Portfolio Segment [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Loans and Leases Receivable, Collateral for Secured Borrowings		4,362,000
Farmland [Member] | Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Loans and Leases Receivable, Collateral for Secured Borrowings	2,492,000	4,362,000
Farmland [Member] | Commercial Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Loans and Leases Receivable, Collateral for Secured Borrowings	0	0
Farmland [Member] | Commercial Portfolio Segment [Member] | Non Owner Occupied Commercial Real Estate [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Loans and Leases Receivable, Collateral for Secured Borrowings		0
Farmland [Member] | Real Estate Construction and Land Development [Member] | Five or More Family Residential and Commercial Properties [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Loans and Leases Receivable, Collateral for Secured Borrowings		0
Commercial Real Estate
Financial Instruments Owned and Pledged as Collateral [Line Items]
Loans and Leases Receivable, Collateral for Secured Borrowings	1,428,000	6,378,000
Commercial Real Estate | Commercial Portfolio Segment [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Loans and Leases Receivable, Collateral for Secured Borrowings		5,807,000
Commercial Real Estate | Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Loans and Leases Receivable, Collateral for Secured Borrowings	1,239,000	1,499,000
Commercial Real Estate | Commercial Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Loans and Leases Receivable, Collateral for Secured Borrowings	189,000	3,035,000
Commercial Real Estate | Commercial Portfolio Segment [Member] | Non Owner Occupied Commercial Real Estate [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Loans and Leases Receivable, Collateral for Secured Borrowings		1,273,000
Single Family Residence
Financial Instruments Owned and Pledged as Collateral [Line Items]
Loans and Leases Receivable, Collateral for Secured Borrowings	1,316,000	1,036,000
Single Family Residence | Commercial Portfolio Segment [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Loans and Leases Receivable, Collateral for Secured Borrowings		1,036,000
Single Family Residence | Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Loans and Leases Receivable, Collateral for Secured Borrowings	1,316,000	1,036,000
Single Family Residence | Commercial Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Loans and Leases Receivable, Collateral for Secured Borrowings	$ 0	0
Single Family Residence | Commercial Portfolio Segment [Member] | Non Owner Occupied Commercial Real Estate [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Loans and Leases Receivable, Collateral for Secured Borrowings		0
Real Estate [Member] | Real Estate Construction and Land Development [Member] | Five or More Family Residential and Commercial Properties [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Loans and Leases Receivable, Collateral for Secured Borrowings		571,000
Single Family [Member] | Real Estate Construction and Land Development [Member] | Five or More Family Residential and Commercial Properties [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Loans and Leases Receivable, Collateral for Secured Borrowings		0
Other [Member] | Commercial Portfolio Segment [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Loans and Leases Receivable, Collateral for Secured Borrowings		245,000
Other [Member] | Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Loans and Leases Receivable, Collateral for Secured Borrowings		245,000
Other [Member] | Commercial Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Loans and Leases Receivable, Collateral for Secured Borrowings		0
Other [Member] | Commercial Portfolio Segment [Member] | Non Owner Occupied Commercial Real Estate [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Loans and Leases Receivable, Collateral for Secured Borrowings		0
Other [Member] | Real Estate Construction and Land Development [Member] | Five or More Family Residential and Commercial Properties [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Loans and Leases Receivable, Collateral for Secured Borrowings		$ 0

XML

Allowance for Credit Losses on Loans - Summary of Changes in Loan Allowance (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for Loan and Lease Losses, Period Increase (Decrease)			$ (2,700)
Allowance for Loan and Lease Losses, Period Increase (Decrease), Percent			(6.30%)
Reduction in ACL			$ 2,900
Schedule of changes in allowance for loan losses
Beginning Balance	$ 40,333	$ 64,225	42,361	$ 70,185
Financing Receivable, Allowance for Credit Loss, Writeoff	(249)	(133)	(604)	(320)
Recoveries	(261)	(291)	(1,110)	(653)
(Reversal of) Provision for Credit Losses	(649)	(12,821)	(3,171)	(18,956)
Ending Balance	39,696	51,562	39,696	51,562
Allowance for Loan and Lease Losses, Write-offs			(604)	(320)
Allowance for Loan and Lease Loss, Recovery of Bad Debts			1,110	653
Commercial Portfolio Segment [Member]
Schedule of changes in allowance for loan losses
Beginning Balance	31,932	45,204	33,049	49,608
Financing Receivable, Allowance for Credit Loss, Writeoff	(117)	(13)	(316)	(14)
Recoveries	(149)	(143)	(421)	(350)
(Reversal of) Provision for Credit Losses	(257)	(8,657)	(1,447)	(13,267)
Ending Balance	31,707	36,677	31,707	36,677
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Schedule of changes in allowance for loan losses
Beginning Balance	15,265	21,770	17,777	30,010
Financing Receivable, Allowance for Credit Loss, Writeoff	(117)	(13)	(280)	(14)
Recoveries	(149)	(132)	(421)	(337)
(Reversal of) Provision for Credit Losses	(1,264)	(4,404)	3,885	(12,848)
Ending Balance	14,033	17,485	14,033	17,485
Commercial Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member]
Schedule of changes in allowance for loan losses
Beginning Balance	7,085	10,464	6,411	9,486
Financing Receivable, Allowance for Credit Loss, Writeoff	0	0	(36)	0
Recoveries	0	(11)	0	(13)
(Reversal of) Provision for Credit Losses	1,077	(1,913)	(1,787)	(937)
Ending Balance	8,162	8,562	8,162	8,562
Commercial Portfolio Segment [Member] | Non Owner Occupied Commercial Real Estate [Member]
Schedule of changes in allowance for loan losses
Beginning Balance	9,582	12,970	8,861	10,112
Financing Receivable, Allowance for Credit Loss, Writeoff	0	0	0	0
Recoveries	0	0	0	0
(Reversal of) Provision for Credit Losses	(70)	(2,340)	(651)	518
Ending Balance	9,512	10,630	9,512	10,630
Residential Portfolio Segment [Member]
Schedule of changes in allowance for loan losses
Beginning Balance	1,803	1,402	1,409	1,591
Financing Receivable, Allowance for Credit Loss, Writeoff	0	0	(30)	0
Recoveries	0	0	(3)	0
(Reversal of) Provision for Credit Losses	334	(249)	(755)	(438)
Ending Balance	2,137	1,153	2,137	1,153
Real Estate Construction and Land Development
Schedule of changes in allowance for loan losses
Beginning Balance	4,299	13,271	5,276	13,092
Financing Receivable, Allowance for Credit Loss, Writeoff	0	0	0	(1)
Recoveries	(59)	(4)	(67)	(20)
(Reversal of) Provision for Credit Losses	(1,074)	(2,804)	(2,059)	(2,640)
Ending Balance	3,284	10,471	3,284	10,471
Real Estate Construction and Land Development | One-to-four Family Real Estate Construction
Schedule of changes in allowance for loan losses
Beginning Balance	1,124	2,048	1,304	1,951
Financing Receivable, Allowance for Credit Loss, Writeoff	0	0	0	0
Recoveries	(6)	(4)	(14)	(20)
(Reversal of) Provision for Credit Losses	(49)	(416)	237	(335)
Ending Balance	1,081	1,636	1,081	1,636
Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties [Member]
Schedule of changes in allowance for loan losses
Beginning Balance	3,175	11,223	3,972	11,141
Financing Receivable, Allowance for Credit Loss, Writeoff	0	0	0	(1)
Recoveries	(53)	0	(53)	0
(Reversal of) Provision for Credit Losses	(1,025)	(2,388)	1,822	(2,305)
Ending Balance	2,203	8,835	2,203	8,835
Consumer Portfolio Segment [Member]
Schedule of changes in allowance for loan losses
Beginning Balance	2,299	4,348	2,627	5,894
Financing Receivable, Allowance for Credit Loss, Writeoff	(132)	(120)	(258)	(305)
Recoveries	(53)	(144)	(619)	(283)
(Reversal of) Provision for Credit Losses	348	(1,111)	420	(2,611)
Ending Balance	$ 2,568	$ 3,261	$ 2,568	$ 3,261

XML

Goodwill and Other Intangible Assets - Other Intangible Assets, Textual (Details) $ in Millions	6 Months Ended
	Jun. 30, 2022 USD ($)
Finite-Lived Intangible Assets [Line Items]
Goodwill, Impairment Loss	$ 0
Core Deposits | Premier Commercial Bancorp
Finite-Lived Intangible Assets [Line Items]
Useful life	10 years
Core Deposits | Puget Sound Bancorp
Finite-Lived Intangible Assets [Line Items]
Useful life	10 years
Core Deposits | Washington Banking Company
Finite-Lived Intangible Assets [Line Items]
Useful life	10 years
Core Deposits | Valley Community Bancshares
Finite-Lived Intangible Assets [Line Items]
Useful life	10 years

XML

Derivative Financial Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Customers
Derivative Asset
Estimated Fair Value	$ (19,000)	$ 9,800
Third Parties
Derivative Asset
Estimated Fair Value		(9,800)
Derivative Liability
Estimated Fair Value	19,000
Interest rate swap
Derivative Asset
Estimated Fair Value	19,842	15,219
Interest rate swap | Non-hedging interest rate derivatives
Derivative Asset
Notional Amounts	305,902	322,726
Derivative Liability
Notional Amounts	305,902	322,726
Estimated Fair Value	$ 19,842	$ 15,286

XML

Stockholders' Equity - Reconciliation of Weighted Average Shares (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Net income:
Net Income	$ 18,584	$ 32,702	$ 38,341	$ 58,046
Basic:
Weighted average common shares outstanding (in shares)	35,110,334	35,994,740	35,102,572	35,961,032
Total basic weighted average common shares outstanding (in shares)	35,110,334	35,994,740	35,102,572	35,961,032
Diluted:
Basic weighted average common shares outstanding (in shares)	35,110,334	35,994,740	35,102,572	35,961,032
Effect of potentially dilutive common shares (in shares)	299,190	294,724	310,150	307,829
Total diluted weighted average common shares outstanding (in shares)	35,409,524	36,289,464	35,412,722	36,268,861
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	16,978	7,065	14,334	4,766

XML

Stockholders' Equity - Dividends (Details) - $ / shares							3 Months Ended		6 Months Ended
	Apr. 20, 2022	Jan. 26, 2022	Oct. 20, 2021	Jul. 21, 2021	Apr. 21, 2021	Jan. 27, 2021	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Stockholders' Equity Note [Abstract]
Declared	Apr. 20, 2022	Jan. 26, 2022	Oct. 20, 2021	Jul. 21, 2021	Apr. 21, 2021	Jan. 27, 2021
Cash Dividend per Share (in usd per share)	$ 0.21	$ 0.21	$ 0.21	$ 0.20	$ 0.20	$ 0.20	$ 0.21	$ 0.20	$ 0.42	$ 0.40
Record Date	May 04, 2022	Feb. 09, 2022	Nov. 03, 2021	Aug. 04, 2021	May 05, 2021	Feb. 10, 2021
Paid Date	May 18, 2022	Feb. 23, 2022	Nov. 17, 2021	Aug. 18, 2021	May 19, 2021	Feb. 24, 2021

XML

Stockholders' Equity - Stock Repurchase Program (Details) - Twelfth Stock Repurchase Plan [Member] [Member] [Domain]	Mar. 12, 2020 shares
Stockholders Equity (Textual) [Abstract]
Outstanding share percent	5.00%
Outstanding common shares in the plan (in shares)	1,799,054

XML

Stockholders' Equity - Shares Repurchased (Details) - $ / shares	3 Months Ended		6 Months Ended		25 Months Ended	28 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Mar. 31, 2022	Jun. 30, 2022
Shares Related to Withholding Taxes on the Vesting of Restricted Stock
Equity, Class of Treasury Stock [Line Items]
Repurchased shares to pay withholding taxes (in shares)	1,649	2,557	26,180	25,803
Withholding taxes average price per share (in usd per share)	$ 24.43	$ 27.47	$ 25.40	$ 29.33
Twelfth Stock Repurchase Plan [Member] [Member] [Domain]
Equity, Class of Treasury Stock [Line Items]
Repurchased shares to pay withholding taxes (in shares)	19,531	0	100,090	0
Net Total Stock Repurchased During Periods Presented, Shares						1,160,840
Net Stock Repurchased During Periods Presented, Value Per Share	$ 24.63	$ 0	$ 25.07	$ 0	$ 23.94

XML

Fair Value Measurements - Fair Value Measurement on Recurring Basis (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021	Jun. 30, 2021
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total investment securities available for sale	$ 1,187,588	$ 894,335
Fair Value
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total investment securities available for sale	1,187,588
Equity security	186	240
Derivative assets - interest rate swaps	19,842	15,219
Derivative liabilities - interest rate swaps	19,842	15,286
Level 1 | Fair Value
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Equity security		240
Derivative assets - interest rate swaps	0	0
Derivative liabilities - interest rate swaps	0	0
Level 2 | Fair Value
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total investment securities available for sale			$ 1,167,649
Equity security	0	0
Derivative assets - interest rate swaps	19,842	15,219
Derivative liabilities - interest rate swaps	19,842	15,286
Level 3 | Fair Value
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Equity security	0	0
Derivative assets - interest rate swaps	0	0
Derivative liabilities - interest rate swaps	0	0
Recurring
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total investment securities available for sale	1,187,588	894,335
Equity security	186	240
Recurring | U.S. government and agency securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total investment securities available for sale	65,668	21,373
Recurring | Municipal securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total investment securities available for sale	200,010	221,212
Recurring | Residential CMO and MBS
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total investment securities available for sale	398,156	306,884
Recurring | Commercial CMO and MBS
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total investment securities available for sale	493,620	315,861
Recurring | Corporate obligations
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total investment securities available for sale	5,978	2,014
Recurring | Other asset-backed securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total investment securities available for sale	24,156	26,991
Recurring | Interest rate swap
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Derivative assets - interest rate swaps	19,842	15,219
Derivative liabilities - interest rate swaps	19,842	15,286
Recurring | Level 1
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total investment securities available for sale	19,939	0
Equity security	186	240
Recurring | Level 1 | Fair Value
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Equity security	186
Recurring | Level 1 | U.S. government and agency securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total investment securities available for sale	19,939	0
Recurring | Level 1 | Municipal securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total investment securities available for sale	0	0
Recurring | Level 1 | Residential CMO and MBS
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total investment securities available for sale	0	0
Recurring | Level 1 | Commercial CMO and MBS
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total investment securities available for sale	0	0
Recurring | Level 1 | Corporate obligations
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total investment securities available for sale	0	0
Recurring | Level 1 | Other asset-backed securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total investment securities available for sale	0	0
Recurring | Level 1 | Interest rate swap
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Derivative assets - interest rate swaps	0	0
Derivative liabilities - interest rate swaps	0	0
Recurring | Level 2
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total investment securities available for sale	1,167,649	894,335
Equity security	0	0
Recurring | Level 2 | U.S. government and agency securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total investment securities available for sale	45,729	21,373
Recurring | Level 2 | Municipal securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total investment securities available for sale	200,010	221,212
Recurring | Level 2 | Residential CMO and MBS
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total investment securities available for sale	398,156	306,884
Recurring | Level 2 | Commercial CMO and MBS
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total investment securities available for sale	493,620	315,861
Recurring | Level 2 | Corporate obligations
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total investment securities available for sale	5,978	2,014
Recurring | Level 2 | Other asset-backed securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total investment securities available for sale	24,156	26,991
Recurring | Level 2 | Interest rate swap
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Derivative assets - interest rate swaps	19,842
Derivative liabilities - interest rate swaps	19,842
Recurring | Level 3
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total investment securities available for sale	0	0
Equity security	0	0
Recurring | Level 3 | U.S. government and agency securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total investment securities available for sale	0	0
Recurring | Level 3 | Municipal securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total investment securities available for sale	0	0
Recurring | Level 3 | Residential CMO and MBS
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total investment securities available for sale	0	0
Recurring | Level 3 | Commercial CMO and MBS
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total investment securities available for sale	0	0
Recurring | Level 3 | Corporate obligations
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total investment securities available for sale	0	0
Recurring | Level 3 | Other asset-backed securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total investment securities available for sale	0	0
Recurring | Level 3 | Interest rate swap
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Derivative assets - interest rate swaps	0	0
Derivative liabilities - interest rate swaps	$ 0	$ 0

XML

Fair Value Measurements - Fair Value Measurement on Nonrecurring Basis (Details) - Nonrecurring - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure	$ 1,667		$ 1,667		$ 4,213
Fair Value, Option, Changes in Fair Value, Gain (Loss)	32	$ (93)	20	$ (142)
Level 1
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure	0		0		0
Level 2
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure	0		0		0
Level 3
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure	1,155		1,155		2,470
Fair Value, Inputs, Level 1, 2 and 3
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure	1,155		1,155		2,470
Impaired Loans
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure					3,515
Impaired Loans | Level 1
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure					0
Impaired Loans | Level 2
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure					0
Impaired Loans | Fair Value, Inputs, Level 1, 2 and 3
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure					1,772
Impaired Loans | Commercial Portfolio Segment [Member]
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure					2,524
Net Losses (Gains) Recorded in Earnings	32	(70)	20	(104)
Impaired Loans | Commercial Portfolio Segment [Member] | Level 1
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure					0
Impaired Loans | Commercial Portfolio Segment [Member] | Level 2
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure					0
Impaired Loans | Commercial Portfolio Segment [Member] | Level 3
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure					1,238
Impaired Loans | Commercial Portfolio Segment [Member] | Fair Value, Inputs, Level 1, 2 and 3
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure					1,238
Impaired Loans | Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure	1,054		1,054		1,911
Net Losses (Gains) Recorded in Earnings	35	6	23	(28)
Impaired Loans | Commercial Portfolio Segment [Member] | Commercial and Industrial [Member] | Level 1
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure	0		0		0
Impaired Loans | Commercial Portfolio Segment [Member] | Commercial and Industrial [Member] | Level 2
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure	0		0		0
Impaired Loans | Commercial Portfolio Segment [Member] | Commercial and Industrial [Member] | Level 3
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure	969		969		1,049
Impaired Loans | Commercial Portfolio Segment [Member] | Commercial and Industrial [Member] | Fair Value, Inputs, Level 1, 2 and 3
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure	969		969		1,049
Impaired Loans | Commercial Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member]
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure	613		613		613
Net Losses (Gains) Recorded in Earnings	(3)	(76)	(3)	(76)
Impaired Loans | Commercial Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member] | Level 1
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure	0		0		0
Impaired Loans | Commercial Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member] | Level 2
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure	0		0		0
Impaired Loans | Commercial Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member] | Level 3
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure	186		186		189
Impaired Loans | Commercial Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member] | Fair Value, Inputs, Level 1, 2 and 3
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure	186		186		189
Impaired Loans | Real Estate Construction and Land Development [Member] | Five or More Family Residential and Commercial Properties [Member]
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure					991
Net Losses (Gains) Recorded in Earnings	$ 0	$ (23)	$ 0	$ (38)
Impaired Loans | Real Estate Construction and Land Development [Member] | Five or More Family Residential and Commercial Properties [Member] | Level 1
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure					0
Impaired Loans | Real Estate Construction and Land Development [Member] | Five or More Family Residential and Commercial Properties [Member] | Level 2
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure					0
Impaired Loans | Real Estate Construction and Land Development [Member] | Five or More Family Residential and Commercial Properties [Member] | Level 3
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure					534
Impaired Loans | Real Estate Construction and Land Development [Member] | Five or More Family Residential and Commercial Properties [Member] | Fair Value, Inputs, Level 1, 2 and 3
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure					534
Branch held for sale
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure					698
Branch held for sale | Level 1
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure					0
Branch held for sale | Level 2
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure					0
Branch held for sale | Level 3
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure					698
Branch held for sale | Fair Value, Inputs, Level 1, 2 and 3
Fair value measurements of assets on a nonrecurring basis
Assets, Fair Value Disclosure					$ 698

XML

Fair Value Measurements - Quantitative Information, Level 3 (Details) - Nonrecurring $ in Thousands	Jun. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
Fair value measurements for financial instruments measured at fair value on a non-recurring basis
Assets, Fair Value Disclosure	$ 1,667	$ 4,213
Impaired Loans
Fair value measurements for financial instruments measured at fair value on a non-recurring basis
Assets, Fair Value Disclosure		3,515
Branch held for sale
Fair value measurements for financial instruments measured at fair value on a non-recurring basis
Assets, Fair Value Disclosure		698
Level 3
Fair value measurements for financial instruments measured at fair value on a non-recurring basis
Assets, Fair Value Disclosure	1,155	2,470
Level 3 | Impaired Loans
Fair value measurements for financial instruments measured at fair value on a non-recurring basis
Collateral-dependent loans	1,155	$ 1,772
Level 3 | Impaired Loans | Minimum | Comparability Adjustment
Fair value measurements for financial instruments measured at fair value on a non-recurring basis
Range of Inputs		(11)
Level 3 | Impaired Loans | Maximum | Comparability Adjustment
Fair value measurements for financial instruments measured at fair value on a non-recurring basis
Range of Inputs		35
Level 3 | Impaired Loans | Weighted Average | Comparability Adjustment
Fair value measurements for financial instruments measured at fair value on a non-recurring basis
Range of Inputs		13.8
Level 3 | Branch held for sale
Fair value measurements for financial instruments measured at fair value on a non-recurring basis
Collateral-dependent loans		$ 698
Assets, Fair Value Disclosure		698
Fair Value, Inputs, Level 1, 2 and 3
Fair value measurements for financial instruments measured at fair value on a non-recurring basis
Assets, Fair Value Disclosure	$ 1,155	2,470
Fair Value, Inputs, Level 1, 2 and 3 | Impaired Loans
Fair value measurements for financial instruments measured at fair value on a non-recurring basis
Assets, Fair Value Disclosure		1,772
Fair Value, Inputs, Level 1, 2 and 3 | Branch held for sale
Fair value measurements for financial instruments measured at fair value on a non-recurring basis
Assets, Fair Value Disclosure		$ 698

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Fair Value Measurements - Carrying Value and Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021	Jun. 30, 2021
Financial Assets:
Investment securities held to maturity	$ 559,312	$ 376,331
Financial Liabilities:
Investment securities held to maturity, at amortized cost, net (fair value of $559,312 and $376,331, respectively)	615,653	383,393
Total investment securities available for sale	1,187,588	894,335
Fair Value, Recurring [Member]
Financial Assets:
Equity security	186	240
Financial Liabilities:
Total investment securities available for sale	1,187,588	894,335
Fair Value, Recurring [Member] | Interest rate swap
Financial Assets:
Derivative assets - interest rate swaps	19,842	15,219
Financial Liabilities:
Derivative liabilities - interest rate swaps	19,842	15,286
Level 1 | Fair Value, Recurring [Member]
Financial Assets:
Equity security	186	240
Financial Liabilities:
Total investment securities available for sale	19,939	0
Level 1 | Fair Value, Recurring [Member] | Interest rate swap
Financial Assets:
Derivative assets - interest rate swaps	0	0
Financial Liabilities:
Derivative liabilities - interest rate swaps	0	0
Level 2 | Fair Value, Recurring [Member]
Financial Assets:
Investment securities held to maturity	559,312	376,331
Equity security	0	0
Financial Liabilities:
Investment securities held to maturity, at amortized cost, net (fair value of $559,312 and $376,331, respectively)	615,653	383,393
Total investment securities available for sale	1,167,649	894,335
Level 2 | Fair Value, Recurring [Member] | Interest rate swap
Financial Assets:
Derivative assets - interest rate swaps	19,842
Financial Liabilities:
Derivative liabilities - interest rate swaps	19,842
Level 3 | Fair Value, Recurring [Member]
Financial Assets:
Equity security	0	0
Financial Liabilities:
Total investment securities available for sale	0	0
Level 3 | Fair Value, Recurring [Member] | Interest rate swap
Financial Assets:
Derivative assets - interest rate swaps	0	0
Financial Liabilities:
Derivative liabilities - interest rate swaps	0	0
Carrying Value
Financial Assets:
Cash and cash equivalents	994,055	1,723,292
Loans receivable, net	3,834,368	3,773,301
Accrued interest receivable	15,908	14,657
Derivative assets - interest rate swaps	19,842	15,219
Equity security	186	240
Financial Liabilities:
Non-maturity deposits		6,038,498
Certificates of deposit		342,839
Securities sold under agreement to repurchase	41,827	50,839
Junior subordinated debentures	21,326	21,180
Accrued interest payable	83	73
Derivative liabilities - interest rate swaps	19,842	15,286
Investment securities held to maturity, at amortized cost, net (fair value of $559,312 and $376,331, respectively)	615,653	383,393
Total investment securities available for sale	1,187,588
Carrying Value | Noninterest deposits, interest bearing demand deposits, money market accounts and savings accounts
Financial Liabilities:
Non-maturity deposits	6,019,421
Carrying Value | Bank Time Deposits
Financial Liabilities:
Certificates of deposit	310,769
Fair Value
Financial Assets:
Cash and cash equivalents	994,055	1,723,292
Investment securities available for sale		894,335
Investment securities held to maturity	559,312	376,331
Loans held for sale	1,353	1,527
Loans receivable, net	3,760,294	3,849,602
Accrued interest receivable	15,908	14,657
Derivative assets - interest rate swaps	19,842	15,219
Equity security	186	240
Financial Liabilities:
Non-maturity deposits		6,038,498
Certificates of deposit		344,025
Securities sold under agreement to repurchase	41,827	50,839
Junior subordinated debentures	19,250	18,750
Accrued interest payable	83	73
Derivative liabilities - interest rate swaps	19,842	15,286
Total investment securities available for sale	1,187,588
Fair Value | Noninterest deposits, interest bearing demand deposits, money market accounts and savings accounts
Financial Liabilities:
Non-maturity deposits	6,019,421
Fair Value | Bank Time Deposits
Financial Liabilities:
Certificates of deposit	311,481
Fair Value | Level 1
Financial Assets:
Cash and cash equivalents	994,055	1,723,292
Investment securities available for sale		0
Investment securities held to maturity	0	0
Loans held for sale	0	0
Loans receivable, net	0	0
Accrued interest receivable	272	14
Derivative assets - interest rate swaps	0	0
Equity security		240
Financial Liabilities:
Non-maturity deposits		6,038,498
Certificates of deposit		0
Securities sold under agreement to repurchase	41,827	50,839
Junior subordinated debentures	0	0
Accrued interest payable	31	33
Derivative liabilities - interest rate swaps	0	0
Fair Value | Level 1 | Fair Value, Recurring [Member]
Financial Assets:
Equity security	186
Fair Value | Level 1 | Noninterest deposits, interest bearing demand deposits, money market accounts and savings accounts
Financial Liabilities:
Non-maturity deposits	6,019,421
Fair Value | Level 1 | Bank Time Deposits
Financial Liabilities:
Certificates of deposit	0
Fair Value | Level 2
Financial Assets:
Cash and cash equivalents	0	0
Investment securities available for sale		894,335
Investment securities held to maturity	559,312	376,331
Loans held for sale	1,353	1,527
Loans receivable, net	0	0
Accrued interest receivable	6,185	4,582
Derivative assets - interest rate swaps	19,842	15,219
Equity security	0	0
Financial Liabilities:
Non-maturity deposits		0
Certificates of deposit		344,025
Securities sold under agreement to repurchase	0	0
Junior subordinated debentures	0	0
Accrued interest payable	16	19
Derivative liabilities - interest rate swaps	19,842	15,286
Total investment securities available for sale			$ 1,167,649
Fair Value | Level 2 | Noninterest deposits, interest bearing demand deposits, money market accounts and savings accounts
Financial Liabilities:
Non-maturity deposits	0
Fair Value | Level 2 | Bank Time Deposits
Financial Liabilities:
Certificates of deposit	311,481
Fair Value | Level 3
Financial Assets:
Cash and cash equivalents	0	0
Investment securities available for sale		0
Investment securities held to maturity	0	0
Loans held for sale	0	0
Loans receivable, net	3,760,294	3,849,602
Accrued interest receivable	9,451	10,061
Derivative assets - interest rate swaps	0	0
Equity security	0	0
Financial Liabilities:
Non-maturity deposits		0
Certificates of deposit		0
Securities sold under agreement to repurchase	0	0
Junior subordinated debentures	19,250	18,750
Accrued interest payable	36	21
Derivative liabilities - interest rate swaps	0	$ 0
Fair Value | Level 3 | Noninterest deposits, interest bearing demand deposits, money market accounts and savings accounts
Financial Liabilities:
Non-maturity deposits	0
Fair Value | Level 3 | Bank Time Deposits
Financial Liabilities:
Certificates of deposit	$ 0

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Cash Restriction (Details) - USD ($) $ in Millions	Jun. 30, 2022	Dec. 31, 2021
Banking and Thrift, Other Disclosures [Abstract]
Restricted Cash	$ 0.0	$ 9.8

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Commitments and Contingencies (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021	Dec. 31, 2020
Other Commitments [Line Items]
Unused Commitments to Extend Credit	$ 1,147,513		$ 1,147,513			$ 1,125,960
Allowance for credit losses on loans	39,696	$ 51,562	39,696	$ 51,562	$ 40,333	42,361	$ 64,225	$ 70,185
Commercial Portfolio Segment [Member]
Other Commitments [Line Items]
Unused Commitments to Extend Credit	570,056		570,056			579,895
Allowance for credit losses on loans	31,707	36,677	31,707	36,677	31,932	33,049	45,204	49,608
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Other Commitments [Line Items]
Unused Commitments to Extend Credit	553,134		553,134			570,156
Allowance for credit losses on loans	14,033	17,485	14,033	17,485	15,265	17,777	21,770	30,010
Commercial Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member]
Other Commitments [Line Items]
Unused Commitments to Extend Credit	3,612		3,612			2,252
Allowance for credit losses on loans	8,162	8,562	8,162	8,562	7,085	6,411	10,464	9,486
Commercial Portfolio Segment [Member] | Non Owner Occupied Commercial Real Estate [Member]
Other Commitments [Line Items]
Unused Commitments to Extend Credit	13,310		13,310			7,487
Allowance for credit losses on loans	9,512	10,630	9,512	10,630	9,582	8,861	12,970	10,112
Real Estate Construction and Land Development [Member]
Other Commitments [Line Items]
Unused Commitments to Extend Credit	269,551		269,551			261,055
Allowance for credit losses on loans	3,284	10,471	3,284	10,471	4,299	5,276	13,271	13,092
Real Estate Construction and Land Development [Member] | One to Four Family Real Estate Construction [Member]
Other Commitments [Line Items]
Unused Commitments to Extend Credit	52,374		52,374			51,838
Allowance for credit losses on loans	1,081	1,636	1,081	1,636	1,124	1,304	2,048	1,951
Real Estate Construction and Land Development [Member] | Five or More Family Residential and Commercial Properties [Member]
Other Commitments [Line Items]
Unused Commitments to Extend Credit	217,177		217,177			209,217
Allowance for credit losses on loans	2,203	8,835	2,203	8,835	3,175	3,972	11,223	11,141
Consumer Portfolio Segment [Member]
Other Commitments [Line Items]
Unused Commitments to Extend Credit	307,906		307,906			285,010
Allowance for credit losses on loans	2,568	3,261	2,568	3,261	2,299	2,627	4,348	5,894
Unused Commitments to Extend Credit [Member]
Other Commitments [Line Items]
Provision for Other Credit Losses	(555)	(1,166)	(1,610)	(2,230)
Allowance for credit losses on loans	$ 997	$ 2,451	$ 997	$ 2,451	$ 1,552	$ 2,607	$ 3,617	$ 4,681