x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
California | 33-0898238 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
949 South Coast Drive, Suite 300, Costa Mesa, California | 92626 | |
(Address of principal executive offices) | (Zip Code) |
Title of each class registered | Name of each Exchange on which registered | |
Common Stock without par value | NASDAQ Global Select Market |
Large accelerated filer | o | Accelerated filer | x | |||
Non-accelerated filer | o | Smaller reporting company | o |
Page No. | ||
Banking and Financial Center | County | Date Opened for Business | |
Newport Beach, California | Orange | March 1999 | |
San Juan Capistrano, California | Orange | August 1999 | |
Costa Mesa, California | Orange | June 2001 | |
Beverly Hills, California | Los Angeles | July 2001 | |
La Jolla, California | San Diego | June 2002 | |
La Habra, California | Orange | September 2003 | |
Ontario, California | San Bernardino | July 2005 |
• | A broad range of loan and deposit products and banking and financial services, more typically offered by larger banks, in order to gain a competitive advantage over independent or community banks that do not provide the same range or breadth of services that we are able to provide to our customers; and |
• | A high level of personal service and responsiveness, more typical of independent and community banks, which we believe gives us a competitive advantage over large out-of-state and other large multi-regional banks that are unable, or unwilling, due to the expense involved, to provide that same level of personal service to this segment of the banking market. |
Year-to-Date Average Balance December 31, 2015 | Balance at December 31, 2015 | ||||||
(Dollars in thousands) | |||||||
Type of Deposit | |||||||
Noninterest-bearing checking accounts(1) | $ | 237,371 | $ | 249,676 | |||
Interest-bearing checking accounts | 40,916 | 51,210 | |||||
Money market and savings deposits | 300,088 | 312,628 | |||||
Certificates of deposit(2) | 308,529 | 280,326 | |||||
Totals | $ | 886,904 | $ | 893,840 |
(1) | Excludes noninterest bearing deposits maintained at the Bank by the Company with an annual average balance of $11.0 million for the year ended December 31, 2015 and a balance of $9.5 million at December 31, 2015. Excludes noninterest bearing deposits maintained at the Bank by PMAR with an annual average balance of $5.9 million for the year ended December 31, 2015 and a balance of $4.4 million at December 31, 2015. |
(2) | Comprised of time certificates of deposit in varying denominations under and over $100,000. Excludes certificates of deposit maintained by the Company at the Bank with an average balance of $250,000 for the year ended December 31, 2015 and a balance at December 31, 2015 of $250,000. Excludes certificates of deposit maintained by PMAR at the Bank with an average balance of $101,000 for the year ended December 31, 2015 and a balance at December 31, 2015 of $101,000. |
At December 31, 2015 | ||||||
Amount | Percent of Total | |||||
(Dollars in thousands) | ||||||
Commercial loans | $ | 347,300 | 40.3 | % | ||
Commercial real estate loans – owner occupied | 195,554 | 22.7 | % | |||
Commercial real estate loans – all other | 146,641 | 17.0 | % | |||
Residential mortgage loans – multi-family | 81,487 | 9.5 | % | |||
Residential mortgage loans – single family(1) | 52,072 | 6.0 | % | |||
Land development loans | 10,001 | 1.2 | % | |||
Consumer loans | 28,663 | 3.3 | % | |||
Gross loans | $ | 861,718 | 100.0 | % |
(1) | These loans originated prior to our exit from the mortgage business and are retained in our loan portfolio as a loan diversification strategy. |
• | Our online business banking portal allows our clients to conduct online transactions and access account information; features include the ability to: |
◦ | View account balances and activity, including statements |
◦ | Transfer funds between accounts |
◦ | Access wires, ACH and bill pay capabilities |
◦ | View check images |
◦ | Setup account alerts |
◦ | Prepare customizable reports and dashboards views |
◦ | Download activity into Intuit QuickBooks and Quicken |
• | Our mobile banking platform allows our clients to conduct transactions and access account information from their mobile device; features include the ability to: |
◦ | View available balances, transactions and transaction details |
◦ | Create one time balance transfers |
◦ | Create bill payments for existing payees |
◦ | Schedule future dated bill payments |
◦ | Cancel scheduled bill payments |
◦ | View recent payments |
◦ | Approve wires, ACH, and balance transfer transactions |
◦ | Deposit checks |
◦ | Find bank locations |
• | Collection services such as remote deposit capture services (PMB xPress Deposit), remittance payments (Lockbox), and incoming ACH & wire reporting and notification. |
• | Payable services such as checks, wire transfer and ACH origination, business bill pay service, and business credit cards. We also provide courier and onsite vault services for those clients with cash needs. |
• | Fraud prevention services such as Positive Pay, ACH Positive Pay, and transactional alerts. |
• | Service Continuity. In order to better ensure continuity of service, we have located our critical servers and telecommunications systems at an offsite hardened and secure data center. This center provides the physical environment necessary to keep servers up and running 24 hours a day, 7 days a week. This data center has raised floors, temperature control systems with separate cooling zones, seismically braced racks, and generators to keep the system operating during power outages and has been designed to withstand fires and major earthquakes. The center also has a wide range of physical security features, including smoke detection and fire suppression systems, motion sensors, and 24/7 secured access, as well as video camera surveillance and security breach alarms. The center is connected to the Internet by redundant high speed data circuits with advanced capacity monitoring. |
• | Physical Security. All servers and network computers reside in secure facilities. Only employees with proper identification may enter the primary server areas. |
• | Monitoring. Customer transactions on online servers and internal computer systems produce one or more entries into transactional logs. Our personnel routinely review these logs as a means of identifying and taking appropriate action with respect to any abnormal or unusual activity. |
• | Transport Layer Security; |
• | Digital certificates; |
• | Multi-factor authentication; |
• | Data loss prevention systems; |
• | Anti-virus, anti-malware, and patch management systems; |
• | Intrusion detection/prevention systems; and |
• | Firewall protection. |
• | misappropriation of a customer’s account number or password; |
• | compromise of the customer’s computer system; |
• | penetration of our servers by an outside “hacker;” |
• | fraud committed by a new customer in completing his or her loan application or opening a deposit account with us; and |
• | fraud committed by employees or service providers. |
• | emphasize personal contacts with existing and potential new customers by our directors, officers and other employees; |
• | develop and participate in local promotional activities; and |
• | seek to develop specialized or streamlined services for customers. |
• | conduct periodic asset quality reviews to identify problem assets, estimate the inherent losses in problem assets and establish reserves that are sufficient to absorb those estimated losses; |
• | compare problem asset totals to capital; |
• | take appropriate corrective action to resolve problem assets; |
• | consider the size and potential risks of material asset concentrations; and |
• | provide periodic asset quality reports with adequate information for the Bank's management and the board of directors to assess the level of asset risk. |
• | Core Capital (Tier 1). Tier 1 capital includes common equity, retained earnings, qualifying non-cumulative perpetual preferred stock, minority interests in equity accounts of consolidated subsidiaries (and, under existing standards, a limited amount of qualifying trust preferred securities and qualifying cumulative perpetual preferred stock at the holding company level), less goodwill, most intangible assets and certain other assets. |
• | Supplementary Capital (Tier 2). Tier 2 capital includes, among other things, perpetual preferred stock and trust preferred securities not meeting the Tier 1 definition, qualifying mandatory convertible debt securities, qualifying subordinated debt, and allowances for loan and lease losses, subject to limitations. |
• | 6.625% Tier 1 capital to risk-weighted assets. |
• | 8.625% Total capital to risk-weighted assets. |
• | 4.0% Tier 1 capital to average assets. |
Applicable Federal Regulatory Requirement | ||||||||||||||||||
At December 31, 2015 | Actual Capital | For Capital Adequacy Purposes | To be Categorized As Well Capitalized | |||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||
(Dollars in thousands) | ||||||||||||||||||
Total Capital to Risk Weighted Assets: | ||||||||||||||||||
Company | $ | 154,884 | 16.8 | % | $ | 73,871 | At least 8.0 | N/A | N/A | |||||||||
Bank | 136,457 | 15.0 | % | 72,672 | At least 8.0 | $ | 90,841 | At least 10.0 | ||||||||||
Common Equity Tier 1 Capital to Risk Weighted Assets: | ||||||||||||||||||
Company | 131,188 | 14.2 | % | 41,552 | At least 4.5 | N/A | N/A | |||||||||||
Bank | 125,018 | 13.8 | % | 40,878 | At least 4.5 | 59,046 | At least 6.5 | |||||||||||
Tier 1 Capital to Risk Weighted Assets: | ||||||||||||||||||
Company | $ | 143,260 | 15.5 | % | $ | 55,403 | At least 6.0 | N/A | N/A | |||||||||
Bank | 125,018 | 13.8 | % | 54,504 | At least 6.0 | $ | 72,672 | At least 8.0 | ||||||||||
Tier 1 Capital to Average Assets: | ||||||||||||||||||
Company | $ | 143,260 | 13.3 | % | $ | 42,984 | At least 4.0 | N/A | N/A | |||||||||
Bank | 125,018 | 11.8 | % | 42,319 | At least 4.0 | $ | 52,899 | At least 5.0 |
• | establish due diligence requirements for financial institutions that administer, maintain, or manage private bank accounts and foreign correspondent accounts; |
• | prohibit U.S. institutions from providing correspondent accounts to foreign shell banks; |
• | establish standards for verifying customer identification at account opening; and |
• | set rules to promote cooperation among financial institutions, regulatory agencies and law enforcement entities in identifying parties that may be involved in terrorism or money laundering. |
• | verifying the identity of any person seeking to open an account, to the extent reasonable and practicable; |
• | maintaining records of the information used to verify the person’s identity; and |
• | determining whether the person appears on any list of known or suspected terrorists or terrorist organizations. |
• | The Home Ownership and Equity Protection Act of 1994, which requires additional disclosures and consumer protections to borrowers designed to protect them against certain lending practices, such as practices deemed to constitute “predatory lending.” |
• | Laws and regulations requiring banks to establish privacy policies which limit the disclosure of nonpublic information about consumers to nonaffiliated third parties. |
• | The Fair Credit Reporting Act, as amended by the Fair and Accurate Credit Transactions Act, which requires banking institutions and financial services businesses to adopt practices and procedures designed to help deter identity theft, including developing appropriate fraud response programs, and provides consumers with greater control of their credit data. |
• | The Truth in Lending Act, which requires that credit terms be disclosed in a meaningful and consistent way so that consumers may compare credit terms more readily and knowledgeably. |
• | The Equal Credit Opportunity Act, which generally prohibits, in connection with any consumer or business credit transaction, discrimination on the basis of race, color, religion, national origin, sex, marital status, age (except in limited circumstances), or the fact that a borrower is receiving income from public assistance programs. |
• | The Fair Housing Act, which regulates many lending practices, including making it unlawful for any lender to discriminate in its housing-related lending activities against any person because of race, color, religion, national origin, sex, handicap or familial status. |
• | The Home Mortgage Disclosure Act, which includes a “fair lending” aspect that requires the collection and disclosure of data about applicant and borrower characteristics as a way of identifying possible discriminatory lending patterns and enforcing anti-discrimination statutes. |
• | The Real Estate Settlement Procedures Act, which requires lenders to provide borrowers with disclosures regarding the nature and cost of real estate settlements and prohibits certain abusive practices, such as kickbacks. |
• | The National Flood Insurance Act, which requires homes in flood-prone areas with mortgages from a federally regulated lender to have flood insurance. |
• | The Secure and Fair Enforcement for Mortgage Licensing Act of 2008, which requires mortgage loan originator employees of federally insured institutions to register with the Nationwide Mortgage Licensing System and Registry, a database created by the states to support the licensing of mortgage loan originators, prior to originating residential mortgage loans. |
• | a decline in the demand for loans, which would cause a decline in interest income and our net interest margin; |
• | a decline in the value of our loans or other assets secured by residential or commercial real estate or by trading assets of our borrowers; |
• | a decrease in deposit balances due to overall reductions in the accounts of customers, which would adversely impact our liquidity position; |
• | an impairment of our investment securities and other real estate owned (“OREO”); and |
• | an increase in the volume of loans that become delinquent or the number of borrowers that file for protection under bankruptcy laws or default on their home loans or commercial loan obligations to us, either of which could result in a higher level of non-performing assets and cause us to increase our ALLL, thereby reducing our earnings. |
• | quarterly fluctuations in our operating results or financial condition; |
• | failure to meet analysts’ revenue or earnings estimates; |
• | the restrictions, described below, on our ability to pay cash dividends on our common stock; |
• | the imposition of additional regulatory restrictions on our business and operations or an inability to meet regulatory requirements; |
• | an inability to successfully implement our growth strategy; |
• | strategic actions by us or our competitors, such as acquisitions or restructurings; |
• | fluctuations in the stock prices and operating results of our competitors; |
• | general market conditions and, in particular, developments related to market conditions for the financial services industry stocks; |
• | proposed or newly adopted legislative or regulatory changes or developments aimed at the financial services industry; |
• | any future proceedings or litigation that may involve or affect us; and |
• | continuing concerns and a lack of confidence among investors that economic and market conditions will improve. |
ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
High | Low | ||||||
Year Ended December 31, 2015 | |||||||
First Quarter | $ | 7.25 | $ | 6.83 | |||
Second Quarter | $ | 7.94 | $ | 6.16 | |||
Third Quarter | $ | 7.77 | $ | 6.41 | |||
Fourth Quarter | $ | 7.22 | $ | 6.48 | |||
Year Ended December 31, 2014 | |||||||
First Quarter | $ | 6.65 | $ | 6.00 | |||
Second Quarter | $ | 6.82 | $ | 6.16 | |||
Third Quarter | $ | 7.20 | $ | 6.59 | |||
Fourth Quarter | $ | 7.25 | $ | 5.48 |
(1) | The source of the above graph and chart is SNL. |
Period Ending | |||||||||||||||||
Index | 12/31/10 | 12/31/11 | 12/31/12 | 12/31/13 | 12/31/14 | 12/31/15 | |||||||||||
Pacific Mercantile Bancorp | 100.00 | 87.87 | 169.54 | 167.65 | 189.76 | 192.18 | |||||||||||
Russell 2000 Index | 100.00 | 95.82 | 111.49 | 154.78 | 162.35 | 155.18 | |||||||||||
SNL Western Bank Index | 100.00 | 90.34 | 114.01 | 160.41 | 192.51 | 199.46 |
Year Ended December 31, | |||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||
(Dollars in thousands except per share data) | |||||||||||||||||||
Selected Statement of Operations Data: | |||||||||||||||||||
Total interest income | $ | 38,797 | $ | 38,290 | $ | 35,651 | $ | 38,426 | $ | 43,107 | |||||||||
Total interest expense | 5,269 | 5,829 | 5,317 | 8,049 | 11,058 | ||||||||||||||
Net interest income | 33,528 | 32,461 | 30,334 | 30,377 | 32,049 | ||||||||||||||
Provision for loan and lease losses | — | 1,500 | 4,505 | 1,950 | (833 | ) | |||||||||||||
Net interest income after provision for loan and lease losses | 33,528 | 30,961 | 25,829 | 28,427 | 32,882 | ||||||||||||||
Total noninterest income | 2,686 | 4,370 | 1,193 | 3,762 | 1,946 | ||||||||||||||
Total noninterest expense | 35,324 | 36,808 | 36,346 | 36,470 | 29,536 | ||||||||||||||
Income (loss) from continuing operations before income taxes | 890 | (1,477 | ) | (9,324 | ) | (4,281 | ) | 5,292 | |||||||||||
Income tax (benefit) provision | (11,551 | ) | (608 | ) | 5,610 | (6,920 | ) | (6,425 | ) | ||||||||||
Net income (loss) from continuing operations | $ | 12,441 | $ | (869 | ) | $ | (14,934 | ) | $ | 2,639 | $ | 11,717 | |||||||
Net income (loss) from discontinued operations | — | 1,226 | (7,282 | ) | 7,015 | (85 | ) | ||||||||||||
Accumulated declared dividends on preferred stock | — | (547 | ) | (538 | ) | (941 | ) | — | |||||||||||
Accumulated undeclared dividends on preferred stock | — | (616 | ) | (544 | ) | (17 | ) | (440 | ) | ||||||||||
Dividends on preferred stock | (927 | ) | — | — | — | — | |||||||||||||
Inducements for exchange of the preferred stock | (512 | ) | — | — | — | — | |||||||||||||
Net income (loss) allocable to common shareholders | $ | 11,002 | $ | (806 | ) | $ | (23,298 | ) | $ | 8,696 | $ | 11,192 | |||||||
Per share data-basic: | |||||||||||||||||||
Net income (loss) from continuing operations | $ | 0.54 | $ | (0.11 | ) | $ | (0.88 | ) | $ | 0.11 | $ | 0.99 | |||||||
Net income (loss) allocable to common shareholders | $ | 0.54 | $ | (0.04 | ) | $ | (1.28 | ) | $ | 0.57 | $ | 0.99 | |||||||
Per share data-diluted: | |||||||||||||||||||
Net income (loss) from continuing operations | $ | 0.53 | $ | (0.11 | ) | $ | (0.88 | ) | $ | 0.15 | $ | 0.99 | |||||||
Net income (loss) allocable to common shareholders | $ | 0.53 | $ | (0.04 | ) | $ | (1.28 | ) | $ | 0.55 | $ | 0.98 | |||||||
Weighted average shares outstanding | |||||||||||||||||||
Basic | 20,516,575 | 19,230,913 | 18,240,891 | 15,386,106 | 11,361,389 | ||||||||||||||
Diluted | 20,675,279 | 19,230,913 | 18,240,891 | 17,674,974 | 11,371,524 | ||||||||||||||
Dividends per share | — | — | — | — | — |
December 31, | |||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||
(Dollars in thousands except for per share information) | |||||||||||||||||||
Selected Balance Sheet Data: | |||||||||||||||||||
Cash and cash equivalents(1) | $ | 113,921 | $ | 177,135 | $ | 106,940 | $ | 128,208 | $ | 96,467 | |||||||||
Total loans, net | 849,733 | 824,197 | 765,426 | 719,257 | 641,962 | ||||||||||||||
Total assets | 1,062,389 | 1,099,610 | 996,583 | 1,053,941 | 1,024,552 | ||||||||||||||
Total deposits | 893,840 | 916,309 | 780,225 | 845,395 | 862,047 | ||||||||||||||
Junior subordinated debentures | 17,527 | 17,527 | 17,527 | 17,527 | 17,527 | ||||||||||||||
Total shareholders’ equity | 133,916 | 119,281 | 115,158 | 122,876 | 86,625 | ||||||||||||||
Book value per share | $ | 5.87 | $ | 5.53 | $ | 5.47 | $ | 6.75 | $ | 6.26 |
(1) | Cash and cash equivalents include cash and due from banks and federal funds sold. |
For the Year Ended December 31, | ||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||
(unaudited) | ||||||||||||||
Selected Financial Ratios: | ||||||||||||||
Return on average assets | 1.17 | % | (0.08 | )% | (1.59 | )% | 0.27 | % | 1.19 | % | ||||
Return on average equity | 10.23 | % | (0.74 | )% | (11.47 | )% | 2.55 | % | 16.63 | % | ||||
Ratio of average equity to average assets | 11.48 | % | 11.30 | % | 13.82 | % | 10.77 | % | 7.16 | % |
ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Year Ended December 31, | ||||||||||||||
2015 | 2014 | 2013 | 2015 vs. 2014 % Change | 2014 vs. 2013 % Change | ||||||||||
(Dollars in thousands) | ||||||||||||||
Interest income | 38,797 | 38,290 | 35,651 | 1.3 | % | 7.4 | % | |||||||
Interest expense | 5,269 | 5,829 | 5,317 | (9.6 | )% | 9.6 | % | |||||||
Provision for loan and lease losses | — | 1,500 | 4,505 | (100.0 | )% | (66.7 | )% | |||||||
Non-interest income | 2,686 | 4,370 | 1,193 | (38.5 | )% | 266.3 | % | |||||||
Non-interest expense | 35,324 | 36,808 | 36,346 | (4.0 | )% | 1.3 | % | |||||||
Income tax (benefit) provision | (11,551 | ) | (608 | ) | 5,610 | 1,799.8 | % | (110.8 | )% | |||||
Net income (loss) from continuing operations | 12,441 | (869 | ) | (14,934 | ) | (1,531.6 | )% | (94.2 | )% | |||||
Net income (loss) from discontinued operations | — | 1,226 | (7,282 | ) | (100.0 | )% | (116.8 | )% | ||||||
Net income (loss) allocable to common shareholders | 11,002 | (806 | ) | (23,298 | ) | (1,465.0 | )% | (96.5 | )% |
Year Ended December 31, | ||||||||||||||||||||||||||||||||
2015 | 2014 | 2013 | ||||||||||||||||||||||||||||||
Average Balance | Interest Earned/ Paid | Average Yield/ Rate | Average Balance | Interest Earned/ Paid | Average Yield/ Rate | Average Balance | Interest Earned/ Paid | Average Yield/ Rate | ||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||
Interest earning assets | ||||||||||||||||||||||||||||||||
Short-term investments(1) | $ | 139,341 | $ | 370 | 0.27 | % | $ | 134,641 | $ | 333 | 0.25 | % | $ | 93,147 | $ | 233 | 0.25 | % | ||||||||||||||
Securities available for sale and stock(2) | 64,960 | 1,710 | 2.63 | % | 71,202 | 1,613 | 2.27 | % | 81,493 | 1,599 | 1.96 | % | ||||||||||||||||||||
Loans(3) | 827,900 | 36,717 | 4.43 | % | 799,900 | 36,344 | 4.54 | % | 713,894 | 33,819 | 4.74 | % | ||||||||||||||||||||
Total interest-earning assets | 1,032,201 | 38,797 | 3.76 | % | 1,005,743 | 38,290 | 3.81 | % | 888,534 | 35,651 | 4.01 | % | ||||||||||||||||||||
Noninterest-earning assets | ||||||||||||||||||||||||||||||||
Cash and due from banks | 16,621 | 12,947 | 12,330 | |||||||||||||||||||||||||||||
All other assets | 10,113 | 21,121 | 41,061 | |||||||||||||||||||||||||||||
Total assets | $ | 1,058,935 | $ | 1,039,811 | $ | 941,925 | ||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||
Interest-bearing checking accounts | $ | 40,916 | $ | 95 | 0.23 | % | $ | 36,281 | $ | 100 | 0.28 | % | $ | 33,447 | 93 | 0.28 | % | |||||||||||||||
Money market and savings accounts | 300,088 | 1,699 | 0.57 | % | 170,047 | 585 | 0.34 | % | 155,352 | 565 | 0.36 | % | ||||||||||||||||||||
Certificates of deposit | 308,529 | 2,765 | 0.90 | % | 431,789 | 4,133 | 0.96 | % | 354,720 | 3,763 | 1.06 | % | ||||||||||||||||||||
Other borrowings | 26,164 | 203 | 0.78 | % | 52,031 | 437 | 0.84 | % | 55,318 | 352 | 0.64 | % | ||||||||||||||||||||
Junior subordinated debentures | 17,527 | 507 | 2.89 | % | 17,527 | 574 | 3.27 | % | 17,527 | 544 | 3.10 | % | ||||||||||||||||||||
Total interest bearing liabilities | 693,224 | 5,269 | 0.76 | % | 707,675 | 5,829 | 0.82 | % | 616,364 | 5,317 | 0.86 | % | ||||||||||||||||||||
Noninterest-bearing liabilities | ||||||||||||||||||||||||||||||||
Demand deposits | 237,371 | 206,295 | 188,696 | |||||||||||||||||||||||||||||
Accrued expenses and other liabilities | 6,773 | 8,355 | 6,645 | |||||||||||||||||||||||||||||
Shareholders' equity | 121,567 | 117,486 | 130,220 | |||||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,058,935 | $ | 1,039,811 | $ | 941,925 | ||||||||||||||||||||||||||
Net interest income | $ | 33,528 | $ | 32,461 | $ | 30,334 | ||||||||||||||||||||||||||
Net interest income/spread | 3.00 | % | 2.99 | % | 3.15 | % | ||||||||||||||||||||||||||
Net interest margin | 3.25 | % | 3.23 | % | 3.41 | % |
(1) | Short-term investments consist of federal funds sold and interest bearing deposits that we maintain at other financial institutions. |
(2) | Stock consists of Federal Home Loan Bank (“FHLB”) stock and Federal Reserve Bank stock. |
(3) | Loans include the average balance of nonaccrual loans and loan fees. |
2015 Compared to 2014 Increase (Decrease) due to Changes in | 2014 Compared to 2013 Increase (Decrease) due to Changes in | ||||||||||||||||||||||
Volume | Rates | Total Increase (Decrease) | Volume | Rates | Total Increase (Decrease) | ||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Interest income | |||||||||||||||||||||||
Short-term investments(1) | $ | 12 | $ | 25 | $ | 37 | $ | 103 | $ | (3 | ) | $ | 100 | ||||||||||
Securities available for sale and stock(2) | (149 | ) | 246 | 97 | (216 | ) | 230 | 14 | |||||||||||||||
Loans | 1,254 | (881 | ) | 373 | 3,950 | (1,425 | ) | 2,525 | |||||||||||||||
Total earning assets | 1,117 | (610 | ) | 507 | 3,837 | (1,198 | ) | 2,639 | |||||||||||||||
Interest expense | |||||||||||||||||||||||
Interest-bearing checking accounts | 12 | (17 | ) | (5 | ) | 8 | (1 | ) | 7 | ||||||||||||||
Money market and savings accounts | 604 | 510 | 1,114 | 52 | (32 | ) | 20 | ||||||||||||||||
Certificates of deposit | (1,118 | ) | (250 | ) | (1,368 | ) | 762 | (392 | ) | 370 | |||||||||||||
Borrowings | (203 | ) | (31 | ) | (234 | ) | (22 | ) | 107 | 85 | |||||||||||||
Junior subordinated debentures | — | (67 | ) | (67 | ) | — | 30 | 30 | |||||||||||||||
Total interest-bearing liabilities | (705 | ) | 145 | (560 | ) | 800 | (288 | ) | 512 | ||||||||||||||
Net interest income | $ | 1,822 | $ | (755 | ) | $ | 1,067 | $ | 3,037 | $ | (910 | ) | $ | 2,127 |
(1) | Short-term investments consist of federal funds sold and interest bearing deposits that we maintain at financial institutions. |
(2) | Stock consists of FHLB stock and Federal Reserve Bank stock. |
Year Ended December 31, | |||||||||||||||||
Amount | Amount | Amount | Percentage Change | Percentage Change | |||||||||||||
2015 | 2014 | 2013 | 2015 vs. 2014 | 2014 vs. 2013 | |||||||||||||
(Dollars in thousands) | |||||||||||||||||
Service fees on deposits and other banking services | $ | 918 | $ | 896 | $ | 801 | 2.5 | % | 11.9 | % | |||||||
Net gains on sale of securities available for sale | — | — | 44 | — | % | (100.0 | )% | ||||||||||
Net gain on sale of small business administration loans | — | 2,074 | — | (100.0 | )% | 100.0 | % | ||||||||||
Other noninterest income | 1,768 | 1,400 | 348 | 26.3 | % | 302.3 | % | ||||||||||
Total noninterest income | $ | 2,686 | $ | 4,370 | $ | 1,193 | (38.5 | )% | 266.3 | % |
• | A decrease of $2.1 million in net gain on sale of SBA loans for the year ended December 31, 2015 as compared to the same period in 2014; partially offset by |
• | A $200 thousand recovery during the year ended December 31, 2015 on a charged off loan in excess of the amount previously charged off against the ALLL; and |
• | An increase in loan servicing and referral fees during the year ended December 31, 2015 as compared to the same period in 2014. |
• | An increase of $2.1 million in net gain on sale of SBA loans for the year ended December 31, 2014 as compared to the same period in 2013; and |
• | No sales of non-SBA loans during the year ended December 31, 2014 as compared to a net loss on sale of non-SBA loans of $448 thousand included in other noninterest income during the year ended December 31, 2013. |
Year Ended December 31, | |||||||||||||||||
2015 | 2014 | 2013 | 2015 vs. 2014 | 2014 vs. 2013 | |||||||||||||
Amount | Amount | Amount | Percent Change | Percent Change | |||||||||||||
(Dollars in thousands) | |||||||||||||||||
Salaries and employee benefits | $ | 22,002 | $ | 22,571 | $ | 19,585 | (2.5 | )% | 15.2 | % | |||||||
Occupancy | 2,871 | 2,499 | 2,234 | 14.9 | % | 11.9 | % | ||||||||||
Equipment and depreciation | 1,652 | 1,541 | 1,609 | 7.2 | % | (4.2 | )% | ||||||||||
Data processing | 1,035 | 931 | 786 | 11.2 | % | 18.4 | % | ||||||||||
FDIC expense | 1,250 | 1,336 | 1,769 | (6.4 | )% | (24.5 | )% | ||||||||||
Other real estate owned expense, net | 365 | 1,962 | 3,233 | (81.4 | )% | (39.3 | )% | ||||||||||
Professional fees | 2,514 | 2,434 | 2,936 | 3.3 | % | (17.1 | )% | ||||||||||
Business development | 488 | 262 | 340 | 86.3 | % | (22.9 | )% | ||||||||||
Loan related expense | 414 | 532 | 355 | (22.2 | )% | 49.9 | % | ||||||||||
Insurance | 341 | 484 | 578 | (29.5 | )% | (16.3 | )% | ||||||||||
Other operating expenses (1) | 2,392 | 2,256 | 2,921 | 6.0 | % | (22.8 | )% | ||||||||||
Total noninterest expense | $ | 35,324 | $ | 36,808 | $ | 36,346 | (4.0 | )% | 1.3 | % |
(1) | Other operating expenses primarily consist of telephone, investor relations, promotional, regulatory expenses, and correspondent bank fees. |
• | A decrease of $1.6 million in the carrying costs and other costs associated with real properties acquired by or in lieu of loan foreclosures (commonly referred to as other real estate owned or “OREO”) and other expenses related to OREO during the year ended December 31, 2015 as compared to the same period in 2014; |
• | A decrease of $569 thousand in salaries and employee benefits primarily related to decreases in our workmen's compensation premium, employment agency fees, and consulting fees and forfeitures in our 401(k) plan; partially offset by |
• | An increase in various expense accounts related to the normal course of operating, including expenses related to an increase in the square footage of our leased premises, the implementation of our mobile banking platform and the roll out of our new credit card platform. |
• | An increase of $3.0 million in salaries and employee benefits primarily related to the hiring of key employees during 2013 and 2014 and an increase in the year-end incentive compensation accrual for the year ended December 31, 2014; partially offset by |
• | A decrease of $1.3 million in OREO expenses attributable to the reduction in OREO properties during the year ended December 31, 2014; |
• | An increase of $502 thousand in professional fees related to recoveries on legal disputes during the year ended December 31, 2013, partially offset by decreased legal expenses due to the resolution of certain lawsuits and other disputes and a decline in legal costs related to nonperforming loans; |
• | A decrease of $433 thousand in our FDIC expense as a result of lower insurance required based upon improvement in the Bank's financial condition; and |
December 31, 2015 | December 31, 2014 | ||||||
(Dollars in thousands) | |||||||
Interest-bearing deposits with financial institutions (1) | $ | 103,276 | $ | 167,138 | |||
Interest-bearing time deposits with financial institutions | 4,665 | 4,668 | |||||
Federal Reserve Bank of San Francisco and Federal Home Loan Bank Stock, at cost | 8,170 | 8,137 | |||||
Securities available for sale, at fair value | 52,249 | 60,926 | |||||
Loans (net of allowances of $12,716 and $13,833, respectively) | 849,733 | 824,197 |
(1) | Includes interest-earning balances maintained at the Federal Reserve Bank of San Francisco (“FRBSF”). |
(Dollars in thousands) | Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Estimated Fair Value | |||||||||||
Securities available for sale at December 31, 2015: | |||||||||||||||
Residential mortgage backed securities issued by U.S. Agencies | $ | 46,126 | $ | 4 | $ | (976 | ) | $ | 45,154 | ||||||
Residential collateralized mortgage obligations issued by non agencies | 646 | — | (14 | ) | 632 | ||||||||||
Asset backed security | 2,027 | — | (547 | ) | 1,480 | ||||||||||
Mutual funds | 5,000 | 33 | (50 | ) | 4,983 | ||||||||||
Total securities available for sale | $ | 53,799 | $ | 37 | $ | (1,587 | ) | $ | 52,249 | ||||||
Securities available for sale at December 31, 2014: | |||||||||||||||
Residential mortgage backed securities issued by U.S. Agencies | 54,653 | 26 | (940 | ) | 53,739 | ||||||||||
Residential collateralized mortgage obligations issued by non agencies | 790 | — | (13 | ) | 777 | ||||||||||
Asset backed security | 2,083 | — | (433 | ) | 1,650 | ||||||||||
Mutual funds | 4,750 | 45 | (35 | ) | 4,760 | ||||||||||
Total securities available for sale | $ | 62,276 | $ | 71 | $ | (1,421 | ) | $ | 60,926 | ||||||
Securities available for sale at December 31, 2013: | |||||||||||||||
U.S. Treasury securities | $ | 700 | $ | — | $ | — | $ | 700 | |||||||
Residential mortgage backed securities issued by U.S. Agencies | 60,514 | 13 | (2,719 | ) | 57,808 | ||||||||||
Residential collateralized mortgage obligations issued by non agencies | 1,572 | — | (48 | ) | 1,524 | ||||||||||
Asset backed security | 2,218 | — | (906 | ) | 1,312 | ||||||||||
Mutual funds | 4,645 | — | — | 4,645 | |||||||||||
Total securities available for sale | $ | 69,649 | $ | 13 | $ | (3,673 | ) | $ | 65,989 |
December 31, 2015 Maturing in | ||||||||||||||||||||||||||||||||||
One year or less | Over one year through five years | Over five years through ten years | Over ten years | Total | ||||||||||||||||||||||||||||||
(Dollars in thousands) | Amortized Cost | Weighted Average Yield | Amortized Cost | Weighted Average Yield | Amortized Cost | Weighted Average Yield | Amortized Cost | Weighted Average Yield | Amortized Cost | Weighted Average Yield | ||||||||||||||||||||||||
Securities available for sale: | ||||||||||||||||||||||||||||||||||
Residential mortgage backed securities issued by U.S. Agencies | $ | 7,115 | 1.51 | % | $ | 21,178 | 1.53 | % | $ | 14,164 | 1.60 | % | $ | 3,669 | 1.66 | % | $ | 46,126 | 1.56 | % | ||||||||||||||
Residential collateralized mortgage obligations issued by non agencies | 646 | 2.94 | % | — | — | % | — | — | % | — | — | % | 646 | 2.94 | % | |||||||||||||||||||
Asset backed security | — | — | % | — | — | % | — | — | % | 2,027 | 2.76 | % | 2,027 | 2.76 | % | |||||||||||||||||||
Mutual funds | — | — | % | 5,000 | 1.93 | % | — | — | % | — | — | % | 5,000 | 1.93 | % | |||||||||||||||||||
Total Securities Available for sale | $ | 7,761 | 1.63 | % | $ | 26,178 | 1.60 | % | $ | 14,164 | 1.60 | % | $ | 5,696 | 2.05 | % | $ | 53,799 | 1.65 | % |
Securities with Unrealized Loss at December 31, 2015 | |||||||||||||||||||||||
Less than 12 months | 12 months or more | Total | |||||||||||||||||||||
(Dollars in thousands) | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | |||||||||||||||||
Residential mortgage backed securities issued by U.S. Agencies | $ | 20,597 | $ | (197 | ) | $ | 23,865 | $ | (779 | ) | $ | 44,462 | $ | (976 | ) | ||||||||
Residential collateralized mortgage obligations issued by non agencies | — | — | 631 | (14 | ) | 631 | (14 | ) | |||||||||||||||
Asset backed security | — | — | 1,480 | (547 | ) | 1,480 | (547 | ) | |||||||||||||||
Mutual funds | 1,728 | (23 | ) | 973 | (27 | ) | 2,701 | (50 | ) | ||||||||||||||
Total | $ | 22,325 | $ | (220 | ) | $ | 26,949 | $ | (1,367 | ) | $ | 49,274 | $ | (1,587 | ) |
(Dollars in thousands) | Gross Other- Than- Temporary Impairments | Other-Than- Temporary Impairments Included in Other Comprehensive Loss | Net Other-Than- Temporary Impairments Included in Retained Earnings (Deficit) | ||||||||
Balance – December 31, 2013 | $ | (1,459 | ) | $ | (906 | ) | $ | (553 | ) | ||
Changes in market value on securities for which an OTTI was previously recognized | 455 | 455 | — | ||||||||
Principal received on OTTI security | 18 | 18 | — | ||||||||
Balance – December 31, 2014 | $ | (986 | ) | $ | (433 | ) | $ | (553 | ) | ||
Change in market value on a security for which an OTTI was previously recognized | (153 | ) | (153 | ) | — | ||||||
Principal received on OTTI security | 52 | 52 | — | ||||||||
Balance – December 31, 2015 | $ | (1,087 | ) | $ | (534 | ) | $ | (553 | ) |
At December 31, | ||||||||||||||||||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||
Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | |||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||
Commercial loans | $ | 347,300 | 40.3 | % | $ | 301,746 | 36.0 | % | $ | 226,450 | 29.2 | % | $ | 170,792 | 23.4 | % | $ | 179,305 | 27.2 | % | ||||||||||||||
Commercial real estate loans – owner occupied | 195,554 | 22.7 | % | 212,515 | 25.4 | % | 174,221 | 22.4 | % | 165,922 | 22.7 | % | 170,960 | 26.0 | % | |||||||||||||||||||
Commercial real estate loans – all other | 146,641 | 17.0 | % | 146,676 | 17.5 | % | 177,884 | 22.9 | % | 150,189 | 20.6 | % | 121,813 | 18.5 | % | |||||||||||||||||||
Residential mortgage loans – multi-family | 81,487 | 9.5 | % | 95,276 | 11.4 | % | 96,565 | 12.4 | % | 105,119 | 14.4 | % | 65,545 | 10.0 | % | |||||||||||||||||||
Residential mortgage loans – single family | 52,072 | 6.0 | % | 64,326 | 7.7 | % | 75,660 | 9.7 | % | 87,263 | 11.9 | % | 68,613 | 10.4 | % | |||||||||||||||||||
Construction loans | — | — | — | — | % | — | — | % | — | — | % | 2,120 | 0.3 | % | ||||||||||||||||||||
Land development loans | 10,001 | 1.2 | % | 7,745 | 0.9 | % | 18,458 | 2.4 | % | 24,018 | 3.3 | % | 25,638 | 3.9 | % | |||||||||||||||||||
Consumer loans | 28,663 | 3.3 | % | 9,687 | 1.2 | % | 7,599 | 1.0 | % | 27,296 | 3.7 | % | 24,285 | 3.7 | % | |||||||||||||||||||
Total loans | 861,718 | 100.0 | % | 837,971 | 100.0 | % | 776,837 | 100.0 | % | 730,599 | 100.0 | % | 658,279 | 100.0 | % | |||||||||||||||||||
Deferred fee (income) costs, net | 731 | 59 | (53 | ) | (461 | ) | (690 | ) | ||||||||||||||||||||||||||
Allowance for loan and lease losses | (12,716 | ) | (13,833 | ) | (11,358 | ) | (10,881 | ) | (15,627 | ) | ||||||||||||||||||||||||
Loans, net | $ | 849,733 | $ | 824,197 | $ | 765,426 | $ | 719,257 | $ | 641,962 |
December 31, 2015 | |||||||||||||||
One Year or Less | Over One Year Through Five Years | Over Five Years | Total | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Real estate loans(1) | |||||||||||||||
Floating rate | $ | 30,027 | $ | 25,901 | $ | 147,083 | $ | 203,011 | |||||||
Fixed rate | 18,266 | 53,077 | 77,842 | 149,185 | |||||||||||
Commercial loans | |||||||||||||||
Floating rate | 109,434 | 63,951 | 22,258 | 195,643 | |||||||||||
Fixed rate | 91,477 | 53,873 | 6,307 | 151,657 | |||||||||||
Total | $ | 249,204 | $ | 196,802 | $ | 253,490 | $ | 699,496 |
(1) | Does not include mortgage loans on single or multi-family residences or consumer loans, which totaled $133.6 million and $28.7 million, respectively, at December 31, 2015. |
At December 31, 2015 | At December 31, 2014 | ||||||
(Dollars in thousands) | |||||||
Nonaccrual loans: | |||||||
Commercial loans | $ | 12,284 | $ | 16,182 | |||
Commercial real estate | 10,083 | 4,288 | |||||
Residential real estate | 1,148 | 1,472 | |||||
Land development | 1,618 | 2,111 | |||||
Total nonaccrual loans | $ | 25,133 | $ | 24,053 | |||
Loans past due 90 days and still accruing interest: | |||||||
Total loans past due 90 days and still accruing interest | $ | — | $ | — | |||
Other real estate owned (OREO): | |||||||
Residential real estate | $ | 650 | $ | 962 | |||
Construction and land development | — | 630 | |||||
Total other real estate owned | $ | 650 | $ | 1,592 | |||
Total nonperforming assets | $ | 25,783 | $ | 25,645 | |||
Restructured loans: | |||||||
Accruing loans | $ | 724 | $ | 11,084 | |||
Nonaccruing loans (included in nonaccrual loans above) | 20,070 | 5,935 | |||||
Total restructured loans | $ | 20,794 | $ | 17,019 |
December 31, 2015 | December 31, 2014 | ||||||||||||||||||||
Loans | Reserves for Loan Losses | % of Reserves to Loans | Loans | Reserves for Loan Losses | % of Reserves to Loans | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Impaired loans with specific reserves | $ | 1,621 | $ | 484 | 29.9 | % | $ | 2,554 | $ | 1,532 | 60.0 | % | |||||||||
Impaired loans without specific reserves | 24,236 | — | — | 32,583 | — | — | |||||||||||||||
Total impaired loans | $ | 25,857 | $ | 484 | 1.9 | % | $ | 35,137 | $ | 1,532 | 4.4 | % |
• | The effects of changes that we may make in our loan policies or underwriting standards on the quality of the loans and the risks in our loan portfolios; |
• | Trends and changes in local, regional and national economic conditions, as well as changes in industry specific conditions, and any other reasonably foreseeable events that could affect the performance or the collectability of the loans in our loan portfolios; |
• | Material changes that may occur in the mix or in the volume of the loans in our loan portfolios that could alter, whether positively or negatively, the risk profile of those portfolios; |
• | Changes in management or loan personnel or other circumstances that could, either positively or negatively, impact the application of our loan underwriting standards, the monitoring of nonperforming loans or our loan collection efforts; and |
• | External factors that, in addition to economic conditions, can affect the ability of borrowers to meet their loan obligations, such as fires, earthquakes and terrorist attacks. |
(Dollars in thousands) | Commercial | Real Estate | Land Development | Consumer and Single Family Mortgages | Total | ||||||||||||||
ALLL for the year ended December 31, 2015: | |||||||||||||||||||
Balance at beginning of year | $ | 7,670 | $ | 5,133 | $ | 296 | $ | 734 | $ | 13,833 | |||||||||
Charge offs | (2,643 | ) | — | (85 | ) | (199 | ) | (2,927 | ) | ||||||||||
Recoveries | 1,798 | 4 | — | 8 | 1,810 | ||||||||||||||
Provision | (186 | ) | (28 | ) | 71 | 143 | — | ||||||||||||
Balance at end of year | $ | 6,639 | $ | 5,109 | $ | 282 | $ | 686 | $ | 12,716 | |||||||||
Allowance for loan and lease losses as a percentage of average total loans | 1.54 | % | |||||||||||||||||
Allowance for loan and lease losses as a percentage of total outstanding loans | 1.48 | % | |||||||||||||||||
Ratio of net charge-offs to average loans outstanding during the period | 0.13 | % | |||||||||||||||||
ALLL for the year ended December 31, 2014: | |||||||||||||||||||
Balance at beginning of year | $ | 5,812 | $ | 4,517 | $ | 165 | $ | 864 | $ | 11,358 | |||||||||
Charge offs | (551 | ) | — | — | (102 | ) | (653 | ) | |||||||||||
Recoveries | 1,467 | 76 | — | 85 | 1,628 | ||||||||||||||
Provision | 942 | 540 | 131 | (113 | ) | 1,500 | |||||||||||||
Balance at end of year | $ | 7,670 | $ | 5,133 | $ | 296 | $ | 734 | $ | 13,833 | |||||||||
Allowance for loan and lease losses as a percentage of average total loans | 1.73 | % | |||||||||||||||||
Allowance for loan and lease losses as a percentage of total outstanding loans | 1.65 | % | |||||||||||||||||
Ratio of net charge-offs to average loans outstanding during the period | (0.12 | )% | |||||||||||||||||
ALLL for the year ended December 31, 2013: | |||||||||||||||||||
Balance at beginning of year | $ | 6,340 | $ | 3,487 | $ | 248 | $ | 806 | $ | 10,881 | |||||||||
Charge offs | (5,945 | ) | (308 | ) | (5 | ) | (200 | ) | (6,458 | ) | |||||||||
Recoveries | 2,337 | 5 | 54 | 34 | 2,430 | ||||||||||||||
Provision | 3,080 | 1,333 | (132 | ) | 224 | 4,505 | |||||||||||||
Balance at end of year | $ | 5,812 | $ | 4,517 | $ | 165 | $ | 864 | $ | 11,358 | |||||||||
Allowance for loan and lease losses as a percentage of average total loans | 1.59 | % | |||||||||||||||||
Allowance for loan and lease losses as a percentage of total outstanding loans | 1.46 | % | |||||||||||||||||
Ratio of net charge-offs to average loans outstanding during the period | 0.56 | % | |||||||||||||||||
ALLL for the year ended December 31, 2012: | |||||||||||||||||||
Balance at beginning of year | $ | 8,908 | $ | 5,777 | $ | 316 | $ | 626 | $ | 15,627 | |||||||||
Charge offs | (6,664 | ) | (1,184 | ) | (158 | ) | (568 | ) | (8,574 | ) | |||||||||
Recoveries | 1,657 | 198 | — | 23 | 1,878 | ||||||||||||||
Provision | 2,439 | (1,304 | ) | 90 | 725 | 1,950 | |||||||||||||
Balance at end of year | $ | 6,340 | $ | 3,487 | $ | 248 | $ | 806 | $ | 10,881 | |||||||||
Allowance for loan and lease losses as a percentage of average total loans | 1.56 | % | |||||||||||||||||
Allowance for loan and lease losses as a percentage of total outstanding loans | 1.49 | % | |||||||||||||||||
Ratio of net charge-offs to average loans outstanding during the period | 0.96 | % | |||||||||||||||||
ALLL for the year ended December 31, 2011: | |||||||||||||||||||
Balance at beginning of year | $ | 10,017 | $ | 6,351 | $ | 830 | $ | 903 | $ | 18,101 | |||||||||
Charge offs | (1,218 | ) | (1,315 | ) | (138 | ) | (65 | ) | (2,736 | ) | |||||||||
Recoveries | 1,067 | 3 | — | 25 | 1,095 | ||||||||||||||
Provision | (958 | ) | 738 | (376 | ) | (237 | ) | (833 | ) | ||||||||||
Balance at end of year | $ | 8,908 | $ | 5,777 | $ | 316 | $ | 626 | $ | 15,627 | |||||||||
Allowance for loan and lease losses as a percentage of average total loans | 2.20 | % | |||||||||||||||||
Allowance for loan and lease losses as a percentage of total outstanding loans | 2.37 | % | |||||||||||||||||
Ratio of net charge-offs to average loans outstanding during the period | 0.23 | % |
• | Loans rated "Pass" totaled $816.3 million, an increase of $25.5 million from $790.8 million at December 31, 2014. The increase was primarily attributable to new loan growth, partially offset by the planned exit of one syndicated loan, downgrades and other paydowns. |
• | Loans rated "Special Mention" totaled $15.3 million, an increase of $7.9 million from $7.4 million at December 31, 2014. The increase was primarily the result of the downgrade of five commercial real estate loans and four commercial loans from "Pass", partially offset by the payoff of one commercial loan and the downgrade to "Substandard" of a related multi-family loan. |
• | Loans rated "Substandard" totaled $30.2 million, a decrease of $8.0 million from $38.2 million at December 31, 2014. This decrease was primarily the result of principal payments of $3.0 million, payoffs of $12.7 million, the foreclosure and transfer to OREO of a $280 thousand land development loan and $825 thousand of loans charged off, partially offset by $8.9 million downgraded from "Pass" and "Special Mention". |
• | Loans rated "Doubtful" totaled $0, a decrease of $1.6 million from $1.6 million at December 31, 2014. The decrease is attributable to the charge off of one commercial loan of $1.0 million and the write down of $584 thousand on a commercial loan. |
December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | December 31, 2014 | |||||||||||||||
Loans Delinquent: | (Dollars in thousands) | ||||||||||||||||||
90 days or more: | |||||||||||||||||||
Commercial loans | $ | 8,766 | $ | 10,383 | $ | 12,132 | $ | — | $ | — | |||||||||
Commercial real estate | 6,004 | 2,579 | — | — | 2,117 | ||||||||||||||
Residential mortgages | 535 | 535 | 763 | 733 | 285 | ||||||||||||||
Land development loans | 1,618 | 1,640 | 1,685 | — | 364 | ||||||||||||||
16,923 | 15,137 | 14,580 | 733 | 2,766 | |||||||||||||||
30-89 days: | |||||||||||||||||||
Commercial loans | 3,018 | 5,346 | 527 | 24,143 | 553 | ||||||||||||||
Commercial real estate | 316 | 1,255 | 4,847 | 891 | 20 | ||||||||||||||
Residential mortgages | — | — | — | 181 | 835 | ||||||||||||||
Land development loans | — | — | — | 1,717 | — | ||||||||||||||
Consumer loans | — | — | — | — | 17 | ||||||||||||||
3,334 | 6,601 | 5,374 | 26,932 | 1,425 | |||||||||||||||
Total Past Due(1): | $ | 20,257 | $ | 21,738 | $ | 19,954 | $ | 27,665 | $ | 4,191 |
(1) | Past due balances include nonaccrual loans. |
Year Ended December 31, | ||||||||||||||||||||
2015 | 2014 | 2013 | ||||||||||||||||||
Average Balance | Average Rate | Average Balance | Average Rate | Average Balance | Average Rate | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Noninterest bearing demand deposits | $ | 237,371 | — | $ | 206,295 | — | $ | 188,696 | — | |||||||||||
Interest-bearing checking accounts | 40,916 | 0.23 | % | 36,281 | 0.28 | % | 33,447 | 0.28 | % | |||||||||||
Money market and savings deposits | 300,088 | 0.57 | % | 170,047 | 0.34 | % | 155,352 | 0.36 | % | |||||||||||
Time deposits(1) | 308,529 | 0.90 | % | 431,789 | 0.96 | % | 354,720 | 1.06 | % | |||||||||||
Total deposits | $ | 886,904 | 0.51 | % | $ | 844,412 | 0.57 | % | $ | 732,215 | 0.60 | % |
(1) | Comprised of time certificates of deposit in denominations of less than and more than $100,000. |
At December 31, 2015 | At December 31, 2014 | ||||||||||||
Amounts | % of Total Deposits | Amounts | % of Total Deposits | ||||||||||
(Dollars in thousands) | |||||||||||||
Core deposits | |||||||||||||
Noninterest bearing demand deposits | $ | 249,676 | 27.9 | % | $ | 237,491 | 25.9 | % | |||||
Savings and other interest-bearing transaction deposits | 363,838 | 40.7 | % | 318,096 | 34.7 | % | |||||||
Time deposits | 280,326 | 31.4 | % | 360,722 | 39.4 | % | |||||||
Total deposits | $ | 893,840 | 100.0 | % | $ | 916,309 | 100.0 | % |
December 31, 2015 | December 31, 2014 | ||||||||||||||
Maturities | Certificates of Deposit Under $ 100,000 | Certificates of Deposit $100,000 or more | Certificates of Deposit Under $100,000 | Certificates of Deposit $100,000 or more | |||||||||||
(Dollars in thousands) | |||||||||||||||
Three months or less | $ | 13,419 | $ | 109,179 | $ | 16,841 | $ | 118,302 | |||||||
Over three and through six months | 5,453 | 31,336 | 6,740 | 29,933 | |||||||||||
Over six and through twelve months | 12,286 | 83,252 | 13,707 | 96,507 | |||||||||||
Over twelve months | 3,957 | 21,444 | 8,433 | 70,259 | |||||||||||
Total | $ | 35,115 | $ | 245,211 | $ | 45,721 | $ | 315,001 |
• | well capitalized |
• | adequately capitalized |
• | undercapitalized |
• | significantly undercapitalized; or |
• | critically undercapitalized |
Applicable Federal Regulatory Requirement | ||||||||||||||||||
At December 31, 2015 | Actual Capital | For Capital Adequacy Purposes | To be Categorized As Well Capitalized | |||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||
(Dollars in thousands) | ||||||||||||||||||
Total Capital to Risk Weighted Assets: | ||||||||||||||||||
Company | $ | 154,884 | 16.8 | % | $ | 73,871 | At least 8.0 | N/A | N/A | |||||||||
Bank | 136,457 | 15.0 | % | 72,672 | At least 8.0 | $ | 90,841 | At least 10.0 | ||||||||||
Common Equity Tier 1 Capital to Risk Weighted Assets: | ||||||||||||||||||
Company | 131,188 | 14.2 | % | 41,552 | At least 4.5 | N/A | N/A | |||||||||||
Bank | 125,018 | 13.8 | % | 40,878 | At least 4.5 | 59,046 | At least 6.5 | |||||||||||
Tier 1 Capital to Risk Weighted Assets: | ||||||||||||||||||
Company | $ | 143,260 | 15.5 | % | $ | 55,403 | At least 6.0 | N/A | N/A | |||||||||
Bank | 125,018 | 13.8 | % | 54,504 | At least 6.0 | $ | 72,672 | At least 8.0 | ||||||||||
Tier 1 Capital to Average Assets: | ||||||||||||||||||
Company | $ | 143,260 | 13.3 | % | $ | 42,984 | At least 4.0 | N/A | N/A | |||||||||
Bank | 125,018 | 11.8 | % | 42,319 | At least 4.0 | $ | 52,899 | At least 5.0 |
Maturity/Obligation by Period | |||||||||||||||||||
Total | Less than 1 year | 1 - 3 years | 3 - 5 years | More than 5 years | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Deposits | $ | 893,840 | $ | 869,005 | $ | 23,904 | $ | 931 | $ | — | |||||||||
FHLB Borrowings | 10,000 | 10,000 | — | — | — | ||||||||||||||
Junior Subordinated Debentures | 17,527 | — | — | — | 17,527 | ||||||||||||||
Operating Leases | 6,943 | 2,302 | 2,794 | 1,847 | — | ||||||||||||||
Total | $ | 928,310 | $ | 881,307 | $ | 26,698 | $ | 2,778 | $ | 17,527 |
Principal Amounts | Interest Rate | Maturity Dates | |||||
(Dollars in thousands) | |||||||
$ | 5,000 | 1.08 | % | September 19, 2016 | |||
5,000 | 0.96 | % | September 30, 2016 |
Original Issue Dates | Principal Amount | Interest Rates | Maturity Dates | ||||
September 2002 | $ | 7,217 | LIBOR plus 3.40% | September 2032 | |||
October 2004 | 10,310 | LIBOR plus 2.00% | October 2034 | ||||
Total | $ | 17,527 |
(1) | Subject to the receipt of prior regulatory approval, we may redeem the Debentures, in whole or in part, without premium or penalty, at any time prior to maturity. |
At December 31, 2015 | |||
(Dollars in thousands) | |||
2016 | $ | 2,302 | |
2017 | 1,467 | ||
2018 | 1,327 | ||
2019 | 1,340 | ||
2020 and beyond | 507 | ||
Total | $ | 6,943 |
At December 31, 2015 | |||
(In thousands) | |||
2016 | $ | 223,767 | |
2017 | 17,884 | ||
2018 | 2,771 | ||
2019 | 789 | ||
2020 and beyond | — | ||
Total | $ | 245,211 |
• | Loan structures, which includes the lien priority, amortization terms and loan tenors; |
• | Collateral requirements, coverage margins and valuation methods; |
• | Underwriting considerations which include recommended due diligence and verification requirements; and |
• | Specific credit performance standards. Examples include minimum debt service coverage ratios, liquidity requirements as well as limits on financial leverage. |
Change in Market Interest Rates (basis points) | Amount ($) | Percent (%) | |||||
(in thousands) | |||||||
+200 | $ | 1,447 | 4.24 | % | |||
+100 | 309 | 0.91 | % | ||||
-100 | 401 | 1.17 | % |
Change in Market Interest Rates (basis points) | Amount ($) | Percent (%) | |||||
(in thousands) | |||||||
+200 | $ | 5,975 | 3.95 | % | |||
+100 | 3,347 | 2.21 | % | ||||
-100 | (5,042 | ) | (3.33 | )% |
ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 8. | FINANCIAL STATEMENTS |
Page No. | |
December 31, | |||||||
2015 | 2014 | ||||||
ASSETS | |||||||
Cash and due from banks | $ | 10,645 | $ | 9,997 | |||
Interest bearing deposits with financial institutions | 103,276 | 167,138 | |||||
Cash and cash equivalents | 113,921 | 177,135 | |||||
Interest-bearing time deposits with financial institutions | 4,665 | 4,668 | |||||
Federal Reserve Bank of San Francisco and Federal Home Loan Bank Stock, at cost | 8,170 | 8,137 | |||||
Securities available for sale, at fair value | 52,249 | 60,926 | |||||
Loans (net of allowances of $12,716 and $13,833, respectively) | 849,733 | 824,197 | |||||
Other real estate owned | 650 | 1,592 | |||||
Accrued interest receivable | 2,266 | 2,436 | |||||
Premises and equipment, net | 1,142 | 1,092 | |||||
Net deferred tax assets | 17,576 | 5,933 | |||||
Other assets | 12,017 | 13,494 | |||||
Total assets | $ | 1,062,389 | $ | 1,099,610 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Deposits: | |||||||
Noninterest-bearing | $ | 249,676 | $ | 237,491 | |||
Interest-bearing | 644,164 | 678,818 | |||||
Total deposits | 893,840 | 916,309 | |||||
Borrowings | 10,000 | 39,500 | |||||
Accrued interest payable | 255 | 222 | |||||
Other liabilities | 6,851 | 6,771 | |||||
Junior subordinated debentures | 17,527 | 17,527 | |||||
Total liabilities | 928,473 | 980,329 | |||||
Commitments and contingencies (Note 15) | |||||||
Shareholders’ equity: | |||||||
Preferred stock, no par value, 2,000,000 shares authorized: | |||||||
Series B Convertible 8.4% Noncumulative Preferred Stock, 300,000 shares authorized; 0 and 112,000 issued and outstanding at December 31, 2015 and 2014, respectively; liquidation preference $100 per share, plus accumulated but undeclared dividends at December 31, 2014 | — | 8,747 | |||||
Series C 8.4% Noncumulative Preferred Stock, 300,000 shares authorized; 0 and 29,308 issued and outstanding at December 31, 2015 and 2014, respectively; liquidation preference $100 per share plus accumulated but undeclared dividends at December 31, 2014 | — | 2,930 | |||||
Common stock, no par value, 85,000,000 shares authorized; 22,820,332 and 19,462,561 shares issued and outstanding at December 31, 2015 and 2014, respectively | 147,202 | 131,181 | |||||
Accumulated deficit | (12,476 | ) | (22,885 | ) | |||
Accumulated other comprehensive loss | (810 | ) | (692 | ) | |||
Total shareholders’ equity | 133,916 | 119,281 | |||||
Total liabilities and shareholders’ equity | $ | 1,062,389 | $ | 1,099,610 |
Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Interest income: | |||||||||||
Loans, including fees | $ | 36,717 | $ | 36,344 | $ | 33,819 | |||||
Securities available for sale and stock | 1,710 | 1,613 | 1,599 | ||||||||
Interest-bearing deposits with financial institutions | 370 | 333 | 233 | ||||||||
Total interest income | 38,797 | 38,290 | 35,651 | ||||||||
Interest expense: | |||||||||||
Deposits | 4,559 | 4,817 | 4,421 | ||||||||
Borrowings | 710 | 1,012 | 896 | ||||||||
Total interest expense | 5,269 | 5,829 | 5,317 | ||||||||
Net interest income | 33,528 | 32,461 | 30,334 | ||||||||
Provision for loan and lease losses | — | 1,500 | 4,505 | ||||||||
Net interest income after provision for loan and lease losses | 33,528 | 30,961 | 25,829 | ||||||||
Noninterest income | |||||||||||
Service fees on deposits and other banking services | 918 | 896 | 801 | ||||||||
Net gains on sale of securities available for sale | — | — | 44 | ||||||||
Net gain on sale of small business administration loans | — | 2,074 | — | ||||||||
Other noninterest income | 1,768 | 1,400 | 348 | ||||||||
Total noninterest income | 2,686 | 4,370 | 1,193 | ||||||||
Noninterest expense | |||||||||||
Salaries and employee benefits | 22,002 | 22,571 | 19,585 | ||||||||
Occupancy | 2,871 | 2,499 | 2,234 | ||||||||
Equipment and depreciation | 1,652 | 1,541 | 1,609 | ||||||||
Data processing | 1,035 | 931 | 786 | ||||||||
FDIC expense | 1,250 | 1,336 | 1,769 | ||||||||
Other real estate owned expense, net | 365 | 1,962 | 3,233 | ||||||||
Professional fees | 2,514 | 2,434 | 2,936 | ||||||||
Business development | 488 | 262 | 340 | ||||||||
Loan related expense | 414 | 532 | 355 | ||||||||
Insurance | 341 | 484 | 578 | ||||||||
Other operating expense | 2,392 | 2,256 | 2,921 | ||||||||
Total noninterest expense | 35,324 | 36,808 | 36,346 | ||||||||
Income (loss) from continuing operations before income taxes | 890 | (1,477 | ) | (9,324 | ) | ||||||
Income tax (benefit) provision | (11,551 | ) | (608 | ) | 5,610 | ||||||
Net income (loss) from continuing operations | 12,441 | (869 | ) | (14,934 | ) | ||||||
Discontinued Operations | |||||||||||
Income (loss) from discontinued operations before income taxes | — | 1,937 | (7,721 | ) | |||||||
Income tax provision (benefit) | — | 711 | (439 | ) | |||||||
Net income (loss) from discontinued operations | — | 1,226 | (7,282 | ) | |||||||
Net income (loss) | 12,441 | 357 | (22,216 | ) | |||||||
Accumulated declared dividends on preferred stock | — | (547 | ) | (538 | ) | ||||||
Accumulated undeclared dividends on preferred stock | — | (616 | ) | (544 | ) | ||||||
Dividends on preferred stock | (927 | ) | — | — | |||||||
Inducements for exchange of the preferred stock | (512 | ) | — | — | |||||||
Net income (loss) allocable to common shareholders | $ | 11,002 | $ | (806 | ) | $ | (23,298 | ) | |||
Basic income (loss) per common share: | |||||||||||
Net income (loss) from continuing operations | $ | 0.54 | $ | (0.11 | ) | $ | (0.88 | ) | |||
Net income (loss) available to common shareholders | $ | 0.54 | $ | (0.04 | ) | $ | (1.28 | ) | |||
Diluted income (loss) per common share: | |||||||||||
Net income (loss) from continuing operations | $ | 0.53 | $ | (0.11 | ) | $ | (0.88 | ) | |||
Net income (loss) available to common shareholders | $ | 0.53 | $ | (0.04 | ) | $ | (1.28 | ) | |||
Weighted average number of common shares outstanding: | |||||||||||
Basic | 20,516,575 | 19,230,913 | 18,240,891 | ||||||||
Diluted | 20,675,279 | 19,230,913 | 18,240,891 |
Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Net income (loss) | $ | 12,441 | $ | 357 | $ | (22,216 | ) | ||||
Other comprehensive income (loss), net of tax: | |||||||||||
Change in unrealized (loss) gain on securities available for sale | (118 | ) | 1,462 | (1,609 | ) | ||||||
Change in net unrealized gain and prior service benefit on supplemental executive retirement plan | — | — | 20 | ||||||||
Total comprehensive income (loss) | $ | 12,323 | $ | 1,819 | $ | (23,805 | ) |
Series A, B, and C Preferred stock | Common stock | Retained earnings (accumulated deficit) | Accumulated other comprehensive income (loss) | Total | |||||||||||||||||||||
Number of shares | Amount | Number of shares | Amount | ||||||||||||||||||||||
Balance at December 31, 2012 | 125 | $ | 10,027 | 16,677 | $ | 112,790 | $ | 624 | $ | (565 | ) | $ | 122,876 | ||||||||||||
Issuance of common stock | — | — | 2,222 | 14,978 | — | — | 14,978 | ||||||||||||||||||
Conversion of Series A Preferred Stock to common stock | — | — | 141 | — | — | — | — | ||||||||||||||||||
Series C Preferred Stock issued as a stock dividend on Series B Preferred Stock | 5 | 538 | — | — | (538 | ) | — | — | |||||||||||||||||
Common stock based compensation expense | — | — | — | 804 | — | — | 804 | ||||||||||||||||||
Common stock options exercised | — | — | 95 | 305 | — | — | 305 | ||||||||||||||||||
Net loss | — | — | — | — | (22,216 | ) | — | (22,216 | ) | ||||||||||||||||
Other comprehensive loss | — | — | — | — | — | (1,589 | ) | (1,589 | ) | ||||||||||||||||
Balance at December 31, 2013 | 130 | $ | 10,565 | 19,135 | $ | 128,877 | $ | (22,130 | ) | $ | (2,154 | ) | $ | 115,158 | |||||||||||
Issuance of restricted stock | — | — | 51 | — | — | — | — | ||||||||||||||||||
Tax effect from vesting of restricted stock | — | — | (12 | ) | (52 | ) | — | — | (52 | ) | |||||||||||||||
Series C Preferred Stock issued as a stock dividend on Series B Preferred Stock | 11 | 1,112 | — | — | (1,112 | ) | — | — | |||||||||||||||||
Common Stock based compensation expense | — | — | — | 1,139 | — | — | 1,139 | ||||||||||||||||||
Common stock options exercised | — | — | 289 | 1,217 | — | — | 1,217 | ||||||||||||||||||
Net income | — | — | — | — | 357 | — | 357 | ||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 1,462 | 1,462 | ||||||||||||||||||
Balance at December 31, 2014 | 141 | $ | 11,677 | 19,463 | $ | 131,181 | $ | (22,885 | ) | $ | (692 | ) | $ | 119,281 | |||||||||||
Exchange of Series B Preferred Stock for common stock | (112 | ) | (8,747 | ) | 2,105 | 8,747 | — | — | — | ||||||||||||||||
Exchange of Series C Preferred Stock for common stock | (35 | ) | (3,523 | ) | 662 | 3,523 | — | — | — | ||||||||||||||||
Dividends on preferred stock exchanged for common stock | — | — | 174 | 927 | (927 | ) | — | — | |||||||||||||||||
Inducement for exchange of preferred stock for common stock | — | — | 68 | 512 | (512 | ) | — | — | |||||||||||||||||
Costs related to the exchange of preferred stock for common stock | — | — | — | (324 | ) | — | — | (324 | ) | ||||||||||||||||
Issuance of restricted stock, net | — | — | 68 | — | — | — | — | ||||||||||||||||||
Tax effect from vesting of restricted stock | — | — | (16 | ) | (109 | ) | — | — | (109 | ) | |||||||||||||||
Series C Preferred Stock issued as a stock dividend on Series B Preferred Stock | 6 | 593 | — | — | (593 | ) | — | — | |||||||||||||||||
Common Stock based compensation expense | — | — | — | 1,234 | — | — | 1,234 | ||||||||||||||||||
Common stock options exercised | — | — | 296 | 1,511 | — | — | 1,511 | ||||||||||||||||||
Net income | — | — | — | — | 12,441 | — | 12,441 | ||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | (118 | ) | (118 | ) | ||||||||||||||||
Balance at December 31, 2015 | — | $ | — | 22,820 | $ | 147,202 | $ | (12,476 | ) | $ | (810 | ) | $ | 133,916 |
Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Cash Flows From Operating Activities: | |||||||||||
Net income (loss) | $ | 12,441 | $ | 357 | $ | (22,216 | ) | ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 525 | 462 | 536 | ||||||||
Provision for loan and lease losses | — | 1,500 | 4,505 | ||||||||
Amortization of premium on securities | 319 | 331 | 462 | ||||||||
Net gains on sales of securities available for sale | — | — | (44 | ) | |||||||
Other | — | (105 | ) | 262 | |||||||
Net amortization of deferred fees and unearned income on loans | (607 | ) | (662 | ) | (386 | ) | |||||
Net (gain) loss on sales of other real estate owned | (44 | ) | 296 | (1,324 | ) | ||||||
Net gain on sale of premises and equipment | (27 | ) | (56 | ) | (14 | ) | |||||
Net gain on sale of small business administration loans | — | (2,074 | ) | — | |||||||
Small business administration loan originations | — | (27,097 | ) | — | |||||||
Proceeds from sale of small business administration loans | — | 29,245 | — | ||||||||
Write down of other real estate owned | 85 | 343 | 1,922 | ||||||||
Stock-based compensation expense | 1,234 | 1,139 | 804 | ||||||||
Tax effect of restricted stock vesting | (109 | ) | (52 | ) | — | ||||||
Changes in operating assets and liabilities: | |||||||||||
Net decrease (increase) in accrued interest receivable | 170 | (419 | ) | 225 | |||||||
Net (increase) decrease in other assets | (561 | ) | (696 | ) | 958 | ||||||
Net (increase) decrease in deferred taxes | (11,562 | ) | 1,620 | 4,165 | |||||||
Net (increase) decrease in income taxes receivable | (49 | ) | (691 | ) | 1,605 | ||||||
Net increase (decrease) in accrued interest payable | 33 | (2,063 | ) | 453 | |||||||
Net increase (decrease) in other liabilities | 80 | (1,304 | ) | 97 | |||||||
Net cash provided by discontinued operations | — | 8,702 | 43,574 | ||||||||
Net cash provided by operating activities | 1,928 | 8,776 | 35,584 | ||||||||
Cash Flows From Investing Activities: | |||||||||||
Net decrease (increase) in interest-bearing time deposits with financial institutions | 3 | (2,245 | ) | — | |||||||
Maturities of and principal payments received on securities available for sale and other stock | 8,409 | 9,403 | 13,256 | ||||||||
Purchase of securities available for sale and other stock | (283 | ) | (1,863 | ) | (1,215 | ) | |||||
Proceeds from sale of securities available for sale and other stock | — | — | 6,689 | ||||||||
Principal payments received on other investments | 2,087 | — | — | ||||||||
Proceeds from sale of other real estate owned | 1,181 | 15,269 | 10,405 | ||||||||
Capitalized cost of other real estate owned | — | (21 | ) | (308 | ) | ||||||
Net increase in loans | (25,209 | ) | (65,668 | ) | (50,245 | ) | |||||
Purchases of premises and equipment | (575 | ) | (334 | ) | (618 | ) | |||||
Proceeds from sale of premises and equipment | 27 | 77 | 71 | ||||||||
Net cash used in investing activities | (14,360 | ) | (45,382 | ) | (21,965 | ) | |||||
Cash Flows From Financing Activities: | |||||||||||
Proceeds from sale of common stock | — | — | 14,978 | ||||||||
Payments for exchange of preferred stock for common stock | (324 | ) | — | — | |||||||
Net (decrease) increase in deposits | (22,469 | ) | 136,084 | (65,170 | ) | ||||||
Proceeds from borrowings | — | — | 35,000 | ||||||||
Payments of borrowings | (29,500 | ) | (30,500 | ) | (20,000 | ) | |||||
Proceeds from exercise of common stock options | 1,511 | 1,217 | 305 | ||||||||
Net cash (used in) provided by financing activities | (50,782 | ) | 106,801 | (34,887 | ) | ||||||
Net (decrease) increase in cash and cash equivalents | (63,214 | ) | 70,195 | (21,268 | ) | ||||||
Cash and Cash Equivalents, beginning of period | 177,135 | 106,940 | 128,208 | ||||||||
Cash and Cash Equivalents, end of period | $ | 113,921 | $ | 177,135 | $ | 106,940 | |||||
Supplementary Cash Flow Information: | |||||||||||
Cash paid for interest on deposits and other borrowings | $ | 5,236 | $ | 7,892 | $ | 4,864 | |||||
Cash paid for income taxes | $ | 58 | $ | — | $ | — |
(Dollars in thousands) | Year Ended December 31, | ||||||||||
2015 | 2014 | 2013 | |||||||||
Non-Cash Investing Activities: | |||||||||||
Transfer of loans into other real estate owned | $ | 280 | $ | 5,188 | $ | 5,276 | |||||
Transfer of loans held for sale to loans held for investment | $ | — | $ | — | $ | 5,319 | |||||
Non-Cash Financing Activities: | |||||||||||
Series C Preferred Stock issued in connection with dividends on Series B Preferred Stock | $ | 593 | $ | 1,112 | $ | 538 | |||||
Exchange of Series B and Series C Preferred Stock for common stock | $ | 13,709 | $ | — | $ | — |
Furniture and equipment | Three to seven years |
Leasehold improvements | Lesser of the lease term or estimated useful life |
Level 1 | Valuation is based upon quoted prices for identical instruments traded in active markets. |
Level 2 | Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. |
Level 3 | Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques. |
At December 31, 2015 | |||||||||||||||
(Dollars in thousands) | Total | Level 1 | Level 2 | Level 3 | |||||||||||
Assets and Liabilities at Fair Value: | |||||||||||||||
Investment securities available for sale | |||||||||||||||
Mortgage backed securities issued by U.S. agencies | $ | 45,154 | $ | — | $ | 45,154 | $ | — | |||||||
Collateralized mortgage obligations issued by non-agency | 632 | — | 632 | — | |||||||||||
Asset-backed securities | 1,480 | — | — | 1,480 | |||||||||||
Mutual funds | 4,983 | 4,983 | — | — | |||||||||||
Total securities available for sale at fair value | $ | 52,249 | $ | 4,983 | $ | 45,786 | $ | 1,480 |
At December 31, 2014 | |||||||||||||||
(Dollars in thousands) | Total | Level 1 | Level 2 | Level 3 | |||||||||||
Assets and Liabilities at Fair Value: | |||||||||||||||
Investment securities available for sale | |||||||||||||||
Mortgage backed securities issued by U.S. agencies | $ | 53,739 | $ | — | $ | 53,739 | $ | — | |||||||
Collateralized mortgage obligations issued by non agency | 777 | — | 777 | — | |||||||||||
Asset-backed securities | 1,650 | — | — | 1,650 | |||||||||||
Mutual funds | 4,760 | 4,760 | — | — | |||||||||||
Total securities available for sale at fair value | $ | 60,926 | $ | 4,760 | $ | 54,516 | $ | 1,650 |
Asset Backed Securities | |||
(Dollars in thousands) | |||
Balance of recurring Level 3 instruments at December 31, 2014 | $ | 1,650 | |
Total gains or losses (realized/unrealized): | |||
Included in other comprehensive income | (114 | ) | |
Settlements | (56 | ) | |
Transfers in and/or out of Level 3 | — | ||
Balance of Level 3 assets at December 31, 2015 | $ | 1,480 |
At December 31, 2015 | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Assets at Fair Value: | (Dollars in thousands) | ||||||||||||||
Impaired loans | $ | 25,857 | $ | — | $ | — | $ | 25,857 | |||||||
Other real estate owned | 650 | — | 650 | — | |||||||||||
Total | $ | 26,507 | $ | — | $ | 650 | $ | 25,857 |
Fair Value Measurement as of December 31, 2015 | Valuation Techniques | Unobservable Inputs | Range | Weighted Average | |||||||
(Dollars in thousands) | |||||||||||
Assets | |||||||||||
Asset-backed security | $ | 1,480 | Third-Party Pricing | Marketability discount | N/A (1) | ||||||
Illiquidity discount | N/A (1) | ||||||||||
Impaired loans | 25,857 | Third-Party Pricing | Appraisals | N/A (2) | |||||||
$ | 27,337 |
(1) | Information is unavailable as valuation was obtained from third-party pricing services. |
(2) | We obtain appraisals for our various properties included within impaired loans which primarily rely upon market comparisons. These market comparisons support our assumption that the carrying value of the respective loans either requires or does not require additional impairment. |
Estimated Fair Value | ||||||||||||||||||||||||||||||||||||
At December 31, 2015 | At December 31, 2014 | |||||||||||||||||||||||||||||||||||
Carrying Value | Total | Level 1 | Level 2 | Level 3 | Carrying Value | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 113,921 | $ | 113,921 | $ | 113,921 | $ | — | $ | — | $ | 177,135 | $ | 177,135 | 177,135 | — | — | |||||||||||||||||||
Interest-bearing deposits with financial institutions | 4,665 | 4,665 | 4,665 | — | — | 4,668 | 4,668 | 4,668 | — | — | ||||||||||||||||||||||||||
Federal Reserve Bank of San Francisco and Federal Home Loan Bank stock | 8,170 | 8,170 | 8,170 | — | — | 8,137 | 8,137 | 8,137 | — | — | ||||||||||||||||||||||||||
Loans, net | 849,733 | 846,690 | — | — | 846,690 | 824,197 | 818,547 | — | — | 818,547 | ||||||||||||||||||||||||||
Accrued interest receivable | 2,266 | 2,266 | 2,266 | — | — | 2,436 | 2,436 | 2,436 | — | — | ||||||||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||||||||||||||
Noninterest bearing deposits | 249,676 | 249,676 | 249,676 | — | — | 237,491 | 237,491 | 237,491 | — | — | ||||||||||||||||||||||||||
Interest-bearing deposits | 644,164 | 643,935 | — | 643,935 | — | 678,818 | 678,890 | — | 678,890 | — | ||||||||||||||||||||||||||
Borrowings | 10,000 | 9,999 | — | 9,999 | — | 39,500 | 39,418 | — | 39,418 | — | ||||||||||||||||||||||||||
Junior subordinated debentures | 17,527 | 17,527 | — | 17,527 | — | 17,527 | 17,527 | — | 17,527 | — | ||||||||||||||||||||||||||
Accrued interest payable | 255 | 255 | 255 | — | — | 222 | 222 | 222 | — | — |
(Dollars in thousands) | December 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||||||
Amortized Cost | Gross Unrealized | Estimated Fair Value | Amortized Cost | Gross Unrealized | Estimated Fair Value | ||||||||||||||||||||||||||
Gain | Loss | Gain | Loss | ||||||||||||||||||||||||||||
Securities Available for Sale | |||||||||||||||||||||||||||||||
Mortgage backed securities issued by U.S. Agencies(1) | $ | 46,126 | $ | 4 | $ | (976 | ) | $ | 45,154 | $ | 54,653 | $ | 26 | $ | (940 | ) | $ | 53,739 | |||||||||||||
Collateralized mortgage obligations issued by non agencies(1) | 646 | — | (14 | ) | 632 | 790 | — | (13 | ) | 777 | |||||||||||||||||||||
Asset backed security(2) | 2,027 | — | (547 | ) | 1,480 | 2,083 | — | (433 | ) | 1,650 | |||||||||||||||||||||
Mutual funds(3) | 5,000 | 33 | (50 | ) | 4,983 | 4,750 | 45 | (35 | ) | 4,760 | |||||||||||||||||||||
Total | $ | 53,799 | $ | 37 | $ | (1,587 | ) | $ | 52,249 | $ | 62,276 | $ | 71 | $ | (1,421 | ) | $ | 60,926 |
(1) | Secured by closed-end first liens on 1-4 family residential mortgages. |
(2) | Comprised of a security that represents an interest in a pool of trust preferred securities issued by U.S.-based banks and insurance companies. |
(3) | Consists primarily of mutual fund investments in closed-end first lien 1-4 family residential mortgages. |
At December 31, 2015 Maturing in | |||||||||||||||||||
(Dollars in thousands) | One year or less | Over one year through five years | Over five years through ten years | Over ten Years | Total | ||||||||||||||
Securities available for sale, amortized cost | $ | 7,761 | $ | 26,178 | $ | 14,164 | $ | 5,696 | $ | 53,799 | |||||||||
Securities available for sale, estimated fair value | 7,599 | 25,716 | 13,857 | 5,077 | 52,249 | ||||||||||||||
Weighted average yield | 1.63 | % | 1.60 | % | 1.60 | % | 2.05 | % | 1.65 | % |
At December 31, 2014 Maturing in | |||||||||||||||||||
(Dollars in thousands) | One year or less | Over one year through five years | Over five years through ten years | Over ten Years | Total | ||||||||||||||
Securities available for sale, amortized cost | $ | 7,483 | $ | 29,008 | $ | 17,448 | $ | 8,337 | $ | 62,276 | |||||||||
Securities available for sale, estimated fair value | 7,359 | 28,614 | 17,148 | 7,805 | 60,926 | ||||||||||||||
Weighted average yield | 1.54 | % | 1.64 | % | 1.60 | % | 1.83 | % | 1.64 | % |
Securities with Unrealized Loss at December 31, 2015 | |||||||||||||||||||||||
Less than 12 months | 12 months or more | Total | |||||||||||||||||||||
(Dollars in thousands) | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | |||||||||||||||||
Residential mortgage backed securities issued by U.S. Agencies | $ | 20,597 | $ | (197 | ) | $ | 23,865 | $ | (779 | ) | $ | 44,462 | $ | (976 | ) | ||||||||
Non-agency collateralized mortgage obligations | — | — | 631 | (14 | ) | 631 | (14 | ) | |||||||||||||||
Asset backed security | — | — | 1,480 | (547 | ) | 1,480 | (547 | ) | |||||||||||||||
Mutual funds | 1,728 | (23 | ) | 973 | (27 | ) | 2,701 | (50 | ) | ||||||||||||||
Total | $ | 22,325 | $ | (220 | ) | $ | 26,949 | $ | (1,367 | ) | $ | 49,274 | $ | (1,587 | ) |
Securities With Unrealized Loss as of December 31, 2014 | |||||||||||||||||||||||
Less than 12 months | 12 months or more | Total | |||||||||||||||||||||
(Dollars In thousands) | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | |||||||||||||||||
Residential mortgage backed securities issued by U.S. Agencies | $ | — | $ | — | $ | 50,697 | $ | (940 | ) | $ | 50,697 | $ | (940 | ) | |||||||||
Non-agency collateralized mortgage obligations | — | — | 776 | (13 | ) | 776 | (13 | ) | |||||||||||||||
Asset backed security | — | — | 1,651 | (433 | ) | 1,651 | (433 | ) | |||||||||||||||
Mutual funds | 2,464 | (35 | ) | — | — | 2,464 | (35 | ) | |||||||||||||||
Total | $ | 2,464 | $ | (35 | ) | $ | 53,124 | $ | (1,386 | ) | $ | 55,588 | $ | (1,421 | ) |
(Dollars in thousands) | Gross Other- Than- Temporary Impairments | Other-Than- Temporary Impairments Included in Other Comprehensive Loss | Net Other-Than- Temporary Impairments Included in Retained Earnings (Deficit) | ||||||||
Balance – December 31, 2013 | $ | (1,459 | ) | $ | (906 | ) | $ | (553 | ) | ||
Changes in market value on securities for which an OTTI was previously recognized | 455 | 455 | — | ||||||||
Principal received on OTTI security | 18 | 18 | — | ||||||||
Balance – December 31, 2014 | $ | (986 | ) | $ | (433 | ) | $ | (553 | ) | ||
Change in market value on a security for which an OTTI was previously recognized | (153 | ) | (153 | ) | — | ||||||
Principal received on OTTI security | 52 | 52 | — | ||||||||
Balance – December 31, 2015 | $ | (1,087 | ) | $ | (534 | ) | $ | (553 | ) |
December 31, | |||||||
2015 | 2014 | ||||||
(Dollars in thousands) | |||||||
Investments accounted for under the equity method | $ | — | $ | 2,081 |
December 31, 2015 | December 31, 2014 | ||||||||||||
(Dollars in thousands) | Amount | Percent | Amount | Percent | |||||||||
Commercial loans | $ | 347,300 | 40.3 | % | $ | 301,746 | 36.0 | % | |||||
Commercial real estate loans – owner occupied | 195,554 | 22.7 | % | 212,515 | 25.4 | % | |||||||
Commercial real estate loans – all other | 146,641 | 17.0 | % | 146,676 | 17.5 | % | |||||||
Residential mortgage loans – multi-family | 81,487 | 9.5 | % | 95,276 | 11.4 | % | |||||||
Residential mortgage loans – single family | 52,072 | 6.0 | % | 64,326 | 7.7 | % | |||||||
Land development loans | 10,001 | 1.2 | % | 7,745 | 0.9 | % | |||||||
Consumer loans | 28,663 | 3.3 | % | 9,687 | 1.2 | % | |||||||
Gross loans | 861,718 | 100.0 | % | 837,971 | 100.0 | % | |||||||
Deferred fee (income) costs, net | 731 | 59 | |||||||||||
Allowance for loan and lease losses | (12,716 | ) | (13,833 | ) | |||||||||
Loans, net | $ | 849,733 | $ | 824,197 |
• | Pass: Loans classified as pass include current loans performing in accordance with contractual terms, installment/consumer loans that are not individually risk rated, and loans which exhibit certain risk factors that require greater than usual monitoring by management. |
• | Special Mention: Loans classified as special mention, while generally not delinquent, have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the Bank’s credit position at some future date. |
• | Substandard: Loans classified as substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. There is a distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. |
• | Doubtful: Loans classified as doubtful have all the weaknesses inherent in a substandard loan, and may also be at delinquency status and have defined weaknesses based on currently existing facts, conditions and values making collection or liquidation in full highly questionable and improbable. |
(Dollars in thousands) | Commercial | Real Estate | Land Development | Consumer and Single Family Mortgages | Total | ||||||||||||||
ALLL in the year ended December 31, 2015: | |||||||||||||||||||
Balance at beginning of year | $ | 7,670 | $ | 5,133 | $ | 296 | $ | 734 | $ | 13,833 | |||||||||
Charge offs | (2,643 | ) | — | (85 | ) | (199 | ) | (2,927 | ) | ||||||||||
Recoveries | 1,798 | 4 | — | 8 | 1,810 | ||||||||||||||
Provision | (186 | ) | (28 | ) | 71 | 143 | — | ||||||||||||
Balance at end of year | $ | 6,639 | $ | 5,109 | $ | 282 | $ | 686 | $ | 12,716 | |||||||||
ALLL in the year ended December 31, 2014: | |||||||||||||||||||
Balance at beginning of year | $ | 5,812 | $ | 4,517 | $ | 165 | $ | 864 | $ | 11,358 | |||||||||
Charge offs | (551 | ) | — | — | (102 | ) | (653 | ) | |||||||||||
Recoveries | 1,467 | 76 | — | 85 | 1,628 | ||||||||||||||
Provision | 942 | 540 | 131 | (113 | ) | 1,500 | |||||||||||||
Balance at end of year | $ | 7,670 | $ | 5,133 | $ | 296 | $ | 734 | $ | 13,833 | |||||||||
ALLL in the year ended December 31, 2013: | |||||||||||||||||||
Balance at beginning of year | $ | 6,340 | $ | 3,487 | $ | 248 | $ | 806 | $ | 10,881 | |||||||||
Charge offs | (5,945 | ) | (308 | ) | (5 | ) | (200 | ) | (6,458 | ) | |||||||||
Recoveries | 2,337 | 5 | 54 | 34 | 2,430 | ||||||||||||||
Provision | 3,080 | 1,333 | (132 | ) | 224 | 4,505 | |||||||||||||
Balance at end of year | $ | 5,812 | $ | 4,517 | $ | 165 | $ | 864 | $ | 11,358 |
(Dollars in thousands) | Commercial | Real Estate | Land Development | Consumer and Single Family Mortgages | Total | ||||||||||||||
ALLL balance at December 31, 2015 related to: | |||||||||||||||||||
Loans individually evaluated for impairment | $ | — | $ | 484 | $ | — | $ | — | $ | 484 | |||||||||
Loans collectively evaluated for impairment | $ | 6,639 | $ | 4,625 | $ | 282 | $ | 686 | $ | 12,232 | |||||||||
Total | $ | 6,639 | $ | 5,109 | $ | 282 | $ | 686 | $ | 12,716 | |||||||||
Loans balance at December 31, 2015 related to: | |||||||||||||||||||
Loans individually evaluated for impairment | $ | 12,431 | $ | 11,107 | $ | 1,618 | $ | 701 | $ | 25,857 | |||||||||
Loans collectively evaluated for impairment | 334,869 | 412,575 | 8,383 | 80,034 | 835,861 | ||||||||||||||
Total | $ | 347,300 | $ | 423,682 | $ | 10,001 | $ | 80,735 | $ | 861,718 | |||||||||
ALLL balance at December 31, 2014 related to: | |||||||||||||||||||
Loans individually evaluated for impairment | $ | 995 | $ | 537 | $ | — | $ | — | $ | 1,532 | |||||||||
Loans collectively evaluated for impairment | $ | 6,675 | $ | 4,596 | $ | 296 | $ | 734 | $ | 12,301 | |||||||||
Total | $ | 7,670 | $ | 5,133 | $ | 296 | $ | 734 | $ | 13,833 | |||||||||
Loans balance at December 31, 2014 related to: | |||||||||||||||||||
Loans individually evaluated for impairment | $ | 21,117 | $ | 7,536 | $ | 2,111 | $ | 4,373 | $ | 35,137 | |||||||||
Loans collectively evaluated for impairment | 280,629 | 446,931 | 5,634 | 69,640 | 802,834 | ||||||||||||||
Total | $ | 301,746 | $ | 454,467 | $ | 7,745 | $ | 74,013 | $ | 837,971 |
(Dollars in thousands) | 30-59 Days Past Due | 60-89 Days Past Due | 90 Days and Greater | Total Past Due | Current | Total Loans Outstanding | Loans >90 Days and Accruing | ||||||||||||||||||||
At December 31, 2015 | |||||||||||||||||||||||||||
Commercial loans | $ | 2,010 | $ | 1,008 | $ | 8,766 | $ | 11,784 | $ | 335,516 | $ | 347,300 | $ | — | |||||||||||||
Commercial real estate loans – owner-occupied | — | — | 797 | 797 | 194,757 | 195,554 | — | ||||||||||||||||||||
Commercial real estate loans – all other | 316 | — | 5,207 | 5,523 | 141,118 | 146,641 | — | ||||||||||||||||||||
Residential mortgage loans – multi-family | — | — | — | — | 81,487 | 81,487 | — | ||||||||||||||||||||
Residential mortgage loans – single family | — | — | 535 | 535 | 51,537 | 52,072 | — | ||||||||||||||||||||
Land development loans | — | — | 1,618 | 1,618 | 8,383 | 10,001 | — | ||||||||||||||||||||
Consumer loans | — | — | — | — | 28,663 | 28,663 | — | ||||||||||||||||||||
Total(1) | $ | 2,326 | $ | 1,008 | $ | 16,923 | $ | 20,257 | $ | 841,461 | $ | 861,718 | $ | — | |||||||||||||
At December 31, 2014 | |||||||||||||||||||||||||||
Commercial loans | $ | 553 | $ | — | $ | — | $ | 553 | $ | 301,193 | $ | 301,746 | $ | — | |||||||||||||
Commercial real estate loans – owner-occupied | — | — | — | — | 212,515 | 212,515 | — | ||||||||||||||||||||
Commercial real estate loans – all other | 20 | — | 2,117 | 2,137 | 144,539 | 146,676 | — | ||||||||||||||||||||
Residential mortgage loans – multi-family | — | — | — | — | 95,276 | 95,276 | — | ||||||||||||||||||||
Residential mortgage loans – single family | 835 | — | 285 | 1,120 | 63,206 | 64,326 | — | ||||||||||||||||||||
Land development loans | — | — | 364 | 364 | 7,381 | 7,745 | — | ||||||||||||||||||||
Consumer loans | 17 | — | — | 17 | 9,670 | 9,687 | — | ||||||||||||||||||||
Total | $ | 1,425 | $ | — | $ | 2,766 | $ | 4,191 | $ | 833,780 | $ | 837,971 | $ | — |
December 31, | |||||||
2015 | 2014 | ||||||
(Dollars in thousands) | |||||||
Nonaccrual loans: | |||||||
Commercial loans | $ | 12,284 | $ | 16,182 | |||
Commercial real estate loans – owner occupied | 3,815 | 2,171 | |||||
Commercial real estate loans – all other | 6,268 | 2,117 | |||||
Residential mortgage loans - multi family | 447 | — | |||||
Residential mortgage loans – single family | 701 | 1,472 | |||||
Land development loans | 1,618 | 2,111 | |||||
Total(1) | $ | 25,133 | $ | 24,053 |
December 31, | |||||||||||
(Dollars in thousands) | 2015 | 2014 | Increase (Decrease) | ||||||||
Pass: | |||||||||||
Commercial loans | $ | 329,192 | $ | 280,102 | $ | 49,090 | |||||
Commercial real estate loans – owner occupied | 189,944 | 208,687 | (18,743 | ) | |||||||
Commercial real estate loans – all other | 127,702 | 128,974 | (1,272 | ) | |||||||
Residential mortgage loans – multi family | 81,040 | 94,817 | (13,777 | ) | |||||||
Residential mortgage loans – single family | 51,371 | 62,854 | (11,483 | ) | |||||||
Land development loans | 8,383 | 5,634 | 2,749 | ||||||||
Consumer loans | 28,663 | 9,687 | 18,976 | ||||||||
Total pass loans | $ | 816,295 | $ | 790,755 | $ | 25,540 | |||||
Special Mention: | |||||||||||
Commercial loans | $ | 5,626 | $ | 351 | $ | 5,275 | |||||
Commercial real estate loans – owner occupied | 177 | — | 177 | ||||||||
Commercial real estate loans – all other | 9,452 | 6,588 | 2,864 | ||||||||
Residential mortgage loans – multi family | — | 459 | (459 | ) | |||||||
Total special mention loans | $ | 15,255 | $ | 7,398 | $ | 7,857 | |||||
Substandard: | |||||||||||
Commercial loans | $ | 12,482 | $ | 19,655 | $ | (7,173 | ) | ||||
Commercial real estate loans – owner occupied | 5,433 | 3,828 | 1,605 | ||||||||
Commercial real estate loans – all other | 9,487 | 11,114 | (1,627 | ) | |||||||
Residential mortgage loans – multi family | 447 | — | 447 | ||||||||
Residential mortgage loans – single family | 701 | 1,472 | (771 | ) | |||||||
Land development loans | 1,618 | 2,111 | (493 | ) | |||||||
Total substandard loans | $ | 30,168 | $ | 38,180 | $ | (8,012 | ) | ||||
Doubtful: | |||||||||||
Commercial loans | $ | — | $ | 1,638 | $ | (1,638 | ) | ||||
Total doubtful loans | $ | — | $ | 1,638 | $ | (1,638 | ) | ||||
Total Loans: | $ | 861,718 | $ | 837,971 | $ | 23,747 |
December 31, | |||||||
(Dollars in thousands) | 2015 | 2014 | |||||
Impaired loans: | |||||||
Nonaccruing loans | $ | 5,063 | $ | 18,118 | |||
Nonaccruing restructured loans | 20,070 | 5,935 | |||||
Accruing restructured loans (1) | 724 | 11,084 | |||||
Accruing impaired loans | — | — | |||||
Total impaired loans | $ | 25,857 | $ | 35,137 | |||
Impaired loans less than 90 days delinquent and included in total impaired loans | $ | 6,584 | $ | 32,371 |
(1) | See "Troubled Debt Restructurings" below for a description of accruing restructured loans at December 31, 2015 and December 31, 2014. |
December 31, 2015 | December 31, 2014 | ||||||||||||||||||||||
Recorded Investment | Unpaid Principal Balance | Related Allowance (1) | Recorded Investment | Unpaid Principal Balance | Related Allowance (1) | ||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
No allowance recorded: | |||||||||||||||||||||||
Commercial loans | $ | 12,431 | $ | 14,137 | $ | — | $ | 18,563 | $ | 18,839 | $ | — | |||||||||||
Commercial real estate loans – owner occupied | 2,371 | 2,515 | — | 2,171 | 2,440 | — | |||||||||||||||||
Commercial real estate loans – all other | 6,668 | 6,806 | — | 5,365 | 5,423 | — | |||||||||||||||||
Residential mortgage loans – multi-family | 447 | 450 | — | — | — | — | |||||||||||||||||
Residential mortgage loans – single family | 701 | 1,037 | — | 4,373 | 4,610 | — | |||||||||||||||||
Land development loans | 1,618 | 1,732 | — | 2,111 | 2,146 | — | |||||||||||||||||
Total | 24,236 | 26,677 | — | 32,583 | 33,458 | — | |||||||||||||||||
With allowance recorded: | |||||||||||||||||||||||
Commercial loans | $ | — | $ | — | $ | — | $ | 2,554 | $ | 2,983 | $ | 1,532 | |||||||||||
Commercial real estate loans – owner occupied | 1,621 | 1,872 | 484 | — | — | — | |||||||||||||||||
Total | 1,621 | 1,872 | 484 | 2,554 | 2,983 | 1,532 | |||||||||||||||||
Total | |||||||||||||||||||||||
Commercial loans | $ | 12,431 | $ | 14,137 | $ | — | $ | 21,117 | $ | 21,822 | $ | 1,532 | |||||||||||
Commercial real estate loans – owner occupied | 3,992 | 4,387 | 484 | 2,171 | 2,440 | — | |||||||||||||||||
Commercial real estate loans – all other | 6,668 | 6,806 | — | 5,365 | 5,423 | — | |||||||||||||||||
Residential mortgage loans – multi-family | 447 | 450 | — | — | — | — | |||||||||||||||||
Residential mortgage loans – single family | 701 | 1,037 | — | 4,373 | 4,610 | — | |||||||||||||||||
Land development loans | 1,618 | 1,732 | — | 2,111 | 2,146 | — | |||||||||||||||||
Total | 25,857 | 28,549 | 484 | 35,137 | 36,441 | 1,532 |
(1) | When the discounted cash flows, collateral value or market price equals or exceeds the recorded investment in the loan, then specific reserves are not required to be set aside for the loan within the ALLL. This typically occurs when the impaired loans have been partially charged-off and/or there have been interest payments received and applied to the balance of the principal outstanding. |
Year Ended December 31, | |||||||||||||||||||||||
2015 | 2014 | 2013 | |||||||||||||||||||||
Average Balance | Interest Income Recognized | Average Balance | Interest Income Recognized | Average Balance | Interest Income Recognized | ||||||||||||||||||
No allowance recorded: | |||||||||||||||||||||||
Commercial loans | $ | 13,455 | $ | 178 | $ | 12,590 | $ | 782 | $ | 8,691 | $ | 496 | |||||||||||
Commercial real estate loans – owner occupied | 2,494 | 115 | 2,088 | 18 | 3,121 | — | |||||||||||||||||
Commercial real estate loans – all other | 6,256 | 337 | 6,442 | 290 | 12,119 | 188 | |||||||||||||||||
Residential mortgage loans – multi-family | 451 | 13 | — | — | — | — | |||||||||||||||||
Residential mortgage loans – single family | 3,137 | — | 3,732 | 148 | 1,716 | 187 | |||||||||||||||||
Land development loans | 1,665 | 7 | 1,246 | 91 | 302 | 12 | |||||||||||||||||
Total | 27,458 | 650 | 26,098 | 1,329 | 25,949 | 883 | |||||||||||||||||
With allowance recorded: | |||||||||||||||||||||||
Commercial loans | 528 | — | 2,298 | 34 | — | — | |||||||||||||||||
Commercial real estate loans – owner occupied | 815 | — | 121 | — | — | — | |||||||||||||||||
Total | 1,343 | — | 2,419 | 34 | — | — | |||||||||||||||||
Total | |||||||||||||||||||||||
Commercial loans | 13,983 | 178 | 14,888 | 816 | 8,691 | 496 | |||||||||||||||||
Commercial real estate loans – owner occupied | 3,309 | 115 | 2,209 | 18 | 3,121 | — | |||||||||||||||||
Commercial real estate loans – all other | 6,256 | 337 | 6,442 | 290 | 12,119 | 188 | |||||||||||||||||
Residential mortgage loans – multi-family | 451 | 13 | — | — | — | — | |||||||||||||||||
Residential mortgage loans – single family | 3,137 | — | 3,732 | 148 | 1,716 | 187 | |||||||||||||||||
Land development loans | 1,665 | 7 | 1,246 | 91 | 302 | 12 | |||||||||||||||||
Total | $ | 28,801 | $ | 650 | $ | 28,517 | $ | 1,363 | $ | 25,949 | $ | 883 |
Year Ended December 31, | ||||||||||||||||||||||||||||||||
2015 | 2014 | 2013 | ||||||||||||||||||||||||||||||
(Dollars in thousands) | Number of loans | Pre-Modification Outstanding Recorded Investment | Post-Modification Outstanding Recorded Investment | Number of loans | Pre-Modification Outstanding Recorded Investment | Post-Modification Outstanding Recorded Investment | Number of loans | Pre-Modification Outstanding Recorded Investment | Post-Modification Outstanding Recorded Investment | |||||||||||||||||||||||
Performing | ||||||||||||||||||||||||||||||||
Commercial loans | 2 | $ | 147 | $ | 147 | — | $ | — | $ | — | 1 | $ | 177 | $ | 177 | |||||||||||||||||
Commercial real estate - owner occupied | 1 | 177 | 177 | — | — | — | — | — | — | |||||||||||||||||||||||
Commercial real estate – all other | 1 | 400 | 400 | — | — | — | 1 | 613 | 303 | |||||||||||||||||||||||
4 | 724 | 724 | — | — | — | 2 | 790 | 480 | ||||||||||||||||||||||||
Nonperforming | ||||||||||||||||||||||||||||||||
Commercial loans | 3 | 2,634 | 2,634 | 3 | 2,716 | 2,672 | 3 | 1,357 | 1,118 | |||||||||||||||||||||||
Commercial real estate – owner occupied | 2 | 1,778 | 1,778 | — | — | — | — | — | — | |||||||||||||||||||||||
Commercial real estate – all other | 1 | 4,114 | 4,114 | — | — | — | — | — | — | |||||||||||||||||||||||
Residential mortgage loans – single family | — | — | — | 1 | 244 | 242 | — | — | — | |||||||||||||||||||||||
Land development loans | — | — | — | — | — | — | 1 | 439 | 391 | |||||||||||||||||||||||
6 | 8,526 | 8,526 | 4 | 2,960 | 2,914 | 4 | 1,796 | 1,509 | ||||||||||||||||||||||||
Total troubled debt restructurings | 10 | $ | 9,250 | $ | 9,250 | 4 | $ | 2,960 | $ | 2,914 | 6 | $ | 2,586 | $ | 1,989 |
Year Ended December 31, | ||||||||||||||||||||
2015 | 2014 | 2013 | ||||||||||||||||||
Number of loans | Recorded Investment | Number of loans | Recorded Investment | Number of loans | Recorded Investment | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Commercial loans | — | $ | — | — | $ | — | 2 | $ | 65 | |||||||||||
Commercial real estate – all other | 1 | 4,114 | — | — | — | — | ||||||||||||||
Total | 1 | $ | 4,114 | — | $ | — | 2 | $ | 65 |
(Dollars in thousands) | December 31, | ||||||
2015 | 2014 | ||||||
Furniture and equipment | $ | 8,371 | $ | 8,380 | |||
Leasehold improvements | 1,910 | 2,036 | |||||
10,281 | 10,416 | ||||||
Accumulated depreciation and amortization | (9,139 | ) | (9,324 | ) | |||
Total | $ | 1,142 | $ | 1,092 |
(Dollars in thousands) | At December 31, 2015 | ||
2016 | $ | 255,491 | |
2017 | 20,798 | ||
2018 | 3,106 | ||
2019 | 919 | ||
2020 and beyond | 12 | ||
Total | $ | 280,326 |
December 31, | |||||||
(Dollars in thousands) | 2015 | 2014 | |||||
FHLB advances—short-term | $ | 10,000 | $ | 29,500 | |||
FHLB advances—long-term | — | 10,000 | |||||
$ | 10,000 | $ | 39,500 |
Principal Amounts | Interest Rate | Maturity Dates | ||
(Dollars in thousands) | ||||
$5,000 | 1.08% | September 19, 2016 | ||
5,000 | 0.96% | September 30, 2016 |
Original Issue Dates | Principal Amount | Interest Rate(1) | Maturity Dates | ||||
(In thousands) | |||||||
September 2002 | $ | 7,217 | LIBOR plus 3.40% | September 2032 | |||
October 2004 | 10,310 | LIBOR plus 2.00% | October 2034 | ||||
Total | $ | 17,527 |
(1) | Interest rate resets quarterly. |
Year Ended December 31, | |||||||
(Dollars in thousands) | 2015 | 2014(1) | |||||
Beginning balance | $ | 96 | $ | 653 | |||
New loans granted | — | 124 | |||||
Principal repayments | (96 | ) | (111 | ) | |||
Transfers out(2) | — | (570 | ) | ||||
Ending balance | $ | — | $ | 96 |
(1) | No loans made to executive officers who are not also directors. |
(2) | Related to loans that no longer meet the qualifications of a related party. |
(Dollars in thousands) | 2015 | 2014 | 2013 | ||||||||
Current taxes: | |||||||||||
Federal | $ | 5 | $ | 7 | $ | 957 | |||||
State | 4 | — | 289 | ||||||||
Total current taxes | 9 | 7 | 1,246 | ||||||||
Deferred taxes: | |||||||||||
Federal | (8,490 | ) | (455 | ) | 3,150 | ||||||
State | (3,070 | ) | (160 | ) | 1,214 | ||||||
Total deferred taxes | (11,560 | ) | (615 | ) | 4,364 | ||||||
Total income tax (benefit) expense | $ | (11,551 | ) | $ | (608 | ) | $ | 5,610 |
Year Ended December 31, | ||||||||
2015 | 2014 | 2013 | ||||||
Federal income tax based on statutory rate | 34.0 | % | 34.0 | % | 34.0 | % | ||
State franchise tax net of federal income tax benefit | 7.1 | 6.3 | 7.0 | |||||
Permanent differences | — | (4.1 | ) | (0.6 | ) | |||
Other | 3.9 | 2.1 | 0.2 | |||||
Valuation allowance | (1,343.5 | ) | 2.9 | (100.8 | ) | |||
Total income tax (benefit) expense | (1,298.5 | )% | 41.2 | % | (60.2 | )% |
(Dollars in thousands) | December 31, | ||||||
2015 | 2014 | ||||||
Deferred tax asset: | |||||||
Allowance for loan and lease losses | $ | 5,253 | $ | 5,740 | |||
Other than temporary impairment on securities | 78 | 78 | |||||
Deferred compensation | 1,098 | 1,159 | |||||
Other accrued expenses | 1,421 | 1,196 | |||||
Charitable contributions | 208 | 220 | |||||
Reserve for unfunded commitments | 113 | 113 | |||||
Tax credits | 158 | 161 | |||||
Net operating loss carry forward | 8,313 | 8,254 | |||||
Stock based compensation | 651 | 587 | |||||
Depreciation and amortization | 177 | 208 | |||||
Unrealized losses on securities and deferred compensation | 637 | 556 | |||||
Total deferred tax assets | 18,107 | 18,272 | |||||
Deferred tax liabilities: | |||||||
State taxes | (230 | ) | (230 | ) | |||
Other | (301 | ) | (25 | ) | |||
Total deferred tax liabilities | (531 | ) | (255 | ) | |||
Valuation allowance | — | (12,084 | ) | ||||
Total net deferred tax asset | $ | 17,576 | $ | 5,933 |
Year Ended December 31, | |||||||||||
Assumptions with respect to: | 2015 | 2014 | 2013 | ||||||||
Expected volatility | 44 | % | 44 | % | 44 | % | |||||
Risk-free interest rate | 1.82 | % | 2.15 | % | 1.72 | % | |||||
Expected dividends | — | % | 0.61 | % | 1.00 | % | |||||
Expected term (years) | 6.0 | 6.7 | 3.1-7.4 | ||||||||
Weighted average fair value of options granted during period | $ | 3.13 | $ | 2.84 | $ | 2.56 |
Number of Shares | Weighted- Average Exercise Price Per Share | Number of Shares | Weighted- Average Exercise Price Per Share | Number of Shares | Weighted- Average Exercise Price Per Share | |||||||||||||||
2015 | 2014 | 2013 | ||||||||||||||||||
Outstanding – January 1, | 1,257,390 | $ | 6.51 | 1,821,000 | $ | 6.88 | 1,566,965 | $ | 6.90 | |||||||||||
Granted | 112,828 | 7.09 | 58,970 | 6.38 | 632,000 | 6.15 | ||||||||||||||
Exercised | (296,100 | ) | 5.15 | (288,892 | ) | 4.24 | (94,244 | ) | 3.23 | |||||||||||
Forfeited/Canceled | (235,422 | ) | 9.59 | (333,688 | ) | 10.47 | (283,721 | ) | 6.66 | |||||||||||
Outstanding – December 31, | 838,696 | 6.20 | 1,257,390 | 6.51 | 1,821,000 | 6.88 | ||||||||||||||
Options Exercisable – December 31, | 622,770 | 6.06 | 788,886 | 6.69 | 1,035,434 | 7.50 | ||||||||||||||
Options Vested – December 31, | 622,770 | $ | 6.06 | 788,886 | $ | 6.69 | 1,035,434 | $ | 7.50 |
Options Outstanding as of December 31, 2015 | Options Exercisable as of December 31, 2015(1) | |||||||||||||||||
Vested | Unvested | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | Shares | Weighted Average Exercise Price | |||||||||||||
$2.97 – $5.99 | 186,981 | 2,600 | $ | 3.92 | 4.96 | 186,981 | $ | 3.91 | ||||||||||
$6.00 – $9.99 | 410,989 | 213,326 | 6.48 | 7.72 | 410,989 | 6.39 | ||||||||||||
$10.00 – $17.99 | 14,800 | — | 15.93 | 0.87 | 14,800 | 15.93 | ||||||||||||
$18.00 – $18.84 | 10,000 | — | 18.00 | 0.11 | 10,000 | 18.00 | ||||||||||||
622,770 | 215,926 | $ | 6.20 | 6.89 | 622,770 | $ | 6.06 |
(1) | The weighted average remaining contractual life of the options that were exercisable as of December 31, 2015 was 6.38 years. |
For the year ended | ||||||||||||||||||||
2015 | 2014 | 2013 | ||||||||||||||||||
Number of Shares Subject to Options | Weighted Average Grant Date Fair Value | Number of Shares Subject to Options | Weighted Average Grant Date Fair Value | Number of Shares Subject to Options | Weighted Average Grant Date Fair Value | |||||||||||||||
Unvested at the beginning of the year | 468,504 | $ | 2.68 | 785,566 | $ | 2.57 | 635,706 | $ | 2.30 | |||||||||||
Granted | 112,828 | 3.13 | 58,970 | 2.84 | 632,000 | 2.56 | ||||||||||||||
Vested | (248,406 | ) | 2.63 | (338,558 | ) | 2.45 | (290,766 | ) | 2.06 | |||||||||||
Forfeited/Canceled | (117,000 | ) | 2.78 | (37,474 | ) | 2.57 | (191,374 | ) | 2.38 | |||||||||||
Unvested at the end of the year | 215,926 | $ | 2.93 | 468,504 | $ | 2.68 | 785,566 | $ | 2.57 |
For the year ended | |||||||||||||
2015 | 2014 | ||||||||||||
Number of Shares | Average Grant Date Fair Value | Number of Shares | Average Grant Date Fair Value | ||||||||||
Outstanding at the beginning of the year | 141,254 | $ | 6.29 | 141,284 | $ | 6.23 | |||||||
Granted | 98,829 | 7.11 | 51,256 | 6.37 | |||||||||
Vested | (80,709 | ) | 6.48 | (45,000 | ) | 6.24 | |||||||
Forfeited | (30,091 | ) | 6.44 | (6,286 | ) | 6.21 | |||||||
Outstanding at the end of the year | 129,283 | $ | 6.75 | 141,254 | $ | 6.29 |
Estimated Stock Based Compensation Expense Stock Options | Estimated Stock Based Compensation Expense Restricted Stock | Estimated Stock Based Compensation Expense Total | |||||||||
(Dollars in thousands) | |||||||||||
For the years ending December 31, | |||||||||||
2016 | $ | 226 | $ | 387 | $ | 613 | |||||
2017 | 113 | 166 | 279 | ||||||||
2018 | 35 | 20 | 55 | ||||||||
2019 | 7 | — | 7 | ||||||||
2020 and beyond | — | — | — | ||||||||
$ | 381 | $ | 573 | $ | 954 |
At December 31, | |||||||||||
(Dollars in thousands) | 2015 | 2014 | 2013 | ||||||||
Change in benefit obligation: | |||||||||||
Benefit obligation at beginning of period | $ | 2,815 | $ | 2,954 | $ | 3,042 | |||||
Service cost | — | — | 18 | ||||||||
Interest cost | 159 | 168 | 175 | ||||||||
Actuarial loss/(gain) | — | — | — | ||||||||
(Benefits paid) | (307 | ) | (307 | ) | (281 | ) | |||||
Benefit obligation at end of period | $ | 2,667 | $ | 2,815 | $ | 2,954 | |||||
Funded status: | |||||||||||
Amounts recognized in the Statement of Financial Condition | |||||||||||
Unfunded accrued SERP liability—current | $ | (299 | ) | $ | (299 | ) | $ | (299 | ) | ||
Unfunded accrued SERP liability—noncurrent | (2,368 | ) | (2,516 | ) | (2,655 | ) | |||||
Total unfunded accrued SERP liability | $ | (2,667 | ) | $ | (2,815 | ) | $ | (2,954 | ) | ||
Net amount recognized in accumulated other comprehensive income | |||||||||||
Prior service cost/(benefit) | $ | — | $ | — | $ | — | |||||
Net actuarial loss/(gain) | — | — | — | ||||||||
Total net amount recognized in accumulated other comprehensive income | $ | — | $ | — | $ | — | |||||
Accumulated benefit obligation | $ | 2,667 | $ | 2,815 | $ | 2,954 | |||||
Components of net periodic SERP cost year to date: | |||||||||||
Service cost | $ | — | $ | — | $ | 18 | |||||
Interest cost | 159 | 168 | 175 | ||||||||
Amortization of prior service cost/(benefit) | — | — | 1 | ||||||||
Amortization of net actuarial loss/(gain) | — | — | 30 | ||||||||
Net periodic SERP cost | $ | 159 | $ | 168 | $ | 224 | |||||
Recognized in other comprehensive income year to date: | |||||||||||
Prior service cost/(benefit) | |||||||||||
Net actuarial loss/(gain) | — | — | — | ||||||||
Amortization of prior service cost/(benefit) | — | — | (1 | ) | |||||||
Amortization of net actuarial loss/(gain) | — | — | (30 | ) | |||||||
Total recognized year to date in other comprehensive (loss) income | $ | — | $ | — | $ | (31 | ) | ||||
Assumptions as of December 31: | |||||||||||
Assumed discount rate | — | % | — | % | 6.00 | % | |||||
Rate of compensation increase | — | % | — | % | — | % |
(In thousands, except per share data) | For the Year Ended December 31, | ||||||||||
2015 | 2014 | 2013 | |||||||||
Numerator: | |||||||||||
Net income (loss) from continuing operations | $ | 12,441 | $ | (869 | ) | $ | (14,934 | ) | |||
Accumulated declared dividends on preferred stock | — | (547 | ) | (538 | ) | ||||||
Accumulated undeclared dividends on preferred stock | — | (616 | ) | (544 | ) | ||||||
Dividends on preferred stock | (927 | ) | — | — | |||||||
Inducements for exchange of the preferred stock | (512 | ) | — | — | |||||||
Numerator for basic and diluted net income (loss) from continuing operations | 11,002 | (2,032 | ) | (16,016 | ) | ||||||
Net income (loss) from discontinued operations | — | 1,226 | (7,282 | ) | |||||||
Numerator for basic and diluted net income (loss) available to common shareholders | $ | 11,002 | $ | (806 | ) | $ | (23,298 | ) | |||
Denominator: | |||||||||||
Basic weighted average outstanding shares of common stock | 20,517 | 19,231 | 18,241 | ||||||||
Dilutive effect of employee stock options and contingently issuable shares | 159 | — | — | ||||||||
Diluted weighted average common stock and common stock equivalents | 20,675 | 19,231 | 18,241 | ||||||||
Basic income (loss) per common share(1): | |||||||||||
Net income (loss) from continuing operations | $ | 0.54 | $ | (0.11 | ) | $ | (0.88 | ) | |||
Net income (loss) from discontinued operations | $ | — | $ | 0.07 | $ | (0.40 | ) | ||||
Net income (loss) available to common shareholders | $ | 0.54 | $ | (0.04 | ) | $ | (1.28 | ) | |||
Diluted income (loss) per common share(1): | |||||||||||
Net income (loss) from continuing operations | $ | 0.53 | $ | (0.11 | ) | $ | (0.88 | ) | |||
Net income (loss) from discontinued operations | $ | — | $ | 0.07 | $ | (0.40 | ) | ||||
Net income (loss) available to common shareholders | $ | 0.53 | $ | (0.04 | ) | $ | (1.28 | ) |
(1) | The basic and diluted earnings per share amounts for the year ended December 31, 2015 are the same under both the Treasury Stock Method and the Two-Class Method as prescribed in FASB ASC 260-10, Earnings Per Share. The Two-Class Method is not required for the years ended December 31, 2014 and 2013. |
For the Year Ended December 31, | ||||||||
2015 | 2014 | 2013 | ||||||
Stock options(1)(2) | 360,600 | 1,746,696 | 1,612,495 | |||||
Convertible securities(3) | — | 2,602,707 | 2,396,504 | |||||
Shares subject to stock purchase warrants(4) | — | 761,278 | 761,278 |
(1) | Stock options were excluded from the computation of diluted earnings per common share for the year ended December 31, 2015 because the options were either “out-of-the-money” or the effect of exercise would have been antidilutive. |
(2) | Stock options were excluded from the computation of diluted earnings per common share for the years ended December 31, 2014 and 2013 as we reported a net loss from continuing operations. |
(3) | Convertible securities were excluded from the computation of diluted earnings per common share for the years ended December 31, 2014 and 2013 as we reported a net loss from continuing operations. |
(4) | Stock purchase warrants were excluded from the computation of diluted earnings per common share for the years ended December 31, 2014 and 2013 because the exercisability of those warrants was conditioned on the happening of certain future events. |
Unrealized Gain (Loss) on Securities Available-for-Sale, net of tax | Unrealized Gain (Loss) on Supplemental Executive Plan Expense, net | Accumulated Other Comprehensive Income, Net | |||||||||
(Dollars in thousands) | |||||||||||
Beginning balance as of January 1, 2013 | $ | (545 | ) | $ | (20 | ) | $ | (565 | ) | ||
Other comprehensive income (loss) before reclassifications, net of tax benefit of $1,141 thousand (1) | (1,635 | ) | — | (1,635 | ) | ||||||
Amounts reclassified from accumulated other comprehensive income, net of tax provision of $18 thousand and tax provision of $10 thousand, respectively (2) | 26 | 20 | 46 | ||||||||
Other comprehensive (loss) income, net of tax benefit of $1,123 thousand and tax provision of $10 thousand, respectively | (1,609 | ) | 20 | (1,589 | ) | ||||||
Ending balance as of December 31, 2013 | $ | (2,154 | ) | $ | — | $ | (2,154 | ) | |||
Other comprehensive income before reclassifications, net of tax provision of $847 thousand (1) | 1,462 | — | 1,462 | ||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax | — | — | — | ||||||||
Other comprehensive income, net of tax provision of $847 thousand | 1,462 | — | 1,462 | ||||||||
Ending balance as of December 31, 2014 | $ | (692 | ) | $ | — | $ | (692 | ) | |||
Other comprehensive income before reclassifications, net of tax provision of $81 thousand (1) | (118 | ) | — | (118 | ) | ||||||
Amounts reclassified from accumulated other comprehensive income, net of tax | — | — | — | ||||||||
Other comprehensive income, net of tax provision of $81 thousand | (118 | ) | — | (118 | ) | ||||||
Ending balance as of December 31, 2015 | $ | (810 | ) | $ | — | $ | (810 | ) |
(1) | Tax impact included in Deferred tax assets. |
(2) | Gross amounts related to Unrealized Gain (Loss) on Securities Available-for-Sale, net of tax are included in Net gains on sale of securities available for sale. Gross amounts related to Unrealized Gain (Loss) on Supplemental Executive Plan Expense, net are included in Salaries and employee benefits. Related tax impact amounts are included in Income tax provision (benefit). |
(Dollars in thousands) | |||
2016 | $ | 2,302 | |
2017 | 1,467 | ||
2018 | 1,327 | ||
2019 | 1,340 | ||
2020 and beyond | 507 | ||
Total | $ | 6,943 |
2015 | 2014 | ||||||
Beginning balance | $ | 381 | $ | 1,883 | |||
Provision for repurchases | (1 | ) | (1,502 | ) | |||
Settlements | (66 | ) | — | ||||
Total repurchases reserve | $ | 314 | $ | 381 |
Applicable Federal Regulatory Requirement | ||||||||||||||||||
At December 31, 2015 | Actual Capital | For Capital Adequacy Purposes | To be Categorized As Well Capitalized | |||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||
(Dollars in thousands) | ||||||||||||||||||
Total Capital to Risk Weighted Assets: | ||||||||||||||||||
Company | $ | 154,884 | 16.8 | % | $ | 73,871 | At least 8.0 | N/A | N/A | |||||||||
Bank | 136,457 | 15.0 | % | 72,672 | At least 8.0 | $ | 90,841 | At least 10.0 | ||||||||||
Common Equity Tier 1 Capital to Risk Weighted Assets: | ||||||||||||||||||
Company | 131,188 | 14.2 | % | 41,552 | At least 4.5 | N/A | N/A | |||||||||||
Bank | 125,018 | 13.8 | % | 40,878 | At least 4.5 | 59,046 | At least 6.5 | |||||||||||
Tier 1 Capital to Risk Weighted Assets: | ||||||||||||||||||
Company | $ | 143,260 | 15.5 | % | $ | 55,403 | At least 6.0 | N/A | N/A | |||||||||
Bank | 125,018 | 13.8 | % | 54,504 | At least 6.0 | $ | 72,672 | At least 8.0 | ||||||||||
Tier 1 Capital to Average Assets: | ||||||||||||||||||
Company | $ | 143,260 | 13.3 | % | $ | 42,984 | At least 4.0 | N/A | N/A | |||||||||
Bank | 125,018 | 11.8 | % | 42,319 | At least 4.0 | $ | 52,899 | At least 5.0 |
Applicable Federal Regulatory Requirement | ||||||||||||||||||
At December 31, 2014 | Actual Capital | For Capital Adequacy Purposes | To be Categorized As Well Capitalized | |||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||
(Dollars in thousands) | ||||||||||||||||||
Total Capital to Risk Weighted Assets: | ||||||||||||||||||
Company | $ | 142,142 | 17.0 | % | $ | 66,924 | At least 8.0 | N/A | N/A | |||||||||
Bank | 122,930 | 14.8 | % | 66,524 | At least 8.0 | $ | 83,155 | At least 10.0 | ||||||||||
Tier 1 Capital to Risk Weighted Assets: | ||||||||||||||||||
Company | $ | 131,635 | 15.7 | % | $ | 33,462 | At least 4.0 | N/A | N/A | |||||||||
Bank | 112,485 | 13.5 | % | 33,262 | At least 4.0 | $ | 49,893 | At least 6.0 | ||||||||||
Tier 1 Capital to Average Assets: | ||||||||||||||||||
Company | $ | 131,635 | 12.2 | % | $ | 43,055 | At least 4.0 | N/A | N/A | |||||||||
Bank | 112,485 | 10.5 | % | 42,806 | At least 4.0 | $ | 53,508 | At least 5.0 |
December 31, | |||||||
(Dollars in thousands) | 2015 | 2014 | |||||
Assets: | |||||||
Due from banks and interest-bearing deposits with financial institutions | $ | 9,736 | $ | 8,805 | |||
Investment in subsidiaries | 141,197 | 127,419 | |||||
Other assets | 649 | 641 | |||||
Total assets | $ | 151,582 | $ | 136,865 | |||
Liabilities and shareholders’ equity: | |||||||
Liabilities | $ | 139 | $ | 57 | |||
Junior subordinated debentures | 17,527 | 17,527 | |||||
Shareholders’ equity | 133,916 | 119,281 | |||||
Total liabilities and shareholders’ equity | $ | 151,582 | $ | 136,865 |
Year Ended December 31, | |||||||||||
(Dollars in thousands) | 2015 | 2014 | 2013 | ||||||||
Interest income | $ | 9 | $ | 10 | $ | 60 | |||||
Interest expense | (507 | ) | (580 | ) | (544 | ) | |||||
Other income | 28 | 81 | — | ||||||||
Other expenses | (984 | ) | (849 | ) | (1,934 | ) | |||||
Equity in undistributed earnings of subsidiaries | 13,895 | 1,695 | (19,798 | ) | |||||||
Net (loss) income | $ | 12,441 | $ | 357 | $ | (22,216 | ) |
Year Ended December 31, | |||||||||||
(Dollars in thousands) | 2015 | 2014 | 2013 | ||||||||
Cash Flows from Operating Activities: | |||||||||||
Net income (loss) | $ | 12,441 | $ | 357 | $ | (22,216 | ) | ||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||||||||||
Net increase in other assets | (7 | ) | (47 | ) | (2 | ) | |||||
Stock-based compensation expense | 1,233 | 1,139 | 804 | ||||||||
Undistributed (income) loss of subsidiary | (13,895 | ) | (1,695 | ) | 19,798 | ||||||
Net increase (decrease) in interest payable | 81 | (2,055 | ) | 544 | |||||||
Net (decrease) increase in other liabilities | — | (220 | ) | 220 | |||||||
Net cash used in operating activities | (147 | ) | (2,521 | ) | (852 | ) | |||||
Cash Flows from Investing Activities: | |||||||||||
Proceeds from dissolution of trust preferred securities | — | — | 155 | ||||||||
Net cash provided by investing activities | — | — | 155 | ||||||||
Cash Flows from Financing Activities: | |||||||||||
Proceeds from sale of common stock | (324 | ) | — | 14,978 | |||||||
Common stock options exercised | 1,511 | 1,218 | 303 | ||||||||
Tax effect included in stockholders equity of restricted stock vesting | (109 | ) | (52 | ) | — | ||||||
Capital contribution to subsidiaries | — | — | (17,000 | ) | |||||||
Net cash provided by (used in) financing activities | 1,078 | 1,166 | (1,719 | ) | |||||||
Net increase (decrease) in cash and cash equivalents | 931 | (1,355 | ) | (2,416 | ) | ||||||
Cash and Cash Equivalents, beginning of period | 8,805 | 10,160 | 12,576 | ||||||||
Cash and Cash Equivalents, end of period | $ | 9,736 | $ | 8,805 | $ | 10,160 |
(Dollars in thousands) | Commercial | Other | Total from continuing operations | Discontinued Operations | Total including discontinued operations | ||||||||||||||
Net interest income for the year ended December 31, | |||||||||||||||||||
2015 | $ | 33,932 | $ | (404 | ) | $ | 33,528 | $ | — | $ | 33,528 | ||||||||
2014 | $ | 32,702 | $ | (241 | ) | $ | 32,461 | $ | 77 | $ | 32,538 | ||||||||
2013 | $ | 30,652 | $ | (318 | ) | $ | 30,334 | $ | 488 | $ | 30,822 | ||||||||
Noninterest income for the year ended December 31, | |||||||||||||||||||
2015 | $ | 2,658 | $ | 28 | $ | 2,686 | $ | — | $ | 2,686 | |||||||||
2014 | $ | 4,289 | $ | 81 | $ | 4,370 | $ | 1,039 | $ | 5,409 | |||||||||
2013 | $ | 806 | $ | 387 | $ | 1,193 | $ | 5,691 | $ | 6,884 | |||||||||
Segment Assets at: | |||||||||||||||||||
December 31, 2015 | $ | 1,051,501 | $ | 10,888 | $ | 1,062,389 | $ | — | $ | 1,062,389 | |||||||||
December 31, 2014 | $ | 1,094,120 | $ | 5,490 | $ | 1,099,610 | $ | — | $ | 1,099,610 |
Three Months Ended | |||||||||||||||
December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | ||||||||||||
(in thousands, except per share data) | |||||||||||||||
Total interest income | $ | 9,860 | $ | 9,653 | $ | 9,813 | $ | 9,471 | |||||||
Total interest expense | 1,281 | 1,342 | 1,324 | 1,322 | |||||||||||
Net interest income | 8,579 | 8,311 | 8,489 | 8,149 | |||||||||||
Provision for loan and lease losses | — | — | — | — | |||||||||||
Net interest income after provision for loan and lease losses | 8,579 | 8,311 | 8,489 | 8,149 | |||||||||||
Total noninterest income | 626 | 562 | 616 | 882 | |||||||||||
Total noninterest expense | 8,689 | 8,552 | 8,967 | 9,116 | |||||||||||
Income (loss) from continuing operations before income taxes | 516 | 321 | 138 | (85 | ) | ||||||||||
Income tax (benefit) provision | (11,551 | ) | — | — | — | ||||||||||
Net income (loss) from continuing operations | $ | 12,067 | $ | 321 | $ | 138 | $ | (85 | ) | ||||||
Accumulated undeclared dividends on preferred stock | — | — | (309 | ) | (309 | ) | |||||||||
Dividends on preferred stock | — | (309 | ) | — | — | ||||||||||
Inducements for exchange of the preferred stock | — | (512 | ) | — | — | ||||||||||
Net loss allocable to common shareholders | $ | 12,067 | $ | (500 | ) | $ | (171 | ) | $ | (394 | ) | ||||
Per share data-basic: | |||||||||||||||
Net (loss) income from continuing operations | $ | 0.53 | $ | (0.03 | ) | $ | (0.01 | ) | $ | (0.02 | ) | ||||
Net (loss) income allocable to common shareholders | $ | 0.53 | $ | (0.03 | ) | $ | (0.01 | ) | $ | (0.02 | ) | ||||
Per share data-diluted: | |||||||||||||||
Net (loss) income from continuing operations | $ | 0.53 | $ | (0.03 | ) | $ | (0.01 | ) | $ | (0.02 | ) | ||||
Net (loss) income allocable to common shareholders | $ | 0.53 | $ | (0.03 | ) | $ | (0.01 | ) | $ | (0.02 | ) |
Three Months Ended | |||||||||||||||
December 31, 2014 | September 30, 2014 | June 30, 2014 | March 31, 2014 | ||||||||||||
(in thousands, except per share data) | |||||||||||||||
Total interest income | $ | 10,205 | $ | 9,664 | $ | 9,134 | $ | 9,287 | |||||||
Total interest expense | 1,525 | 1,353 | 1,508 | 1,443 | |||||||||||
Net interest income | 8,680 | 8,311 | 7,626 | 7,844 | |||||||||||
Provision for loan and lease losses | — | 450 | 600 | 450 | |||||||||||
Net interest income after provision for loan and lease losses | 8,680 | 7,861 | 7,026 | 7,394 | |||||||||||
Total noninterest income | 1,238 | 854 | 984 | 1,294 | |||||||||||
Total noninterest expense | 9,580 | 9,029 | 8,778 | 9,421 | |||||||||||
Income (loss) from continuing operations before income taxes | 338 | (314 | ) | (768 | ) | (733 | ) | ||||||||
Income tax (benefit) provision | (608 | ) | — | — | — | ||||||||||
Net income (loss) from continuing operations | $ | 946 | $ | (314 | ) | $ | (768 | ) | $ | (733 | ) | ||||
Net (loss) income from discontinued operations | (659 | ) | (71 | ) | 772 | 1,184 | |||||||||
Accumulated declared dividends on preferred stock | — | — | — | — | |||||||||||
Accumulated undeclared dividends on preferred stock | (251 | ) | (308 | ) | (308 | ) | (296 | ) | |||||||
Net loss allocable to common shareholders | $ | 36 | $ | (693 | ) | $ | (304 | ) | $ | 155 | |||||
Per share data-basic: | |||||||||||||||
Net (loss) income from continuing operations | $ | 0.01 | $ | (0.03 | ) | $ | (0.06 | ) | $ | (0.05 | ) | ||||
Net (loss) income allocable to common shareholders | $ | 0.01 | $ | (0.04 | ) | $ | (0.02 | ) | $ | 0.01 | |||||
Per share data-diluted: | |||||||||||||||
Net (loss) income from continuing operations | $ | 0.01 | $ | (0.03 | ) | $ | (0.06 | ) | $ | (0.05 | ) | ||||
Net (loss) income allocable to common shareholders | $ | 0.01 | $ | (0.04 | ) | $ | (0.02 | ) | $ | 0.01 |
ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES |
• | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; |
• | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America; |
• | provide reasonable assurance that our receipts and expenditures are being made only in accordance with authorization of our management and board of directors; and |
• | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our consolidated financial statements. |
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
(1) | Financial Statements. The Consolidated Financial Statements of Pacific Mercantile Bancorp: See Index to Consolidated Financial Statements on Page 57 of this Annual Report. |
(2) | Financial Statement Schedules. No financial statement schedules are included in this Annual Report as such schedules are not required or the information that would be included in such schedules is not material or is otherwise furnished. |
(3) | Exhibits. See Index to Exhibits, elsewhere in this Report, for a list and description of (i) exhibits previously filed by the Company with the Commission and (ii) the exhibits being filed with this Report. |
PACIFIC MERCANTILE BANCORP | ||
By: | /S/ THOMAS M. VERTIN | |
Thomas M. Vertin | ||
President and Chief Executive Officer |
/S/ THOMAS M. VERTIN | President, Chief Executive Officer and Director (Principal Executive Officer) | March 14, 2016 | ||
Thomas M. Vertin | ||||
/S/ CURT CHRISTIANSSEN | Chief Financial Officer (Principal Financial Officer) | March 14, 2016 | ||
Curt Christianssen | ||||
/S/ NANCY GRAY | Chief Accounting Officer (Principal Accounting Officer) | March 14, 2016 | ||
Nancy Gray | ||||
/s/ EDWARD J. CARPENTER | Chairman of the Board and Director | March 14, 2016 | ||
Edward J. Carpenter | ||||
/S/ ROMIR BOSU | Director | March 14, 2016 | ||
Romir Bosu | ||||
/S/ WARREN T. FINLEY | Director | March 14, 2016 | ||
Warren T. Finley | ||||
/S/ JOHN D. FLEMMING | Director | March 14, 2016 | ||
John D. Flemming | ||||
/s/ MICHAEL P. HOOPIS | Director | March 14, 2016 | ||
Michael P. Hoopis | ||||
/s/ DENIS KALSCHEUR | Director | March 14, 2016 | ||
Denis Kalscheur | ||||
/s/ DAVID J. MUNIO | Director | March 14, 2016 | ||
David Munio | ||||
/S/ JOHN THOMAS, M.D. | Director | March 14, 2016 | ||
John Thomas, M.D | ||||
/S/ STEPHEN P. YOST | Director | March 14, 2016 | ||
Stephen P. Yost |
Exhibit No. | Description of Exhibit | |
3.1 | Articles of Incorporation of Pacific Mercantile Bancorp. (Incorporated by reference to the same numbered exhibit to the Company’s Registration Statement (No. 333-33452) on Form S-1 filed with the Commission on March 28, 2000.) | |
3.2 | Certificate of Amendment of Articles of Incorporation of Pacific Mercantile Bancorp (Incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q filed with the Commission on August 14, 2001.) | |
3.3 | Certificate of Amendment of Articles of Incorporation of Pacific Mercantile Bancorp (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K dated January 26, 2012 and filed with the Commission on February 1, 2012.) | |
3.4 | Certificate of Determination of Rights, Preferences, Privileges and Restrictions of Series A Convertible 10% Cumulative Preferred Stock of Pacific Mercantile Bancorp. (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (No. 000-30777) dated October 13, 2009.) | |
3.5 | Certificate of Amendment of Certificate of Determination of Rights, Preferences, Privileges and Restrictions of the Series A Convertible 10% Cumulative Preferred Stock of Pacific Mercantile Bancorp. (Incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K dated January 26, 2012 and filed with the Commission on February 1, 2012.) | |
3.6 | Certificate of Determination of Rights, Preferences, Privileges and Restrictions of the Series B Convertible 8.4% Noncumulative Preferred Stock of Pacific Mercantile Bancorp. (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (No. 000-30777) dated August 22, 2011.) | |
3.7 | Certificate of Determination of Rights, Preferences, Privileges and Restrictions of the Series C 8.4% Noncumulative Preferred Stock of Pacific Mercantile Bancorp. (Incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K (No. 000-30777) dated August 22, 2011.) | |
3.8 | Pacific Mercantile Bancorp Bylaws, Amended and Restated as of January 22, 2014. (Incorporated by reference Exhibit 3.1 to the Current Report on Form 8-K dated January 27, 2014.) | |
4.1 | Specimen form of Pacific Mercantile Bancorp Common Stock Certificate. (Incorporated by reference to the same numbered exhibit to the Company’s Registration Statement (No. 333-33452) on Form S-1 filed with the Commission on June 14, 2000.) | |
10.1 | Common Stock Purchase Agreement, dated August 26, 2011, between the Company, Carpenter Community Bancfund, L.P. and Carpenter Community Bancfund-A, L.P. (Incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K (No. 000-30777) dated August 30, 2011.) | |
10.2 | Exchange Agreement, dated as of August 28, 2015, by and among Pacific Mercantile Bancorp, SBAV, LP, Carpenter Community BancFund, L.P. and Carpenter Community BancFund-A, L.P. (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K dated August 28, 2015 and filed with the Commission on August 31, 2015.) | |
10.3 | Registration Rights Agreement, dated as of August 28, 2015, by and among Pacific Mercantile Bancorp, SBAV, LP, Carpenter Community BancFund, L.P. and Carpenter Community BancFund-A, L.P. (Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K dated August 28, 2015 and filed with the Commission on August 31, 2015.) | |
10.4+ | Form of Indemnification Agreement. (Incorporated by reference to Exhibit 10.1 to the Registration Statement (No. 333-177141) on Form S-8 dated October 3, 2011.) | |
10.5+ | Pacific Mercantile Bancorp 2004 Stock Incentive Plan (Incorporated by reference to Exhibit 10.19 to the Company’s Annual Report on Form 10-K (No. 000-30777) for the year ended December 31, 2004.) | |
10.6+ | Pacific Mercantile Bancorp 2008 Equity Incentive Plan. (Incorporated by reference to Appendix A to the Company’s 2008 Definitive Proxy Statement filed with the Commission on April 18, 2008.) | |
10.7+ | Pacific Mercantile Bancorp 2010 Equity Incentive Plan, as amended June 5, 2013. (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013.) | |
10.8 | Stock Purchase Agreement effective as of February 27, 2013 by and between the Company and the Carpenter Funds. (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K dated February 27, 2013 and filed with the Commission on March 5, 2013. | |
10.9+ | Employment Agreement between Pacific Mercantile Bank and Steven K. Buster dated April 18, 2013. (Incorporated by reference to Exhibit 10.97 to the Current Report on Form 8-K dated April 23, 2013.) | |
10.10+ | Pacific Mercantile Bancorp Change in Control Severance Plan. (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K dated January 27, 2014.) | |
10.11+ | Pacific Mercantile Bancorp Change in Control Severance Plan Participation Agreement. (Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K dated January 27, 2014.) | |
10.12+ | Employment Agreement between Pacific Mercantile Bank and Curt A. Christianssen dated January 20, 2015. (Incorporated by reference to Exhibit 10.97 to the Current Report on Form 8-K dated January 20, 2015.) | |
10.13+ | Employment Agreement between Pacific Mercantile Bank and Robert J. Stevens dated April 4, 2014 (Incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed with the Commission on May 8, 2015.) | |
10.14+ | Employment Agreement between Pacific Mercantile Bank and Thomas M. Vertin dated December 8, 2015 (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K dated December 8, 2015 and filed with the Commission on December 10, 2015.) | |
10.15+ | Transition Agreement between Pacific Mercantile Bank and Steven K. Buster, dated December 8, 2015 (Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K dated December 8, 2015 and filed with the Commission on December 10, 2015.) | |
21* | Subsidiaries of the Company | |
23.1* | Consent of RSM US LLP, Independent Registered Public Accounting Firm | |
23.2* | Consent of Squar Milner LLP, Independent Registered Public Accounting Firm | |
24.1 | Power of Attorney (contained on the Signature Page of this Annual Report on Form 10-K) | |
31.1* | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
31.2* | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
32.1** | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
32.2** | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
Exhibit 101.INS* | XBRL Instance Document | |
Exhibit 101.SCH* | XBRL Taxonomy Extension Schema Document | |
Exhibit 101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document | |
Exhibit 101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document | |
Exhibit 101.LAB* | XBRL Taxonomy Extension Labels Linkbase Document | |
Exhibit 101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document |
Name of Subsidiary | State of Incorporation or Organization | Percentage Ownership | |||
Pacific Mercantile Bank | A California corporation | 100 | % | ||
PMB Statutory Trust III | A Connecticut trust | 100 | % | ||
PMB Capital Trust III | A Delaware trust | 100 | % | ||
PM Asset Resolution, Inc. | A California corporation | 100 | % |
1. | I have reviewed this Annual Report on Form 10-K of Pacific Mercantile Bancorp for the fiscal year ended December 31, 2015. |
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 (the registrant’s fourth fiscal quarter in the case of an annual report) 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 control 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. |
/S/ THOMAS M. VERTIN |
Thomas M. Vertin |
President and Chief Executive Officer |
1. | I have reviewed this Annual Report on Form 10-K of Pacific Mercantile Bancorp for the fiscal year ended December 31, 2015. |
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 (the registrant’s fourth fiscal quarter in the case of an annual report) 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 control 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. |
/S/ CURT CHRISTIANSSEN |
Curt Christianssen |
Chief Financial Officer |
/S/ THOMAS M. VERTIN |
Thomas M. Vertin |
President and Chief Executive Officer |
/S/ CURT CHRISTIANSSEN |
Curt Christianssen |
Chief Financial Officer |
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Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Mar. 09, 2016 |
Jun. 30, 2015 |
|
Document and Entity Information [Abstract] | |||
Entity Registrant Name | PACIFIC MERCANTILE BANCORP | ||
Entity Central Index Key | 0001109546 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2015 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | PMBC | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 22,912,299 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 96,915,852 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 12,441 | $ 357 | $ (22,216) |
Other comprehensive income (loss), net of tax: | |||
Change in unrealized (loss) gain on securities available for sale | (118) | 1,462 | (1,609) |
Change in net unrealized gain and prior service benefit on supplemental executive retirement plan | 0 | 0 | 20 |
Total comprehensive income (loss) | $ 12,323 | $ 1,819 | $ (23,805) |
Nature of Business |
12 Months Ended |
---|---|
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | Nature of Business Organization Pacific Mercantile Bancorp (“PMBC”) is a bank holding company which, through its wholly owned subsidiary, Pacific Mercantile Bank (the “Bank”), is engaged in the commercial banking business in Southern California. PMBC is registered as a one bank holding company under the United States Bank Holding Company Act of 1956, as amended, and, as such, is regulated by the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”) and the Federal Reserve Bank of San Francisco (“FRBSF”) under delegated authority from the Federal Reserve Board. Substantially all of our operations are conducted and substantially all of our assets are owned by the Bank, which accounts for substantially all of our consolidated revenues, expenses, and income. The Bank provides a full range of banking services to small and medium-size businesses and professionals in Orange, Los Angeles, San Bernardino and San Diego counties in Southern California and is subject to competition from other banks and financial institutions and from financial services organizations conducting operations in those same markets. The Bank is chartered by the California Department of Business Oversight under the Division of Financial Institutions and is a member of the FRBSF. In addition, the deposit accounts of the Bank’s customers are insured by the Federal Deposit Insurance Corporation up to the maximum amount allowed by law. During the first quarter of 2013, PMBC organized a new wholly-owned subsidiary, PM Asset Resolution, Inc. ("PMAR"), for the purpose of purchasing certain non-performing loans and other real estate from the Bank and thereafter collecting or disposing of those assets. During the fourth quarter of 2013, the Bank announced the closure of our mortgage banking business, which was completed in the third quarter of 2014. The Bank operated a direct-to-consumer retail mortgage banking business, originating and funding residential mortgage loans and selling those loans, generally within the succeeding 30 days. Our mortgage banking operations are classified as discontinued operations within the financial statements and footnotes for all presented periods. PMBC, the Bank and PMAR are sometimes referred to, together, on a consolidated basis, in this report as the “Company” or as “we”, “us” or “our”. |
Significant Accounting Policies |
12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||
Accounting Policies [Abstract] | |||||||||
Significant Accounting Policies | Significant Accounting Policies The accompanying consolidated financial statements have been prepared in accordance with the instructions of the U.S. Securities and Exchange Commission (the “SEC”) to Form 10-K and in accordance with generally accepted accounting principles in effect in the United States (“GAAP”), on a basis consistent with prior periods. Use of Estimates The preparation of the financial statements in conformity with GAAP requires us to make certain estimates and assumptions that could affect the reported amounts of certain of our assets, liabilities, and contingencies at the date of the financial statements and the reported amounts of our revenues and expenses during the reporting periods. For the fiscal periods covered by this Report, those estimates related primarily to our determinations of the allowance for loan and lease losses (“ALLL”), the fair values of securities available for sale, repurchase reserves on mortgage loans sold, and the determination of reserves pertaining to deferred tax assets. If circumstances or financial trends on which those estimates were based were to change in the future or there were to occur any currently unanticipated events affecting the amounts of those estimates, our future financial position or results of operations could differ, possibly materially, from those expected at the current time. Principles of Consolidation Our consolidated financial statements for the years ended December 31, 2015, 2014 and 2013 include the accounts of PMBC, the Bank and PMAR. All significant intercompany balances and transactions were eliminated in consolidation. Discontinued Operations The revenues and expenses of our mortgage banking division are reported in the consolidated statements of operations as discontinued operations for all periods presented. In determining whether the revenues and expenses are reported as discontinued operations, we evaluate whether we have any significant continuing involvement in the management of any of the mortgage banking operations. If we were to determine that we had any significant continuing involvement, the revenues and expenses of the respective operations would not be recorded in discontinued operations. As of December 31, 2015 and 2014, we determined that the mortgage repurchase reserves are a liability of the Bank and are not included within the liabilities of discontinued operations. The repurchase reserves are included within other liabilities of the consolidated statements of financial condition. Cash and Cash Equivalents For purposes of the statements of cash flow, cash and cash equivalents consist of cash and due from banks, interest bearing demand deposits with the FRBSF, federal funds sold and interest-bearing deposits, with original maturities of 90 days or less, with financial institutions. Generally, federal funds are sold for one-day periods. As of December 31, 2015 and 2014 the Bank maintained required reserves with FRBSF of approximately $1,356,000 and $724,000, respectively, which are included in cash and due from banks in the accompanying consolidated statements of financial condition. Federal Home Loan Bank Stock and Federal Reserve Bank Stock The Bank, as a member of the Federal Home Loan Bank System, is required to maintain an investment in capital stock of the Federal Home Loan Bank of San Francisco (“FHLB”) in varying amounts based on asset size and on amounts borrowed from the FHLB. Because no ready market exists and there is no quoted market value for this stock, the Bank’s investment in this stock is carried at cost. The Bank also maintains an investment in capital stock of the FRBSF, which is carried at cost because no ready market exists and there is no quoted market value for this stock. Securities Available for Sale, at Fair Value Securities available for sale are those which we intend to hold for an indefinite period of time, but which may be sold in response to changes in liquidity needs, changes in interest rates, changes in prepayment risks and other similar factors. These securities are recorded at fair value, with unrealized gains and losses excluded from earnings and reported as other comprehensive income or loss, net of taxes. Purchased premiums and discounts are recognized as interest income using the interest method over the term of these securities. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method. Declines in the fair value of these securities below their cost which are other-than-temporary are reflected in earnings as realized losses. In determining other-than-temporary losses, we consider a number of factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether we have the intent to sell the security or it is more likely than not that we will be required to sell the security before its anticipated recovery. A high degree of subjectivity and judgment is involved in assessing whether an other-than-temporary decline exists and such assessments are based on information available to us at the time we make such assessments. Loan Loss Obligation on Loans Previously Sold Upon a sale of mortgage loans held for sale (“LHFS”) that we have originated, the risk of loss due to default by the borrower is generally transferred to the investor. However, we are required to make certain representations to the purchasers of such loans relating to credit information, loan documentation and collateral. These representations and warranties may extend through the contractual life of the loan. If subsequent to the sale of such a loan, any underwriting deficiencies, borrower fraud or documentation defects are discovered with respect to the loan, we may become obligated to repurchase the loan or indemnify the investors for any losses from borrower defaults if such deficiencies or defects cannot be cured within the specified cure periods following their discovery. The obligation for losses attributable to any erroneous representations and warranties or other deficiencies or defects is recorded at its estimate of expected future losses using historical and projected loss frequency and loss severity ratios to estimate our exposure to such losses. In the case of early loan payoffs and early defaults on certain loans, we may be required to repay all or a portion of any premium initially paid by the purchaser of the loan at the time of sale. The obligations associated with early loan payoffs and early defaults on mortgage loans are estimated on the basis of historical loss experience by type of loan. Loans and Allowance for Loan and Lease Losses Loans that we intend and have the ability to hold for the foreseeable future or until maturity or pay-off are stated at their respective principal amounts outstanding, net of unearned income. Interest is accrued daily as earned, except where reasonable doubt exists as to collectability of the loan. A loan with principal or interest that is 90 days or more past due, based on its contractual payment due dates, is placed on nonaccrual status, in which case accrual of interest is discontinued, except that we may elect to continue the accrual of interest when the estimated net realizable value of collateral securing the loan is expected to be sufficient to enable us to recover both principal and accrued interest and those loans are in the process of collection. Generally, interest payments received on nonaccrual loans are applied to principal. Once all principal has been received by us, any additional interest payments are recognized as interest income on a cash basis. An ALLL is established by means of a provision for loan and lease losses that is charged against income. If we conclude that the collection, in full, of the carrying amount of a loan has become unlikely, the loan, or the portion thereof that is believed to be uncollectible, is charged against the ALLL. We carefully monitor changing economic conditions, the loan portfolio by category, the financial condition of borrowers and the history of the performance of the loan portfolio in determining the adequacy of the ALLL. Additionally, as the volume of loans increases, additional provisions for loan losses may be required to maintain the allowance at levels deemed adequate. Moreover, if economic conditions were to deteriorate, causing the risk of loan losses to increase, it would become necessary to increase the allowance to an even greater extent, which would necessitate additional provisions that would be charged to income. We also evaluate the unfunded portion of loan commitments and establish a loss reserve, included in other liabilities, for such unfunded commitments through a charge against noninterest expense. The loss reserve for unfunded loan commitments was $275,000 at each of December 31, 2015 and 2014. The ALLL is based on estimates, and ultimate loan losses may vary from current estimates. These estimates are reviewed periodically and, as adjustments become necessary, they are recorded in earnings in the periods in which they become known. Impaired Loans A loan is generally classified as impaired when, in management’s opinion, the principal or interest will not be collectible in accordance with its contractual terms. We measure and reserve for impairment on a loan-by-loan basis using either the present value of expected future cash flows discounted at the loan’s effective interest rate, or the fair value of the collateral if the loan is collateral dependent. We exclude smaller, homogeneous loans, such as consumer installment loans and lines of credit, from these impairment calculations. Also, loans that experience insignificant payment delays or shortfalls are generally not considered impaired. Restructured Loans We sometimes modify or restructure loans when the borrower is experiencing financial difficulties by making a concession to the borrower in the form of changes in the amortization terms, reductions in the interest rates, the acceptance of interest only payments and, in limited cases, concessions to the outstanding loan balances. These loans are classified as troubled debt restructurings (“TDRs”) and considered impaired loans. TDRs are loans modified for the purpose of alleviating temporary impairments to the borrower’s financial condition or cash flows. A workout plan between us and the borrower is designed to provide a bridge for borrower cash flow shortfalls in the near term. A TDR loan may be returned to accrual status when the loan is brought current, has performed in accordance with the contractual restructured terms for a time frame of at least six months and the ultimate collectability of the total contractual restructured principal and interest in no longer in doubt. These loans, while no longer considered a TDR, are still considered impaired loans. Loan Origination Fees and Costs Loan origination fees and related direct costs for loans held for investment are deferred and amortized to interest income as an adjustment to yield over the respective lives of the loans using the effective interest method, except for loans that are revolving or short-term in nature for which the straight line method is used, which approximates the interest method. Investment in Unconsolidated Subsidiaries Investment in unconsolidated subsidiaries is stated at cost. The unconsolidated subsidiaries are comprised of two grantor trusts established in 2002 and 2004 in connection with our issuance of subordinated debentures in each of those years. Prior to 2004, we organized two business trusts, under the names PMB Statutory Trust III and PMB Capital Trust III, to facilitate our issuance of $7.2 million and $10.3 million, respectively, principal amount of junior subordinated debentures with maturity dates in 2032 and 2034, respectively. The principal amounts remain outstanding as of December 31, 2015. Other Real Estate Owned Other real estate owned (“OREO”) consists of real properties acquired by us through foreclosure or in lieu of foreclosure in satisfaction of loans. OREO is recorded at fair value less estimated selling costs at the time of acquisition or foreclosure. Loan balances in excess of fair value, less selling costs, are charged to the ALLL prior to foreclosure. Any subsequent operating expenses or income, reductions in estimated fair values and gains or losses on disposition of such properties are charged or credited to current operations. Premises and Equipment Premises and equipment are stated at cost, less accumulated depreciation and amortization which are charged to expense on a straight-line basis over the estimated useful lives of the assets or, in the case of leasehold improvements, over the term of the leases, whichever is shorter. For income tax purposes, accelerated depreciation methods are used. Maintenance and repairs are charged directly to expense as incurred. Improvements to premises and equipment that extend their useful lives are capitalized. When such an asset is disposed of, the applicable costs and accumulated depreciation thereon are removed from the accounts and any resulting gain or loss is included in current operations. Rates of depreciation and amortization are based on the following estimated useful lives:
Income Taxes Deferred income taxes and liabilities are determined using the asset and liability method. Under this method, the net deferred tax asset or liability is determined based on the tax effects of the temporary differences between the book and tax basis of the various balance sheet assets and liabilities and gives current recognition to changes in tax rates and laws. We record as a deferred tax asset on our balance sheet an amount equal to the tax credit and tax loss carryforwards and tax deductions ("tax benefits") that we believe will be available to us to offset or reduce the amount of our income taxes in future periods. Under applicable federal and state income tax laws and regulations, such tax benefits will expire if not used within specified periods of time. Accordingly, the ability to fully use our deferred tax asset depends on the amount of taxable income that we generate during those time periods. At least once each year, or more frequently, if warranted, we make estimates of future taxable income that we believe we are likely to generate during those future periods. If we conclude, on the basis of those estimates and the amount of the tax benefits available to us, that it is more likely than not that we will be able to fully utilize those tax benefits prior to their expiration, we recognize the deferred tax asset in full on our balance sheet. On the other hand, if we conclude on the basis of those estimates and the amount of the tax benefits available to us that it has become more likely than not that we will be unable to utilize those tax benefits in full prior to their expiration, then, we would establish (or increase any existing) valuation allowance to reduce the deferred tax asset on our balance sheet to the amount which we believe we are more likely than not to be able to utilize. Such a reduction is implemented by recognizing a non-cash charge that would have the effect of increasing the provision, or reducing any credit, for income taxes that we would otherwise have recorded in our statement of operations. The determination of whether and the extent to which we will be able to utilize our deferred tax asset involves significant management judgments and assumptions that are subject to period to period changes as a result of changes in tax laws, changes in market or economic conditions that could affect our operating results or variances between our actual operating results and our projected operating results, as well as other factors. Uncertain tax positions that meet the more likely than not recognition threshold are measured to determine the amount of benefit to recognize. An uncertain tax position is measured at the largest amount of benefit that management believes has a greater than 50% likelihood of realization upon settlement. Earnings (Loss) Per Share Basic income (loss) per share for any fiscal period is computed by dividing net income (loss) allocable to our common shareholders for such period by the weighted average number of common shares outstanding during that period. Fully diluted income (loss) per share reflects the potential dilution that could have occurred assuming the conversion of any convertible securities into common stock at conversion prices, and the exercise of all outstanding options and warrants to purchase shares of our common stock at exercise prices, that were less than the market price of our shares, thereby increasing the number of shares outstanding during the period, and is determined using the treasury method. Although accumulated undeclared dividends on our preferred stock are not recorded in the accompanying consolidated statement of operations, such dividends are included for purposes of computing earnings (loss) per share available to our common shareholders. Stock Option Plans We follow Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) 718-10, Share-Based Payment, which requires entities that grant stock options or other equity compensation awards to employees to recognize in their financial statements the fair values of those options or share awards as compensation cost over their requisite service (vesting) periods of those options or share awards. Since stock-based compensation cost that is recognized in the statements of operations is to be determined based on the equity compensation awards that we expect will ultimately vest, that compensation expense is reduced for estimated forfeitures of unvested options or unvested share awards that typically occur due primarily to terminations of employment of optionees or recipients of such share awards. Forfeitures are required to be estimated at the time of the grant of options or other share awards and are revised, if necessary, in subsequent periods if actual forfeitures differ from those earlier estimates. For purposes of the determination of stock-based compensation expense for the year ended December 31, 2015, we estimated forfeitures of 11.9% of the options that were granted to officers and other employees. Comprehensive Income (Loss) Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. However, certain changes in assets and liabilities, such as unrealized gains and losses on securities available for sale, are reported as a separate component of the equity in the accompanying consolidated statement of financial condition, net of income taxes, and such items, along with net income, are components of comprehensive income (loss). Segment Reporting During the years ended December 31, 2015, 2014 and 2013, we had one reportable segment, which was our commercial banking division, and one non-reportable segment which was our discontinued operations related to our mortgage banking division. In connection with our exit from the mortgage banking business in 2013, the revenues and expenses of our mortgage banking division have been classified as discontinued operations for all periods presented. Recent Accounting Pronouncements In February 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-04, “Receivables — Troubled Debt Restructurings by Creditors (Subtopic 310-40) — Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure,” which amended its guidance to clarify when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan should be derecognized and the real estate recognized. This guidance is effective for interim and annual periods beginning after December 15, 2014. Early adoption is permitted. We adopted this guidance on January 1, 2015 and it did not have a material effect on our consolidated financial statements. In April 2014, the FASB issued ASU 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity,” which amended its guidance on classification and reporting of discontinued operations. The amendments clarify when an entity should classify a component as discontinued operations, how to report the balances related to discontinued operations for prior periods, and additional disclosure requirements for discontinued operations. This guidance is effective for interim and annual periods beginning after December 15, 2014. Early adoption is permitted only for disposals which have not been previously reported. We adopted this guidance on January 1, 2015 and it did not have a material effect on our consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which amended its guidance on revenue recognition to conform with international accounting guidance under the International Accounting Standards Board. The ASU provides a framework for addressing revenue recognition and replaces most existing revenue recognition guidance, as well as requires increased disclosure requirements. In August 2015, the FASB issued ASU 2015-14 to defer the effective date of ASU 2014-09 by one year. Accordingly, this guidance is effective for interim and annual periods beginning after December 15, 2017 with early adoption permitted for interim and annual periods beginning after December 15, 2016. We will adopt this guidance on January 1, 2018. We are currently evaluating the expected impact on our consolidated financial statements. In June 2014, the FASB issued ASU 2014-11, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period,” which amended its guidance on how to account for certain performance related share-based compensation plans. The amendments clarify the guidance on how to account for performance based awards when the requisite service period is met prior to potential performance targets being achieved. This guidance is effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. We adopted this guidance on January 1, 2016 and it did not have a material effect on our consolidated financial statements. In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements — Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern,” which defines management's responsibility to evaluate whether there is substantial doubt about an organization's ability to continue as a going concern and clarifies when to provide related footnote disclosure. This guidance is effective for interim and annual periods beginning after December 15, 2016. Early adoption is permitted. We will adopt this guidance on January 1, 2017 and do not expect it to have a material effect on our consolidated financial statements. In January 2015, the FASB issued ASU 2015-01, “Income Statement - Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items,” which eliminated the concept of extraordinary items from GAAP. This guidance is effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. We adopted this guidance on January 1, 2015 and it did not have an impact on our consolidated financial statements. In February 2015, the FASB issued ASU 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis,” amends the guidance for assessing how relationships of related parties affect the consolidation analysis, eliminates the presumption that a general partner should consolidate a limited partnership, eliminates the consolidation model specific to limited partnerships, clarifies when fees paid to a decision maker should be a factor in consolidation of a variable interest entity, and reduces the number of variable interest entity consolidation models. This guidance is effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. We adopted this guidance on January 1, 2016 and it did not have an impact on our consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs,” which requires that the debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. This simplifies the presentation of debt issuance costs and makes the presentation consistent with the presentation of debt discounts. This guidance is effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. We adopted this guidance on January 1, 2016 and it did not have a material impact on our consolidated financial statements. In August 2015, the FASB issued ASU 2015-15, “Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements — Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting,” which clarifies the accounting for debt issuance costs for line-of-credit arrangements. We adopted this guidance on January 1, 2016 and it did not have a material impact on our consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities,” which enhances the reporting model for financial instruments to provide users of financial statements with more useful information. Some of the provisions include: requiring equity investments to be measured at fair value with changes in fair value recognized in net income, simplifying the impairment assessment of equity investments without readily determinable fair values, eliminating the requirement to disclose the method and significant assumptions used to estimate fair value on financial instruments measured at amortized cost on the balance sheet, requiring public business entities to use the exit price notion when measuring the fair value of financial instruments, requiring the reporting organization to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the organization has elected to measure the liability at fair value in accordance with the fair value option, requiring separate presentation of financial assets and liabilities by measurement category and form of financial asset on the balance sheet or notes to the financial statements, and clarifying that the reporting organization should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the organization's other deferred tax assets. This guidance is effective for interim and annual periods beginning after December 15, 2017. Early adoption is not permitted for public companies. We will adopt this guidance on January 1, 2018 and do not expect it to have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which requires lessees to recognize the following for all leases (with the exception of short-term leases) at the commencement date: a lease liability measured on a discounted basis and a right-of-use asset a specified asset for the lease term. Under the new guidance, lessor account is largely unchanged and the the accounting for sale and leaseback transactions were simplified. This guidance is effective for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. We will adopt this guidance on January 1, 2019 and do not expect it to have a material impact on our consolidated financial statements and our disclosures related to leases. Subsequent Events Subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued. The Company recognizes in the financial statements the effects of all subsequent events that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing the financial statements. The Company’s financial statements do not recognize subsequent events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after the balance sheet date and before financial statements are available to be issued. The Company has evaluated events subsequent through the date these consolidated financial statements were filed with the SEC. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Under FASB ASC 820-10, we group assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are:
Risks with Fair Value Measurements Fair value estimates are made at a discrete point in time based on relevant market information and other information about the financial instruments. Because no active market exists for a significant portion of our financial instruments, fair value estimates are based in large part on judgments we make primarily regarding current economic conditions, risk characteristics of various financial instruments, prepayment rates, and future expected loss experience. These estimates are subjective in nature and invariably involve some inherent uncertainties. Additionally, the occurrence of unexpected events or changes in circumstances can occur that could require us to make changes to our assumptions and which, in turn, could significantly affect and require us to make changes to our previous estimates of fair value. In addition, the fair value estimates are based on existing on and off-balance sheet financial instruments without attempting to estimate the value of existing and anticipated future customer relationships and the value of assets and liabilities that are not considered financial instruments, such as premises and equipment and OREO. Measurement Methodology Cash and Cash Equivalents. The fair value of cash and cash equivalents approximates its carrying value. Interest-Bearing Deposits with Financial Institutions. The fair values of interest-bearing deposits maturing within one year approximate their carrying values. FHLB and FRBSF Stock. The Bank is a member of the FHLB and the FRBSF. As members, we are required to own stock of the FHLB and the FRBSF, the amount of which is based primarily on the level of our borrowings from those institutions. We also have the right to acquire additional shares of stock in either or both of the FHLB and the FRBSF. During the year ended December 31, 2015, we purchased $33 thousand in value of FHLB stock and no shares of FRBSF stock. The fair values of the FHLB and FRBSF stock are equal to their respective carrying amounts, are classified as restricted securities and are periodically evaluated for impairment based on our assessment of the ultimate recoverability of our investments in that stock. Any cash or stock dividends paid to us on such stock are reported as income. Investment Securities Available for Sale. Fair value measurement for our investment securities available for sale is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 investment securities include those traded on an active exchange, such as the New York Stock Exchange, U.S. Treasury securities that are traded by dealers or brokers in active over-the- counter markets and money market funds. Level 2 investment securities include mortgage-backed securities issued by government sponsored entities, municipal bonds and corporate debt securities. Securities classified as Level 3 include asset-backed securities in less liquid markets. Impaired Loans. Loans measured for impairment are measured at an observable market price (if available), or the fair value of the loan’s collateral (if the loan is collateral dependent). The fair value of an impaired loan may be estimated using one of several methods, including collateral value, market value of similar debt, liquidation value and discounted cash flows. Those impaired loans not requiring a specific loan loss reserve represent loans for which the fair value of the expected repayments or collateral exceeds the recorded investments in such loans. When the fair value of the collateral is based on an observable market price or a current appraised value, we record the impaired loan at Level 2. When an appraised value is not available or we determine that the fair value of the collateral is further impaired below the appraised value and there is no observable market price, we record the impaired loan at Level 3. Loans. The fair value for loans with variable interest rates less a credit discount is the carrying amount. The fair value of fixed rate loans is derived by calculating the discounted value of future cash flows expected to be received by the various homogeneous categories of loans. All loans have been adjusted to reflect changes in credit risk. Changes are not recorded directly as an adjustment to current earnings or comprehensive income, but rather as an adjustment component in determining the overall adequacy of the loan loss reserve. Other Real Estate Owned. OREO is reported at its net realizable value (fair value less estimated costs to sell) at the time any real estate collateral is acquired by the Bank in satisfaction of a loan. Subsequently, OREO is carried at the lower of carrying value or fair value less estimated costs to sell. Fair value is determined based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. When the fair value of the collateral is based on an observable market price or a current appraised value, we record the foreclosed asset at Level 2. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, we record the foreclosed asset at Level 3. Deposits. Deposits are carried at historical cost. The carrying amounts of deposits from savings and money market accounts are deemed to approximate fair value as they either have no stated maturities or short-term maturities. Certificates of deposit are estimated utilizing discounted cash flow techniques. The interest rates applied are rates currently being offered for similar certificates of deposit. Borrowings. The fair value of borrowings is the carrying amount for those borrowings that mature on a daily basis. The fair value of term borrowings is derived by calculating the discounted value of future cash flows expected to be paid out by the Company. Junior Subordinated Debentures. The fair value of the junior subordinated debentures is based on quoted market prices of the underlying securities. These securities are variable rate in nature and repriced quarterly. Commitments to Extend Credit and Standby Letters of Credit. The fair value of commitments to extend credit and standby letters of credit are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. Interest Receivable and Interest Payable. The carrying amounts of our accrued interest receivable and accrued interest payable are deemed to approximate fair value. Assets Recorded at Fair Value on a Recurring Basis The following tables show the recorded amounts of assets and liabilities measured at fair value on a recurring basis at December 31, 2015 and 2014.
The changes in Level 3 assets measured at fair value on a recurring basis are summarized as follows for the year ended December 31, 2015:
Assets Recorded at Fair Value on a Nonrecurring Basis We may be required, from time to time, to measure certain assets at fair value on a nonrecurring basis in accordance with GAAP. These nonrecurring fair value adjustments typically involve application of lower of cost or market accounting or write-downs of individual assets. Information regarding assets measured at fair value on a nonrecurring basis is set forth in the table below.
There were no transfers in or out of Level 3 measurements for nonrecurring items during the year ended December 31, 2015. Significant Unobservable Inputs and Valuation Techniques of Level 3 Fair Value Measurements For our fair value measurements classified in Level 3 of the fair value hierarchy as of December 31, 2015, a summary of the significant unobservable inputs and valuation techniques is as follows:
Fair Value Measurements for Other Financial Instruments The table below provides estimated fair values and related carrying amounts of our financial instruments as of December 31, 2015 and December 31, 2014, excluding financial assets and liabilities which are recorded at fair value on a recurring basis.
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Investments |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | Investments Securities Available For Sale, at Fair Value The following table sets forth the major components of securities available for sale and compares the amortized costs and estimated fair market values of, and the gross unrealized gains and losses on, these securities at December 31, 2015 and 2014:
At December 31, 2015 and 2014, U.S. agency mortgage backed securities and collateralized mortgage obligations with an aggregate fair market value of $2.9 million and $3.6 million, respectively, were pledged to secure FHLB borrowings, repurchase agreements, local agency deposits and treasury, tax and loan accounts. The amortized cost and estimated fair values of securities available for sale at December 31, 2015 and December 31, 2014 are shown in the tables below by contractual maturities taking into consideration historical prepayments based on the prior twelve months of principal payments. Expected maturities will differ from contractual maturities and historical prepayments, particularly with respect to collateralized mortgage obligations, primarily because prepayment rates are affected by changes in conditions in the interest rate market and, therefore, future prepayment rates may differ from historical prepayment rates.
We had no sales of securities available for sale during the years ended December 31, 2015 and December 31, 2014. We recognized net gains on sales of securities available for sale of $44 thousand on sale proceeds of $6.7 million during the year ended December 31, 2013. The tables below indicate, as of December 31, 2015 and 2014, the gross unrealized losses and fair values of our investments, aggregated by investment category, and length of time that the individual securities have been in a continuous unrealized loss position.
We regularly monitor investments for significant declines in fair value. We have determined that declines in the fair values of these investments below their respective amortized costs, as set forth in the tables above, are temporary because (i) those declines were due to interest rate changes and not to a deterioration in the creditworthiness of the issuers of those investment securities, and (ii) we have the intent and ability to hold those securities until there is a recovery in their values or until their maturity. We recognize other-than-temporary impairments (“OTTI”) to our available-for-sale debt securities in accordance with FASB ASC 320-10. When there are credit losses associated with, but we have no intention to sell, an impaired debt security, and it is more likely than not that we will not have to sell the security before recovery of its cost basis, we will separate the amount of impairment, or OTTI, between the amount that is credit related and the amount that is related to non-credit factors. Credit-related impairments are recognized in our consolidated statements of operations. Any non-credit-related impairments are recognized and reflected in other comprehensive income (loss). Through the impairment assessment process, we determined that the available-for-sale securities discussed below were other-than-temporarily impaired at December 31, 2015. We recorded no impairment credit losses on available-for-sale securities in our consolidated statements of operations for the years ended December 31, 2015 and 2014. The OTTI related to factors other than credit losses, in the aggregate amount of $534 thousand, was recognized as other comprehensive loss in our accompanying consolidated statement of financial condition. The table below presents, for the years ended December 31, 2015 and 2014, a roll-forward of OTTI in those instances when a portion of the OTTI was attributable to non-credit related factors and, therefore, was recognized in other comprehensive loss:
In determining the component of OTTI related to credit losses, we compare the amortized cost basis of each OTTI security to the present value of its expected cash flows, discounted using the effective interest rate implicit in the security at the date of acquisition. As a part of our OTTI assessment process with respect to securities held for sale with unrealized losses, we consider available information about (i) the performance of the collateral underlying each such security, including any credit enhancements, (ii) historical prepayment speeds, (iii) delinquency and default rates, (iv) loss severities, (v) the age or “vintage” of the security, and (vi) any rating agency reports on the security. Significant judgments are required with respect to these and other factors in order to make a determination of the future cash flows that can be expected to be generated by the security. Based on our OTTI assessment process, we determined that there is one asset-backed security in our portfolio of securities held for sale that was impaired as of December 31, 2015. This security is a multi-class, cash flow collateralized bond obligation backed by a pool of trust preferred securities issued by a diversified pool of 56 issuers that consisted of 45 U.S. depository institutions and 11 insurance companies at the time of the security’s issuance in November 2007. We purchased $3.0 million face amount of this security in November 2007 at a price of 95.21% for a total purchase price of $2.9 million, out of a total of $363 million of this security sold at the time of issuance. The security that we own (CUSIP 74042CAE8) is the mezzanine class B piece security with a variable interest rate of 3 month LIBOR plus 60 basis points, which had a rating of Aa2 and AA by Moody’s and Fitch, respectively, at the time of issuance in 2007. As of December 31, 2015 the amortized cost of this security was $2.0 million with a fair value of $1.5 million, for an unrealized loss of approximately $547 thousand. As of December 31, 2015, the security had a Baa3 rating from Moody’s and a B rating from Fitch and had experienced $42.5 million in defaults (12.5% of total current collateral) and $7.0 million in deferring securities (2.1% of total current collateral) from issuance to December 31, 2015. As of December 31, 2015, the mezzanine class B tranche had $59.5 million in excess subordination. We have made a determination that the remainder of our securities with respect to which there were unrealized losses as of December 31, 2015 are not other-than-temporarily impaired, because we have concluded that we have the intent and ability to continue to hold those securities until their respective fair market values increase above their respective amortized costs or, if necessary, until their respective maturities. In reaching that conclusion we considered a number of factors and other information, which included: (i) the significance of each such security, (ii) the amount of the unrealized losses attributable to each such security, (iii) our liquidity position, (iv) the impact that retention of those securities could have on our capital position and (v) our evaluation of the expected future performance of these securities (based on the criteria discussed above). Other Investments As of December 31, 2014, we had one investment in a limited partnership which was accounted for under the equity method of accounting and included within other assets on the consolidated statements of financial condition. During the year ended December 31, 2015, we redeemed 100% of our investment in the limited partnership for a return of capital of $2.1 million. As of December 31, 2015 and December 31, 2014, our other investment was as follows:
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Loans and Allowance for Loan and Lease Losses |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans and Allowance for Loan and Lease Losses | Loans and Allowance for Loan and Lease Losses The loan portfolio consisted of the following at:
At December 31, 2015 and 2014, real estate loans of approximately $523.4 million and $424.5 million, respectively, were pledged to secure borrowings obtained from the FHLB. Allowance for Loan and Lease Losses The ALLL represents our estimate of credit losses in our loan and lease portfolio that are probable and estimable at the balance sheet date. We employ economic models that are based on bank regulatory guidelines, industry standards and our own historical loan loss experience, as well as a number of more subjective qualitative factors, to determine both the sufficiency of the ALLL and the amount of the provisions that are required to increase or replenish the ALLL. The ALLL is first determined by (i) analyzing all classified loans (graded as “Substandard” or “Doubtful” under our internal asset quality grading parameters) on non-accrual status for loss exposure and (ii) establishing specific reserves as needed. ASC 310-10 defines loan impairment as the existence of uncertainty concerning collection of all principal and interest in accordance with the contractual terms of a loan. For collateral dependent loans, impairment is typically measured by comparing the loan amount to the fair value of collateral, less estimated costs to sell, with any “shortfall” amount charged off. Other methods can be used in estimating impairment, including market price and the present value of expected future cash flows discounted at the loan’s original interest rate. We are an active lender with the U.S. Small Business Administration and collection of a percentage of the loan balance of many of the loans originated is guaranteed. The ALLL reserves are calculated against the non-guaranteed loan balances. On a quarterly basis, we utilize a classification based loan loss migration model as well as review individual loans in determining the adequacy of the ALLL for homogenous pools of loans that are not subject to specific reserve allocations. Our loss migration analysis tracks 16 quarters of loan loss history and industry loss factors to determine historical losses by classification category for each loan type, except certain consumer loans (automobile, mortgage and credit cards). We then apply these calculated loss factors, together with qualitative factors based on external economic conditions and trends and internal assessments, to the outstanding loan balances in each homogenous group of loans, and then, using our internal asset quality grading parameters, we grade the loans as “Pass,” “Special Mention,” “Substandard” or “Doubtful”. We analyze impaired loans individually. This grading is based on the credit classifications of assets as prescribed by government regulations and industry standards and is separated into the following groups:
Set forth below is a summary of the activity in the ALLL, by portfolio type, during the years ended December 31, 2015, 2014 and 2013.
Set forth below is information regarding loan balances and the related ALLL, by portfolio type, as of December 31, 2015 and December 31, 2014.
Credit Quality The amounts of nonperforming assets and delinquencies that occur within our loan portfolio factors in our evaluation of the adequacy of the ALLL. The following table provides a summary of the delinquency status of loans by portfolio type at December 31, 2015 and 2014:
(1) Loans 90 days or more past due included one consumer mortgage loan collateralized by residential real estate with a recorded investment of $535 thousand which is in the process of foreclosure. Generally, the accrual of interest on a loan is discontinued when principal or interest payments become more than 90 days past due, unless we believe that the loan is adequately collateralized and it is in the process of collection. There were no loans 90 days or more past due and still accruing interest at December 31, 2015 or December 31, 2014. In certain instances, when a loan is placed on non-accrual status, previously accrued but unpaid interest is reversed against current income. Subsequent collections of cash are applied as principal reductions when received, except when the ultimate collectability of principal is probable, in which case such payments are applied to accrued and unpaid interest, which is credited to income. Non-accrual loans may be restored to accrual status when principal and interest become current and full repayment becomes expected. The following table provides information with respect to loans on nonaccrual status, by portfolio type, as of December 31, 2015 and 2014:
(1) Nonaccrual loans may include loans that are currently considered performing loans. We classify our loan portfolio using internal credit quality ratings. The following table provides a summary of loans by portfolio type and our internal credit quality ratings as of December 31, 2015 and 2014, respectively.
Impaired Loans A loan generally is classified as impaired and placed on nonaccrual status when, in our opinion, principal or interest is not likely to be collected in accordance with the contractual terms of the loan agreement. We measure for impairments on a loan-by-loan basis, using either the present value of expected future cash flows discounted at the loan’s effective interest rate, or the fair value of the collateral if the loan is collateral dependent. The following table sets forth information regarding impaired loans, at December 31, 2015 and December 31, 2014:
The table below contains additional information with respect to impaired loans, by portfolio type, as of December 31, 2015 and 2014:
At December 31, 2015 and December 31, 2014 there were $24.2 million and $32.6 million, respectively, of impaired loans for which no specific reserves had been allocated because these loans, in our judgment, were sufficiently collateralized. Of the impaired loans at December 31, 2015 for which no specific reserves were allocated, $14.2 million had been deemed impaired in the prior year. Average balances and interest income recognized on impaired loans, by portfolio type, for the year ended December 31, 2015, 2014 and 2013 were as follows:
The interest that would have been earned had the impaired loans remained current in accordance with their original terms was $899 thousand in 2015, $384 thousand in 2014 and $490 thousand in 2013. Troubled Debt Restructurings Pursuant to the FASB's ASU No. 2011-2, A Creditor's Determination of whether a Restructuring is a Troubled Debt Restructuring, the Company's TDRs totaled $20.8 million and $17.0 million at December 31, 2015 and December 31, 2014, respectively. TDRs consist of loans to which modifications have been made for the purpose of alleviating temporary impairments of the borrower's financial condition and cash flows. Those modifications have come in the forms of changes in amortization terms, reductions in interest rates, interest only payments and, in limited cases, concessions to outstanding loan balances. The modifications are made as part of workout plans we enter into with the borrower that are designed to provide a bridge for the borrower's cash flow shortfalls in the near term. If a borrower works through the near term issues, then in most cases, the original contractual terms of the borrower's loan will be reinstated. Of the $20.8 million of TDRs outstanding at December 31, 2015, $724 thousand were performing in accordance with their terms and accruing interest and $20.1 million were not. Of the $20.1 million nonperforming TDRs, three loan relationships made up $15.7 million of the amount outstanding as of December 31, 2015. Our impairment analysis determined no specific reserves were required on the TDR balances outstanding at December 31, 2015. The following table presents loans restructured as TDRs during the years ended December 31, 2015, 2014 and 2013:
During the years ended December 31, 2015, 2014 and 2013, TDRs that were modified within the preceding 12-month period which subsequently defaulted were as follows:
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Premises and Equipment |
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Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Premises and Equipment | Premises and Equipment The major classes of premises and equipment are as follows:
The amount of depreciation and amortization included in operating expense was $525,000, $462,000 and $400,000 for the years ended December 31, 2015, 2014 and 2013, respectively. |
Deposits |
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Banking and Thrift [Abstract] | |||||||||||||||||||||||||||||||||||||
Deposits | Deposits Asset At December 31, 2015, we had $103.3 million in interest bearing deposits at other financial institutions, as compared to $167.1 million at December 31, 2014. The weighted average percentage yields on these deposits for each of the years ended December 31, 2015 and December 31, 2014 was 0.26% and 0.25%, respectively. Interest bearing deposits with financial institutions can be withdrawn on demand and are considered cash equivalents for purposes of the consolidated statements of cash flows. At each of December 31, 2015 and December 31, 2014, we had $4.7 million of interest-bearing time deposits at other financial institutions, which were scheduled to mature within one year or had no stated maturity date. The weighted average percentage yields on these deposits were 0.53% and 0.32% for the years ended December 31, 2015 and December 31, 2014, respectively. Liability The aggregate amount of time deposits in denominations of $250,000 or more at December 31, 2015 and 2014 was $58.8 million and $97.8 million, respectively. The scheduled maturities of all time certificates of deposit at December 31, 2015 were as follows:
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Borrowings and Contractual Obligations |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowings and Contractual Obligations | Borrowings and Contractual Obligations At December 31, 2015 and 2014, our borrowings and contractual obligations consisted of the following:
The table below sets forth the amounts of, the interest rates we pay on, and the maturity dates of these FHLB borrowings. These borrowings had a weighted-average annualized interest rate of 1.02% for the year ended December 31, 2015.
At December 31, 2015, $523 million of loans were pledged to secure these FHLB borrowings and to support our unfunded borrowing capacity. As of December 31, 2015, we had unused borrowing capacity of $241 million with the FHLB. The highest amount of borrowings outstanding at any month-end during the year ended December 31, 2015 was $39.5 million. As of December 31, 2014, we had $29.5 million of outstanding short-term borrowings and $10.0 million of outstanding long-term borrowings that we had obtained from the FHLB. These borrowings had a weighted-average annualized interest rate of 0.75% for the year ended December 31, 2014. As of December 31, 2014 we had unused borrowing capacity of $175 million with the FHLB. The highest amount of borrowings outstanding at any month-end during the year ended December 31, 2014 was $70 million. These FHLB borrowings were obtained in accordance with the Company’s asset/liability management objective to reduce the Company’s exposure to interest rate fluctuations and increase our contingent funding. Junior Subordinated Debentures. We formed two grantor trusts to sell and issue to institutional investors floating junior trust preferred securities ("trust preferred securities"). The net proceeds from the sales of the trust preferred securities was used in exchange for our issuance to the grantor trusts for the principal amount of our junior subordinated floating rate debentures (the "Debentures"). The payment terms of the Debentures are used by the grantor trusts to make the payments that come due to the holders of the trust preferred securities pursuant to the terms of those securities. The Debentures also were pledged by the grantor trusts as security for the payment obligations of the grantor trusts under the trust preferred securities. Set forth below are the respective principal amounts, and certain other information regarding the terms of the Debentures that remained outstanding as of December 31, 2015 and 2014:
These Debentures require quarterly interest payments, which are used to make quarterly distributions required to be paid on the corresponding trust preferred securities. Subject to certain conditions, we have the right, at our discretion, to defer those interest payments, and the corresponding distributions on the trust preferred securities, for up to five years. Exercise of this deferral right does not constitute a default of our obligations to pay the interest on the Debentures or the corresponding distributions that are payable on the trust preferred securities. As of December 31, 2015, we were current on all interest payments. Under the Federal Reserve Board rulings, the borrowings evidenced by the Debentures, which are subordinated to all of our other borrowings that are outstanding or which we may obtain in the future, are eligible (subject to certain dollar limitations) to qualify and, at December 31, 2015 and 2014, $17.0 million of those Debentures qualified as Tier I capital, for regulatory purposes. |
Related Party Transactions |
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Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | Related Party Transactions Per ASC 850-10-20, a related party is defined under GAAP to include: affiliates, principal owners and their immediate family members, management and their immediate families, other parties with which the entity may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests, and other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. GAAP requires disclosure of all material related party transactions, excluding compensation arrangements, expense allowances, and items eliminated in consolidation. Excluding the equity transactions described in Note 14, Shareholders' Equity, and the transactions noted below, we have no other related party transactions. Previously, we conducted banking transactions with and made loans to and entered into loan commitments with members of our Board of Directors and certain of the businesses with which they are affiliated or associated. All such loans and loan commitments were made in accordance with applicable laws and government regulations and on substantially the same terms, including interest rates and collateral, as those prevailing at the same time for comparable transactions with persons of similar creditworthiness that are not affiliated with us and, when made, did not present any undue risk of collectability. As of December 31, 2015, we are no longer making loans or entering into loan commitments with members of our Board of Directors and their affiliates. As a result, the outstanding loan balance from December 31, 2014 of loans entered into with members of our Board of Directors was paid in full during the year ended December 31, 2015. The following is a summary of loan transactions with members of the Board of Directors and certain of their affiliates and associates:
Deposits maintained by members of the Board of Directors and executive officers at the Bank totaled $240 thousand and $197 thousand at December 31, 2015 and 2014, respectively. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The components of income tax expense (benefit) from continuing operations consisted of the following for the years ended December 31:
The reasons for the differences between the statutory federal income tax rates and our effective tax rates are summarized in the following table:
At December 31, 2015, we have a net deferred tax asset of $17.6 million, as compared with $5.9 million at December 31, 2014. Adjustments to our deferred tax valuation allowance could be required in the future if we were to conclude, on the basis of our assessment of the realizability of the deferred tax asset, that the amount of that asset which is more likely, than not, to be available to offset or reduce future taxes has decreased. Any such decrease could result in an increase in our provision for income taxes or reductions to our income tax benefits. The components of our net deferred tax asset are as follows at:
During the year ended December 31, 2013, management analyzed the positive and negative evidence in determining whether our deferred tax assets were more-likely-than-not to be realized. Based on this analysis, we reestablished a $12.5 million valuation allowance against a substantial portion of our net deferred tax assets when we determined that there was significant negative evidence with respect to our ability to realize such assets. Positive evidence included improvement in our asset quality, tax planning strategies, projected taxable income, and improvement in economic conditions. Negative evidence we considered in making this determination included the history of operating losses, which then diminished our ability to rely on projected taxable income and created uncertainty regarding the realization of a portion of the deferred tax assets at future points in time. As a result, we increased the valuation allowance against our deferred tax asset, which resulted in the recognition of a non-cash income tax charge in the amount of $5.6 million. During the year ended December 31, 2014, we recorded an income tax benefit of $608 thousand. Per ASC 740-20-45-7 all sources of pre-tax income must be considered in determining the tax benefit that results from a loss from continuing operations and that shall be allocated to continuing operations. This benefit is the result of an intraperiod tax allocation where the benefit of the income tax provision that is recorded in discontinued operations and other comprehensive income created a tax benefit in continuing operations. On a net basis we recorded no income tax provision. Based on the analysis performed, and the positive and negative evidence considered, management chose not to release any portion of the $12.1 million valuation allowance as of December 31, 2014. Positive evidence included improvement in our asset quality, tax planning strategies, projected taxable income, and improvement in economic conditions. Negative evidence included historical operating losses. Management determined the negative evidence was significant enough that until such time as we are in continuous periods of pre-tax income we would not make any reversals of our valuation allowance; however, we did conclude that it is more-likely-than-not that the existing $5.9 million net deferred tax asset will be realized. During the year ended December 31, 2015, we recorded an $11.6 million income tax benefit. Management evaluated the positive and negative evidence and determined that there was enough positive evidence to support the full realization of the deferred tax asset and that no valuation allowance was needed. Positive evidence included projected taxable income utilizing objective assumptions based on 2015 actual results, tax planning strategies, improvement in economic conditions and at least 17 years remaining on the life of our $8.3 million deferred tax asset generated from our net operating loss carryforward. Additionally, the Company has generated positive core earnings for the trailing six quarters which demonstrates the ability to be profitable in what is considered to be the Company's core business (as defined in Note 18, Business Segment Information as our commercial banking segment). While the decision to exit the mortgage business in 2013 did not necessarily ensure that the Company would become profitable, the results provide positive evidence that the decision to exit the unprofitable business is sufficient to overcome the losses incurred in recent years. Negative evidence we considered in making this determination included our three-year cumulative loss deficit and our accumulated deficit. Management determined that the expectation of future taxable income supported by our recent history of positive core earnings after adjusting for aberrational items that caused our cumulative loss condition, including discontinued operations, provided enough positive evidence to outweigh the negative evidence. Therefore, we concluded that it is more-likely-than-not that the existing $17.6 million net deferred tax asset will be realized, resulting in the reversal of the entire valuation allowance against the Company's deferred tax asset. Our deferred tax assets as of December 31, 2015 do not include $202 thousand of excess tax benefits from stock based compensation expenses that are a component of our net operating loss carryforwards. If and when such excess tax benefits are realized, stockholders equity will be increased. We file income tax returns with the U.S. federal government and the state of California. As of December 31, 2015, we were subject to examination by the Internal Revenue Service with respect to our U.S. federal tax returns for the 2012 to 2014 tax years and Franchise Tax Board for California state income tax returns for the 2011 to 2014 tax years. Net operating losses on our U.S. federal and California state income tax returns may be carried forward twenty years. As of December 31, 2015, we do not believe there will be any material adverse changes in our unrecognized tax benefits over the next 12 months. Our policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of tax expense. We did not have any accrued interest or penalties associated with any unrecognized tax benefits, and no interest expense was recognized during the years ended 2015, 2014 and 2013. |
Stock-Based Employee Compensation Plans |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Employee Compensation Plans | Stock-Based Employee Compensation Plans In May 2010, our shareholders approved the adoption of our 2010 Equity Incentive Plan (the “2010 Incentive Plan”), which authorized and set aside a total of 400,000 shares of our common stock for issuance on the exercise of stock options or the grant of restricted stock or other equity incentives to our officers, and other key employees and directors. An additional 158,211 shares of common stock were also set aside which was equal to the total of the shares that were available for the grant of equity incentives under our shareholder-approved 2008 and 2004 Equity Incentive Plans (the "Previously Approved Plans") at the time of the adoption of the 2010 Incentive Plan. Options to purchase a total of 444,812 shares of our common stock granted under the Previously Approved Plans were outstanding at December 31, 2015. The 2010 Incentive Plan provides that if any of these outstanding options under the Previously Approved Plans expire or are terminated for any reason, then the number of shares that would become available for grants or awards of equity incentives under the 2010 Incentive Plan would be increased by an equivalent number of shares. At the Annual Shareholders meeting held in May 2013, our shareholders approved an additional 800,000 share increase in the maximum number of shares of our common stock that may be issued pursuant to grants or exercises of options or restricted shares or other equity incentives under the 2010 Incentive Plan, of which 80,709 shares of restricted stock vested during the year ended December 31, 2015, thereby decreasing the maximum number of shares authorized under the 2010 Incentive Plan. As a result, as of December 31, 2015, the maximum number of shares that were authorized for the grant of options or other equity incentives under the 2010 Incentive Plan totaled 1,693,526 (assuming that all 444,812 shares of our common stock subject to options under the Previously Approved Plans expire or are terminated), or approximately 7% of the shares of our common stock then outstanding. A stock option entitles the recipient to purchase shares of our common stock at a price per share that may not be less than 100% of the fair market value of the Company’s shares on the date the option is granted. Restricted shares may be granted at such purchase prices and on such other terms, including restrictions and Company repurchase or reacquisition rights, as are fixed by the Compensation Committee at the time rights to purchase such restricted shares are granted. Stock Appreciation Rights ("SARs") entitle the recipient to receive a cash payment in an amount equal to the difference between the fair market value of the Company’s shares on the date of vesting and a “base price” (which, in most cases, will be equal to the fair market value of the Company’s shares on the date the SAR is granted), subject to the right of the Company to make such payment in shares of its common stock at their then fair market value. Options, restricted shares and SARs may vest immediately or in installments over various periods generally ranging up to five years, subject to the recipient’s continued employment or service or the achievement of specified performance goals, as determined by the Compensation Committee at the time it grants or awards the options, the restricted shares or the SARs. Stock options and SARs may be granted for terms of up to 10 years after the date of grant, but will terminate sooner upon or shortly after a termination of service occurring prior to the expiration of the term of the option or SAR. The Company will become entitled to repurchase any unvested restricted shares, at the same price that was paid for the shares by the recipient, or to cancel those shares in the event of a termination of employment or service of the holder of such shares or if any performance goals specified in the award are not satisfied. To date, the Company has not granted any SARs. Under FASB ASC 718-10, we are required to recognize, in our financial statements, the fair value of the options or any restricted shares that we grant as compensation cost over their respective service periods. The fair values of the options that were outstanding at December 31, 2015 under the 2010 Incentive Plan were estimated as of their respective dates of grant using the Black-Scholes option-pricing model. The Company, under the 2010 Incentive Plan, granted restricted stock for the benefit of its employees. These restricted shares vest over a period of three years. The recipients of restricted shares have the right to vote all shares subject to such grant and receive all dividends with respect to such shares whether or not the shares have vested. The recipients do not pay any cash consideration for the shares. Stock Options The table below summarizes the weighted average assumptions used to determine the fair values of the options granted during the following periods:
The following table summarizes the stock option activity under the Company’s equity incentive plans during the years ended December 31, 2015, 2014 and 2013, respectively.
Options to purchase 296,100, 288,892, and 94,244 shares of our common stock were exercised during the years ended December 31, 2015, 2014 and 2013, respectively. The aggregate intrinsic value of options exercised during the year ended December 31, 2015, 2014 and 2013, was $556 thousand, $558 thousand and $290 thousand, respectively. The fair values of options vested during the years ended December 31, 2015, 2014 and 2013 were $655 thousand, $831 thousand and $599 thousand, respectively. The following table provides additional information regarding the vested and unvested options that were outstanding at December 31, 2015.
The aggregate intrinsic values of options that were outstanding and exercisable under the 2010 Incentive Plan at December 31, 2015 and 2014 was $904 thousand and $1.2 million, respectively. A summary of the status of the unvested options outstanding as of December 31, 2015, 2014 and 2013, and changes in the weighted average grant date fair values of the unvested options during the years ended December 31, 2015, 2014 and 2013, are set forth in the following table.
At December 31, 2015, the weighted average period over which nonvested awards were expected to be recognized was 1.99 years. Restricted Stock We issued 98,829 shares of restricted stock under the 2010 Incentive Plan during the year ended December 31, 2015, at a price of $7.11 that vest on an annual prorated basis over the next three years. The following table summarizes the activity related to restricted stock granted, vested and forfeited under our equity incentive plans during the years ended December 31, 2015 and 2014.
Compensation Expense We expect that the compensation expense that will be recognized during the periods presented below in respect of stock options and restricted stock outstanding at December 31, 2015, will be as follows:
The aggregate amounts of stock based compensation expense recognized in our consolidated statements of operations for the years ended December 31, 2015, 2014 and 2013 were $1.2 million, $1.1 million and $804 thousand respectively, in each case net of taxes. |
Employee Benefit Plans |
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans | Employee Benefit Plans The Company has a 401(k) plan that covers substantially all full-time employees. That plan permits voluntary contributions by employees, a portion of which are sometimes matched by the Company. The Company’s expenses relating to its contributions to the 401(k) plan for the years ended December 31, 2015, 2014 and 2013 were $164 thousand, $356 thousand, and $324 thousand, respectively. In January 2001, the Company established an unfunded Supplemental Retirement Plan (“SERP”) for our former CEO, Raymond E. Dellerba, who retired from that position in April 2013. The SERP was amended and restated in April 2006 to comply with the requirements of new Section 409A of Internal Revenue Code. The SERP provides that, subject to meeting certain vesting requirements described below, upon reaching age 65, Mr. Dellerba will become entitled to receive 180 equal successive monthly retirement payments, each in an amount equal to 60% of his average monthly base salary during the three years immediately preceding his reaching 65 years old (the “Monthly SERP Benefit”). Mr. Dellerba reached the age of 65 in January 2013 and, as a result, a monthly benefit payment under the SERP to Mr. Dellerba commenced on February 1, 2013. The Company follows FASB ASC 715-30-35, which requires us to recognize in our balance sheet the funded status of any post-retirement plans that we maintain and to recognize, in other comprehensive income, changes in funded status of any such plans in any year in which changes occur. The changes in the projected benefit obligations under the SERP during 2015, 2014 and 2013, its funded status at December 31, 2015, 2014 and 2013, and the amounts recognized in our consolidated statements of financial condition at each of those dates were as follows:
As of December 31, 2015, $1.5 million benefits are expected to be paid in the next five years and a total of $1.5 million of benefits are expected to be paid from year 2021 through year 2025. In 2016, $150,000 is expected to be recognized in net periodic benefit cost. |
Earnings Per Share ("EPS") |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share ("EPS") | Earnings Per Share (“EPS”) Basic EPS excludes dilution and is computed by dividing net income or loss available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if stock options or other contracts to issue common stock were exercised or converted into common stock that would then share in our earnings. The following table shows how we computed basic and diluted EPS for the years ended December 31, 2015, 2014 and 2013.
The weighted average shares that have an antidilutive effect in the calculation of diluted net income (loss) per share and have been excluded from the computations above were as follows:
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Shareholders' Equity |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity | Shareholders’ Equity Common Stock As previously reported, in March 2013, we sold an additional 2,222,222 shares of our common stock, at a purchase price of $6.75 per shares in cash, to Carpenter Community Bancfund L.P. and Carpenter Community Bancfund-A, L.P. (collectively, the “Carpenter Funds”) for approximately $15.0 million. The purchase price of $6.75 per share of common stock was equal to our tangible book value per share of common stock as of December 31, 2012 and represented a 15% premium over the closing price of our shares on the last trading day immediately preceding the date the sale was consummated. The proceeds from the sale of those shares were contributed by us to capitalize a new wholly-owned asset management subsidiary, PMAR, which used those proceeds to fund the purchase of $15.8 million of non-performing loans and foreclosed properties from the Bank. As a result of the previous stock purchased by the Carpenter Funds, this transaction is considered to be a related party transaction. Preferred Stock and Warrants On August 28, 2015, we entered into an Exchange Agreement (the “Exchange Agreement”) with SBAV, LP, an affiliate of Clinton Group, Inc. (“SBAV”), and the Carpenter Funds pursuant to which SBAV and the Carpenter Funds exchanged an aggregate of 112,000 shares of the Company’s Series B Convertible 8.4% Noncumulative Preferred Stock (the “Series B Shares”), 35,225 shares of the Series C 8.4% Noncumulative Preferred Stock (the “Series C Shares”) and warrants to purchase 761,278 shares of the Company’s common stock (the “Warrants”) for an aggregate of 3,009,148 shares of the Company’s common stock (the “Exchange Transaction”). The Series B Shares, Series C Shares and Warrants exchanged by SBAV and the Carpenter Funds in the Exchange Transaction comprised all of the Company’s outstanding shares of preferred stock and warrants to purchase shares of the Company’s common stock. The Exchange Transaction closed on September 30, 2015. Due to the ownership interests of SBAV and the Carpenter Funds, this transaction is considered to be a related party transaction. Accumulated Other Comprehensive Income, net Accumulated other comprehensive income, net as of December 31, 2015, 2014 and 2013 was as follows:
Dividends Payment of Cash Dividends by the Company. California laws place restrictions on the ability of California corporations to pay cash dividends on preferred or common stock. Subject to certain limited exceptions, a California corporation may pay cash dividends only to the extent of (i) the amount of its retained earnings or (ii) the amount by which the fair value of the corporation’s assets exceeds its liabilities. The Company's ability to pay dividends is also limited by the ability of the Bank to pay cash dividends to the Company. See “—Payment of Dividends by the Bank to the Company” below. During the years ended December 31, 2015, 2014 and 2013, we issued 5,917, 11,123, and 5,382 Series C Shares, respectively, in lieu of accumulated declared and undeclared dividends on the Series B Shares. As of December 31, 2015, we had no outstanding Series C Shares or Series B Shares as a result of the Exchange Transaction noted above in “Preferred Stock and Warrants.” Payment of Dividends by the Bank to the Company. Generally, the principal source of cash available to a bank holding company consists of cash dividends from its bank subsidiaries. Under California law, the Board of Directors of the Bank may declare and pay cash dividends to the Company, which is its sole shareholder, subject to the restriction that the amount available for the payment of cash dividends may not exceed the lesser of (i) the Bank’s retained earnings or (ii) its net income for its last three fiscal years (less the amount of any dividends paid during such period). Cash dividends by the Bank to the Company in excess of that amount may be made only with the prior approval of the California Commissioner of Financial Institutions (“Commissioner”). If the Commissioner finds that the shareholders’ equity of the Bank is not adequate, or that the payment by the Bank of cash dividends to the Company would be unsafe or unsound for the Bank, the Commissioner can order the Bank not to pay such dividends. The ability of the Bank to pay dividends is further restricted under the Federal Deposit Insurance Corporation Improvement Act of 1991, which prohibits an FDIC-insured bank from paying dividends if, after making such payment, the bank would fail to meet any of its minimum capital requirements. Under the Financial Institutions Supervisory Act and Federal Financial Institutions Reform, Recovery and Enforcement Act of 1989, federal banking regulators also have authority to prohibit FDIC-insured financial institutions from engaging in business practices which are considered to be unsafe or unsound. Under the authority of these acts, federal bank regulatory agencies, as part of their supervisory powers, generally require FDIC insured banks to adopt dividend policies which limit the payment of cash dividends. As a result, it is not expected that the Bank will be permitted to pay cash dividends for the foreseeable future. While restrictions on the payment of dividends from the Bank to us exist, there are no restrictions on the dividends that PMAR may pay to the Company. PMAR has approximately $14.7 million in assets and could provide the Company with additional cash if required. |
Commitments and Contingencies |
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Commitments and Contingencies | Commitments and Contingencies Leases We lease certain facilities and equipment under various non-cancelable operating leases, which generally include 2% to 6% escalation clauses in the lease agreements. Rent expense for the years ended December 31, 2015, 2014 and 2013 was $2.8 million, $2.6 million, and $2.7 million, respectively. Future minimum non-cancelable lease commitments were as follows at December 31, 2015:
Repurchase Reserves We have historically maintained reserves for possible repurchases that we may have been required to make of certain of the mortgage loans which we sold as a result of deficiencies or defects that may be found to exist in such loans. Our repurchase reserve also covered returns of any premiums earned and administrative fees pertaining to the repurchase of mortgage loans that did not meet investor guidelines, including potential loss of advances on Veterans Affairs or Federal Housing Authority Ginnie Mae loans. As a result of our exit from the mortgage banking business and no longer being subject to potential loss for anything other than mortgage fraud, we have undertaken an analysis of our accrual. Our analysis assumes that the repurchase liability exposure will decrease over time as mortgage loans are paid off and as we are no longer originating new mortgage loans. We repurchased $619 thousand and $1.3 million of loans during the years ended December 31, 2015 and 2014, respectively. We review the repurchase reserves throughout the year for adequacy. The following table sets forth information, at December 31, 2015 and 2014, with respect to our reserves:
Commitments To meet the financing needs of our customers in the normal course of business, we are a party to financial instruments with off-balance sheet risk. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated financial statements. At December 31, 2015 and 2014, we were committed to fund certain loans including letters of credit amounting to approximately $193 million and $148 million, respectively. The contractual amounts of a credit-related financial instrument, such as a commitment to extend credit, a credit-card arrangement or a letter of credit, represents the amount of potential accounting loss should the commitment be fully drawn upon, the customer were to default, and the value of any existing collateral securing the customer’s payment obligation becomes worthless. The loss reserve for unfunded loan commitments was $275,000 at each of December 31, 2015 and 2014. As a result, we use the same credit policies in making commitments to extend credit and conditional obligations as we do for on-balance sheet instruments. Commitments generally have fixed expiration dates; however, since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. We evaluate each customer’s creditworthiness on a case-by-case basis, using the same credit underwriting standards that are employed in making commercial loans. The amount of collateral obtained, if any, upon an extension of credit is based on our evaluation of the creditworthiness of the customer. Collateral held varies, but may include accounts receivable, inventory, property, plant and equipment, residential real estate and income-producing commercial properties. We are required to purchase stock in the FRBSF in an amount equal to 6% of our capital, one-half of which must be paid currently with the balance due upon request. The Bank is a member of the FHLB and therefore, is required to purchase FHLB stock in an amount equal to the lesser of 1% of the Bank’s real estate loans that are secured by residential properties, or 5% of total advances. Litigation, Claims and Assessments We are a defendant in or a party to a number of legal actions or proceedings that arise in the ordinary course of business. In some of these actions and proceedings, claims for monetary damages are asserted against us. In accordance with applicable accounting guidance, we establish an accrued liability for lawsuits or other legal proceedings when they present loss contingencies that are both probable and estimable. We estimate any potential loss based upon currently available information and significant judgments and a variety of assumptions, and known and unknown uncertainties. Moreover, the facts and circumstances on which such estimates are based will change over time. Therefore, the amount of any losses we might incur in any lawsuits or other legal proceedings may exceed amounts which we had accrued based on our estimates and those estimates do not represent the maximum loss exposure that we may have in connection with any lawsuits or other legal proceedings. Based on our evaluation of the lawsuits and other proceedings that were pending against us as of December 31, 2015, the outcomes in those suits or other proceedings are not expected to have, either individually or in the aggregate, a material adverse effect on our consolidated financial position, results of operations or cash flows. However, in light of the inherent uncertainties involved, some of which are beyond our control, and the very large or indeterminate damages often sought in such legal actions or proceedings, an adverse outcome in one or more of these suits or proceedings could be material to our results of operations or cash flows for any particular reporting period. |
Capital/Operating Plans |
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Regulatory Capital Requirements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital/Operating Plans | Capital/Operating Plans The Company and the Bank are subject to various regulatory capital requirements administered by the federal and state banking agencies. A failure to meet minimum capital requirements is likely to lead to the imposition by federal and state regulators of (i) certain requirements, such as an order requiring additional capital to be raised, and (ii) operational restrictions that could have a direct and material adverse effect on operating results. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Company and Bank to maintain minimum amounts and ratios (set forth in the following table) of total capital, common equity Tier 1 capital and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier I capital (as defined) to average assets (as defined). We believe that, as of December 31, 2015, the Company and the Bank met all capital adequacy requirements to which they are subject and have not been notified by any regulatory agency that would require the Company or the Bank to maintain additional capital. The actual capital amounts and ratios of the Company and the Bank at December 31, 2015 and December 31, 2014 are presented in the following tables:
As the above tables indicate, at December 31, 2015 and 2014, the Bank (on a stand-alone basis) qualified as a “well—capitalized” institution, and the capital ratios of the Company (on a consolidated basis) exceeded the capital ratios mandated for bank holding companies, under federally mandated capital standards and federally established prompt corrective action regulations. Since December 31, 2015, there have been no events or circumstances known to us which have changed or which are expected to result in a change in the Company’s or the Bank’s classification as well-capitalized institutions. In early July 2013, the Federal Reserve Board and the FDIC issued final rules implementing the Basel III regulatory capital framework and related Dodd-Frank Wall Street Reform and Consumer Protection Act changes. The rules revise minimum capital requirements and adjust prompt corrective action thresholds. The final rules revise the regulatory capital elements, add a new common equity Tier 1 capital ratio, increase the minimum Tier 1 capital ratio requirement, and implement a new capital conservation buffer. The rules also permit certain banking organizations to retain, through a one-time election, the existing treatment for accumulated other comprehensive income. The final rules took effect for community banks on January 1, 2015, subject to a transition period for certain parts of the rules. At December 31, 2015 the Bank (on a stand-alone basis) continued to qualify as a well-capitalized institution, and the Company continued to exceed the minimum required capital ratios applicable to it, under the capital adequacy guidelines described above. |
Parent Company Only Information |
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Parent Company Only Information | Parent Company Only Information Condensed Statements of Financial Condition
Condensed Statements of Operations
Condensed Statements of Cash Flows
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Business Segment Information |
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Business Segment Information | Business Segment Information We have one reportable business segment, commercial banking. The commercial banking segment provides small and medium-size businesses, professional firms and individuals with a diversified range of products and services such as various types of deposit accounts, various types of commercial and consumer loans, cash management services, and online banking services. We also have one non-reportable segment, discontinued operations, which is comprised of our mortgage banking business. Our mortgage banking business originated mortgage loans that, for the most part, were resold within 30 days to long-term investors in the secondary residential mortgage market. Since our operating segment derives all of its revenues from interest and noninterest income and interest expense constitutes its most significant expense, this segment, as well as our discontinued operations, are reported below using net interest income (interest income less interest expense) and noninterest income (primarily net gains on sales of SBA loans and fee income). We do not allocate general and administrative expenses or income taxes to our operating segment. The following table sets forth information regarding the net interest income and noninterest income for our commercial banking and discontinued operations segments, respectively, for the years ended December 31, 2015, 2014 and 2013.
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Unaudited Quarterly Information |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unaudited Quarterly Information | Unaudited Quarterly Information Unaudited quarterly information for each of the three months in the years ended December 31, 2015 and 2014 was as follows:
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Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||
Basis of Accounting | The accompanying consolidated financial statements have been prepared in accordance with the instructions of the U.S. Securities and Exchange Commission (the “SEC”) to Form 10-K and in accordance with generally accepted accounting principles in effect in the United States (“GAAP”), on a basis consistent with prior periods. |
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Use of Estimates | Use of Estimates The preparation of the financial statements in conformity with GAAP requires us to make certain estimates and assumptions that could affect the reported amounts of certain of our assets, liabilities, and contingencies at the date of the financial statements and the reported amounts of our revenues and expenses during the reporting periods. For the fiscal periods covered by this Report, those estimates related primarily to our determinations of the allowance for loan and lease losses (“ALLL”), the fair values of securities available for sale, repurchase reserves on mortgage loans sold, and the determination of reserves pertaining to deferred tax assets. If circumstances or financial trends on which those estimates were based were to change in the future or there were to occur any currently unanticipated events affecting the amounts of those estimates, our future financial position or results of operations could differ, possibly materially, from those expected at the current time. |
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Principles of Consolidation | Principles of Consolidation Our consolidated financial statements for the years ended December 31, 2015, 2014 and 2013 include the accounts of PMBC, the Bank and PMAR. All significant intercompany balances and transactions were eliminated in consolidation. |
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Discontinued Operations | Discontinued Operations The revenues and expenses of our mortgage banking division are reported in the consolidated statements of operations as discontinued operations for all periods presented. In determining whether the revenues and expenses are reported as discontinued operations, we evaluate whether we have any significant continuing involvement in the management of any of the mortgage banking operations. If we were to determine that we had any significant continuing involvement, the revenues and expenses of the respective operations would not be recorded in discontinued operations. As of December 31, 2015 and 2014, we determined that the mortgage repurchase reserves are a liability of the Bank and are not included within the liabilities of discontinued operations. The repurchase reserves are included within other liabilities of the consolidated statements of financial condition. |
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Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of the statements of cash flow, cash and cash equivalents consist of cash and due from banks, interest bearing demand deposits with the FRBSF, federal funds sold and interest-bearing deposits, with original maturities of 90 days or less, with financial institutions. Generally, federal funds are sold for one-day periods. |
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Federal Home Loan Bank Stock and Federal Reserve Bank Stock | Federal Home Loan Bank Stock and Federal Reserve Bank Stock The Bank, as a member of the Federal Home Loan Bank System, is required to maintain an investment in capital stock of the Federal Home Loan Bank of San Francisco (“FHLB”) in varying amounts based on asset size and on amounts borrowed from the FHLB. Because no ready market exists and there is no quoted market value for this stock, the Bank’s investment in this stock is carried at cost. The Bank also maintains an investment in capital stock of the FRBSF, which is carried at cost because no ready market exists and there is no quoted market value for this stock. |
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Securities Available for Sale, at Fair Value | Securities Available for Sale, at Fair Value Securities available for sale are those which we intend to hold for an indefinite period of time, but which may be sold in response to changes in liquidity needs, changes in interest rates, changes in prepayment risks and other similar factors. These securities are recorded at fair value, with unrealized gains and losses excluded from earnings and reported as other comprehensive income or loss, net of taxes. Purchased premiums and discounts are recognized as interest income using the interest method over the term of these securities. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method. Declines in the fair value of these securities below their cost which are other-than-temporary are reflected in earnings as realized losses. In determining other-than-temporary losses, we consider a number of factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether we have the intent to sell the security or it is more likely than not that we will be required to sell the security before its anticipated recovery. A high degree of subjectivity and judgment is involved in assessing whether an other-than-temporary decline exists and such assessments are based on information available to us at the time we make such assessments. |
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Loan Loss Obligation on Loans Previously Sold | Loan Loss Obligation on Loans Previously Sold Upon a sale of mortgage loans held for sale (“LHFS”) that we have originated, the risk of loss due to default by the borrower is generally transferred to the investor. However, we are required to make certain representations to the purchasers of such loans relating to credit information, loan documentation and collateral. These representations and warranties may extend through the contractual life of the loan. If subsequent to the sale of such a loan, any underwriting deficiencies, borrower fraud or documentation defects are discovered with respect to the loan, we may become obligated to repurchase the loan or indemnify the investors for any losses from borrower defaults if such deficiencies or defects cannot be cured within the specified cure periods following their discovery. The obligation for losses attributable to any erroneous representations and warranties or other deficiencies or defects is recorded at its estimate of expected future losses using historical and projected loss frequency and loss severity ratios to estimate our exposure to such losses. In the case of early loan payoffs and early defaults on certain loans, we may be required to repay all or a portion of any premium initially paid by the purchaser of the loan at the time of sale. The obligations associated with early loan payoffs and early defaults on mortgage loans are estimated on the basis of historical loss experience by type of loan. |
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Loans and Allowance for Loan and Lease Losses | Loans and Allowance for Loan and Lease Losses Loans that we intend and have the ability to hold for the foreseeable future or until maturity or pay-off are stated at their respective principal amounts outstanding, net of unearned income. Interest is accrued daily as earned, except where reasonable doubt exists as to collectability of the loan. A loan with principal or interest that is 90 days or more past due, based on its contractual payment due dates, is placed on nonaccrual status, in which case accrual of interest is discontinued, except that we may elect to continue the accrual of interest when the estimated net realizable value of collateral securing the loan is expected to be sufficient to enable us to recover both principal and accrued interest and those loans are in the process of collection. Generally, interest payments received on nonaccrual loans are applied to principal. Once all principal has been received by us, any additional interest payments are recognized as interest income on a cash basis. An ALLL is established by means of a provision for loan and lease losses that is charged against income. If we conclude that the collection, in full, of the carrying amount of a loan has become unlikely, the loan, or the portion thereof that is believed to be uncollectible, is charged against the ALLL. We carefully monitor changing economic conditions, the loan portfolio by category, the financial condition of borrowers and the history of the performance of the loan portfolio in determining the adequacy of the ALLL. Additionally, as the volume of loans increases, additional provisions for loan losses may be required to maintain the allowance at levels deemed adequate. Moreover, if economic conditions were to deteriorate, causing the risk of loan losses to increase, it would become necessary to increase the allowance to an even greater extent, which would necessitate additional provisions that would be charged to income. We also evaluate the unfunded portion of loan commitments and establish a loss reserve, included in other liabilities, for such unfunded commitments through a charge against noninterest expense. The loss reserve for unfunded loan commitments was $275,000 at each of December 31, 2015 and 2014. The ALLL is based on estimates, and ultimate loan losses may vary from current estimates. These estimates are reviewed periodically and, as adjustments become necessary, they are recorded in earnings in the periods in which they become known. |
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Impaired Loans | Impaired Loans A loan is generally classified as impaired when, in management’s opinion, the principal or interest will not be collectible in accordance with its contractual terms. We measure and reserve for impairment on a loan-by-loan basis using either the present value of expected future cash flows discounted at the loan’s effective interest rate, or the fair value of the collateral if the loan is collateral dependent. We exclude smaller, homogeneous loans, such as consumer installment loans and lines of credit, from these impairment calculations. Also, loans that experience insignificant payment delays or shortfalls are generally not considered impaired. |
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Restructured Loans | Restructured Loans We sometimes modify or restructure loans when the borrower is experiencing financial difficulties by making a concession to the borrower in the form of changes in the amortization terms, reductions in the interest rates, the acceptance of interest only payments and, in limited cases, concessions to the outstanding loan balances. These loans are classified as troubled debt restructurings (“TDRs”) and considered impaired loans. TDRs are loans modified for the purpose of alleviating temporary impairments to the borrower’s financial condition or cash flows. A workout plan between us and the borrower is designed to provide a bridge for borrower cash flow shortfalls in the near term. A TDR loan may be returned to accrual status when the loan is brought current, has performed in accordance with the contractual restructured terms for a time frame of at least six months and the ultimate collectability of the total contractual restructured principal and interest in no longer in doubt. These loans, while no longer considered a TDR, are still considered impaired loans. |
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Loan Origination Fees and Costs | Loan Origination Fees and Costs Loan origination fees and related direct costs for loans held for investment are deferred and amortized to interest income as an adjustment to yield over the respective lives of the loans using the effective interest method, except for loans that are revolving or short-term in nature for which the straight line method is used, which approximates the interest method. |
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Investment in Unconsolidated Subsidiaries | Investment in Unconsolidated Subsidiaries Investment in unconsolidated subsidiaries is stated at cost. |
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Other Real Estate Owned | Other Real Estate Owned Other real estate owned (“OREO”) consists of real properties acquired by us through foreclosure or in lieu of foreclosure in satisfaction of loans. OREO is recorded at fair value less estimated selling costs at the time of acquisition or foreclosure. Loan balances in excess of fair value, less selling costs, are charged to the ALLL prior to foreclosure. Any subsequent operating expenses or income, reductions in estimated fair values and gains or losses on disposition of such properties are charged or credited to current operations. |
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Premises and Equipment | Premises and Equipment Premises and equipment are stated at cost, less accumulated depreciation and amortization which are charged to expense on a straight-line basis over the estimated useful lives of the assets or, in the case of leasehold improvements, over the term of the leases, whichever is shorter. For income tax purposes, accelerated depreciation methods are used. Maintenance and repairs are charged directly to expense as incurred. Improvements to premises and equipment that extend their useful lives are capitalized. When such an asset is disposed of, the applicable costs and accumulated depreciation thereon are removed from the accounts and any resulting gain or loss is included in current operations. Rates of depreciation and amortization are based on the following estimated useful lives:
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Income Taxes | Income Taxes Deferred income taxes and liabilities are determined using the asset and liability method. Under this method, the net deferred tax asset or liability is determined based on the tax effects of the temporary differences between the book and tax basis of the various balance sheet assets and liabilities and gives current recognition to changes in tax rates and laws. We record as a deferred tax asset on our balance sheet an amount equal to the tax credit and tax loss carryforwards and tax deductions ("tax benefits") that we believe will be available to us to offset or reduce the amount of our income taxes in future periods. Under applicable federal and state income tax laws and regulations, such tax benefits will expire if not used within specified periods of time. Accordingly, the ability to fully use our deferred tax asset depends on the amount of taxable income that we generate during those time periods. At least once each year, or more frequently, if warranted, we make estimates of future taxable income that we believe we are likely to generate during those future periods. If we conclude, on the basis of those estimates and the amount of the tax benefits available to us, that it is more likely than not that we will be able to fully utilize those tax benefits prior to their expiration, we recognize the deferred tax asset in full on our balance sheet. On the other hand, if we conclude on the basis of those estimates and the amount of the tax benefits available to us that it has become more likely than not that we will be unable to utilize those tax benefits in full prior to their expiration, then, we would establish (or increase any existing) valuation allowance to reduce the deferred tax asset on our balance sheet to the amount which we believe we are more likely than not to be able to utilize. Such a reduction is implemented by recognizing a non-cash charge that would have the effect of increasing the provision, or reducing any credit, for income taxes that we would otherwise have recorded in our statement of operations. The determination of whether and the extent to which we will be able to utilize our deferred tax asset involves significant management judgments and assumptions that are subject to period to period changes as a result of changes in tax laws, changes in market or economic conditions that could affect our operating results or variances between our actual operating results and our projected operating results, as well as other factors. Uncertain tax positions that meet the more likely than not recognition threshold are measured to determine the amount of benefit to recognize. An uncertain tax position is measured at the largest amount of benefit that management believes has a greater than 50% likelihood of realization upon settlement. |
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Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic income (loss) per share for any fiscal period is computed by dividing net income (loss) allocable to our common shareholders for such period by the weighted average number of common shares outstanding during that period. Fully diluted income (loss) per share reflects the potential dilution that could have occurred assuming the conversion of any convertible securities into common stock at conversion prices, and the exercise of all outstanding options and warrants to purchase shares of our common stock at exercise prices, that were less than the market price of our shares, thereby increasing the number of shares outstanding during the period, and is determined using the treasury method. Although accumulated undeclared dividends on our preferred stock are not recorded in the accompanying consolidated statement of operations, such dividends are included for purposes of computing earnings (loss) per share available to our common shareholders. |
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Stock Option Plans | Stock Option Plans We follow Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) 718-10, Share-Based Payment, which requires entities that grant stock options or other equity compensation awards to employees to recognize in their financial statements the fair values of those options or share awards as compensation cost over their requisite service (vesting) periods of those options or share awards. Since stock-based compensation cost that is recognized in the statements of operations is to be determined based on the equity compensation awards that we expect will ultimately vest, that compensation expense is reduced for estimated forfeitures of unvested options or unvested share awards that typically occur due primarily to terminations of employment of optionees or recipients of such share awards. Forfeitures are required to be estimated at the time of the grant of options or other share awards and are revised, if necessary, in subsequent periods if actual forfeitures differ from those earlier estimates. For purposes of the determination of stock-based compensation expense for the year ended December 31, 2015, we estimated forfeitures of 11.9% of the options that were granted to officers and other employees. |
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Comprehensive Income (Loss) | Comprehensive Income (Loss) Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. However, certain changes in assets and liabilities, such as unrealized gains and losses on securities available for sale, are reported as a separate component of the equity in the accompanying consolidated statement of financial condition, net of income taxes, and such items, along with net income, are components of comprehensive income (loss). |
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Segment Reporting | Segment Reporting During the years ended December 31, 2015, 2014 and 2013, we had one reportable segment, which was our commercial banking division, and one non-reportable segment which was our discontinued operations related to our mortgage banking division. In connection with our exit from the mortgage banking business in 2013, the revenues and expenses of our mortgage banking division have been classified as discontinued operations for all periods presented. |
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Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-04, “Receivables — Troubled Debt Restructurings by Creditors (Subtopic 310-40) — Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure,” which amended its guidance to clarify when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan should be derecognized and the real estate recognized. This guidance is effective for interim and annual periods beginning after December 15, 2014. Early adoption is permitted. We adopted this guidance on January 1, 2015 and it did not have a material effect on our consolidated financial statements. In April 2014, the FASB issued ASU 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity,” which amended its guidance on classification and reporting of discontinued operations. The amendments clarify when an entity should classify a component as discontinued operations, how to report the balances related to discontinued operations for prior periods, and additional disclosure requirements for discontinued operations. This guidance is effective for interim and annual periods beginning after December 15, 2014. Early adoption is permitted only for disposals which have not been previously reported. We adopted this guidance on January 1, 2015 and it did not have a material effect on our consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which amended its guidance on revenue recognition to conform with international accounting guidance under the International Accounting Standards Board. The ASU provides a framework for addressing revenue recognition and replaces most existing revenue recognition guidance, as well as requires increased disclosure requirements. In August 2015, the FASB issued ASU 2015-14 to defer the effective date of ASU 2014-09 by one year. Accordingly, this guidance is effective for interim and annual periods beginning after December 15, 2017 with early adoption permitted for interim and annual periods beginning after December 15, 2016. We will adopt this guidance on January 1, 2018. We are currently evaluating the expected impact on our consolidated financial statements. In June 2014, the FASB issued ASU 2014-11, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period,” which amended its guidance on how to account for certain performance related share-based compensation plans. The amendments clarify the guidance on how to account for performance based awards when the requisite service period is met prior to potential performance targets being achieved. This guidance is effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. We adopted this guidance on January 1, 2016 and it did not have a material effect on our consolidated financial statements. In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements — Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern,” which defines management's responsibility to evaluate whether there is substantial doubt about an organization's ability to continue as a going concern and clarifies when to provide related footnote disclosure. This guidance is effective for interim and annual periods beginning after December 15, 2016. Early adoption is permitted. We will adopt this guidance on January 1, 2017 and do not expect it to have a material effect on our consolidated financial statements. In January 2015, the FASB issued ASU 2015-01, “Income Statement - Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items,” which eliminated the concept of extraordinary items from GAAP. This guidance is effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. We adopted this guidance on January 1, 2015 and it did not have an impact on our consolidated financial statements. In February 2015, the FASB issued ASU 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis,” amends the guidance for assessing how relationships of related parties affect the consolidation analysis, eliminates the presumption that a general partner should consolidate a limited partnership, eliminates the consolidation model specific to limited partnerships, clarifies when fees paid to a decision maker should be a factor in consolidation of a variable interest entity, and reduces the number of variable interest entity consolidation models. This guidance is effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. We adopted this guidance on January 1, 2016 and it did not have an impact on our consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs,” which requires that the debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. This simplifies the presentation of debt issuance costs and makes the presentation consistent with the presentation of debt discounts. This guidance is effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. We adopted this guidance on January 1, 2016 and it did not have a material impact on our consolidated financial statements. In August 2015, the FASB issued ASU 2015-15, “Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements — Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting,” which clarifies the accounting for debt issuance costs for line-of-credit arrangements. We adopted this guidance on January 1, 2016 and it did not have a material impact on our consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities,” which enhances the reporting model for financial instruments to provide users of financial statements with more useful information. Some of the provisions include: requiring equity investments to be measured at fair value with changes in fair value recognized in net income, simplifying the impairment assessment of equity investments without readily determinable fair values, eliminating the requirement to disclose the method and significant assumptions used to estimate fair value on financial instruments measured at amortized cost on the balance sheet, requiring public business entities to use the exit price notion when measuring the fair value of financial instruments, requiring the reporting organization to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the organization has elected to measure the liability at fair value in accordance with the fair value option, requiring separate presentation of financial assets and liabilities by measurement category and form of financial asset on the balance sheet or notes to the financial statements, and clarifying that the reporting organization should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the organization's other deferred tax assets. This guidance is effective for interim and annual periods beginning after December 15, 2017. Early adoption is not permitted for public companies. We will adopt this guidance on January 1, 2018 and do not expect it to have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which requires lessees to recognize the following for all leases (with the exception of short-term leases) at the commencement date: a lease liability measured on a discounted basis and a right-of-use asset a specified asset for the lease term. Under the new guidance, lessor account is largely unchanged and the the accounting for sale and leaseback transactions were simplified. This guidance is effective for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. We will adopt this guidance on January 1, 2019 and do not expect it to have a material impact on our consolidated financial statements and our disclosures related to leases. |
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Subsequent Events | Subsequent Events Subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued. The Company recognizes in the financial statements the effects of all subsequent events that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing the financial statements. The Company’s financial statements do not recognize subsequent events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after the balance sheet date and before financial statements are available to be issued. The Company has evaluated events subsequent through the date these consolidated financial statements were filed with the SEC. |
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Measurement Methodology | Under FASB ASC 820-10, we group assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are:
Risks with Fair Value Measurements Fair value estimates are made at a discrete point in time based on relevant market information and other information about the financial instruments. Because no active market exists for a significant portion of our financial instruments, fair value estimates are based in large part on judgments we make primarily regarding current economic conditions, risk characteristics of various financial instruments, prepayment rates, and future expected loss experience. These estimates are subjective in nature and invariably involve some inherent uncertainties. Additionally, the occurrence of unexpected events or changes in circumstances can occur that could require us to make changes to our assumptions and which, in turn, could significantly affect and require us to make changes to our previous estimates of fair value. In addition, the fair value estimates are based on existing on and off-balance sheet financial instruments without attempting to estimate the value of existing and anticipated future customer relationships and the value of assets and liabilities that are not considered financial instruments, such as premises and equipment and OREO. Measurement Methodology Cash and Cash Equivalents. The fair value of cash and cash equivalents approximates its carrying value. Interest-Bearing Deposits with Financial Institutions. The fair values of interest-bearing deposits maturing within one year approximate their carrying values. FHLB and FRBSF Stock. The Bank is a member of the FHLB and the FRBSF. As members, we are required to own stock of the FHLB and the FRBSF, the amount of which is based primarily on the level of our borrowings from those institutions. We also have the right to acquire additional shares of stock in either or both of the FHLB and the FRBSF. During the year ended December 31, 2015, we purchased $33 thousand in value of FHLB stock and no shares of FRBSF stock. The fair values of the FHLB and FRBSF stock are equal to their respective carrying amounts, are classified as restricted securities and are periodically evaluated for impairment based on our assessment of the ultimate recoverability of our investments in that stock. Any cash or stock dividends paid to us on such stock are reported as income. Investment Securities Available for Sale. Fair value measurement for our investment securities available for sale is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 investment securities include those traded on an active exchange, such as the New York Stock Exchange, U.S. Treasury securities that are traded by dealers or brokers in active over-the- counter markets and money market funds. Level 2 investment securities include mortgage-backed securities issued by government sponsored entities, municipal bonds and corporate debt securities. Securities classified as Level 3 include asset-backed securities in less liquid markets. Impaired Loans. Loans measured for impairment are measured at an observable market price (if available), or the fair value of the loan’s collateral (if the loan is collateral dependent). The fair value of an impaired loan may be estimated using one of several methods, including collateral value, market value of similar debt, liquidation value and discounted cash flows. Those impaired loans not requiring a specific loan loss reserve represent loans for which the fair value of the expected repayments or collateral exceeds the recorded investments in such loans. When the fair value of the collateral is based on an observable market price or a current appraised value, we record the impaired loan at Level 2. When an appraised value is not available or we determine that the fair value of the collateral is further impaired below the appraised value and there is no observable market price, we record the impaired loan at Level 3. Loans. The fair value for loans with variable interest rates less a credit discount is the carrying amount. The fair value of fixed rate loans is derived by calculating the discounted value of future cash flows expected to be received by the various homogeneous categories of loans. All loans have been adjusted to reflect changes in credit risk. Changes are not recorded directly as an adjustment to current earnings or comprehensive income, but rather as an adjustment component in determining the overall adequacy of the loan loss reserve. Other Real Estate Owned. OREO is reported at its net realizable value (fair value less estimated costs to sell) at the time any real estate collateral is acquired by the Bank in satisfaction of a loan. Subsequently, OREO is carried at the lower of carrying value or fair value less estimated costs to sell. Fair value is determined based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. When the fair value of the collateral is based on an observable market price or a current appraised value, we record the foreclosed asset at Level 2. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, we record the foreclosed asset at Level 3. Deposits. Deposits are carried at historical cost. The carrying amounts of deposits from savings and money market accounts are deemed to approximate fair value as they either have no stated maturities or short-term maturities. Certificates of deposit are estimated utilizing discounted cash flow techniques. The interest rates applied are rates currently being offered for similar certificates of deposit. Borrowings. The fair value of borrowings is the carrying amount for those borrowings that mature on a daily basis. The fair value of term borrowings is derived by calculating the discounted value of future cash flows expected to be paid out by the Company. Junior Subordinated Debentures. The fair value of the junior subordinated debentures is based on quoted market prices of the underlying securities. These securities are variable rate in nature and repriced quarterly. Commitments to Extend Credit and Standby Letters of Credit. The fair value of commitments to extend credit and standby letters of credit are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. Interest Receivable and Interest Payable. The carrying amounts of our accrued interest receivable and accrued interest payable are deemed to approximate fair value. |
Significant Accounting Policies (Tables) |
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Dec. 31, 2015 | |||||||||
Accounting Policies [Abstract] | |||||||||
Premises and equipment estimated useful lives | Rates of depreciation and amortization are based on the following estimated useful lives:
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assets and liabilities measured on a recurring basis | The following tables show the recorded amounts of assets and liabilities measured at fair value on a recurring basis at December 31, 2015 and 2014.
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Changes in Level 3 assets measured at fair value on a recurring basis | The changes in Level 3 assets measured at fair value on a recurring basis are summarized as follows for the year ended December 31, 2015:
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Assets measured at fair value on a nonrecurring basis | Information regarding assets measured at fair value on a nonrecurring basis is set forth in the table below.
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Summary of significant unobservable inputs and valuation techniques | For our fair value measurements classified in Level 3 of the fair value hierarchy as of December 31, 2015, a summary of the significant unobservable inputs and valuation techniques is as follows:
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Estimated fair values and related carrying amounts of financial instruments | The table below provides estimated fair values and related carrying amounts of our financial instruments as of December 31, 2015 and December 31, 2014, excluding financial assets and liabilities which are recorded at fair value on a recurring basis.
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Investments (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Major components of securities available for sale and comparison of amortized cost, estimated fair market values, and gross unrealized gains and losses | The following table sets forth the major components of securities available for sale and compares the amortized costs and estimated fair market values of, and the gross unrealized gains and losses on, these securities at December 31, 2015 and 2014:
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Amortized cost and estimated fair values of securities available for sale by contractual maturities and historical prepayments based on prior twelve months of principal payments | Expected maturities will differ from contractual maturities and historical prepayments, particularly with respect to collateralized mortgage obligations, primarily because prepayment rates are affected by changes in conditions in the interest rate market and, therefore, future prepayment rates may differ from historical prepayment rates.
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Gross unrealized losses and fair values of investments | The tables below indicate, as of December 31, 2015 and 2014, the gross unrealized losses and fair values of our investments, aggregated by investment category, and length of time that the individual securities have been in a continuous unrealized loss position.
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Other-than-temporary impairments, portion attributable to non-credit related factors recognized in other comprehensive loss | The table below presents, for the years ended December 31, 2015 and 2014, a roll-forward of OTTI in those instances when a portion of the OTTI was attributable to non-credit related factors and, therefore, was recognized in other comprehensive loss:
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Schedule of equity method investments | As of December 31, 2015 and December 31, 2014, our other investment was as follows:
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Loans and Allowance for Loan and Lease Losses (Tables) |
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Composition of loan portfolio | The loan portfolio consisted of the following at:
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Allowance for loan losses and loan balances | Set forth below is a summary of the activity in the ALLL, by portfolio type, during the years ended December 31, 2015, 2014 and 2013.
Set forth below is information regarding loan balances and the related ALLL, by portfolio type, as of December 31, 2015 and December 31, 2014.
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Summary of delinquency status of loans by portfolio type | The following table provides a summary of the delinquency status of loans by portfolio type at December 31, 2015 and 2014:
(1) Loans 90 days or more past due included one consumer mortgage loan collateralized by residential real estate with a recorded investment of $535 thousand which is in the process of foreclosure. |
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Loans on nonaccrual status by portfolio type | The following table provides information with respect to loans on nonaccrual status, by portfolio type, as of December 31, 2015 and 2014:
(1) Nonaccrual loans may include loans that are currently considered performing loans. |
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Summary of loans by portfolio type and internal credit quality ratings | We classify our loan portfolio using internal credit quality ratings. The following table provides a summary of loans by portfolio type and our internal credit quality ratings as of December 31, 2015 and 2014, respectively.
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Schedule of impaired loans | The following table sets forth information regarding impaired loans, at December 31, 2015 and December 31, 2014:
The table below contains additional information with respect to impaired loans, by portfolio type, as of December 31, 2015 and 2014:
Average balances and interest income recognized on impaired loans, by portfolio type, for the year ended December 31, 2015, 2014 and 2013 were as follows:
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Troubled debt restructurings | During the years ended December 31, 2015, 2014 and 2013, TDRs that were modified within the preceding 12-month period which subsequently defaulted were as follows:
The following table presents loans restructured as TDRs during the years ended December 31, 2015, 2014 and 2013:
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Premises and Equipment (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Major classes of premises and equipment | The major classes of premises and equipment are as follows:
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Deposits (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||
Banking and Thrift [Abstract] | |||||||||||||||||||||||||||||||||||||
Maturities of time certificates of deposit | The scheduled maturities of all time certificates of deposit at December 31, 2015 were as follows:
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Borrowings and Contractual Obligations (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowings | At December 31, 2015 and 2014, our borrowings and contractual obligations consisted of the following:
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Federal Home Loan Bank borrowings | These borrowings had a weighted-average annualized interest rate of 1.02% for the year ended December 31, 2015.
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Terms of debentures remained outstanding | Set forth below are the respective principal amounts, and certain other information regarding the terms of the Debentures that remained outstanding as of December 31, 2015 and 2014:
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Related Party Transactions (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of loan transactions with Board of Directors | The following is a summary of loan transactions with members of the Board of Directors and certain of their affiliates and associates:
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Income Taxes (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of income tax expense (benefit) | The components of income tax expense (benefit) from continuing operations consisted of the following for the years ended December 31:
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Differences between statutory federal income tax rate and effective tax rates | The reasons for the differences between the statutory federal income tax rates and our effective tax rates are summarized in the following table:
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Components of deferred tax asset | The components of our net deferred tax asset are as follows at:
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Stock-Based Employee Compensation Plans (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted average assumptions used to determine fair values of options granted | The table below summarizes the weighted average assumptions used to determine the fair values of the options granted during the following periods:
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Stock option activity under plans | The following table summarizes the stock option activity under the Company’s equity incentive plans during the years ended December 31, 2015, 2014 and 2013, respectively.
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Additional information regarding vested and unvested options outstanding | The following table provides additional information regarding the vested and unvested options that were outstanding at December 31, 2015.
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Summary of status of unvested options and weighted average grant date fair values of unvested options | A summary of the status of the unvested options outstanding as of December 31, 2015, 2014 and 2013, and changes in the weighted average grant date fair values of the unvested options during the years ended December 31, 2015, 2014 and 2013, are set forth in the following table.
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Schedule of restricted stock activity | The following table summarizes the activity related to restricted stock granted, vested and forfeited under our equity incentive plans during the years ended December 31, 2015 and 2014.
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Compensation expense of non-vested stock options outstanding | We expect that the compensation expense that will be recognized during the periods presented below in respect of stock options and restricted stock outstanding at December 31, 2015, will be as follows:
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Employee Benefit Plans (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in projected benefit obligations under supplemental retirement plan | The changes in the projected benefit obligations under the SERP during 2015, 2014 and 2013, its funded status at December 31, 2015, 2014 and 2013, and the amounts recognized in our consolidated statements of financial condition at each of those dates were as follows:
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Earnings Per Share ("EPS") (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of basic and diluted earnings per share | The following table shows how we computed basic and diluted EPS for the years ended December 31, 2015, 2014 and 2013.
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Antidilutive securities excluded from earnings per share | The weighted average shares that have an antidilutive effect in the calculation of diluted net income (loss) per share and have been excluded from the computations above were as follows:
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Shareholders' Equity (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accumulated other comprehensive income | Accumulated other comprehensive income, net as of December 31, 2015, 2014 and 2013 was as follows:
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Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of future minimum non-cancelable lease commitments | Future minimum non-cancelable lease commitments were as follows at December 31, 2015:
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Activity related repurchase reserves | The following table sets forth information, at December 31, 2015 and 2014, with respect to our reserves:
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Capital/Operating Plans (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Capital Requirements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Actual amount and capital ratios of Company and Bank | The actual capital amounts and ratios of the Company and the Bank at December 31, 2015 and December 31, 2014 are presented in the following tables:
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Parent Company Only Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Statements of Financial Condition | Condensed Statements of Financial Condition
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Condensed Statements of Operations | Condensed Statements of Operations
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Condensed Statements of Cash Flows | Condensed Statements of Cash Flows
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Business Segment Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest income and noninterest income | The following table sets forth information regarding the net interest income and noninterest income for our commercial banking and discontinued operations segments, respectively, for the years ended December 31, 2015, 2014 and 2013.
|
Unaudited Quarterly Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of quarterly financial information | Unaudited quarterly information for each of the three months in the years ended December 31, 2015 and 2014 was as follows:
|
Nature of Business (Details) |
12 Months Ended |
---|---|
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Reselling period of originated mortgage loans (in days) | 30 days |
Significant Accounting Policies - Premises and Equipment Estimated Useful Lives (Detail) |
12 Months Ended |
---|---|
Dec. 31, 2015 | |
Minimum | |
Property, Plant and Equipment [Line Items] | |
Furniture and equipment, estimated useful life | 3 years |
Maximum | |
Property, Plant and Equipment [Line Items] | |
Furniture and equipment, estimated useful life | 7 years |
Fair Value Measurements - Additional Information (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
shares
| |
Fair Value Disclosures [Abstract] | |
Payments to acquire Federal Home Loan Bank stock | $ | $ 33 |
Purchases of Federal Reserve Bank of San Francisco stock | shares | 0 |
Fair Value Measurements - Changes in Level 3 Assets Measured at Fair Value on Recurring Basis (Detail) - Asset Backed Securities $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
| |
Changes in Level 3 assets measured at fair value on a recurring basis | |
Balance of recurring Level 3 instruments at December 31, 2014 | $ 1,650 |
Total gains or losses (realized/unrealized): | |
Included in other comprehensive income | (114) |
Settlements | (56) |
Transfers in and/or out of Level 3 | 0 |
Balance of Level 3 assets at December 31, 2015 | $ 1,480 |
Fair Value Measurements - Valuation Techniques for Level 3 Financial Instruments (Detail) - Level 3 $ in Thousands |
Dec. 31, 2015
USD ($)
|
---|---|
Asset Backed Securities | Third-Party Pricing | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Assets, fair value | $ 1,480 |
Impaired loans | Third-Party Pricing | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Assets, fair value | 25,857 |
Assets | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Assets, fair value | $ 27,337 |
Investments - Other Investments (Details) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015
USD ($)
|
Dec. 31, 2014
USD ($)
Investment
|
Dec. 31, 2013
USD ($)
|
|
Investments, Debt and Equity Securities [Abstract] | |||
Number of investments accounted for under the equity method | Investment | 1 | ||
Investment in limited partnership, percent of investment redeemed | 100.00% | ||
Return of capital | $ 2,087 | $ 0 | $ 0 |
Investments accounted for under the equity method | $ 0 | $ 2,081 |
Loans and Allowance for Loan and Lease Losses - Activity in ALLL (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Allowance for Loan and Lease Losses [Roll Forward] | |||||||||||
Balance at beginning of year | $ 13,833 | $ 11,358 | $ 13,833 | $ 11,358 | $ 10,881 | ||||||
Charge offs | (2,927) | (653) | (6,458) | ||||||||
Recoveries | 1,810 | 1,628 | 2,430 | ||||||||
Provision | $ 0 | $ 0 | $ 0 | 0 | $ 0 | $ 450 | $ 600 | 450 | 0 | 1,500 | 4,505 |
Balance at end of year | 12,716 | 13,833 | 12,716 | 13,833 | 11,358 | ||||||
Commercial loans | |||||||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||||||
Balance at beginning of year | 7,670 | 5,812 | 7,670 | 5,812 | 6,340 | ||||||
Charge offs | (2,643) | (551) | (5,945) | ||||||||
Recoveries | 1,798 | 1,467 | 2,337 | ||||||||
Provision | (186) | 942 | 3,080 | ||||||||
Balance at end of year | 6,639 | 7,670 | 6,639 | 7,670 | 5,812 | ||||||
Real Estate | |||||||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||||||
Balance at beginning of year | 5,133 | 4,517 | 5,133 | 4,517 | 3,487 | ||||||
Charge offs | 0 | 0 | (308) | ||||||||
Recoveries | 4 | 76 | 5 | ||||||||
Provision | (28) | 540 | 1,333 | ||||||||
Balance at end of year | 5,109 | 5,133 | 5,109 | 5,133 | 4,517 | ||||||
Land Development | |||||||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||||||
Balance at beginning of year | 296 | 165 | 296 | 165 | 248 | ||||||
Charge offs | (85) | 0 | (5) | ||||||||
Recoveries | 0 | 0 | 54 | ||||||||
Provision | 71 | 131 | (132) | ||||||||
Balance at end of year | 282 | 296 | 282 | 296 | 165 | ||||||
Consumer and Single Family Mortgages | |||||||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||||||
Balance at beginning of year | $ 734 | $ 864 | 734 | 864 | 806 | ||||||
Charge offs | (199) | (102) | (200) | ||||||||
Recoveries | 8 | 85 | 34 | ||||||||
Provision | 143 | (113) | 224 | ||||||||
Balance at end of year | $ 686 | $ 734 | $ 686 | $ 734 | $ 864 |
Loans and Allowance for Loan and Lease Losses - Nonaccrual Loans and Restructured Loans (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Impaired loans: | ||
Nonaccruing loans | $ 5,063 | $ 18,118 |
Nonaccruing restructured loans | 20,070 | 5,935 |
Accruing restructured loans | 724 | 11,084 |
Accruing impaired loans | 0 | 0 |
Total impaired loans | 25,857 | 35,137 |
Impaired loans less than 90 days delinquent | ||
Impaired loans: | ||
Total impaired loans | $ 6,584 | $ 32,371 |
Premises and Equipment - Major Classes of Premises and Equipment (Detail) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Property, Plant and Equipment [Abstract] | ||
Furniture and equipment | $ 8,371 | $ 8,380 |
Leasehold improvements | 1,910 | 2,036 |
Premises and Equipment, gross | 10,281 | 10,416 |
Accumulated depreciation and amortization | (9,139) | (9,324) |
Total | $ 1,142 | $ 1,092 |
Premises and Equipment - Additional Information (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization | $ 525 | $ 462 | $ 536 |
Continuing Operations | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization | $ 525 | $ 462 | $ 400 |
Deposits - Additional Information (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Banking and Thrift [Abstract] | ||
Interest bearing deposits with financial institutions | $ 103,276 | $ 167,138 |
Weighted average percentage yields on deposits | 0.26% | 0.25% |
Interest-bearing time deposits with financial institutions | $ 4,665 | $ 4,668 |
Weighted average percentage yields on time deposits | 0.53% | 0.32% |
Aggregate amount of time deposits in denominations of $250,000 or more | $ 58,800 | $ 97,800 |
Deposits - Maturities of Time Certificates of Deposit (Details) $ in Thousands |
Dec. 31, 2015
USD ($)
|
---|---|
Banking and Thrift [Abstract] | |
2016 | $ 255,491 |
2017 | 20,798 |
2018 | 3,106 |
2019 | 919 |
2020 and beyond | 12 |
Total | $ 280,326 |
Borrowings and Contractual Obligations - Additional Information (Details) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015
USD ($)
trust
|
Dec. 31, 2014
USD ($)
|
|
Debt Disclosure [Line Items] | ||
Weighted-average annualized interest rate | 1.02% | |
Unused borrowing capacity with FHLB | $ 241,000 | $ 175,000 |
Highest amount of borrowings outstanding from FHLB | 39,500 | 70,000 |
FHLB advances—short-term | 10,000 | 29,500 |
FHLB advances—long-term | $ 0 | $ 10,000 |
Borrowings for FHLB, weighted-average annualized interest rate | 0.75% | |
Number of unconsolidated subsidiary investments | trust | 2 | |
Debentures qualified as Tier I capital, for regulatory purposes | $ 17,000 | $ 17,000 |
Residential mortgage and other real estate loans | ||
Debt Disclosure [Line Items] | ||
Fair value of securities and loans pledged as collateral of FHLB Borrowings | $ 523,000 | |
Junior subordinated debentures | ||
Debt Disclosure [Line Items] | ||
Number of unconsolidated subsidiary investments | trust | 2 | |
Maximum period to defer interest payments | 5 years |
Borrowings and Contractual Obligations - Borrowings (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Debt Disclosure [Abstract] | ||
FHLB advances—short-term | $ 10,000 | $ 29,500 |
FHLB advances—long-term | 0 | 10,000 |
Total borrowings | $ 10,000 | $ 39,500 |
Borrowings and Contractual Obligations - Federal Home Loan Bank Borrowings (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Long and Short Term Federal Home Loan Advances [Line Items] | ||
Principal amounts | $ 10,000,000 | $ 39,500,000 |
1.08% Federal Home Loan Bank borrowings | ||
Long and Short Term Federal Home Loan Advances [Line Items] | ||
Principal amounts | $ 5,000,000 | |
Interest rate | 1.08% | |
Maturity dates | Sep. 19, 2016 | |
0.96% Federal Home Loan Bank borrowings | ||
Long and Short Term Federal Home Loan Advances [Line Items] | ||
Principal amounts | $ 5,000,000 | |
Interest rate | 0.96% | |
Maturity dates | Sep. 30, 2016 |
Borrowings and Contractual Obligations - Terms of Debentures Remained Outstanding (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Debt Instrument [Line Items] | ||
Principal Amount | $ 17,527 | $ 17,527 |
Junior subordinated debentures | ||
Debt Instrument [Line Items] | ||
Principal Amount | 17,527 | 17,527 |
Junior subordinated debentures | September 2002 | ||
Debt Instrument [Line Items] | ||
Principal Amount | $ 7,217 | $ 7,217 |
Interest rate, spread on variable rate | 3.40% | 3.40% |
Junior subordinated debentures | October 2004 | ||
Debt Instrument [Line Items] | ||
Principal Amount | $ 10,310 | $ 10,310 |
Interest rate, spread on variable rate | 2.00% | 2.00% |
Related Party Transactions - Summary of Loan Transactions (Details) - Board of Directors - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Loans and Leases Receivable, Related Parties [Roll Forward] | ||
Beginning balance | $ 96 | $ 653 |
New loans granted | 0 | 124 |
Principal repayments | (96) | (111) |
Transfers out | 0 | (570) |
Ending balance | $ 0 | $ 96 |
Related Party Transactions - Additional Information (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Board of Directors and executive officers | ||
Related Party Transaction [Line Items] | ||
Deposits by related party | $ 240 | $ 197 |
Income Taxes - Additional Information (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Income Tax Disclosure [Abstract] | |||||||||||
Net deferred tax assets | $ 17,576,000 | $ 5,933,000 | $ 17,576,000 | $ 5,933,000 | |||||||
Income tax expense (benefit) | (11,551,000) | $ 0 | $ 0 | $ 0 | (608,000) | $ 0 | $ 0 | $ 0 | (11,551,000) | (608,000) | $ 5,610,000 |
Intraperiod tax allocation | 0 | ||||||||||
Valuation allowance | 0 | 12,084,000 | 0 | 12,084,000 | 12,500,000 | ||||||
Net operating loss carry forward | 8,313,000 | 8,254,000 | 8,313,000 | 8,254,000 | |||||||
Excess tax benefits from stock based compensation that are not included in deferred tax assets | 202,000 | 202,000 | |||||||||
Accrued interest or penalties associated with unrecognized tax benefits | $ 0 | $ 0 | 0 | 0 | 0 | ||||||
Interest expense recognized | $ 0 | $ 0 | $ 0 |
Income Taxes - Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Current taxes: | |||||||||||
Federal | $ 5 | $ 7 | $ 957 | ||||||||
State | 4 | 0 | 289 | ||||||||
Total current taxes | 9 | 7 | 1,246 | ||||||||
Deferred taxes: | |||||||||||
Federal | (8,490) | (455) | 3,150 | ||||||||
State | (3,070) | (160) | 1,214 | ||||||||
Total deferred taxes | (11,560) | (615) | 4,364 | ||||||||
Total income tax (benefit) expense | $ (11,551) | $ 0 | $ 0 | $ 0 | $ (608) | $ 0 | $ 0 | $ 0 | $ (11,551) | $ (608) | $ 5,610 |
Income Taxes - Differences Between Statutory Federal Income Tax Rate and Effective Tax Rates (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Income Tax Disclosure [Abstract] | |||
Federal income tax based on statutory rate | 34.00% | 34.00% | 34.00% |
State franchise tax net of federal income tax benefit | 7.10% | 6.30% | 7.00% |
Permanent differences | 0.00% | (4.10%) | (0.60%) |
Other | 3.90% | 2.10% | 0.20% |
Valuation allowance | (1343.50%) | 2.90% | (100.80%) |
Total income tax (benefit) expense | (1298.50%) | 41.20% | (60.20%) |
Income Taxes - Components of Net Deferred Tax Asset (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
---|---|---|---|
Deferred tax asset: | |||
Allowance for loan and lease losses | $ 5,253 | $ 5,740 | |
Other than temporary impairment on securities | 78 | 78 | |
Deferred compensation | 1,098 | 1,159 | |
Other accrued expenses | 1,421 | 1,196 | |
Charitable contributions | 208 | 220 | |
Reserve for unfunded commitments | 113 | 113 | |
Tax credits | 158 | 161 | |
Net operating loss carry forward | 8,313 | 8,254 | |
Stock based compensation | 651 | 587 | |
Depreciation and amortization | 177 | 208 | |
Unrealized losses on securities and deferred compensation | 637 | 556 | |
Total deferred tax assets | 18,107 | 18,272 | |
Deferred tax liabilities: | |||
State taxes | (230) | (230) | |
Other | (301) | (25) | |
Total deferred tax liabilities | (531) | (255) | |
Valuation allowance | 0 | (12,084) | $ (12,500) |
Total net deferred tax asset | $ 17,576 | $ 5,933 |
Stock-Based Employee Compensation Plans - Weighted Average Assumptions (Details) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average fair value of options granted during period (in dollars per share) | $ 3.13 | $ 2.84 | $ 2.56 |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 44.00% | 44.00% | 44.00% |
Risk-free interest rate | 1.82% | 2.15% | 1.72% |
Expected dividends | 0.00% | 0.61% | 1.00% |
Expected term (years) | 6 years | 6 years 8 months | |
Weighted average fair value of options granted during period (in dollars per share) | $ 3.13 | $ 2.84 | $ 2.56 |
Stock Options | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (years) | 3 years 25 days | ||
Stock Options | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (years) | 7 years 4 months 24 days |
Stock-Based Employee Compensation Plans - Stock Option Activity (Details) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Number of Shares | |||
Outstanding, beginning of period | 1,257,390 | 1,821,000 | 1,566,965 |
Granted | 112,828 | 58,970 | 632,000 |
Exercised | (296,100) | (288,892) | (94,244) |
Forfeited/Canceled | (235,422) | (333,688) | (283,721) |
Outstanding, end of period | 838,696 | 1,257,390 | 1,821,000 |
Options exercisable, end of period | 622,770 | 788,886 | 1,035,434 |
Options vested, end of period | 622,770 | 788,886 | 1,035,434 |
Weighted Average Exercise Price Per Share | |||
Outstanding, beginning of period (in dollars per share) | $ 6.51 | $ 6.88 | $ 6.90 |
Granted (in dollars per share) | 7.09 | 6.38 | 6.15 |
Exercised (in dollars per share) | 5.15 | 4.24 | 3.23 |
Forfeited/Canceled (in dollars per share) | 9.59 | 10.47 | 6.66 |
Outstanding, end of period (in dollars per share) | 6.20 | 6.51 | 6.88 |
Options exercisable, end of period (in dollars per share) | 6.06 | 6.69 | 7.50 |
Options vested, end of period (in dollars per share) | $ 6.06 | $ 6.69 | $ 7.50 |
Stock-Based Employee Compensation Plans - Summary of Status of Unvested Options Outstanding and Weighted Average Grant Date Fair Values (Details) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Number of Shares Subject to Options | |||
Unvested at the beginning of the year | 468,504 | 785,566 | 635,706 |
Granted | 112,828 | 58,970 | 632,000 |
Vested | (248,406) | (338,558) | (290,766) |
Forfeited/Canceled | (117,000) | (37,474) | (191,374) |
Unvested at the end of the year | 215,926 | 468,504 | 785,566 |
Weighted Average Grant Date Fair Value | |||
Unvested at the beginning of the year (in dollars per share) | $ 2.68 | $ 2.57 | $ 2.30 |
Granted (in dollars per share) | 3.13 | 2.84 | 2.56 |
Vested (in dollars per share) | 2.63 | 2.45 | 2.06 |
Forfeited/Canceled (in dollars per share) | 2.78 | 2.57 | 2.38 |
Unvested at the end of the year (in dollars per share) | $ 2.93 | $ 2.68 | $ 2.57 |
Stock-Based Employee Compensation Plans - Restricted Stock Activity (Details) - Restricted Stock - $ / shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Number of Shares | ||
Outstanding at the beginning of the year | 141,254 | 141,284 |
Granted | 98,829 | 51,256 |
Vested | (80,709) | (45,000) |
Forfeited | (30,091) | (6,286) |
Outstanding at the end of the year | 129,283 | 141,254 |
Average Grant Date Fair Value | ||
Outstanding, at beginning of year (in dollars per share) | $ 6.29 | $ 6.23 |
Granted (in dollars per share) | 7.11 | 6.37 |
Vested (in dollars per share) | 6.48 | 6.24 |
Forfeited (in dollars per share) | 6.44 | 6.21 |
Outstanding, at end of year (in dollars per share) | $ 6.75 | $ 6.29 |
Stock-Based Employee Compensation Plans - Compensation Expense Expected to be Recognized (Details) $ in Thousands |
Dec. 31, 2015
USD ($)
|
---|---|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
2016 | $ 613 |
2017 | 279 |
2018 | 55 |
2019 | 7 |
2020 and beyond | 0 |
Total | 954 |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
2016 | 226 |
2017 | 113 |
2018 | 35 |
2019 | 7 |
2020 and beyond | 0 |
Total | 381 |
Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
2016 | 387 |
2017 | 166 |
2018 | 20 |
2019 | 0 |
2020 and beyond | 0 |
Total | $ 573 |
Employee Benefit Plans - Additional Information (Details) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015
USD ($)
Installment
yr
|
Dec. 31, 2014
USD ($)
|
Dec. 31, 2013
USD ($)
|
|
Defined Benefit Plan Disclosure [Line Items] | |||
Expenses relating to 401(k) contributions to employees | $ 164 | $ 356 | $ 324 |
Defined expected benefits to be paid in next five years | 1,500 | ||
Defined expected benefits to be paid from year 2021 to 2025 | 1,500 | ||
Benefits expected to be recognized in net periodic benefit cost in next year | $ 150 | ||
Mr. Dellerba | Supplemental Executive Retirement Plan (SERP) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Minimum age requirement to be eligible for SERP | yr | 65 | ||
Number of monthly retirement payments | Installment | 180 | ||
Retirement payment amount as percentage of average monthly base salary | 60.00% | ||
Number of years after reaching age 65 to receive monthly retirement payments | 3 years |
Earnings Per Share ("EPS") - Anti-dilutive Securities (Details) - shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Stock Options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive shares not included in computation of earnings per share | 360,600 | 1,746,696 | 1,612,495 |
Convertible securities | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive shares not included in computation of earnings per share | 0 | 2,602,707 | 2,396,504 |
Shares subject to stock purchase warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive shares not included in computation of earnings per share | 0 | 761,278 | 761,278 |
Shareholders' Equity - Accumulated Other Comprehensive Income Additional Information (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Unrealized Gain (Loss) on Securities Available-for-Sale, Tax | |||
Other comprehensive income (loss) before reclassifications, tax expense (benefit) | $ 81 | $ 847 | $ (1,141) |
Amounts reclassified from accumulated other comprehensive income, tax expense (benefit) | 18 | ||
Other comprehensive income (loss), tax expense (benefit) | $ 81 | $ 847 | (1,123) |
Unrealized Gain (Loss) on Supplemental Executive Plan Expense, Tax | |||
Amounts reclassified from accumulated other comprehensive income, tax expense (benefit) | 10 | ||
Other comprehensive income (loss), tax benefit (expense) | $ 10 |
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Commitment And Contingencies [Line Items] | |||
Rent expense | $ 2,800 | $ 2,600 | $ 2,700 |
Repurchased loans | 619 | 1,300 | |
Commitment to fund certain loans including letter of credit | 193,000 | 148,000 | |
Loss reserve for unfunded loan commitments | $ 275 | $ 275 | |
Minimum | |||
Commitment And Contingencies [Line Items] | |||
Non-cancelable operating leases, escalation clauses rate | 2.00% | ||
Maximum | |||
Commitment And Contingencies [Line Items] | |||
Non-cancelable operating leases, escalation clauses rate | 6.00% |
Commitments and Contingencies - Future Minimum Non-Cancelable Lease Commitments (Details) $ in Thousands |
Dec. 31, 2015
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2016 | $ 2,302 |
2017 | 1,467 |
2018 | 1,327 |
2019 | 1,340 |
2020 and beyond | 507 |
Total | $ 6,943 |
Commitments and Contingencies - Repurchase Reserves (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Repurchase Reserve [Roll Forward] | ||
Beginning balance | $ 381 | $ 1,883 |
Provision for repurchases | (1) | (1,502) |
Settlements | (66) | 0 |
Total repurchases reserve | $ 314 | $ 381 |
Parent Company Only Information - Condensed Statements of Financial Condition (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
Dec. 31, 2012 |
---|---|---|---|---|
Assets: | ||||
Due from banks and interest-bearing deposits with financial institutions | $ 103,276 | $ 167,138 | ||
Other assets | 12,017 | 13,494 | ||
Total assets | 1,062,389 | 1,099,610 | ||
Liabilities and shareholders’ equity: | ||||
Shareholders’ equity | 133,916 | 119,281 | $ 115,158 | $ 122,876 |
Total liabilities and shareholders’ equity | 1,062,389 | 1,099,610 | ||
Parent Company | ||||
Assets: | ||||
Due from banks and interest-bearing deposits with financial institutions | 9,736 | 8,805 | ||
Investment in subsidiaries | 141,197 | 127,419 | ||
Other assets | 649 | 641 | ||
Total assets | 151,582 | 136,865 | ||
Liabilities and shareholders’ equity: | ||||
Liabilities | 139 | 57 | ||
Junior subordinated debentures | 17,527 | 17,527 | ||
Shareholders’ equity | 133,916 | 119,281 | ||
Total liabilities and shareholders’ equity | $ 151,582 | $ 136,865 |
Parent Company Only Information - Condensed Statements of Operations (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Interest income | $ 9,860 | $ 9,653 | $ 9,813 | $ 9,471 | $ 10,205 | $ 9,664 | $ 9,134 | $ 9,287 | $ 38,797 | $ 38,290 | $ 35,651 |
Interest expense | $ (1,281) | $ (1,342) | $ (1,324) | $ (1,322) | $ (1,525) | $ (1,353) | $ (1,508) | $ (1,443) | (5,269) | (5,829) | (5,317) |
Net income (loss) | 12,441 | 357 | (22,216) | ||||||||
Parent Company | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Interest income | 9 | 10 | 60 | ||||||||
Interest expense | (507) | (580) | (544) | ||||||||
Other income | 28 | 81 | 0 | ||||||||
Other expenses | (984) | (849) | (1,934) | ||||||||
Equity in undistributed earnings of subsidiaries | 13,895 | 1,695 | (19,798) | ||||||||
Net income (loss) | $ 12,441 | $ 357 | $ (22,216) |
Business Segment Information - Additional Information (Details) - Segment |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Segment Reporting [Abstract] | |||
Reportable business segments | 1 | 1 | 1 |
Non-reportable segments | 1 | 1 | 1 |
Reselling period of originated mortgage loans (in days) | 30 days |
Unaudited Quarterly Information (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Quarterly Financial Information [Line Items] | |||||||||||
Total interest income | $ 9,860 | $ 9,653 | $ 9,813 | $ 9,471 | $ 10,205 | $ 9,664 | $ 9,134 | $ 9,287 | $ 38,797 | $ 38,290 | $ 35,651 |
Total interest expense | 1,281 | 1,342 | 1,324 | 1,322 | 1,525 | 1,353 | 1,508 | 1,443 | 5,269 | 5,829 | 5,317 |
Net interest income | 8,579 | 8,311 | 8,489 | 8,149 | 8,680 | 8,311 | 7,626 | 7,844 | 33,528 | 32,461 | 30,334 |
Provision for loan and lease losses | 0 | 0 | 0 | 0 | 0 | 450 | 600 | 450 | 0 | 1,500 | 4,505 |
Net interest income after provision for loan and lease losses | 8,579 | 8,311 | 8,489 | 8,149 | 8,680 | 7,861 | 7,026 | 7,394 | 33,528 | 30,961 | 25,829 |
Total noninterest income | 626 | 562 | 616 | 882 | 1,238 | 854 | 984 | 1,294 | 2,686 | 4,370 | 1,193 |
Total noninterest expense | 8,689 | 8,552 | 8,967 | 9,116 | 9,580 | 9,029 | 8,778 | 9,421 | 35,324 | 36,808 | 36,346 |
Income (loss) from continuing operations before income taxes | 516 | 321 | 138 | (85) | 338 | (314) | (768) | (733) | 890 | (1,477) | (9,324) |
Income tax (benefit) provision | (11,551) | 0 | 0 | 0 | (608) | 0 | 0 | 0 | (11,551) | (608) | 5,610 |
Net income (loss) from continuing operations | 12,067 | 321 | 138 | (85) | 946 | (314) | (768) | (733) | 12,441 | (869) | (14,934) |
Net income (loss) from discontinued operations | (659) | (71) | 772 | 1,184 | 0 | 1,226 | (7,282) | ||||
Dividends on preferred stock | 0 | (309) | 0 | 0 | (927) | 0 | 0 | ||||
Inducements for exchange of the preferred stock | 0 | (512) | 0 | 0 | (512) | 0 | 0 | ||||
Net income (loss) allocable to common shareholders | $ 12,067 | $ (500) | $ (171) | $ (394) | $ 36 | $ (693) | $ (304) | $ 155 | $ 11,002 | $ (806) | $ (23,298) |
Per share data-basic: | |||||||||||
Net (loss) income from continuing operations (in dollars per common share) | $ 0.53 | $ (0.03) | $ (0.01) | $ (0.02) | $ 0.01 | $ (0.03) | $ (0.06) | $ (0.05) | $ 0.54 | $ (0.11) | $ (0.88) |
Net (loss) income available to common shareholders (in dollars per common share) | 0.53 | (0.03) | (0.01) | (0.02) | 0.01 | (0.04) | (0.02) | 0.01 | 0.54 | (0.04) | (1.28) |
Per share data-diluted: | |||||||||||
Net (loss) income from continuing operations (in dollars per common share) | 0.53 | (0.03) | (0.01) | (0.02) | 0.01 | (0.03) | (0.06) | (0.05) | 0.53 | (0.11) | (0.88) |
Net (loss) income available to common shareholders (in dollars per common share) | $ 0.53 | $ (0.03) | $ (0.01) | $ (0.02) | $ 0.01 | $ (0.04) | $ (0.02) | $ 0.01 | $ 0.53 | $ (0.04) | $ (1.28) |
Dividend declared | |||||||||||
Quarterly Financial Information [Line Items] | |||||||||||
Accumulative dividends on preferred stock | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ (547) | $ (538) | ||||
Dividend undeclared | |||||||||||
Quarterly Financial Information [Line Items] | |||||||||||
Accumulative dividends on preferred stock | $ 0 | $ 0 | $ (309) | $ (309) | $ (251) | $ (308) | $ (308) | $ (296) | $ 0 | $ (616) | $ (544) |
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