(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
, | par value $0.001 per share | |||||||||||||
(Title of class) | (Trading Symbol) | (Name of exchange on which registered) |
☒ | Accelerated filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company |
Page | ||||||||
Item 1. | ||||||||
Consolidated Statements of Financial Condition (Unaudited) | ||||||||
Consolidated Statements of Income (Unaudited) | ||||||||
Consolidated Statements of Comprehensive Income (Unaudited) | ||||||||
Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) | ||||||||
Consolidated Statements of Cash Flows (Unaudited) | ||||||||
1. Hope Bancorp, Inc. | ||||||||
2. Basis of Presentation | ||||||||
3. Earnings Per Share (“EPS”) | ||||||||
4. Equity Investments | ||||||||
5. Securities Available for Sale | ||||||||
6. Loans Receivable and Allowance for Credit Losses | ||||||||
7. Leases | ||||||||
8. Deposits | ||||||||
9. Borrowings | ||||||||
10. Subordinated Debentures and Convertible Notes | ||||||||
11. Derivative Financial Instruments | ||||||||
12. Commitments and Contingencies | ||||||||
13. Goodwill, Intangible Assets, and Servicing Assets | ||||||||
14. Income Taxes | ||||||||
15. Fair Value Measurements | ||||||||
16. Stockholders’ Equity | ||||||||
17. Stock-Based Compensation | ||||||||
18. Regulatory Matters | ||||||||
19. Revenue Recognition | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 1. | LEGAL PROCEEDINGS | |||||||
Item 1A. | RISK FACTORS | |||||||
Item 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | |||||||
Item 3. | DEFAULTS UPON SENIOR SECURITIES | |||||||
Item 4. | MINE SAFETY DISCLOSURES | |||||||
Item 5. | OTHER INFORMATION | |||||||
Item 6. | EXHIBITS | |||||||
INDEX TO EXHIBITS | ||||||||
SIGNATURES |
(Unaudited) | |||||||||||
June 30, 2020 | December 31, 2019 | ||||||||||
ASSETS | (Dollars in thousands, except share data) | ||||||||||
Cash and cash equivalents: | |||||||||||
Cash and due from banks | $ | $ | |||||||||
Interest bearing cash in other banks | |||||||||||
Total cash and cash equivalents | |||||||||||
Interest bearing deposits in other financial institutions | |||||||||||
Securities available for sale, at fair value | |||||||||||
Equity investments | |||||||||||
Loans held for sale, at the lower of cost or fair value | |||||||||||
Loans receivable, net of allowance for credit losses of $ | |||||||||||
Other real estate owned (“OREO”), net | |||||||||||
Federal Home Loan Bank (“FHLB”) stock, at cost | |||||||||||
Premises and equipment, net | |||||||||||
Accrued interest receivable | |||||||||||
Deferred tax assets, net | |||||||||||
Customers’ liabilities on acceptances | |||||||||||
Bank owned life insurance (“BOLI”) | |||||||||||
Investments in affordable housing partnerships | |||||||||||
Operating lease right-of-use assets, net | |||||||||||
Goodwill | |||||||||||
Core deposit intangible assets, net | |||||||||||
Servicing assets, net | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
(Continued) |
(Unaudited) | |||||||||||
June 30, 2020 | December 31, 2019 | ||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | (Dollars in thousands, except share data) | ||||||||||
LIABILITIES: | |||||||||||
Deposits: | |||||||||||
Noninterest bearing | $ | $ | |||||||||
Interest bearing: | |||||||||||
Money market and NOW accounts | |||||||||||
Savings deposits | |||||||||||
Time deposits | |||||||||||
Total deposits | |||||||||||
FHLB advances | |||||||||||
Convertible notes, net | |||||||||||
Subordinated debentures, net | |||||||||||
Accrued interest payable | |||||||||||
Acceptances outstanding | |||||||||||
Operating lease liabilities | |||||||||||
Commitments to fund investments in affordable housing partnerships | |||||||||||
Other liabilities | |||||||||||
Total liabilities | $ | $ | |||||||||
STOCKHOLDERS’ EQUITY: | |||||||||||
Common stock, $ | $ | $ | |||||||||
Additional paid-in capital | |||||||||||
Retained earnings | |||||||||||
Treasury stock, at cost; | ( | ( | |||||||||
Accumulated other comprehensive income, net | |||||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||||||
INTEREST INCOME: | |||||||||||||||||||||||
Interest and fees on loans | $ | $ | $ | $ | |||||||||||||||||||
Interest on securities | |||||||||||||||||||||||
Interest on other investments | |||||||||||||||||||||||
Total interest income | |||||||||||||||||||||||
INTEREST EXPENSE: | |||||||||||||||||||||||
Interest on deposits | |||||||||||||||||||||||
Interest on FHLB advances | |||||||||||||||||||||||
Interest on other borrowings and convertible notes | |||||||||||||||||||||||
Total interest expense | |||||||||||||||||||||||
NET INTEREST INCOME BEFORE PROVISION FOR CREDIT LOSSES | |||||||||||||||||||||||
PROVISION FOR CREDIT LOSSES | |||||||||||||||||||||||
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | |||||||||||||||||||||||
NONINTEREST INCOME: | |||||||||||||||||||||||
Service fees on deposit accounts | |||||||||||||||||||||||
International service fees | |||||||||||||||||||||||
Loan servicing fees, net | |||||||||||||||||||||||
Wire transfer fees | |||||||||||||||||||||||
Swap fees | |||||||||||||||||||||||
Net gains on sales of other loans | |||||||||||||||||||||||
Net gains on sales of securities available for sale | |||||||||||||||||||||||
Other income and fees | |||||||||||||||||||||||
Total noninterest income | |||||||||||||||||||||||
NONINTEREST EXPENSE: | |||||||||||||||||||||||
Salaries and employee benefits | |||||||||||||||||||||||
Occupancy | |||||||||||||||||||||||
Furniture and equipment | |||||||||||||||||||||||
Advertising and marketing | |||||||||||||||||||||||
Data processing and communications | |||||||||||||||||||||||
Professional fees | |||||||||||||||||||||||
Investments in affordable housing partnerships expenses | |||||||||||||||||||||||
FDIC assessments | |||||||||||||||||||||||
Credit related expenses | |||||||||||||||||||||||
OREO expense (income), net | ( | ||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total noninterest expense | |||||||||||||||||||||||
INCOME BEFORE INCOME TAXES | |||||||||||||||||||||||
INCOME TAX PROVISION | |||||||||||||||||||||||
NET INCOME | $ | $ | $ | $ | |||||||||||||||||||
EARNINGS PER COMMON SHARE | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income: | |||||||||||||||||||||||
Change in unrealized net holding gains on securities available for sale | |||||||||||||||||||||||
Change in unrealized net holding losses on interest rate swaps used in cash flow hedges | ( | ( | |||||||||||||||||||||
Reclassification adjustments for net gains realized in net income | ( | ( | ( | ( | |||||||||||||||||||
Tax effect | ( | ( | ( | ( | |||||||||||||||||||
Other comprehensive income, net of tax | |||||||||||||||||||||||
Total comprehensive income | $ | $ | $ | $ |
Common stock | Additional paid-in capital | Retained earnings | Treasury stock | Accumulated other comprehensive (loss) income, net | Total stockholders’ equity | |||||||||||||||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands, except share and per share data) | ||||||||||||||||||||||||||||||||||||||||||||
BALANCE, MARCH 31, 2019 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Issuance of shares pursuant to various stock plans, net of forfeitures and tax withholding cancellations | — | |||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | ||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared on common stock ($ | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | ||||||||||||||||||||||||||||||||||||||||||||
BALANCE, JUNE 30, 2019 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||
BALANCE, MARCH 31, 2020 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||
Issuance of shares pursuant to various stock plans, net of forfeitures and tax withholding cancellations | — | |||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | ||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared on common stock ($ | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | ||||||||||||||||||||||||||||||||||||||||||||
BALANCE, JUNE 30, 2020 | $ | $ | $ | $ | ( | $ | $ |
Common stock | Additional paid-in capital | Retained earnings | Treasury stock | Accumulated other comprehensive (loss) income, net | Total stockholders’ equity | |||||||||||||||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands, except share and per share data) | ||||||||||||||||||||||||||||||||||||||||||||
BALANCE, DECEMBER 31, 2018 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Issuance of shares pursuant to various stock plans, net of forfeitures and tax withholding cancellations | — | |||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | ||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared on common stock ($ | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | ||||||||||||||||||||||||||||||||||||||||||||
BALANCE, JUNE 30, 2019 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||
BALANCE, DECEMBER 31, 2019 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||
( | ( | |||||||||||||||||||||||||||||||||||||||||||
Issuance of shares pursuant to various stock plans, net of forfeitures and tax withholding cancellations | — | |||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | ||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared on common stock ($ | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | ||||||||||||||||||||||||||||||||||||||||||||
Repurchase of treasury stock | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
BALANCE, JUNE 30, 2020 | $ | $ | $ | $ | ( | $ | $ |
Six Months Ended June 30, | |||||||||||
2020 | 2019 | ||||||||||
(Dollars in thousands) | |||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash from operating activities: | |||||||||||
Discount accretion, net of depreciation and amortization | |||||||||||
Stock-based compensation expense | |||||||||||
Provision for credit losses | |||||||||||
Provision for unfunded loan commitments | |||||||||||
Valuation adjustment of OREO | |||||||||||
Net gains on sales of other loans | ( | ( | |||||||||
Earnings on BOLI | ( | ( | |||||||||
Net change in fair value of derivatives | ( | ( | |||||||||
Net losses on sale and disposal of premises and equipment | |||||||||||
Net losses on sales of OREO | |||||||||||
Net gains on sales and calls of securities available for sale | ( | ||||||||||
Net change in fair value of equity investments with readily determinable fair value | ( | ( | |||||||||
Losses on investments in affordable housing partnerships | |||||||||||
Net change in deferred income taxes | ( | ||||||||||
Proceeds from sales of loans held for sale | |||||||||||
Originations of loans held for sale | ( | ( | |||||||||
Originations of servicing assets | ( | ( | |||||||||
Net change in accrued interest receivable | ( | ( | |||||||||
Net change in other assets | ( | ( | |||||||||
Net change in accrued interest payable | ( | ||||||||||
Net change in other liabilities | ( | ||||||||||
Net cash provided by operating activities | |||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||
Purchase of interest bearing deposits in other financial institutions | ( | ( | |||||||||
Redemption of interest bearing deposits in other financial institutions | |||||||||||
Purchase of securities available for sale | ( | ( | |||||||||
Proceeds from matured, called, or paid-down securities available for sale | |||||||||||
Proceeds from sale of securities available for sale | |||||||||||
Proceeds from sales of other loans held for sale previously classified as held for investment | |||||||||||
Net change in loans receivable | ( | ||||||||||
Proceeds from sales of OREO | |||||||||||
Purchase of FHLB stock | ( | ( | |||||||||
Redemption of FHLB stock | |||||||||||
Purchase of premises and equipment | ( | ( | |||||||||
Proceeds from BOLI death benefits | |||||||||||
Investments in affordable housing partnerships | ( | ( | |||||||||
Net cash (used in) provided by investing activities | ( | ||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||
Net change in deposits | |||||||||||
Proceeds from FHLB advances | |||||||||||
Repayment of FHLB advances | ( | ( | |||||||||
Purchase of treasury stock | ( | ||||||||||
Cash dividends paid on common stock | ( | ( | |||||||||
Taxes paid in net settlement of restricted stock | ( | ( | |||||||||
Issuance of additional stock pursuant to various stock plans | |||||||||||
Net cash provided by (used in) financing activities | ( | ||||||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | |||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | |||||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | $ | |||||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | |||||||||||
Interest paid | $ | $ | |||||||||
Income taxes paid | $ | $ | |||||||||
SUPPLEMENTAL DISCLOSURES OF NON-CASH ACTIVITIES | |||||||||||
Transfer from loans receivable to OREO | $ | $ | |||||||||
Transfer from loans receivable to loans held for sale | $ | $ | |||||||||
Transfer from loans held for sale to loans receivable | $ | $ | |||||||||
Lease liabilities arising from obtaining right-of-use assets | $ | $ | |||||||||
Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||||||
Net Income (Numerator) | Weighted-Average Shares (Denominator) | Earnings Per Share | Net Income (Numerator) | Weighted-Average Shares (Denominator) | Earnings Per Share | ||||||||||||||||||||||||||||||
(Dollars in thousands, except share and per share data) | |||||||||||||||||||||||||||||||||||
Basic EPS - common stock | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
Effect of dilutive securities: | |||||||||||||||||||||||||||||||||||
Stock options, restricted stock, and ESPP shares | |||||||||||||||||||||||||||||||||||
Diluted EPS - common stock | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||||||
Net Income (Numerator) | Weighted-Average Shares (Denominator) | Earnings Per Share | Net Income (Numerator) | Weighted-Average Shares (Denominator) | Earnings Per Share | ||||||||||||||||||||||||||||||
(Dollars in thousands, except share and per share data) | |||||||||||||||||||||||||||||||||||
Basic EPS - common stock | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
Effect of dilutive securities: | |||||||||||||||||||||||||||||||||||
Stock options, restricted stock, and ESPP shares | |||||||||||||||||||||||||||||||||||
Diluted EPS - common stock | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Net change in fair value recorded during the period on equity investments with readily determinable fair value | $ | $ | $ | $ | |||||||||||||||||||
Net change in fair value recorded on equity investments sold during the period | |||||||||||||||||||||||
Net change in fair value on equity investments with readily determinable fair values | $ | $ | $ | $ | |||||||||||||||||||
At June 30, 2020 | |||||||||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Allowance For Investment Credit Losses | Fair Value | |||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Debt securities: | |||||||||||||||||||||||||||||
U.S. Government agency and U.S. Government sponsored enterprises: | |||||||||||||||||||||||||||||
Collateralized mortgage obligations | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||||||||
Residential | ( | ||||||||||||||||||||||||||||
Commercial | |||||||||||||||||||||||||||||
Corporate securities | ( | ||||||||||||||||||||||||||||
Municipal securities | ( | ||||||||||||||||||||||||||||
Total investment securities available for sale | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
At December 31, 2019 | |||||||||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Allowance For Investment Credit Losses | Fair Value | |||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Debt securities: | |||||||||||||||||||||||||||||
U.S. Government agency and U.S. Government sponsored enterprises: | |||||||||||||||||||||||||||||
Collateralized mortgage obligations | $ | $ | $ | ( | N/A | $ | |||||||||||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||||||||
Residential | ( | N/A | |||||||||||||||||||||||||||
Commercial | ( | N/A | |||||||||||||||||||||||||||
Corporate securities | ( | N/A | |||||||||||||||||||||||||||
Municipal securities | ( | N/A | |||||||||||||||||||||||||||
Total investment securities available for sale | $ | $ | $ | ( | N/A | $ |
Amortized Cost | Estimated Fair Value | ||||||||||
(Dollars in thousands) | |||||||||||
Available for sale: | |||||||||||
Due within one year | $ | $ | |||||||||
Due after one year through five years | |||||||||||
Due after five years through ten years | |||||||||||
Due after ten years | |||||||||||
U.S. Government agency and U.S. Government sponsored enterprises: | |||||||||||
Collateralized mortgage obligations | |||||||||||
Mortgage-backed securities: | |||||||||||
Residential | |||||||||||
Commercial | |||||||||||
Total | $ | $ |
As of June 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description of Securities | Number of Securities | Fair Value | Gross Unrealized Losses | Number of Securities | Fair Value | Gross Unrealized Losses | Number of Securities | Fair Value | Gross Unrealized Losses | |||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Collateralized mortgage obligations* | $ | $ | ( | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential* | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial* | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate securities | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Municipal securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( | $ | $ | ( |
As of December 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description of Securities | Number of Securities | Fair Value | Gross Unrealized Losses | Number of Securities | Fair Value | Gross Unrealized Losses | Number of Securities | Fair Value | Gross Unrealized Losses | |||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Collateralized mortgage obligations* | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential* | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial* | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate securities | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Municipal securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( | $ | $ | ( |
June 30, 2020 | December 31, 2019 | ||||||||||
Loan portfolio composition | (Dollars in thousands) | ||||||||||
Real estate loans: | |||||||||||
Residential | $ | $ | |||||||||
Commercial | |||||||||||
Construction | |||||||||||
Total real estate loans | |||||||||||
Commercial business1 | |||||||||||
Residential mortgage | |||||||||||
Consumer and other | |||||||||||
Loans receivable | |||||||||||
Allowance for credit losses | ( | ( | |||||||||
Loans receivable, net of allowance for credit losses | $ | $ |
Real Estate | Commercial Business | Residential Mortgage | Consumer and Other | Total | |||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Three Months Ended June 30, 2020 | |||||||||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Provision (credit) for credit losses | ( | ||||||||||||||||||||||||||||
Loans charged off | ( | ( | ( | ( | |||||||||||||||||||||||||
Recoveries of charge offs | |||||||||||||||||||||||||||||
Balance, end of period | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Six Months Ended June 30, 2020 | |||||||||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
( | ( | ( | |||||||||||||||||||||||||||
Provision for credit losses | |||||||||||||||||||||||||||||
Loans charged off | ( | ( | ( | ( | |||||||||||||||||||||||||
Recoveries of charge offs | |||||||||||||||||||||||||||||
Balance, end of period | $ | $ | $ | $ | $ |
Real Estate | Commercial Business | Residential Mortgage | Consumer and Other | Total | |||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Three Months Ended June 30, 2019 | |||||||||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Provision (credit) for loan losses | ( | ||||||||||||||||||||||||||||
Loans charged off | ( | ( | ( | ( | |||||||||||||||||||||||||
Recoveries of charge offs | |||||||||||||||||||||||||||||
Balance, end of period | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Six Months Ended June 30, 2019 | |||||||||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Provision (credit) for loan losses | ( | ||||||||||||||||||||||||||||
Loans charged off | ( | ( | ( | ( | ( | ||||||||||||||||||||||||
Recoveries of charge offs | |||||||||||||||||||||||||||||
PCI allowance adjustment | ( | ( | |||||||||||||||||||||||||||
Balance, end of period | $ | $ | $ | $ | $ |
June 30, 2020 | |||||||||||||||||||||||||||||
Real Estate | Commercial Business | Residential Mortgage | Consumer and Other | Total | |||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Allowance for credit losses: | |||||||||||||||||||||||||||||
Individually evaluated | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Collectively evaluated | |||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Loans outstanding: | |||||||||||||||||||||||||||||
Individually evaluated | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Collectively evaluated | |||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
December 31, 2019 | |||||||||||||||||||||||||||||
Real Estate | Commercial Business | Residential Mortgage | Consumer and Other | Total | |||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Collectively evaluated for impairment | |||||||||||||||||||||||||||||
PCI loans | |||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Loans outstanding: | |||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Collectively evaluated for impairment | |||||||||||||||||||||||||||||
PCI loans | |||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
June 30, 2020 | ||||||||||||||||||||||||||
Nonaccrual with No ACL | Nonaccrual with an ACL | Total Nonaccrual (1) | Accruing Loans Past Due 90 or More Days | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Real estate – residential | $ | $ | $ | $ | ||||||||||||||||||||||
Real estate – commercial | ||||||||||||||||||||||||||
Retail | ||||||||||||||||||||||||||
Hotel & motel | ||||||||||||||||||||||||||
Gas station & car wash | ||||||||||||||||||||||||||
Mixed use | ||||||||||||||||||||||||||
Industrial & warehouse | ||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||
Real estate – construction | ||||||||||||||||||||||||||
Commercial business | ||||||||||||||||||||||||||
Residential mortgage | ||||||||||||||||||||||||||
Consumer and other | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
December 31, 2019 | |||||||||||
Nonaccrual Loans(1)(2) | Accruing Loans Past Due 90 or More Days | ||||||||||
(Dollars in thousands) | |||||||||||
Real estate – residential | $ | $ | |||||||||
Real estate – commercial | |||||||||||
Retail | |||||||||||
Hotel & motel | |||||||||||
Gas station & car wash | |||||||||||
Mixed use | |||||||||||
Industrial & warehouse | |||||||||||
Other | |||||||||||
Real estate – construction | |||||||||||
Commercial business | |||||||||||
Residential mortgage | |||||||||||
Consumer and other | |||||||||||
Total | $ | $ |
June 30, 2020 | ||||||||||||||||||||
Real Estate Collateral | Other Collateral | Total | ||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Real Estate - Residential | $ | $ | $ | |||||||||||||||||
Real Estate - Commercial | ||||||||||||||||||||
Real Estate - Construction | ||||||||||||||||||||
Commercial Business | ||||||||||||||||||||
Residential Mortgage | ||||||||||||||||||||
Consumer and Other | ||||||||||||||||||||
Total | $ | $ | $ | |||||||||||||||||
As of June 30, 2020 | As of December 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||
30-59 Days Past Due | 60-89 Days Past Due | 90 or More Days Past Due | Total Past Due | 30-59 Days Past Due | 60-89 Days Past Due | 90 or More Days Past Due | Total
Past Due (1) | ||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Real estate – residential | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Real estate – commercial | |||||||||||||||||||||||||||||||||||||||||||||||
Retail | |||||||||||||||||||||||||||||||||||||||||||||||
Hotel & motel | |||||||||||||||||||||||||||||||||||||||||||||||
Gas station & car wash | |||||||||||||||||||||||||||||||||||||||||||||||
Mixed use | |||||||||||||||||||||||||||||||||||||||||||||||
Industrial & warehouse | |||||||||||||||||||||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||||||||||||||||||||
Real estate – construction | |||||||||||||||||||||||||||||||||||||||||||||||
Commercial business | |||||||||||||||||||||||||||||||||||||||||||||||
Residential mortgage | |||||||||||||||||||||||||||||||||||||||||||||||
Consumer and other | |||||||||||||||||||||||||||||||||||||||||||||||
Total Past Due | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
As of June 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Term Loan by Origination Year | Revolving Loans | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | Prior | |||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate - Residential | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass/Not Rated | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful/Loss | ||||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Real Estate - Commercial | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass/Not Rated | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful/Loss | ||||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Real Estate - Construction | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass/Not Rated | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful/Loss | ||||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Commercial Business | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass/Not Rated | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful/Loss | ||||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Residential Mortgage | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass/Not Rated | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful/Loss | ||||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Consumer and Other | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass/Not Rated | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful/Loss | ||||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Total Loans | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass/Not Rated | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful/Loss | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ |
As of December 31, 2019 | |||||||||||||||||||||||||||||
Pass/Not Rated | Special Mention | Substandard | Doubtful | Total | |||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Real estate – residential | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Real estate – commercial | |||||||||||||||||||||||||||||
Retail | |||||||||||||||||||||||||||||
Hotel & motel | |||||||||||||||||||||||||||||
Gas station & car wash | |||||||||||||||||||||||||||||
Mixed use | |||||||||||||||||||||||||||||
Industrial & warehouse | |||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||
Real estate – construction | |||||||||||||||||||||||||||||
Commercial business | |||||||||||||||||||||||||||||
Residential mortgage | |||||||||||||||||||||||||||||
Consumer and other | |||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Transfer of loans held for investment to held for sale | (Dollars in thousands) | ||||||||||||||||||||||
Residential mortgage | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
As of June 30, 2020 | |||||||||||||||||||||||||||||||||||||||||
Real Estate – Residential | Real Estate – Commercial | Real Estate – Construction | Commercial Business | Residential Mortgage | Consumer and Other | Total | |||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||
Individually evaluated loans | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
ACL on individually evaluated loans | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Individually evaluated loans ACL coverage | N/A | % | % | % | % | % | % | ||||||||||||||||||||||||||||||||||
Collectively evaluated loans | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
ACL on collectively evaluated loans | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Collectively evaluated loans ACL coverage | % | % | % | % | % | % | % | ||||||||||||||||||||||||||||||||||
Total loans | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Total ACL | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Total ACL to total loans | % | % | % | % | % | % | % |
As of December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||
Real Estate – Residential | Real Estate – Commercial | Real Estate – Construction | Commercial Business | Residential Mortgage | Consumer and Other | Total | |||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||
Impaired loans (recorded investment) | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Specific allowance | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Specific allowance to impaired loans | N/A | % | % | % | % | % | % | ||||||||||||||||||||||||||||||||||
Other loans | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
General allowance | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
General allowance to other loans | % | % | % | % | % | % | % | ||||||||||||||||||||||||||||||||||
Total loans | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Total allowance for loan losses | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Total allowance to total loans | % | % | % | % | % | % | % |
As of June 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
TDR Loans on Accrual Status | TDR Loans on Nonaccrual Status | Total TDRs | |||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate | Commercial Business | Residential Mortgage | Other | Real Estate | Commercial Business | Residential Mortgage | Other | ||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Payment concession | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Maturity / amortization concession | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Rate concession | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | $ |
As of December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
TDR Loans on Accrual Status | TDR Loans on Nonaccrual Status | Total TDRs | |||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate | Commercial Business | Residential Mortgage | Other | Real Estate | Commercial Business | Residential Mortgage | Other | ||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Payment concession | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Maturity / amortization concession | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Rate concession | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | ||||||||||||||||||||||
Number of Loans | Balance | Number of Loans | Balance | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Real estate – residential | $ | $ | |||||||||||||||||||||
Real estate – commercial | |||||||||||||||||||||||
Retail | |||||||||||||||||||||||
Hotel & motel | |||||||||||||||||||||||
Gas station & car wash | |||||||||||||||||||||||
Mixed use | |||||||||||||||||||||||
Industrial & warehouse | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Real estate – construction | |||||||||||||||||||||||
Commercial business | |||||||||||||||||||||||
Residential mortgage | |||||||||||||||||||||||
Consumer and other | |||||||||||||||||||||||
Total | $ | $ |
For the Six Months Ended June 30, 2020 | For the Six Months Ended June 30, 2019 | ||||||||||||||||||||||
Number of Loans | Balance | Number of Loans | Balance | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Real estate – residential | $ | $ | |||||||||||||||||||||
Real estate – commercial | |||||||||||||||||||||||
Retail | |||||||||||||||||||||||
Hotel & motel | |||||||||||||||||||||||
Gas station & car wash | |||||||||||||||||||||||
Mixed use | |||||||||||||||||||||||
Industrial & warehouse | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Real estate – construction | |||||||||||||||||||||||
Commercial business | |||||||||||||||||||||||
Residential mortgage | |||||||||||||||||||||||
Consumer and other | |||||||||||||||||||||||
Total | $ | $ | |||||||||||||||||||||
Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | ||||||||||||||||||||||
Number of Loans | Balance | Number of Loans | Balance | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Real estate – commercial | |||||||||||||||||||||||
Retail | $ | $ | |||||||||||||||||||||
Hotel & motel | |||||||||||||||||||||||
Gas station & car wash | |||||||||||||||||||||||
Mixed Use | |||||||||||||||||||||||
Industrial & warehouse | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Real estate – construction | |||||||||||||||||||||||
Commercial business | |||||||||||||||||||||||
Residential mortgage | |||||||||||||||||||||||
Consumer and other | |||||||||||||||||||||||
Subtotal | $ | $ | |||||||||||||||||||||
Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | ||||||||||||||||||||||
Number of Loans | Balance | Number of Loans | Balance | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Real estate – residential | $ | $ | |||||||||||||||||||||
Real estate – commercial | |||||||||||||||||||||||
Retail | |||||||||||||||||||||||
Hotel & motel | |||||||||||||||||||||||
Gas station & car wash | |||||||||||||||||||||||
Mixed Use | |||||||||||||||||||||||
Industrial & warehouse | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Real estate – construction | |||||||||||||||||||||||
Commercial business | |||||||||||||||||||||||
Residential mortgage | |||||||||||||||||||||||
Consumer and other | |||||||||||||||||||||||
Total | $ | $ |
Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Operating lease cost | $ | $ | $ | $ | |||||||||||||||||||
Short term lease cost | |||||||||||||||||||||||
Variable lease cost | |||||||||||||||||||||||
Sublease income | ( | ( | ( | ( | |||||||||||||||||||
Net lease cost | $ | $ | $ | $ |
At or for the Six Months Ended June 30, 2020 | At or for the Six Months Ended June 30, 2019 | ||||||||||
(Dollars in thousands) | |||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
Operating cash outflows for operating leases | $ | $ | |||||||||
Right-of-use assets obtained in exchange for lease liabilities, net | |||||||||||
Weighted-average remaining lease term - operating leases | |||||||||||
Weighted-average discount rate - operating leases | % | % |
June 30, 2020 | |||||
(Dollars in thousands) | |||||
2020 | $ | ||||
2021 | |||||
2022 | |||||
2023 | |||||
2024 | |||||
2025 and thereafter | |||||
Total lease payments | |||||
Less: imputed interest | |||||
Total lease obligations | $ | ||||
June 30, 2020 | |||||
Scheduled maturities in: | (Dollars in thousands) | ||||
2020 | $ | ||||
2021 | |||||
2022 | |||||
Total | $ |
Issuance Trust | Issuance Date | Trust Preferred Security Amount | Carrying Value of Debentures | Rate Type | Current Rate | Maturity Date | ||||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||
Nara Capital Trust III | 06/05/2003 | $ | $ | Variable | 06/15/2033 | |||||||||||||||||||||||||||||||||
Nara Statutory Trust IV | 12/22/2003 | Variable | 01/07/2034 | |||||||||||||||||||||||||||||||||||
Nara Statutory Trust V | 12/17/2003 | Variable | 12/17/2033 | |||||||||||||||||||||||||||||||||||
Nara Statutory Trust VI | 03/22/2007 | Variable | 06/15/2037 | |||||||||||||||||||||||||||||||||||
Center Capital Trust I | 12/30/2003 | Variable | 01/07/2034 | |||||||||||||||||||||||||||||||||||
Wilshire Trust II | 03/17/2005 | Variable | 03/17/2035 | |||||||||||||||||||||||||||||||||||
Wilshire Trust III | 09/15/2005 | Variable | 09/15/2035 | |||||||||||||||||||||||||||||||||||
Wilshire Trust IV | 07/10/2007 | Variable | 09/15/2037 | |||||||||||||||||||||||||||||||||||
Saehan Capital Trust I | 03/30/2007 | Variable | 06/30/2037 | |||||||||||||||||||||||||||||||||||
Total | $ | $ |
As of June 30, 2020 | ||||||||||||||||||||||||||
Amortization/ Capitalization Period | Gross Carrying Amount | Accumulated Amortization / Capitalization | Carrying Amount | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Convertible notes principal balance | $ | $ | — | $ | ||||||||||||||||||||||
Discount | ( | ( | ||||||||||||||||||||||||
Issuance costs to be capitalized | ( | ( | ||||||||||||||||||||||||
Carrying balance of convertible notes | $ | $ | $ |
As of December 31, 2019 | ||||||||||||||||||||||||||
Amortization/ Capitalization Period | Gross Carrying Amount | Accumulated Amortization / Capitalization | Carrying Amount | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Convertible notes principal balance | $ | $ | — | $ | ||||||||||||||||||||||
Discount | ( | ( | ||||||||||||||||||||||||
Issuance costs to be capitalized | ( | ( | ||||||||||||||||||||||||
Carrying balance of convertible notes | $ | $ | $ |
June 30, 2020 | December 31, 2019 | |||||||||||||
(Dollars in thousands) | ||||||||||||||
Interest rate swaps on loans with correspondent banks (included in other assets) | ||||||||||||||
Notional amount | $ | $ | ||||||||||||
Weighted average remaining term (years) | — | |||||||||||||
Pay fixed rate (weighted average) | % | % | ||||||||||||
Received variable rate (weighted average) | % | % | ||||||||||||
Estimated fair value | $ | $ | ||||||||||||
Interest rate swaps on loans with correspondent banks (included in other liabilities) | ||||||||||||||
Notional amount | $ | $ | ||||||||||||
Weighted average remaining term (years) | ||||||||||||||
Pay fixed rate (weighted average) | % | % | ||||||||||||
Received variable rate (weighted average) | % | % | ||||||||||||
Estimated fair value | $ | ( | $ | ( | ||||||||||
Back to back interest rate swaps with loan customers (included in other liabilities) | ||||||||||||||
Notional amount | $ | $ | ||||||||||||
Weighted average remaining term (years) | — | |||||||||||||
Received fixed rate (weighted average) | % | % | ||||||||||||
Pay variable rate (weighted average) | % | % | ||||||||||||
Estimated fair value | $ | $ | ( | |||||||||||
Back to back interest rate swaps with loan customers (included in other assets) | ||||||||||||||
Notional amount | $ | $ | ||||||||||||
Weighted average remaining term (years) | ||||||||||||||
Received fixed rate (weighted average) | % | % | ||||||||||||
Pay variable rate (weighted average) | % | % | ||||||||||||
Estimated fair value | $ | $ | ||||||||||||
June 30, 2020 | December 31, 2019 | |||||||||||||
(Dollars in thousands) | ||||||||||||||
Interest rate swaps designated as cash flow hedge | ||||||||||||||
Notional amount | $ | $ | ||||||||||||
Weighted average remaining term (years) | — | |||||||||||||
Received variable rate (weighted average) | % | % | ||||||||||||
Pay fixed rate (weighted average) | % | % | ||||||||||||
Estimated fair value | $ | ( | $ |
As of June 30, 2020 | As of December 31, 2019 | ||||||||||||||||||||||
Notional Amount | Fair Value | Notional Amount | Fair Value | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Interest rate lock commitments | $ | $ | $ | $ | |||||||||||||||||||
Forward sale contracts related to mortgage banking | $ | $ | $ | $ | |||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Interest rate lock commitments | $ | $ | $ | $ | |||||||||||||||||||
Forward sale contracts related to mortgage banking | $ | $ | ( | $ | $ | ( |
June 30, 2020 | December 31, 2019 | ||||||||||
(Dollars in thousands) | |||||||||||
Commitments to extend credit | $ | $ | |||||||||
Standby letters of credit | |||||||||||
Other letters of credit | |||||||||||
Commitments to fund investments in affordable housing partnerships |
As of June 30, 2020 | As of December 31, 2019 | |||||||||||||||||||||||||||||||||||||
Core Deposit Intangibles Related To: | Amortization Period | Gross Amount | Accumulated Amortization | Carrying Amount | Accumulated Amortization | Carrying Amount | ||||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||
Center Financial acquisition | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||
Pacific International Bank acquisition | ( | ( | ||||||||||||||||||||||||||||||||||||
Foster Bankshares acquisition | ( | ( | ||||||||||||||||||||||||||||||||||||
Wilshire Bancorp acquisition | ( | ( | ||||||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | ||||||||||||||||||||||
Additions through originations of servicing assets | ||||||||||||||||||||||||||
Amortization | ( | ( | ( | ( | ||||||||||||||||||||||
Balance at end of period | $ | $ | $ | $ |
June 30, 2020 | December 31, 2019 | |||||||||||||||||||||||||
SBA Servicing Assets: | ||||||||||||||||||||||||||
Weighted-average discount rate | ||||||||||||||||||||||||||
Constant prepayment rate | ||||||||||||||||||||||||||
Mortgage Servicing Assets: | ||||||||||||||||||||||||||
Weighted-average discount rate | ||||||||||||||||||||||||||
Constant prepayment rate |
Fair Value Measurements at the End of the Reporting Period Using | |||||||||||||||||||||||
June 30, 2020 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Securities available for sale: | |||||||||||||||||||||||
U.S. Government agency and U.S. Government sponsored enterprises: | |||||||||||||||||||||||
Collateralized mortgage obligations | $ | $ | $ | $ | |||||||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||
Residential | |||||||||||||||||||||||
Commercial | |||||||||||||||||||||||
Corporate securities | |||||||||||||||||||||||
Municipal securities | |||||||||||||||||||||||
Equity investments with readily determinable fair value | |||||||||||||||||||||||
Interest rate swaps | |||||||||||||||||||||||
Mortgage banking derivatives | |||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Interest rate swaps | |||||||||||||||||||||||
Mortgage banking derivatives | |||||||||||||||||||||||
Other derivatives | |||||||||||||||||||||||
Fair Value Measurements at the End of the Reporting Period Using | |||||||||||||||||||||||
December 31, 2019 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Securities available for sale: | |||||||||||||||||||||||
U.S. Government agency and U.S. Government sponsored enterprises: | |||||||||||||||||||||||
Collateralized mortgage obligations | $ | $ | $ | $ | |||||||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||
Residential | |||||||||||||||||||||||
Commercial | |||||||||||||||||||||||
Corporate securities | |||||||||||||||||||||||
Municipal securities | |||||||||||||||||||||||
Equity investments with readily determinable fair value | |||||||||||||||||||||||
Interest rate swaps | |||||||||||||||||||||||
Mortgage banking derivatives | |||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Interest rate swaps | |||||||||||||||||||||||
Mortgage banking derivatives |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Beginning Balance | $ | $ | $ | $ | ||||||||||||||||||||||
Change in fair value included in other comprehensive income (loss) | ( | ( | ||||||||||||||||||||||||
Ending Balance | $ | $ | $ | $ | ||||||||||||||||||||||
Fair Value Measurements at the End of the Reporting Period Using | |||||||||||||||||||||||
June 30, 2020 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Collateral dependent loans at fair value: | |||||||||||||||||||||||
Real estate loans | $ | $ | $ | $ | |||||||||||||||||||
Commercial business | |||||||||||||||||||||||
OREO |
Fair Value Measurements at the End of the Reporting Period Using | |||||||||||||||||||||||
December 31, 2019 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Collateral dependent loans at fair value: | |||||||||||||||||||||||
Real estate loans | $ | $ | $ | $ | |||||||||||||||||||
Commercial business | |||||||||||||||||||||||
OREO |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Collateral dependent loans at fair value: | |||||||||||||||||||||||
Real estate loans | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Commercial business | ( | ( | ( | ( | |||||||||||||||||||
Consumer | ( | ( | |||||||||||||||||||||
OREO | ( | ( |
June 30, 2020 | |||||||||||||||||
Carrying Amount | Estimated Fair Value | Fair Value Measurement Using | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Financial Assets: | |||||||||||||||||
Cash and cash equivalents | $ | $ | Level 1 | ||||||||||||||
Interest bearing deposits in other financial institutions | Level 2 | ||||||||||||||||
Equity investments without readily determinable fair values | Level 2 | ||||||||||||||||
Loans held for sale | Level 2 | ||||||||||||||||
Loans receivable—net | Level 3 | ||||||||||||||||
Accrued interest receivable | Level 2/3 | ||||||||||||||||
Servicing assets, net | Level 3 | ||||||||||||||||
Customers’ liabilities on acceptances | Level 2 | ||||||||||||||||
Financial Liabilities: | |||||||||||||||||
Noninterest bearing deposits | $ | $ | Level 2 | ||||||||||||||
Saving and other interest bearing demand deposits | Level 2 | ||||||||||||||||
Time deposits | Level 2 | ||||||||||||||||
FHLB advances | Level 2 | ||||||||||||||||
Convertible notes, net | Level 1 | ||||||||||||||||
Subordinated debentures | Level 2 | ||||||||||||||||
Accrued interest payable | Level 2 | ||||||||||||||||
Acceptances outstanding | Level 2 | ||||||||||||||||
December 31, 2019 | |||||||||||||||||
Carrying Amount | Estimated Fair Value | Fair Value Measurement Using | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Financial Assets: | |||||||||||||||||
Cash and cash equivalents | $ | $ | Level 1 | ||||||||||||||
Interest bearing deposits in other financial institutions | Level 2 | ||||||||||||||||
Equity investments without readily determinable fair values | Level 2 | ||||||||||||||||
Loans held for sale | Level 2 | ||||||||||||||||
Loans receivable—net | Level 3 | ||||||||||||||||
Accrued interest receivable | Level 2/3 | ||||||||||||||||
Servicing assets, net | Level 3 | ||||||||||||||||
Customers’ liabilities on acceptances | Level 2 | ||||||||||||||||
Financial Liabilities: | |||||||||||||||||
Noninterest bearing deposits | $ | $ | Level 2 | ||||||||||||||
Saving and other interest bearing demand deposits | Level 2 | ||||||||||||||||
Time deposits | Level 2 | ||||||||||||||||
FHLB advances | Level 2 | ||||||||||||||||
Convertible notes, net | Level 1 | ||||||||||||||||
Subordinated debentures | Level 2 | ||||||||||||||||
Accrued interest payable | Level 2 | ||||||||||||||||
Acceptances outstanding | Level 2 |
Three Months Ended, | Six Months Ended | ||||||||||||||||||||||
June 30, 2020 | June 30, 2019 | June 30, 2020 | June 30, 2019 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Balance at beginning of period | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Unrealized gain on securities available for sale | |||||||||||||||||||||||
Unrealized loss on interest rate swaps used for cash flow hedge | ( | ( | |||||||||||||||||||||
Reclassification adjustments for net gains realize in net income | ( | ( | ( | ( | |||||||||||||||||||
Tax effect | ( | ( | ( | ( | |||||||||||||||||||
Total other comprehensive income | $ | $ | $ | $ | |||||||||||||||||||
Balance at end of period | $ | $ | $ | $ |
Number of Shares | Weighted-Average Exercise Price Per Share | Weighted-Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Outstanding - January 1, 2020 | $ | ||||||||||||||||||||||
Granted | |||||||||||||||||||||||
Exercised | |||||||||||||||||||||||
Expired | ( | ||||||||||||||||||||||
Forfeited | |||||||||||||||||||||||
Outstanding - June 30, 2020 | $ | $ | |||||||||||||||||||||
Options exercisable - June 30, 2020 | $ | $ |
Number of Shares | Weighted-Average Grant Date Fair Value | ||||||||||
Outstanding (unvested) - January 1, 2020 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Outstanding (unvested) - June 30, 2020 | $ |
Actual | Required For Capital Adequacy Purposes | Minimum Capital Adequacy With Capital Conservation Buffer | Required To Be Well Capitalized Under Prompt Corrective Action Provisions | ||||||||||||||||||||||||||||||||||||||||||||
As of June 30, 2020 | Amount | Ratio | Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Common equity Tier 1 capital (to risk weighted assets): | |||||||||||||||||||||||||||||||||||||||||||||||
Company | $ | % | $ | % | $ | % | N/A | N/A | |||||||||||||||||||||||||||||||||||||||
Bank | $ | % | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||
Total capital (to risk-weighted assets): | |||||||||||||||||||||||||||||||||||||||||||||||
Company | $ | % | $ | % | $ | % | N/A | N/A | |||||||||||||||||||||||||||||||||||||||
Bank | $ | % | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||
Tier 1 capital (to risk-weighted assets): | |||||||||||||||||||||||||||||||||||||||||||||||
Company | $ | % | $ | % | $ | % | N/A | N/A | |||||||||||||||||||||||||||||||||||||||
Bank | $ | % | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||
Tier 1 capital (to average assets): | |||||||||||||||||||||||||||||||||||||||||||||||
Company | $ | % | $ | % | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||||||||||||||
Bank | $ | % | $ | % | N/A | N/A | $ | % |
Actual | Required For Capital Adequacy Purposes | Minimum Capital Adequacy With Capital Conservation Buffer | Required To Be Well Capitalized Under Prompt Corrective Action Provisions | ||||||||||||||||||||||||||||||||||||||||||||
As of December 31, 2019 | Amount | Ratio | Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Common equity Tier 1 capital (to risk weighted assets): | |||||||||||||||||||||||||||||||||||||||||||||||
Company | $ | % | $ | % | $ | % | N/A | N/A | |||||||||||||||||||||||||||||||||||||||
Bank | $ | % | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||
Total capital (to risk-weighted assets): | |||||||||||||||||||||||||||||||||||||||||||||||
Company | $ | % | $ | % | $ | % | N/A | N/A | |||||||||||||||||||||||||||||||||||||||
Bank | $ | % | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||
Tier 1 capital (to risk-weighted assets): | |||||||||||||||||||||||||||||||||||||||||||||||
Company | $ | % | $ | % | $ | % | N/A | N/A | |||||||||||||||||||||||||||||||||||||||
Bank | $ | % | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||
Tier 1 capital (to average assets): | |||||||||||||||||||||||||||||||||||||||||||||||
Company | $ | % | $ | % | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||||||||||||||
Bank | $ | % | $ | % | N/A | N/A | $ | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Noninterest bearing deposit account income: | |||||||||||||||||||||||
Monthly service charges | $ | $ | $ | $ | |||||||||||||||||||
Customer analysis charges | |||||||||||||||||||||||
NSF charges | |||||||||||||||||||||||
Other service charges | |||||||||||||||||||||||
Total noninterest bearing deposit account income | |||||||||||||||||||||||
Interest bearing deposit account income: | |||||||||||||||||||||||
Monthly service charges | |||||||||||||||||||||||
Total service fees on deposit accounts | $ | $ | $ | $ | |||||||||||||||||||
Wire transfer fee income: | |||||||||||||||||||||||
Wire transfer fees | $ | $ | $ | $ | |||||||||||||||||||
Foreign exchange fees | |||||||||||||||||||||||
Total wire transfer fees | $ | $ | $ | $ |
At or for the Three Months Ended June 30, | At or for the Six Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(Dollars in thousands, except share and per share data) | |||||||||||||||||||||||
Income Statement Data: | |||||||||||||||||||||||
Interest income | $ | 145,061 | $ | 173,466 | $ | 311,929 | $ | 346,596 | |||||||||||||||
Interest expense | 35,247 | 56,245 | 82,824 | 109,767 | |||||||||||||||||||
Net interest income | 109,814 | 117,221 | 229,105 | 236,829 | |||||||||||||||||||
Provision for credit losses | 17,500 | 1,200 | 45,500 | 4,200 | |||||||||||||||||||
Net interest income after provision for credit losses | 92,314 | 116,021 | 183,605 | 232,629 | |||||||||||||||||||
Noninterest income | 11,240 | 12,287 | 24,504 | 23,709 | |||||||||||||||||||
Noninterest expense | 67,030 | 71,371 | 139,170 | 142,204 | |||||||||||||||||||
Income before income tax provision | 36,524 | 56,937 | 68,939 | 114,134 | |||||||||||||||||||
Income tax provision | 9,771 | 14,256 | 16,233 | 28,695 | |||||||||||||||||||
Net income | $ | 26,753 | $ | 42,681 | $ | 52,706 | $ | 85,439 | |||||||||||||||
Per Share Data: | |||||||||||||||||||||||
Earnings per common share - basic | $ | 0.22 | $ | 0.34 | $ | 0.43 | $ | 0.67 | |||||||||||||||
Earnings per common share - diluted | $ | 0.22 | $ | 0.34 | $ | 0.42 | $ | 0.67 | |||||||||||||||
Book value per common share (period end) | $ | 16.48 | $ | 15.75 | $ | 16.48 | $ | 15.75 | |||||||||||||||
Cash dividends declared per common share | $ | 0.14 | $ | 0.14 | $ | 0.28 | $ | 0.28 | |||||||||||||||
Tangible book value per common share (period end) (1) | $ | 12.62 | $ | 11.98 | $ | 12.62 | $ | 11.98 | |||||||||||||||
Number of common shares outstanding (period end) | 123,239,276 | 126,673,822 | 123,239,276 | 126,673,822 | |||||||||||||||||||
Weighted average shares - basic | 123,200,127 | 126,658,509 | 123,747,727 | 126,649,536 | |||||||||||||||||||
Weighted average shares - diluted | 123,430,891 | 126,870,455 | 124,054,291 | 126,842,870 | |||||||||||||||||||
Tangible common equity to tangible assets (1) | 9.32 | % | 10.21 | % | 9.32 | % | 10.21 | % | |||||||||||||||
Average Balance Sheet Data: | |||||||||||||||||||||||
Assets | $ | 16,759,147 | $ | 15,185,495 | $ | 16,102,977 | $ | 15,237,627 | |||||||||||||||
Securities available for sale | 1,750,156 | 1,804,677 | 1,731,094 | 1,816,081 | |||||||||||||||||||
Loans receivable and loans held for sale | 12,755,088 | 11,959,920 | 12,507,468 | 12,023,690 | |||||||||||||||||||
Deposits | 13,653,065 | 12,052,613 | 12,997,544 | 12,071,026 | |||||||||||||||||||
Stockholders’ equity | 2,016,947 | 1,960,500 | 2,022,271 | 1,940,606 | |||||||||||||||||||
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Selected Performance Ratios: | |||||||||||||||||||||||
Return on average assets (2) | 0.64 | % | 1.12 | % | 0.65 | % | 1.12 | % | |||||||||||||||
Return on average stockholders’ equity (2) | 5.31 | % | 8.71 | % | 5.21 | % | 8.81 | % | |||||||||||||||
Return on average tangible equity (1) (2) | 6.94 | % | 11.51 | % | 6.82 | % | 11.68 | % | |||||||||||||||
Dividend payout ratio (dividends per share / diluted EPS) | 64.61 | % | 41.62 | % | 65.90 | % | 41.57 | % | |||||||||||||||
Efficiency ratio (3) | 55.37 | % | 55.11 | % | 54.88 | % | 54.58 | % | |||||||||||||||
Net interest spread | 2.41 | % | 2.66 | % | 2.58 | % | 2.73 | % | |||||||||||||||
Net interest margin (4) | 2.79 | % | 3.31 | % | 3.04 | % | 3.35 | % | |||||||||||||||
At June 30, | |||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Statement of Financial Condition Data - at Period End: | |||||||||||||||||||||||
Assets | $ | 17,169,062 | $ | 15,338,827 | |||||||||||||||||||
Securities available for sale | 1,887,604 | 1,826,903 | |||||||||||||||||||||
Loans receivable | 12,871,834 | 11,977,134 | |||||||||||||||||||||
Deposits | 14,123,532 | 12,172,384 | |||||||||||||||||||||
FHLB advances | 500,000 | 695,000 | |||||||||||||||||||||
Convertible notes, net | 201,987 | 196,977 | |||||||||||||||||||||
Subordinated debentures | 103,602 | 102,477 | |||||||||||||||||||||
Stockholders’ equity | 2,030,776 | 1,995,172 | |||||||||||||||||||||
Regulatory Capital Ratios (5) | |||||||||||||||||||||||
Leverage capital ratio | 10.08 | % | 10.94 | % | |||||||||||||||||||
Common equity Tier 1 capital ratio | 11.50 | % | 11.90 | % | |||||||||||||||||||
Tier 1 risk-based capital ratio | 12.24 | % | 12.67 | % | |||||||||||||||||||
Total risk-based capital ratio | 13.23 | % | 13.42 | % | |||||||||||||||||||
Asset Quality Ratios: | |||||||||||||||||||||||
Allowance for credit losses to loans receivable | 1.26 | % | 0.79 | % | |||||||||||||||||||
Allowance for credit losses to nonaccrual loans | 196.95 | % | 144.86 | % | |||||||||||||||||||
Allowance for credit losses to nonperforming loans (7) | 127.79 | % | 88.73 | % | |||||||||||||||||||
Allowance for credit losses to nonperforming assets (8) | 109.62 | % | 84.24 | % | |||||||||||||||||||
Nonaccrual loans to loans receivable | 0.64 | % | 0.54 | % | |||||||||||||||||||
Nonperforming loans to loans receivable (7) | 0.98 | % | 0.89 | % | |||||||||||||||||||
Nonperforming assets to loans receivable and OREO (8) | 1.14 | % | 0.93 | % | |||||||||||||||||||
Nonperforming assets to total assets (8) | 0.86 | % | 0.73 | % | |||||||||||||||||||
At June 30, | |||||||||||
2020 | 2019 | ||||||||||
(Dollars in thousands, except share data) | |||||||||||
Total stockholders’ equity | $ | 2,030,776 | $ | 1,995,172 | |||||||
Less: Goodwill and core deposit intangible assets, net | (475,220) | (477,397) | |||||||||
Tangible common equity | $ | 1,555,556 | $ | 1,517,775 | |||||||
Total assets | $ | 17,169,062 | $ | 15,338,827 | |||||||
Less: Goodwill and core deposit intangible assets, net | (475,220) | (477,397) | |||||||||
Tangible Assets | $ | 16,693,842 | $ | 14,861,430 | |||||||
Common shares outstanding | 123,239,276 | 126,673,822 | |||||||||
Tangible book value per common share | $ | 12.62 | $ | 11.98 | |||||||
Tangible common equity to tangible assets | 9.32 | % | 10.21 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Net income | $ | 26,753 | $ | 42,681 | $ | 52,706 | $ | 85,439 | |||||||||||||||
Average stockholders’ equity | $ | 2,016,947 | $ | 1,960,500 | $ | 2,022,271 | $ | 1,940,606 | |||||||||||||||
Less: Average goodwill and core deposit intangible assets, net | (475,534) | (477,736) | (475,793) | (478,021) | |||||||||||||||||||
Average tangible equity | $ | 1,541,413 | $ | 1,482,764 | $ | 1,546,478 | $ | 1,462,585 | |||||||||||||||
Return on average tangible equity (annualized) | 6.94 | % | 11.51 | % | 6.82 | % | 11.68 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Accretion of discounts on purchased performing loans | $ | 658 | $ | 1,799 | $ | 1,717 | $ | 3,965 | |||||||||||||||
Accretion of discounts on PCD (formerly PCI) loans | 3,046 | 6,848 | 12,495 | 12,682 | |||||||||||||||||||
Amortization of premiums on purchased investments in affordable housing partnerships | (70) | (76) | (141) | (152) | |||||||||||||||||||
Amortization of premiums on assumed FHLB advances | — | — | — | 1,280 | |||||||||||||||||||
Accretion of discounts on assumed subordinated debt | (284) | (275) | (567) | (548) | |||||||||||||||||||
Amortization of core deposit intangibles | (532) | (557) | (1,063) | (1,114) | |||||||||||||||||||
Total | $ | 2,818 | $ | 7,739 | $ | 12,441 | $ | 16,113 | |||||||||||||||
Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||||||
Average Balance | Interest Income/ Expense | Average Yield/ Rate* | Average Balance | Interest Income/ Expense | Average Yield/ Rate* | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
INTEREST EARNINGS ASSETS: | |||||||||||||||||||||||||||||||||||
Loans(1) (2) | $ | 12,755,088 | $ | 134,190 | 4.23 | % | $ | 11,959,920 | $ | 158,627 | 5.32 | % | |||||||||||||||||||||||
Securities available for sale(3) | 1,750,156 | 9,891 | 2.27 | % | 1,804,677 | 11,866 | 2.64 | % | |||||||||||||||||||||||||||
FHLB stock and other investments | 1,317,049 | 980 | 0.30 | % | 460,623 | 2,973 | 2.59 | % | |||||||||||||||||||||||||||
Total interest earning assets | 15,822,293 | 145,061 | 3.69 | % | 14,225,220 | 173,466 | 4.89 | % | |||||||||||||||||||||||||||
Total noninterest earning assets | 936,854 | 960,275 | |||||||||||||||||||||||||||||||||
Total assets | $ | 16,759,147 | $ | 15,185,495 | |||||||||||||||||||||||||||||||
INTEREST BEARING LIABILITIES: | |||||||||||||||||||||||||||||||||||
Deposits: | |||||||||||||||||||||||||||||||||||
Demand, interest bearing | $ | 4,903,786 | $ | 7,563 | 0.62 | % | $ | 3,094,179 | $ | 14,019 | 1.82 | % | |||||||||||||||||||||||
Savings | 284,050 | 862 | 1.22 | % | 225,978 | 608 | 1.08 | % | |||||||||||||||||||||||||||
Time deposits | 4,954,446 | 21,026 | 1.71 | % | 5,784,980 | 34,199 | 2.37 | % | |||||||||||||||||||||||||||
Total interest bearing deposits | 10,142,282 | 29,451 | 1.17 | % | 9,105,137 | 48,826 | 2.15 | % | |||||||||||||||||||||||||||
FHLB advances | 593,407 | 2,238 | 1.52 | % | 706,044 | 3,384 | 1.92 | % | |||||||||||||||||||||||||||
Convertible notes, net | 201,169 | 2,358 | 4.64 | % | 196,244 | 2,310 | 4.66 | % | |||||||||||||||||||||||||||
Other borrowings, net | 99,534 | 1,200 | 4.77 | % | 98,406 | 1,725 | 6.93 | % | |||||||||||||||||||||||||||
Total interest bearing liabilities | 11,036,392 | 35,247 | 1.28 | % | 10,105,831 | 56,245 | 2.23 | % | |||||||||||||||||||||||||||
Noninterest bearing liabilities and equity: | |||||||||||||||||||||||||||||||||||
Noninterest bearing demand deposits | 3,510,783 | 2,947,476 | |||||||||||||||||||||||||||||||||
Other liabilities | 195,025 | 171,688 | |||||||||||||||||||||||||||||||||
Stockholders’ equity | 2,016,947 | 1,960,500 | |||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 16,759,147 | $ | 15,185,495 | |||||||||||||||||||||||||||||||
Net interest income/net interest spread | $ | 109,814 | 2.41 | % | $ | 117,221 | 2.66 | % | |||||||||||||||||||||||||||
Net interest margin | 2.79 | % | 3.31 | % | |||||||||||||||||||||||||||||||
Cost of deposits | 0.87 | % | 1.62 | % |
Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||||||
Average Balance | Interest Income/ Expense | Average Yield/ Rate* | Average Balance | Interest Income/ Expense | Average Yield/ Rate* | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
INTEREST EARNINGS ASSETS: | |||||||||||||||||||||||||||||||||||
Loans(1) (2) | $ | 12,507,468 | $ | 288,420 | 4.64 | % | $ | 12,023,690 | $ | 316,763 | 5.31 | % | |||||||||||||||||||||||
Securities available for sale(3) | 1,731,094 | 20,500 | 2.38 | % | 1,816,081 | 24,185 | 2.69 | % | |||||||||||||||||||||||||||
FHLB stock and other investments | 918,179 | 3,009 | 0.66 | % | 433,293 | 5,648 | 2.63 | % | |||||||||||||||||||||||||||
Total interest earning assets | 15,156,741 | 311,929 | 4.14 | % | 14,273,064 | 346,596 | 4.90 | % | |||||||||||||||||||||||||||
Total noninterest earning assets | 946,236 | 964,563 | |||||||||||||||||||||||||||||||||
Total assets | $ | 16,102,977 | $ | 15,237,627 | |||||||||||||||||||||||||||||||
INTEREST BEARING LIABILITIES: | |||||||||||||||||||||||||||||||||||
Deposits: | |||||||||||||||||||||||||||||||||||
Demand, interest bearing | $ | 4,554,096 | $ | 22,443 | 0.99 | % | $ | 3,068,494 | $ | 27,005 | 1.77 | % | |||||||||||||||||||||||
Savings | 279,063 | 1,670 | 1.20 | % | 224,761 | 1,173 | 1.05 | % | |||||||||||||||||||||||||||
Time deposits | 4,927,425 | 46,451 | 1.90 | % | 5,860,492 | 67,495 | 2.32 | % | |||||||||||||||||||||||||||
Total interest bearing deposits | 9,760,584 | 70,564 | 1.45 | % | 9,153,747 | 95,673 | 2.11 | % | |||||||||||||||||||||||||||
FHLB advances | 594,148 | 4,885 | 1.65 | % | 758,161 | 5,998 | 1.60 | % | |||||||||||||||||||||||||||
Convertible notes, net | 200,565 | 4,704 | 4.64 | % | 195,610 | 4,609 | 4.69 | % | |||||||||||||||||||||||||||
Other borrowings, net | 99,393 | 2,671 | 5.32 | % | 98,267 | 3,487 | 7.06 | % | |||||||||||||||||||||||||||
Total interest bearing liabilities | 10,654,690 | 82,824 | 1.56 | % | 10,205,785 | 109,767 | 2.17 | % | |||||||||||||||||||||||||||
Noninterest bearing liabilities and equity: | |||||||||||||||||||||||||||||||||||
Noninterest bearing demand deposits | 3,236,960 | 2,917,279 | |||||||||||||||||||||||||||||||||
Other liabilities | 189,056 | 173,957 | |||||||||||||||||||||||||||||||||
Stockholders’ equity | 2,022,271 | 1,940,606 | |||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 16,102,977 | $ | 15,237,627 | |||||||||||||||||||||||||||||||
Net interest income/net interest spread | $ | 229,105 | 2.58 | % | $ | 236,829 | 2.73 | % | |||||||||||||||||||||||||||
Net interest margin | 3.04 | % | 3.35 | % | |||||||||||||||||||||||||||||||
Cost of deposits | 1.09 | % | 1.60 | % | |||||||||||||||||||||||||||||||
Three Months Ended June 30, 2020 over June 30, 2019 | |||||||||||||||||
Net Increase (Decrease) | Change due to: | ||||||||||||||||
Rate | Volume | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
INTEREST INCOME: | |||||||||||||||||
Loans, including fees | $ | (24,437) | $ | (34,321) | $ | 9,884 | |||||||||||
Securities available for sale | (1,975) | (1,621) | (354) | ||||||||||||||
FHLB stock and other investments | (1,993) | (4,196) | 2,203 | ||||||||||||||
Total interest income | $ | (28,405) | $ | (40,138) | $ | 11,733 | |||||||||||
INTEREST EXPENSE: | |||||||||||||||||
Demand, interest bearing | $ | (6,456) | $ | (12,082) | $ | 5,626 | |||||||||||
Savings | 254 | 86 | 168 | ||||||||||||||
Time deposits | (13,173) | (8,710) | (4,463) | ||||||||||||||
FHLB advances | (1,146) | (653) | (493) | ||||||||||||||
Convertible notes, net | 48 | (9) | 57 | ||||||||||||||
Other borrowings, net | (525) | (544) | 19 | ||||||||||||||
Total interest expense | $ | (20,998) | $ | (21,912) | $ | 914 | |||||||||||
NET INTEREST INCOME | $ | (7,407) | $ | (18,226) | $ | 10,819 |
Six Months Ended June 30, 2020 over June 30, 2019 | |||||||||||||||||
Net Increase (Decrease) | Change due to: | ||||||||||||||||
Rate | Volume | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
INTEREST INCOME: | |||||||||||||||||
Loans, including fees | $ | (28,343) | $ | (40,944) | $ | 12,601 | |||||||||||
Securities available for sale | (3,685) | (2,607) | (1,078) | ||||||||||||||
FHLB stock and other investments | (2,639) | (6,142) | 3,503 | ||||||||||||||
Total interest income | $ | (34,667) | $ | (49,693) | $ | 15,026 | |||||||||||
INTEREST EXPENSE: | |||||||||||||||||
Demand, interest bearing | $ | (4,562) | $ | (14,684) | $ | 10,122 | |||||||||||
Savings | 497 | 185 | 312 | ||||||||||||||
Time deposits | (21,044) | (11,274) | (9,770) | ||||||||||||||
FHLB advances | (1,113) | 214 | (1,327) | ||||||||||||||
Convertible notes, net | 95 | (39) | 134 | ||||||||||||||
Other borrowings, net | (816) | (855) | 39 | ||||||||||||||
Total interest expense | $ | (26,943) | $ | (26,453) | $ | (490) | |||||||||||
NET INTEREST INCOME | $ | (7,724) | $ | (23,240) | $ | 15,516 |
Three Months Ended June 30, | Increase (Decrease) | ||||||||||||||||||||||
2020 | 2019 | Amount | Percent (%) | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Service fees on deposit accounts | $ | 2,583 | $ | 4,416 | $ | (1,833) | (41.5) | % | |||||||||||||||
International service fees | 667 | 1,020 | (353) | (34.6) | % | ||||||||||||||||||
Loan servicing fees, net | 1,106 | 738 | 368 | 49.9 | % | ||||||||||||||||||
Wire transfer fees | 820 | 1,311 | (491) | (37.5) | % | ||||||||||||||||||
Swap fees | 1,040 | 357 | 683 | 191.3 | % | ||||||||||||||||||
Net gains on sales of other loans | 1,678 | 1,066 | 612 | 57.4 | % | ||||||||||||||||||
Net gains on sales and calls of securities available for sale | — | 129 | (129) | 100.0 | % | ||||||||||||||||||
Other income and fees | 3,346 | 3,250 | 96 | 3.0 | % | ||||||||||||||||||
Total noninterest income | $ | 11,240 | $ | 12,287 | $ | (1,047) | (8.5) | % | |||||||||||||||
Six Months Ended June 30, | Increase (Decrease) | ||||||||||||||||||||||
2020 | 2019 | Amount | Percent (%) | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Service fees on deposit accounts | $ | 6,716 | $ | 8,733 | $ | (2,017) | (23.1) | % | |||||||||||||||
International service fees | 1,456 | 1,953 | (497) | (25.4) | % | ||||||||||||||||||
Loan servicing fees, net | 1,471 | 1,467 | 4 | 0.3 | % | ||||||||||||||||||
Wire transfer fees | 1,818 | 2,400 | (582) | (24.3) | % | ||||||||||||||||||
Swap fees | 2,016 | 422 | 1,594 | 377.7 | % | ||||||||||||||||||
Net gains on sales of other loans | 3,533 | 1,807 | 1,726 | 95.5 | % | ||||||||||||||||||
Net gains on sales and calls of securities available for sale | — | 129 | (129) | 100.0 | % | ||||||||||||||||||
Other income and fees | 7,494 | 6,798 | 696 | 10.2 | % | ||||||||||||||||||
Total noninterest income | $ | 24,504 | $ | 23,709 | $ | 795 | 3.4 | % |
Three Months Ended June 30, | Increase (Decrease) | ||||||||||||||||||||||
2020 | 2019 | Amount | Percent (%) | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Salaries and employee benefits | $ | 38,850 | $ | 39,297 | $ | (447) | (1.1) | % | |||||||||||||||
Occupancy | 7,043 | 7,839 | (796) | (10.2) | % | ||||||||||||||||||
Furniture and equipment | 4,654 | 4,026 | 628 | 15.6 | % | ||||||||||||||||||
Advertising and marketing | 1,315 | 2,245 | (930) | (41.4) | % | ||||||||||||||||||
Data processing and communications | 2,274 | 2,587 | (313) | (12.1) | % | ||||||||||||||||||
Professional fees | 1,510 | 5,959 | (4,449) | (74.7) | % | ||||||||||||||||||
Investments in affordable housing partnership expenses | 2,873 | 2,388 | 485 | 20.3 | % | ||||||||||||||||||
FDIC assessments | 1,652 | 1,559 | 93 | 6.0 | % | ||||||||||||||||||
Credit related expenses | 1,361 | 1,549 | (188) | (12.1) | % | ||||||||||||||||||
OREO (income) expense, net | 1,338 | 83 | 1,255 | 1,512.0 | % | ||||||||||||||||||
Other | 4,160 | 3,839 | 321 | 8.4 | % | ||||||||||||||||||
Total noninterest expense | $ | 67,030 | $ | 71,371 | $ | (4,341) | (6.1) | % | |||||||||||||||
Six Months Ended June 30, | Increase (Decrease) | ||||||||||||||||||||||
2020 | 2019 | Amount | Percent (%) | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Salaries and employee benefits | $ | 81,352 | $ | 79,726 | $ | 1,626 | 2.0 | % | |||||||||||||||
Occupancy | 14,453 | 15,516 | (1,063) | (6.9) | % | ||||||||||||||||||
Furniture and equipment | 8,913 | 7,472 | 1,441 | 19.3 | % | ||||||||||||||||||
Advertising and marketing | 2,988 | 4,307 | (1,319) | (30.6) | % | ||||||||||||||||||
Data processing and communications | 4,905 | 5,543 | (638) | (11.5) | % | ||||||||||||||||||
Professional fees | 4,810 | 11,339 | (6,529) | (57.6) | % | ||||||||||||||||||
Investments in affordable housing partnership expenses | 5,424 | 5,268 | 156 | 3.0 | % | ||||||||||||||||||
FDIC assessments | 3,211 | 3,110 | 101 | 3.2 | % | ||||||||||||||||||
Credit related expenses | 3,023 | 2,227 | 796 | 35.7 | % | ||||||||||||||||||
OREO (income) expense, net | 2,181 | (69) | 2,250 | N/A | |||||||||||||||||||
Other | 7,910 | 7,765 | 145 | 1.9 | % | ||||||||||||||||||
Total noninterest expense | $ | 139,170 | $ | 142,204 | $ | (3,034) | (2.1) | % |
June 30, 2020 | December 31, 2019 | ||||||||||||||||||||||
Amount | Percent (%) | Amount | Percent (%) | ||||||||||||||||||||
Loan portfolio composition | (Dollars in thousands) | ||||||||||||||||||||||
Real estate loans: | |||||||||||||||||||||||
Residential | $ | 54,619 | — | % | $ | 52,558 | — | % | |||||||||||||||
Commercial | 8,343,276 | 65 | % | 8,316,470 | 68 | % | |||||||||||||||||
Construction | 289,044 | 2 | % | 295,523 | 3 | % | |||||||||||||||||
Total real estate loans | 8,686,939 | 67 | % | 8,664,551 | 71 | % | |||||||||||||||||
Commercial business | 3,415,111 | 27 | % | 2,721,183 | 22 | % | |||||||||||||||||
Residential mortgage | 723,477 | 6 | % | 835,188 | 7 | % | |||||||||||||||||
Consumer and other | 46,307 | — | % | 55,085 | — | % | |||||||||||||||||
Total loans receivable, net of deferred costs and fees | 12,871,834 | 100 | % | 12,276,007 | 100 | % | |||||||||||||||||
Allowance for credit losses | (161,771) | (94,144) | |||||||||||||||||||||
Loans receivable, net of allowance for credit losses | $ | 12,710,063 | $ | 12,181,863 |
June 30, 2020 | December 31, 2019 | ||||||||||
(Dollars in thousands) | |||||||||||
Commitments to extend credit | $ | 1,662,376 | $ | 1,864,947 | |||||||
Standby letters of credit | 117,071 | 113,720 | |||||||||
Other commercial letters of credit | 30,508 | 37,627 | |||||||||
Total | $ | 1,809,955 | $ | 2,016,294 |
June 30, 2020 | December 31, 2019 | ||||||||||
(Dollars in thousands) | |||||||||||
Nonaccrual loans (1) | $ | 82,137 | $ | 54,785 | |||||||
Loans 90 days or more days past due, still accruing | 430 | 7,547 | |||||||||
Accruing restructured loans | 44,026 | 35,709 | |||||||||
Total nonperforming loans | 126,593 | 98,041 | |||||||||
OREO | 20,983 | 24,091 | |||||||||
Total nonperforming assets | $ | 147,576 | $ | 122,132 | |||||||
Nonperforming loans to loans receivable | 0.98 | % | 0.80 | % | |||||||
Nonperforming assets to loans receivable and OREO | 1.14 | % | 0.99 | % | |||||||
Nonperforming assets to total assets | 0.86 | % | 0.78 | % | |||||||
Allowance for credit losses to nonperforming loans | 127.79 | % | 96.03 | % | |||||||
Allowance for credit losses to nonperforming assets | 109.62 | % | 77.08 | % |
Allocation of Allowance for Credit Losses | |||||||||||||||||||||||||||||||||||
June 30, 2020 | March 31, 2020 | December 31, 2019 | |||||||||||||||||||||||||||||||||
Allowance for Credit Losses | Percent of Allowance to Loans Receivable | Allowance for Credit Losses | Percent of Allowance to Loans Receivable | Allowance for Loan Losses | Percent of Allowance to Loans Receivable | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Loan Type | |||||||||||||||||||||||||||||||||||
Real estate – residential | $ | 460 | 0.84 | % | $ | 399 | 0.70 | % | $ | 204 | 0.39 | % | |||||||||||||||||||||||
Real estate – commercial | 114,668 | 1.37 | % | 92,560 | 1.11 | % | 51,712 | 0.62 | % | ||||||||||||||||||||||||||
Real estate – construction | 3,902 | 1.35 | % | 1,686 | 0.60 | % | 1,677 | 0.57 | % | ||||||||||||||||||||||||||
Commercial business | 35,493 | 1.04 | % | 42,883 | 1.40 | % | 33,032 | 1.21 | % | ||||||||||||||||||||||||||
Residential mortgage | 5,868 | 0.81 | % | 5,779 | 0.73 | % | 5,925 | 0.71 | % | ||||||||||||||||||||||||||
Consumer and other | 1,380 | 2.98 | % | 1,616 | 3.35 | % | 1,594 | 2.89 | % | ||||||||||||||||||||||||||
Total | $ | 161,771 | 1.26 | % | $ | 144,923 | 1.15 | % | $ | 94,144 | 0.77 | % |
At or for the Three Months Ended June 30, | At or for the Six Months Ended June 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
LOANS: | ||||||||||||||||||||||||||
Average loans, including loans held for sale | $ | 12,755,088 | $ | 11,959,920 | $ | 12,507,468 | $ | 12,023,690 | ||||||||||||||||||
Loans receivable | $ | 12,871,834 | $ | 11,977,134 | $ | 12,871,834 | $ | 11,977,134 | ||||||||||||||||||
ALLOWANCE: | ||||||||||||||||||||||||||
Balance, beginning of period | $ | 144,923 | $ | 94,217 | $ | 94,144 | $ | 92,557 | ||||||||||||||||||
Less loan charge offs: | ||||||||||||||||||||||||||
Real estate – commercial | (174) | (182) | (2,571) | (242) | ||||||||||||||||||||||
Commercial business | (459) | (1,551) | (3,494) | (2,959) | ||||||||||||||||||||||
Consumer and other | (271) | (343) | (796) | (629) | ||||||||||||||||||||||
Total loan charge offs | (904) | (2,076) | (6,861) | (3,830) | ||||||||||||||||||||||
Plus loan recoveries: | ||||||||||||||||||||||||||
Real estate – commercial | 25 | 570 | 192 | 1,697 | ||||||||||||||||||||||
Commercial business | 220 | 152 | 2,579 | 310 | ||||||||||||||||||||||
Consumer and other | 7 | 3 | 17 | 10 | ||||||||||||||||||||||
Total loans recoveries | 252 | 725 | 2,788 | 2,017 | ||||||||||||||||||||||
Net loan charge offs | (652) | (1,351) | (4,073) | (1,813) | ||||||||||||||||||||||
CECL day 1 adoption impact | — | — | 26,200 | — | ||||||||||||||||||||||
Provision for credit losses | 17,500 | 1,200 | 45,500 | 4,200 | ||||||||||||||||||||||
PCI allowance adjustment | — | — | — | (878) | ||||||||||||||||||||||
Balance, end of period | $ | 161,771 | $ | 94,066 | $ | 161,771 | $ | 94,066 | ||||||||||||||||||
Net loan charge offs to average loans, including loans held for sale* | 0.02 | % | 0.05 | % | 0.07 | % | 0.03 | % | ||||||||||||||||||
Allowance for credit losses to loans receivable at end of period | 1.26 | % | 0.79 | % | 1.26 | % | 0.79 | % | ||||||||||||||||||
Net loan charge offs to allowance for credit losses* | 1.61 | % | 5.74 | % | 5.04 | % | 3.85 | % | ||||||||||||||||||
Net loan charge offs to provision for credit losses | 3.73 | % | 112.58 | % | 8.95 | % | 43.17 | % | ||||||||||||||||||
COVID-19 Modifications | |||||||||||||||||
June 30, 2020 | |||||||||||||||||
Modified Loans | Loans Receivable* | Percentage of Loans Modified | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Real estate – residential | $ | 3,219 | $ | 54,619 | 5.9 | % | |||||||||||
Real estate – commercial | |||||||||||||||||
Retail | 809,024 | 2,267,050 | 35.7 | % | |||||||||||||
Hotel & motel | 1,012,434 | 1,654,389 | 61.2 | % | |||||||||||||
Gas station & car wash | 134,480 | 833,194 | 16.1 | % | |||||||||||||
Mixed use | 207,155 | 657,281 | 31.5 | % | |||||||||||||
Industrial & warehouse | 239,943 | 1,040,221 | 23.1 | % | |||||||||||||
Other | 342,600 | 1,891,141 | 18.1 | % | |||||||||||||
Real estate – construction | 68,661 | 289,044 | 23.8 | % | |||||||||||||
Commercial business | 150,978 | 3,415,111 | 4.4 | % | |||||||||||||
Residential mortgage | 146,011 | 723,477 | 20.2 | % | |||||||||||||
Consumer and other | 1,314 | 46,307 | 2.8 | % | |||||||||||||
Total | $ | 3,115,819 | $ | 12,871,834 | 24.2 | % | |||||||||||
Balance | Percent (%) | ||||||||||
(Dollars in thousands) | |||||||||||
Three months or less | $ | 1,625,659 | 33 | % | |||||||
Over three months through six months | 1,112,498 | 22 | % | ||||||||
Over six months through nine months | 1,055,699 | 21 | % | ||||||||
Over nine months through twelve months | 1,072,980 | 22 | % | ||||||||
Over twelve months | 92,020 | 2 | % | ||||||||
Total time deposits | $ | 4,958,856 | 100 | % |
As of June 30, 2020 | |||||||||||||||||||||||||||||||||||
Actual | To Be Well-Capitalized | Excess | |||||||||||||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Hope Bancorp, Inc. | |||||||||||||||||||||||||||||||||||
Common equity Tier 1 capital ratio
(to risk-weighted assets) | $ | 1,539,114 | 11.50 | % | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||
Total risk-based capital ratio (to risk-weighted assets) | $ | 1,771,876 | 13.23 | % | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||
Tier 1 risk-based capital ratio (to risk-weighted assets) | $ | 1,638,815 | 12.24 | % | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||
Tier 1 capital to total assets (to average assets) | $ | 1,638,815 | 10.08 | % | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||
Bank of Hope | |||||||||||||||||||||||||||||||||||
Common equity Tier 1 capital ratio
(to risk-weighted assets) | $ | 1,818,250 | 13.58 | % | $ | 870,184 | 6.50 | % | $ | 948,066 | 7.08 | % | |||||||||||||||||||||||
Total risk-based capital ratio
(to risk-weighted assets) | $ | 1,951,311 | 14.58 | % | $ | 1,338,745 | 10.00 | % | $ | 612,566 | 4.58 | % | |||||||||||||||||||||||
Tier 1 risk-based capital ratio
(to risk-weighted assets) | $ | 1,818,250 | 13.58 | % | $ | 1,070,996 | 8.00 | % | $ | 747,254 | 5.58 | % | |||||||||||||||||||||||
Tier 1 capital to total assets
(to average assets) | $ | 1,818,250 | 11.19 | % | $ | 812,715 | 5.00 | % | $ | 1,005,535 | 6.19 | % | |||||||||||||||||||||||
As of December 31, 2019 | |||||||||||||||||||||||||||||||||||
Actual | To Be Well-Capitalized | Excess | |||||||||||||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Hope Bancorp, Inc. | |||||||||||||||||||||||||||||||||||
Common equity Tier 1 capital ratio (to risk-weighted assets) | $ | 1,553,697 | 11.76 | % | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||
Total risk-based capital ratio (to risk-weighted assets) | $ | 1,747,611 | 13.23 | % | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||
Tier 1 risk-based capital ratio (to risk-weighted assets) | $ | 1,652,831 | 12.51 | % | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||
Tier 1 capital to total assets (to average assets) | $ | 1,652,831 | 11.22 | % | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||
Bank of Hope | |||||||||||||||||||||||||||||||||||
Common equity Tier 1 capital ratio (to risk-weighted assets) | $ | 1,811,862 | 13.72 | % | $ | 858,462 | 6.50 | % | $ | 953,400 | 7.22 | % | |||||||||||||||||||||||
Total risk-based capital ratio (to risk-weighted assets) | $ | 1,906,642 | 14.44 | % | $ | 1,320,711 | 10.00 | % | $ | 585,931 | 4.44 | % | |||||||||||||||||||||||
Tier 1 risk-based capital ratio (to risk-weighted assets) | $ | 1,811,862 | 13.72 | % | $ | 1,056,569 | 8.00 | % | $ | 755,293 | 5.72 | % | |||||||||||||||||||||||
Tier 1 capital to total assets (to average assets) | $ | 1,811,862 | 12.29 | % | $ | 737,005 | 5.00 | % | $ | 1,074,857 | 7.29 | % | |||||||||||||||||||||||
June 30, 2020 | December 31, 2019 | ||||||||||||||||||||||
Simulated Rate Changes | Estimated Net Interest Income Sensitivity | Market Value Of Equity Volatility | Estimated Net Interest Income Sensitivity | Market Value Of Equity Volatility | |||||||||||||||||||
+ 200 basis points | 9.96 | % | 8.02 | % | 1.57 | % | 1.84 | % | |||||||||||||||
+ 100 basis points | 5.01 | % | 4.89 | % | 0.88 | % | (0.42) | % | |||||||||||||||
- 100 basis points | (0.63) | % | (6.42) | % | (1.10) | % | (1.12) | % | |||||||||||||||
- 200 basis points | (0.64) | % | (6.41) | % | (2.68) | % | (4.43) | % |
Exhibit No. | Description | |||||||
101.INS | The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document* | |||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document* | |||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document* | |||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document* | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document* | |||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)* |
HOPE BANCORP, INC. | |||||||||||
Date: | August 7, 2020 | /s/ Kevin S. Kim | |||||||||
Kevin S. Kim | |||||||||||
Chairman, President, and Chief Executive Officer | |||||||||||
Date: | August 7, 2020 | /s/ Alex Ko | |||||||||
Alex Ko | |||||||||||
Executive Vice President and Chief Financial Officer | |||||||||||
/s/ Kevin S. Kim | ||
Kevin S. Kim | ||
Chairman, President, and Chief Executive Officer |
/s/ Alex Ko | ||
Alex Ko | ||
Executive Vice President and Chief Financial Officer |
/s/ Kevin S. Kim | ||
Kevin S. Kim | ||
Chairman, President, and Chief Executive Officer |
/s/ Alex Ko | ||
Alex Ko | ||
Executive Vice President and Chief Financial Officer |
Consolidated Statements Of Financial Condition (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for credit losses | $ 161,771 | $ 94,144 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 135,900,857 | 135,702,090 |
Common stock, shares outstanding (in shares) | 123,239,276 | 125,756,543 |
Treasury stock, at cost, shares repurchased (in shares) | 12,661,581 | 9,945,547 |
Consolidated Statements Of Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
INTEREST INCOME: | ||||
Interest and fees on loans | $ 134,190 | $ 158,627 | $ 288,420 | $ 316,763 |
Interest on securities | 9,891 | 11,866 | 20,500 | 24,185 |
Interest on other investments | 980 | 2,973 | 3,009 | 5,648 |
Total interest income | 145,061 | 173,466 | 311,929 | 346,596 |
INTEREST EXPENSE: | ||||
Interest on deposits | 29,451 | 48,826 | 70,564 | 95,673 |
Interest on FHLB advances | 2,238 | 3,384 | 4,885 | 5,998 |
Interest on other borrowings and convertible notes | 3,558 | 4,035 | 7,375 | 8,096 |
Total interest expense | 35,247 | 56,245 | 82,824 | 109,767 |
NET INTEREST INCOME BEFORE PROVISION FOR CREDIT LOSSES | 109,814 | 117,221 | 229,105 | 236,829 |
PROVISION FOR CREDIT LOSSES | 17,500 | 1,200 | 45,500 | 4,200 |
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | 92,314 | 116,021 | 183,605 | 232,629 |
NONINTEREST INCOME: | ||||
Service fees on deposit accounts | 2,583 | 4,416 | 6,716 | 8,733 |
International service fees | 667 | 1,020 | 1,456 | 1,953 |
Loan servicing fees, net | 1,106 | 738 | 1,471 | 1,467 |
Wire transfer fees | 820 | 1,311 | 1,818 | 2,400 |
Swap fees | 1,040 | 357 | 2,016 | 422 |
Net gains on sales of other loans | 1,678 | 1,066 | 3,533 | 1,807 |
Net gains on sales of securities available for sale | 0 | 129 | 0 | 129 |
Other income and fees | 3,346 | 3,250 | 7,494 | 6,798 |
Total noninterest income | 11,240 | 12,287 | 24,504 | 23,709 |
NONINTEREST EXPENSE: | ||||
Salaries and employee benefits | 38,850 | 39,297 | 81,352 | 79,726 |
Occupancy | 7,043 | 7,839 | 14,453 | 15,516 |
Furniture and equipment | 4,654 | 4,026 | 8,913 | 7,472 |
Advertising and marketing | 1,315 | 2,245 | 2,988 | 4,307 |
Data processing and communications | 2,274 | 2,587 | 4,905 | 5,543 |
Professional fees | 1,510 | 5,959 | 4,810 | 11,339 |
Investments in affordable housing partnerships expenses | 2,873 | 2,388 | 5,424 | 5,268 |
FDIC assessments | 1,652 | 1,559 | 3,211 | 3,110 |
Credit related expenses | 1,361 | 1,549 | 3,023 | 2,227 |
OREO expense (income), net | 1,338 | 83 | 2,181 | (69) |
Other | 4,160 | 3,839 | 7,910 | 7,765 |
Total noninterest expense | 67,030 | 71,371 | 139,170 | 142,204 |
INCOME BEFORE INCOME TAXES | 36,524 | 56,937 | 68,939 | 114,134 |
INCOME TAX PROVISION | 9,771 | 14,256 | 16,233 | 28,695 |
NET INCOME | $ 26,753 | $ 42,681 | $ 52,706 | $ 85,439 |
EARNINGS PER COMMON SHARE | ||||
Basic (in dollars per share) | $ 0.22 | $ 0.34 | $ 0.43 | $ 0.67 |
Diluted (in dollars per share) | $ 0.22 | $ 0.34 | $ 0.42 | $ 0.67 |
Consolidated Statements Of Comprehensive Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 26,753 | $ 42,681 | $ 52,706 | $ 85,439 |
Other comprehensive income: | ||||
Change in unrealized net holding gains on securities available for sale | 3,270 | 32,523 | 42,123 | 57,189 |
Change in unrealized net holding losses on interest rate swaps used in cash flow hedges | (711) | 0 | (711) | 0 |
Reclassification adjustments for net gains realized in net income | (139) | (129) | (139) | (129) |
Tax effect | (720) | (9,613) | (12,273) | (16,932) |
Other comprehensive income, net of tax | 1,700 | 22,781 | 29,000 | 40,128 |
Total comprehensive income | $ 28,453 | $ 65,462 | $ 81,706 | $ 125,567 |
Consolidated Statements Of Changes In Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Statement of Stockholders' Equity [Abstract] | ||||
Cash dividends declared on common stock (in dollars per share) | $ 0.14 | $ 0.14 | $ 0.28 | $ 0.28 |
Hope Bancorp, Inc. |
6 Months Ended |
---|---|
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Hope Bancorp, Inc. | Hope Bancorp, Inc.Hope Bancorp, Inc. (“Hope Bancorp” on a parent-only basis and the “Company” on a consolidated basis), headquartered in Los Angeles, California, is the holding company for Bank of Hope (the “Bank”). As of June 30, 2020, the Bank operated branches in California, Washington, Texas, Illinois, Alabama, Virginia, New Jersey, and New York, loan production offices in Colorado, Texas, Oregon, Washington, Georgia, New Jersey, Southern California, and Northern California, and a representative office in Seoul, South Korea. The Company is a corporation organized under the laws of the state of Delaware and a bank holding company registered under the Bank Holding Company Act of 1956, as amended. |
Basis of Presentation |
6 Months Ended |
---|---|
Jun. 30, 2020 | |
Basis Of Presentation [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements included herein have been prepared without an audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”), except for the Consolidated Statement of Financial Condition as of December 31, 2019 which was from the audited financial statements included in the Company’s 2019 Annual Report on Form 10-K. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such SEC rules and regulations. The consolidated financial statements include the accounts of Hope Bancorp and its wholly owned subsidiaries, principally Bank of Hope. All intercompany transactions and balances have been eliminated in consolidation. The Company has made all adjustments, that in the opinion of management, are necessary to fairly present the Company’s financial position at June 30, 2020 and December 31, 2019 and the results of operations for the three and six months ended June 30, 2020 and 2019. Certain reclassifications have been made to prior period amounts to conform to the current year presentation. The results of operations for the interim periods are not necessarily indicative of results to be anticipated for the full year. The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates. The global pandemic resulting from the outbreak of the novel strain of coronavirus (“COVID-19”) has substantially and negatively impacted the United States economy, disrupted global supply chains, considerably lowered equity market valuations, created significant volatility and disruption in financial markets, and materially increased unemployment levels. In addition, the pandemic has resulted in temporary closures of countless businesses and the institution of social distancing and sheltering in place requirements in most states and communities. The Company has, and could continue to, experience a material and adverse effect on its business as a result of the impact of the COVID-19 pandemic, and the resulting governmental actions to curtail its spread. It is at least reasonably possible that information which was available to the Company at the date of the financial statements will change in the near term due to the COVID-19 pandemic and that the effect of the change could be material to the financial statements. The extent to which the COVID-19 pandemic will impact the Company’s estimates and assumptions is highly uncertain. These unaudited consolidated financial statements should be read along with the audited consolidated financial statements and accompanying notes included in the Company’s 2019 Annual Report on Form 10-K. Pending Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments provide temporary, optional guidance to ease the potential burden in accounting for reference rate reform. The amendments provide optional expedients and exceptions for applying GAAP to transactions affected by reference rate reform if certain criteria are met. The amendments primarily include relief related to contract modifications and hedging relationships, as well as providing a one-time election for the sale or transfer of debt securities classified as held-to-maturity. This guidance is effective immediately and the amendments may be applied prospectively through December 31, 2022. The Company is currently in the process of evaluating ASU 2020-04 and determining the impact to the Company’s consolidated financial statements. |
Earnings Per Share ("EPS") |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share ("EPS") | Earnings Per Share (“EPS”) Basic EPS does not reflect the possibility of dilution that could result from the issuance of additional shares of common stock upon exercise or conversion of outstanding equity awards or convertible notes and is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if stock options, convertible notes, or other contracts to issue common stock were exercised or converted to common stock that would then share in earnings. For the three months ended June 30, 2020 and 2019, stock options and restricted share awards of 1,450,408 and 982,625 shares of common stock, respectively, were excluded in computing diluted earnings per common share because they were anti-dilutive. For the six months ended June 30, 2020 and 2019, stock options and restricted shares awards of 737,208 and 959,319 shares of common stock, respectively, were excluded in computing diluted earnings per common share because they were anti-dilutive. The Company previously issued $217.5 million in convertible senior notes maturing on May 15, 2038. The convertible notes can be converted into the Company’s shares of common stock at an initial rate of 45.0760 shares per $1,000 principal amount of the notes (See footnote 10 “Subordinated Debentures and Convertible Notes” for additional information regarding convertible notes issued). For the three and six months ended June 30, 2020 and 2019, shares related to the convertible notes issued were not included in the Company’s diluted EPS calculation. In accordance with the terms of the convertible notes and settlement options available to the Company, no shares would have been delivered to investors of the convertible notes upon assumed conversion based on the Company’s common stock price during the three and six months ended June 30, 2020 and 2019. In June 2019, the Company’s Board of Directors approved a share repurchase program that authorized the Company to repurchase up to $50.0 million of its common stock which was completed in March 2020. As of June 30, 2020, the Company had repurchased 12,661,581 shares of common stock totaling $200.0 million as part of previously announced share repurchase programs. The Company’s Board of Directors had previously approved the repurchase of $150.0 million in shares of common stock in 2018, all of which were repurchased in the year ended December 31, 2018. The repurchased shares were recorded as treasury stock and reduced the total number of common shares outstanding. The following tables show the computation of basic and diluted EPS for the three and six months ended June 30, 2020 and 2019.
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Equity Investments |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Investments | Equity Investments Equity investments with readily determinable fair values at June 30, 2020 and December 31, 2019, consisted of mutual funds in the amounts of $22.7 million and $22.1 million, respectively, and were included in “Equity investments” on the Consolidated Statements of Financial Condition. During the second quarter of 2019, the Company sold its equity stock in other institutions for $2.6 million. There was no change in fair value recorded on the equity investments sold at that time. The changes in fair value for equity investments with readily determinable fair values for the three and six ended June 30, 2020 and 2019 were recorded in other noninterest income and fees as summarized in the table below:
At June 30, 2020 and December 31, 2019, the Company also had equity investments without readily determinable fair value which are carried at cost less any determined impairment. The balance of these investments is adjusted for changes in subsequent observable prices. At June 30, 2020, the total balance of equity investments without readily determinable fair values included in “Equity investments” on the Consolidated Statements of Financial Condition was $27.2 million, consisting of $370 thousand in correspondent bank stock, $1.0 million in Community Development Financial Institutions (“CDFI”) investments, and $25.8 million in Community Reinvestment Act (“CRA”) investments. At December 31, 2019, the total balance of equity investments without readily determinable fair values was $27.0 million, consisting of $370 thousand in correspondent bank stock, $1.0 million in CDFI investments, and $25.6 million in CRA investments. The Company had no impairments or subsequent observable price changes for equity investments without readily determinable fair values for the three and six months ended June 30, 2020 and 2019. |
Securities Available for Sale |
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Debt Securities, Available-for-sale [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities Available for Sale | Securities Available for Sale The following is a summary of securities available for sale as of the dates indicated:
As of June 30, 2020 and December 31, 2019, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of stockholders’ equity. During the three and six months ended June 30, 2020, the Company recognized zero net gains on sales of securities available for sale. For the three and six months ended June 30, 2019, the Company recognized net gains on sales of securities available for sale of $129 thousand. For the three and six months ended June 30, 2020, there were no sales of securities available for sale. For the three and six months ended June 30, 2019, the Company received proceeds from the sale of $69.2 million in investment securities, which consisted of $39.5 million municipal securities and $29.7 million mortgage-backed securities sold. At June 30, 2020 and December 31, 2019, $38.7 million and $9.1 million in unrealized gains on securities available for sale net of taxes, respectively, were included in accumulated other comprehensive income. For the three and six months ended June 30, 2020, there were no reclassifications out of accumulated other comprehensive income into earnings for investments securities available for sale. For the three and six months ended June 30, 2019, reclassifications out of accumulated other comprehensive income into earnings for investments securities available for sale was $129 thousand. The amortized cost and estimated fair value of investment securities at June 30, 2020, by contractual maturity, is presented in the table below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations, with or without call or prepayment penalties. Collateralized mortgage obligations and mortgage-backed securities are not due at a single maturity date and their total balances are shown separately.
Securities with carrying values of approximately $346.0 million and $340.9 million at June 30, 2020 and December 31, 2019, respectively, were pledged to secure public deposits, for various borrowings, and for other purposes as required or permitted by law. The following tables show the Company’s investments’ gross unrealized losses and estimated fair values, aggregated by investment category and the length of time that the individual securities have been in a continuous unrealized loss position as of the dates indicated.
__________________________________ * Investments in U.S. Government agency and U.S. Government sponsored enterprises
__________________________________ * Investments in U.S. Government agency and U.S. Government sponsored enterprises The Company had one corporate security and three municipal securities that were in a continuous unrealized loss position for twelve months or longer with fair values totaling $3.5 million and $12.8 million, respectively, as of June 30, 2020. With the adoption of CECL, the length of time that the fair value of investment securities have been less than amortized cost is not considered when assessing for credit impairment. On January 1, 2020, the Company adopted ASU 2016-13 and implemented the CECL methodology for allowance for credit losses on its investment securities available for sale. The new CECL methodology replaces the other-than-temporary impairment model that previously existed. The Company did not have a day 1 allowance impact attributable to its investment securities portfolio and did not have an allowance for credit losses as of June 30, 2020. The Company has elected to exclude accrued interest from the amortized cost of its investment securities available for sale. Accrued interest receivable for investment securities available for sale at June 30, 2020 and December 31, 2019, totaled $4.4 million and $4.3 million, respectively. The Company evaluates securities in unrealized loss position for impairment related to credit losses on at least a quarterly basis. Securities in unrealized loss positions are first assessed as to whether we intend to sell, or if it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If one of the criteria is met, the security’s amortized cost basis is written down to fair value through current earnings. For securities that do not meet these criteria, the Company evaluates whether the decline in fair value resulted from credit losses or other factors. In evaluating whether a credit loss exists, the Company has set up an initial filter for impairment triggers. Once the quantitative filters have been triggered, the securities are placed on a watch list and an additional assessment is performed to identify whether a credit impairment exists. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security and the issuer, among other factors. If this assessment indicates that a credit loss exists, we compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an allowance for credit losses is recorded, limited to the amount that the fair value of the security is less than its amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income, net of applicable taxes. No allowance for credit losses for available for sale securities was recorded at June 30, 2020. Approximately 95% of the Company’s investment portfolio at June 30, 2020 consisted of securities that were issued by U.S. Government agency and U.S. Government sponsored enterprises. Although a government guarantee exists on these investments, these entities are not legally backed by the full faith and credit of the federal government, and the current support they receive is subject to a cap as part of the agreement entered into in 2008. Nonetheless, at this time we do not foresee any set of circumstances in which the government would not fund its commitments on these investments as the issuers are an integral part of the U.S. housing market in providing liquidity and stability. Therefore, we concluded that a zero allowance approach for these investment securities is appropriate. The Company had also had one corporate security and six municipal securities in unrealized loss positions at June 30, 2020. The Company performed an assessment of these investments for credit impairment and concluded that no allowance for credit losses was required at June 30, 2020. |
Loans Receivable and Allowance for Credit Losses |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans Receivable and Allowance for Credit Losses | Loans Receivable and Allowance for Credit Losses The following is a summary of loans receivable by major category:
__________________________________ 1 Commercial Business loans as of June 30, 2020 includes $473.9 million in SBA Paycheck Protection Program Loans Loans receivable is stated at the amount of unpaid principal, adjusted for net deferred fees and costs, premiums and discounts, purchase accounting fair value adjustments, and allowance for credit losses. Loan balances as of December 31, 2019 have been reclassified based on the Company’s current presentation and represent amortized costs balances which are net of deferred fees and costs. The Company had net deferred fees of $8.4 million and net deferred costs of $2.7 million at June 30, 2020 and December 31, 2019, respectively. The loan portfolio consists of four segments: real estate, commercial business, residential mortgage, and consumer and other loans. Real estate loans are extended for the purchase and refinance of commercial real estate and are generally secured by first deeds of trust and are collateralized by residential or commercial properties. Commercial business loans are loans provided to businesses for various purposes such as for working capital, purchasing inventory, debt refinancing, business acquisitions, international trade finance activities, and other business related financing needs and also include SBA Paycheck Protection Program (“PPP”) loans. Residential mortgage loans are extended for personal, family, or household use and are secured by a mortgage or deed of trust. Consumer and other loans consist of home equity, credit card, and other personal loans. On January 1, 2020, the Company adopted ASU 2016-13, or CECL, using the modified retrospective method for all of its loans measured at amortized cost. With the adoption of CECL, the Company reassessed its loan portfolio segments and classes of loans receivable and made changes based on the new allowance for credit losses methodology. As a result, the Company now discloses residential mortgage loans as a separate segment and class of receivable. Trade finance loans, which were previously disclosed as a distinct segment and class of receivable are now combined with commercial business loans. Prior period balances have been reclassified to conform with the current presentation. The tables below details the activity in the allowance for credit losses by portfolio segment for the three and six months ended June 30, 2020 and 2019. Accrued interest receivable on loans totaled $48.3 million at June 30, 2020 and is excluded from the estimate of credit losses.
The following tables break out the allowance for credit losses and loan balance by measurement methodology at June 30, 2020 and December 31, 2019:
As of June 30, 2020 and December 31, 2019, the reserve for unfunded loan commitments recorded in other liabilities was $1.3 million and $636 thousand, respectively. For the three and six months ended June 30, 2020, the Company recorded additions to reserves for unfunded commitments recorded in credit related expenses totaling $50 thousand and $660 thousand, respectively. The Company did not set aside any reserves for unfunded commitments for the three and six months ended June 30, 2019. Generally, loans are placed on nonaccrual status if principal and/or interest payments become 90 days or more past due and/or management deems the collectability of the principal and/or interest to be in question, as well as when required by regulatory requirements. Loans to customers whose financial conditions have deteriorated are considered for nonaccrual status whether or not the loan is 90 days or more past due. Generally, payments received on nonaccrual loans are recorded as principal reductions. Loans are returned to accrual status only when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. The Company does not recognize interest income while loans are on nonaccrual status. The tables below represent the recorded investment of nonaccrual loans and loans past due 90 or more days and still on accrual status by class of loans and broken out by loans with an ACL and those without a recorded ACL as of June 30, 2020 and total nonaccrual loans and loans past due 90 or more days and still on accrual status by class of loans as of December 31, 2019.
__________________________________ (1) Total nonaccrual loans exclude the guaranteed portion of SBA loans that are in liquidation totaling $30.3 million and $28.1 million, at June 30, 2020 and December 31, 2019, respectively. (2) Nonaccrual loans exclude PCI loans of $13.2 million at December 31, 2019. The following table presents the amortized cost basis of collateral-dependent loans as of June 30, 2020:
Interest income reversals due to loans being placed on nonaccrual status were $319 thousand and $286 thousand for the three months ended June 30, 2020 and 2019, respectively. Nonaccrual interest income reversals for the six months ended June 30, 2020 and 2019 were $356 thousand and $1.1 million, respectively. The following table presents the recorded investment of past due loans, including nonaccrual loans past due 30 or more days, by the number of days past due as of June 30, 2020 and December 31, 2019 by class of loans:
__________________________________ (1) Past due loans at December 31, 2019 exclude PCI loans totaling $15.0 million. The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, including, but not limited to, current financial information, historical payment experience, credit documentation, public information, and current economic trends. Homogeneous loans (i.e., home mortgage loans, home equity lines of credit, overdraft loans, express business loans, and automobile loans) are not risk rated and credit risk is analyzed largely by the number of days past due. This analysis is performed at least on a quarterly basis. The definitions for risk ratings are as follows: •Pass: Loans that meet a preponderance or more of the Company’s underwriting criteria and evidence an acceptable level of risk. •Special Mention: Loans that 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 of the institution’s credit position at some future date. •Substandard: Loans that are inadequately protected by the current net worth and paying capacity of the borrower or by the collateral pledged, if any. Loans in this classification have a well-defined weakness or weaknesses that jeopardize the repayment of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. •Doubtful: Loans that have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or repayment in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The following presents the amortized cost basis of loans receivable by class, credit quality indicator, and year of origination as of June 30, 2020.
For the three and six months ended June 30, 2020, there were no revolving loans converted to term loans. The following presents by loan class and credit quality indicator, the recorded investment in the Company’s loans and leases as of December 31, 2019.
The Company may reclassify loans held for investment to loans held for sale in the event that the Company plans to sell loans that were originated with the intent to hold to maturity. Loans transferred from held for investment to held for sale are carried at the lower of cost or fair value. The breakdown of loans by type that were reclassified from held for investment to held for sale for the three and six months ended June 30, 2020 and 2019 is presented in the following table:
On January 1, 2020 the Company adopted ASU 2016-13, “Measurement of Credit Losses on Financial Instruments”, or CECL which significantly changed the credit losses estimation model for loans and investments. The discussion below relates to the Company’s CECL allowance for credit losses (“ACL”) methodology. For a discussion of the Company’s former incurred loss allowance for loan losses methodology, please refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The Company calculates its ACL by estimating expected credit losses on a collective basis for loans that share similar risk characteristics. Loans that do not share similar risk characteristics with other loans are evaluated for credit losses on an individual basis. The Company uses a combination of a modeled and non-modeled approach that incorporates current and future economic conditions to estimate lifetime expected losses on a collective basis. The Company uses Probability of Default (“PD”), Loss Given Default (“LGD”), and Exposure at Default (“EAD”) methodologies with quantitative factors and qualitative considerations in calculation of the allowance for credit losses for collectively assessed loans. The Company uses a reasonable and supportable period of 2 years at which point loss assumptions revert back to historical loss information by means of 1 year reversion period. The ACL for the Company’s construction, credit card, and certain consumer loans is calculated based on a non-modeled approach utilizing historical loss rates to estimate losses. A non-modeled approach was chosen for these loans as fewer data points exist which could result in high levels of estimated loss volatility under a modeled approach. In aggregate, non-modeled loans represented less than 3% of the Company’s total loan portfolio as of June 30, 2020. With the adoption of CECL, the Company formed an Economic Forecast Committee (“EFC”) to review economic forecast scenarios that are incorporated in the Company’s ACL. The EFC reviews multiple scenarios provided to the Company by an independent third party and chooses a single scenario that best aligns with management’s expectation of future economic conditions. The forecast scenario contains certain macroeconomic variables that are incorporated into the Company’s modeling process, including GDP, unemployment rates, interest rates, and housing prices. As of June 30, 2020, the Company chose a forecast scenario that incorporates the effect of the recent COVID-19 pandemic into estimates of future economic conditions. The scenario assumes a large decline in GDP and an increase in unemployment for the first half of 2020 followed by a return to GDP growth in the second half of 2020, while unemployment remains slightly elevated through 2023. Subsequent to the completion of the ACL calculation as of June 30, 2020, the Company received updated macroeconomic forecast scenarios in July 2020, which reflects slightly lower projected GDP growth for the third quarter of 2020 followed by slightly higher GDP growth in the subsequent quarters. Overall the updated projections were not significantly changed from the projections incorporated into the Company’s ACL calculation. The updated July 2020 forecast scenario information was not reflected in the Company’s ACL as of June 30, 2020, but the Company expects such forecast and further updated forecasts to be reflected in future ACL calculations. Additionally, in order to systematically quantify the credit risk impact of other trends and changes within the loan portfolio, the Company utilizes qualitative adjustments to the modeled and non-modeled estimated loss approaches. The parameters for making adjustments are established under a Credit Risk Matrix that provides different possible scenarios for each of the factors below. The Credit Risk Matrix and the possible scenarios enable the Bank to qualitatively adjust the Loss Migration Ratio by as much as 25 basis points for each loan type pool. This matrix considers the following seven factors, which are patterned after the guidelines provided under the Federal Financial Institutions Examination Council (“FFIEC”) Interagency Policy Statement on the Allowance for Loan and Lease Losses, updated to reflect the adoption of CECL: •Changes in lending policies and procedures, including underwriting standards and collection, charge off, and recovery practices; •Changes in the nature and volume of the loan portfolio; •Changes in the experience, ability, and depth of lending management and staff; •Changes in the trends of the volume and severity of past due loans, classified loans, nonaccrual loans, troubled debt restructurings, and other loan modifications; •Changes in the quality of the loan review system and the degree of oversight by the Directors; •The existence and effect of any concentrations of credit and changes in the level of such concentrations; and •The effect of external factors, such as competition, legal requirements, and regulatory requirements on the level of estimated losses in the loan portfolio. As of June 30, 2020, the Company recorded additional ACL as part of its qualitative assessment to account for the additional risks associated with the increase in loan modifications related to the COVID-19 pandemic and to account for the Company’s concentration of hotel/motel loans which were particularly hard hit by the pandemic. For loans which do not share similar risk characteristics such as nonaccrual and TDR loans above $500 thousand, the Company evaluates these loans on an individual basis in accordance with ASC 326. These nonaccrual and TDR loans are considered to have different risk profiles than performing loans and therefore are evaluated separately from performing loan pools. The Company decided to collectively assess TDRs and nonaccrual loans with balances below $500 thousand along with the performing and accrual loans in order to reduce the operational burden of individually assessing small TDR and nonaccrual loans with immaterial balances. For individually assessed loans, the ACL is measured using 1) the present value of future cash flows discounted at the loan’s effective interest rate; 2) the loan’s observable market price; or 3) the fair value of the collateral, if the loan is collateral dependent. For the collateral dependent loans, the Company obtains a new appraisal to determine the fair value of collateral. The appraisals are based on an “as-is” valuation. To ensure that appraised values remain current, the Company either obtains updated appraisals every twelve months from a qualified independent appraiser or an internal evaluation of the collateral is performed by qualified personnel. If the third party market data indicates that the value of the collateral property has declined since the most recent valuation date, management adjusts the value of the property downward to reflect current market conditions. If the fair value of the collateral is less than the amortized balance of the loan, the Company recognizes an ACL with a corresponding charge to the provision for credit losses. The Company maintains a separate ACL for its off-balance sheet unfunded loan commitments. The Company uses a funding rate to allocate the allowance to undrawn exposures. This funding rate is used as a credit conversion factor to capture how much undrawn can potentially become drawn at any point. Funding rate is determined based on a lookback period of 8 quarters. Credit loss is not estimated for off-balance sheet credit exposures that are unconditionally cancellable by the Company. The following tables present a breakdown of loans by recorded ACL, broken out by loans evaluated individually and collectively at June 30, 2020 and December 31, 2019:
Under certain circumstances, the Company provides borrowers relief through loan modifications. These modifications are either temporary in nature (“temporary modifications”) or are more substantive. The temporary modifications generally consist of interest only payments for a to month period, whereby principal payments are deferred. At the end of the modification period, the remaining principal balance is re-amortized based on the original maturity date. Loans subject to temporary modifications are generally downgraded to Special Mention or Substandard. At the end of the modification period, the loan either 1) returns to the original contractual terms; 2) is further modified and accounted for as a troubled debt restructuring in accordance with ASC 310-10-35; or 3) is disposed of through foreclosure or liquidation. TDR loans are individually evaluated in accordance with ASC 310 and ASC 326. The concessions may be granted in various forms, including reduction in the stated interest rate, reduction in the amount of principal amortization, forgiveness of a portion of a loan balance or accrued interest, or extension of the maturity date. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed on the probability that the borrower will be in payment default on their debt in the foreseeable future without the modification. This evaluation is performed under the Bank’s internal underwriting policy. At June 30, 2020, total TDR loans were $58.7 million, compared to $46.7 million at December 31, 2019. As of June 30, 2020, the Company had $3.12 billion loans with COVID-19 related loan modifications, most of which were modified during the second quarter of 2020. The majority of these loans were modified in accordance with Section 4013 of the CARES Act. The CARES Act provides banks the option to temporarily suspend certain requirements under U.S. GAAP related to TDR for a limited period of time to account for the effects of COVID-19 if (i) the loan modification is made between March 1, 2020 and the earlier of December 31, 2020 or 60 days after the end of the coronavirus emergency declaration and (ii) the applicable loan was not more than 30 days past due as of December 31, 2019. As such, all modified loans that met the criteria outlined within Section 4013 of the CARES Act were not classified as TDR loans as of June 30, 2020. As of June 30, 2020, real estate loans accounted for more than 90% of the loans modified due to hardship from the COVID-19 pandemic. The modifications mostly consisted of full payment deferrals for three months (see “COVID-19 Related Loan Modifications” in the Financial Condition section of the Management’s Discussion and Analysis of Financial Condition and Results of Operations for more information). A summary of the recorded investment of TDR loans on accrual and nonaccrual status by type of concession as of June 30, 2020 and December 31, 2019 is presented below:
TDR loans on accrual status are comprised of loans that were accruing at the time of restructuring and for which the Company anticipates full repayment of both principal and interest under the restructured terms. TDR loans that are on nonaccrual status can be returned to accrual status after a period of sustained performance, generally determined to be six months of timely payments as modified. Sustained performance includes the periods prior to the modification if the prior performance met or exceeded the modified terms. TDR loans on accrual status at June 30, 2020 were comprised of 32 commercial real estate loans totaling $31.2 million, 36 commercial business loans totaling $12.7 million, and 18 consumer and other loans totaling $156 thousand. TDR loans on accrual status at December 31, 2019 were comprised of 15 commercial real estate loans totaling $23.7 million, 27 commercial business loans totaling $11.8 million, and 12 consumer and other loans totaling $200 thousand. The Company expects that TDR loans on accrual status as of June 30, 2020, which were all performing in accordance with their restructured terms, to continue to comply with the restructured terms because of the reduced principal or interest payments on these loans. TDR loans that were restructured at market interest rates and had sustained performance as agreed under the modified loan terms may be reclassified as non-TDR after each year end but are reserved for under ASC 310-10. The Company recorded an allowance totaling $4.8 million and $3.1 million for TDR loans as of June 30, 2020 and December 31, 2019, respectively. The following tables present the recorded investment of loans classified as TDR during the three and six months ended June 30, 2020 and 2019 by class of loans:
For TDRs modified during the three and six months ended June 30, 2020, the Company recorded $57 thousand and $219 thousand, respectively in ACL. Total charge-offs of TDR loans modified during the three and six months ended June 30, 2020 totaled $0. For TDR loans modified during the three and six months ended June 30, 2019, the Company recorded $31 thousand and $52 thousand, respectively, in allowance for loan losses. Total charge-offs of TDR loans modified during the three and six months ended June 30, 2019 totaled $33 thousand. The following tables present loans modified as TDRs within the previous twelve months ended June 30, 2020 and 2019 that subsequently had payment defaults during the three and six months ended June 30, 2020 and 2019:
A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms. The Company recorded $86 thousand and $143 thousand in ACL for TDR loans that had payment defaults during the three and six months ended June 30, 2020, respectively. Total charge offs for TDR loans that had payment defaults during the three and six months ended June 30, 2020 was $0. The Company recorded $85 thousand and $119 thousand in allowance for the TDR loans that had payment defaults during the three and six months ended June 30, 2019, respectively. Total charge offs for TDR loans that had payment defaults during the three and six months ended June 30, 2019 totaled $67 thousand. |
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Leases | Leases On January 1, 2019, the Company adopted ASU 2016-02, “Leases (Topic 842)”, using the modified retrospective approach under and recorded $64.2 million in operating lease right-of-use (“ROU”) assets at adoption. The Company’s operating leases are real estate leases which are comprised of bank branch locations, loan production offices, and office spaces with remaining lease terms ranging from 1 to 11 years as of June 30, 2020. Certain lease arrangements contain extension options which are typically around 5 years. As these extension options are not generally considered reasonably certain of exercise, they are not included in the lease term. At June 30, 2020, ROU assets and related liabilities were $55.3 million and $57.7 million, respectively. At June 30, 2020, the short term operating lease liability totaled $13.4 million and the long-term operating lease liability totaled $44.2 million. The Company defines short-term operating lease liabilities as liabilities due in twelve months or less and long term lease liabilities are defined as liabilities that are due in more than twelve months at the end of each reporting period. The Company did not have any finance leases at June 30, 2020. During the six months ended June 30, 2020, the Company extended four leases and entered into no new lease contracts. Lease extensions were for five years each and the Company reassessed the ROU assets and lease liabilities related to these leases. Operating lease ROU assets represent the Company’s right to use the underlying asset during the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and operating lease liabilities are recognized at lease commencement based on the present value of the remaining lease payments using the Company’s incremental borrowing rate at the lease commencement date. Operating lease expense, which is comprised of amortization of the ROU asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term and is recorded in occupancy expense in the Consolidated Statements of Income. The Company’s occupancy expense also includes variable lease costs which is comprised of the Company's share of actual costs for utilities, common area maintenance, property taxes, and insurance that are not included in lease liabilities and are expensed as incurred. Variable lease costs can also include rent escalations based on changes to indices, such as the Consumer Price Index, where the Company estimates future rent increases and records the actual difference to variable costs. The Company uses its incremental borrowing rate to present value lease payments in order to recognize a ROU asset and the related lease liability. The Company calculates its incremental borrowing rate by adding a spread to the FHLB borrowing interest rate at a given period. The table below summarizes the Company’s net lease cost:
Rent expense for the three and six months ended June 30, 2020 was $9.1 million and $4.5 million, respectively. Rent expense for the three and six months ended June 30, 2019 was $9.5 million and $4.7 million, respectively. The table below summarizes other information related to the Company’s operating leases:
The table below summarizes the maturity of remaining lease liabilities:
As of June 30, 2020, the Company did not have any additional operating lease commitments that have not yet commenced. |
Deposits |
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Jun. 30, 2020 | |
Deposits [Abstract] | |
Deposits | DepositsThe aggregate amount of time deposits in denominations of more than $250 thousand at June 30, 2020 and December 31, 2019, was $1.78 billion and $1.86 billion, respectively. Included in time deposits of more than $250 thousand were $300.0 million in California State Treasurer’s deposits at June 30, 2020 and December 31, 2019. The California State Treasurer’s deposits are subject to withdrawal based on the State’s periodic evaluations. The Company is required to pledge eligible collateral of at least 110% of outstanding deposits. At June 30, 2020 and December 31, 2019, securities with fair values of approximately $332.0 million and $333.2 million, respectively, were pledged as collateral for the California State Treasurer’s deposit.The Company also utilizes brokered deposits as a secondary source of funds. Total brokered deposits at June 30, 2020 and December 31, 2019, totaled $1.87 billion and $1.48 billion, respectively. Brokered deposits at June 30, 2020 consisted of $840.6 million in money market and NOW accounts, and $1.03 billion in time deposits accounts. Brokered deposits at December 31, 2019 consisted of $538.2 million in money market and NOW accounts and $940.5 million in time deposit accounts. |
Borrowings |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
Borrowings | Borrowings The Company maintains a line of credit with the Federal Home Loan Bank (“FHLB”) of San Francisco as a secondary source of funds. The borrowing capacity with the FHLB is limited to the lower of 25% of the Bank’s total assets or the Bank’s collateral capacity, which was $4.01 billion at June 30, 2020, and $3.85 billion at December 31, 2019. The terms of this credit facility require the Company to pledge eligible collateral with the FHLB equal to at least 100% of outstanding advances. The Company also has an unsecured credit facility with the FHLB that totaled $81.2 million at June 30, 2020 and $95.0 million at December 31, 2019. At June 30, 2020 and December 31, 2019, real estate secured loans with a carrying amount of approximately $6.98 billion and $6.76 billion, respectively, were pledged at the FHLB for outstanding advances and remaining borrowing capacity. At June 30, 2020 and December 31, 2019, other than FHLB stock, no securities were pledged as collateral at the FHLB. The purchase of FHLB stock is a prerequisite to become a member of the FHLB system, and the Company is required to own a certain amount of FHLB stock based on outstanding borrowings. At June 30, 2020 and December 31, 2019, FHLB advances totaled $500.0 million and $625.0 million, respectively, and had weighted average interest rates of 1.55% and 1.84%, respectively. FHLB advances at June 30, 2020 and December 31, 2019 had various maturities through December 2022. The interest rates of FHLB advances as of June 30, 2020 ranged between 0.00% and 2.39%. During the second quarter of 2020, the FHLB announced a new Recovery Advance program available to members to help banks assist customers struggling as a results of the COVID-19 pandemic. The Recovery Advance is a zero percent borrowing with terms of either six months or one year. The Company borrowed $10.0 million in funds under the Recovery Advance program during the second quarter of 2020. At June 30, 2020, the Company’s remaining borrowing capacity with the FHLB was $3.46 billion. The Company maintains unsecured borrowing lines with other banks. There were no federal funds purchased from other banks at June 30, 2020 and December 31, 2019. At June 30, 2020, the contractual maturities for outstanding FHLB advances were as follows:
As a member of the Federal Reserve Bank (“FRB”) system, the Bank may also borrow from the FRB of San Francisco. The maximum amount that the Bank may borrow from the FRB’s discount window is up to 95% of the fair market value of the qualifying loans and securities that are pledged. At June 30, 2020, the outstanding principal balance of the qualifying loans pledged at the FRB was $946.6 million and there was one investment security pledged to borrow against the discount window totaling $7.8 million. At June 30, 2020 and December 31, 2019, the total available borrowing capacity at the FRB discount window was $726.6 million and $740.6 million, respectively. There were no borrowings outstanding with the FRB discount window as of June 30, 2020 and December 31, 2019. |
Subordinated Debentures and Convertible Notes |
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Subordinated Borrowings [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subordinated Debentures and Convertible Notes | Subordinated Debentures and Convertible Notes Subordinated Debt At June 30, 2020, the Company had nine wholly owned subsidiary grantor trusts that had issued $126.0 million of pooled trust preferred securities. Trust preferred securities accrue and pay distributions periodically at specified annual rates as provided in the indentures. The trusts used the net proceeds from the offering to purchase a like amount of subordinated debentures (the “Debentures”). The Debentures are the sole assets of the trusts. The Company’s obligations under the subordinated debentures and related documents, taken together, constitute a full and unconditional guarantee by the Company of the obligations of the trusts. The trust preferred securities are mandatorily redeemable upon the maturity of the Debentures, or upon earlier redemption as provided in the indentures. The Company has the right to redeem the Debentures in whole (but not in part) on a quarterly basis at a redemption price specified in the indentures plus any accrued but unpaid interest to the redemption date. The Company also has a right to defer consecutive payments of interest on the debentures for up to five years. The following table is a summary of trust preferred securities and Debentures at June 30, 2020:
The carrying value of Debentures at June 30, 2020 and December 31, 2019 was $103.6 million and $103.0 million, respectively. At June 30, 2020 and December 31, 2019, acquired Debentures had remaining discounts of $26.3 million and $26.9 million, respectively. The carrying balance of Debentures is net of remaining discounts and includes common trust securities. The Company’s investment in the common trust securities of the issuer trusts was $3.9 million at June 30, 2020 and December 31, 2019 and is included in other assets. Although the subordinated debt issued by the trusts are not included as a component of stockholders’ equity in the Consolidated Statements of Financial Condition, the debt is treated as capital for regulatory purposes. The Company’s trust preferred security debt issuances (less common trust securities) are includable in Tier 1 capital up to a maximum of 25% of capital on an aggregate basis as they were grandfathered in under BASEL III. Any amount that exceeds 25% qualifies as Tier 2 capital. Convertible Notes In 2018, the Company issued $200 million aggregate principal amount of 2.00% convertible senior notes maturing on May 15, 2038 in a private offering to qualified institutional buyers under Rule 144A of the Securities Act of 1933. Subsequently on June 7, 2018, an additional $17.5 million in convertible notes were issued as part of the initial offering over-allotment option. In total, the Company issued $217.5 million in convertible notes in 2018. The convertible notes can be converted into shares of the Company’s common stock at an initial rate of 45.0760 shares per $1,000 principal amount of the notes (equivalent to an initial conversion price of approximately $22.18 per share of common stock which represents a premium of 22.5% to the closing stock price on the date of the pricing of the notes). Holders of the convertible notes have the option to convert all or a portion of the notes at any time on or after February 15, 2023. Prior to February 15, 2023, the convertible notes cannot be converted unless under certain specified scenarios. The convertible notes can be called by the Company, in part or in whole, on or after May 20, 2023 for 100% of the principal amount in cash. Holders of the convertible notes also have the option to put the notes back to the Company on May 15, 2023, May 15, 2028, or May 15, 2033 for 100% of the principal amount in cash. The convertible notes can be settled in cash, stock, or a combination of stock and cash at the option of the Company. In accordance with accounting principles, the convertible notes issued by the Company were separated into a debt component and an equity component which represents the stock conversion option. The present value of the convertible notes was calculated based on a discount rate of 4.25%, which represented the current offering rate for similar types of debt without conversion options. The effective life of the convertible notes was estimated to be five years based on the first call and put date. The difference between the principal amount of the notes and the present value was recorded as the convertible note discount and additional paid-in capital. The issuance costs related to the offering were also allocated into a debt component to be capitalized, and an equity component in the same percentage allocation of debt and equity of the convertible note. The value of the convertible note at issuance and the carrying value as of June 30, 2020 and December 31, 2019 is presented in the tables below:
Interest expense on the convertible notes for the three and six months ended June 30, 2020, totaled $2.4 million and $4.7 million, respectively. Interest expense on the convertible notes for the three and six months ended June 30, 2019 totaled $2.3 million and $4.6 million, respectively. Interest expense for the Company’s convertible notes includes accrued interest on the convertible note coupon, non-cash interest expense representing the conversion option or note discount, and interest expense from capitalized issuance costs. Non-cash interest expense and issuance cost capitalization expense will only be recorded for the first outstanding years of the convertible notes. Subsequent to May 15, 2023, interest expense on the convertible notes will consist of only accrued interest on the coupon. |
Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments The Company offers a loan hedging program to certain loan customers. Through this program, the Company originates a variable rate loan with the customer. The Company and the customer will then enter into a fixed interest rate swap. Lastly, an identical offsetting swap is entered into by the Company with a correspondent bank. These “back-to-back” swap arrangements are intended to offset each other and allow the Company to book a variable rate loan, while providing the customer with a contract for fixed interest payments. In these arrangements, the Company’s net cash flow is equal to the interest income received from the variable rate loan originated with the customer. These customer swaps are not designated as hedging instruments and are recorded at fair value in other assets and other liabilities. The changes in fair value is recognized in the income statement as other income and fees. At June 30, 2020 and December 31, 2019, interest rate swaps related to the Company’s loan hedging program that were outstanding are presented in the following table:
The Company has one risk participation agreement with an outside counterparty for an interest rate swap related to a loan in which it is a participant. The risk participation agreement provides credit protection to the financial institution should the borrower fail to perform on its interest rate derivative contract. Risk participation agreements are credit derivatives not designated as hedges. Credit derivatives are not speculative and are not used to manage interest rate risk in assets or liabilities. Changes in the fair value in credit derivatives are recognized directly in earnings. The fee received, less the estimate of the loss for credit exposure, was recognized in earnings at the time of the transaction. At June 30, 2020, the notional amount of the risk participation agreement sold was $63.2 million with a credit valuation adjustment of $223 thousand. As part of the overall liability management, the Company utilizes interest rate swap agreements to help manage interest rate risk positions. The notional amount of the interest rate swaps do not represent the amount exchanged by the parties. The exchange of cash flows is determined by reference to the notional amounts and the other terms of the interest rate swap agreements. The Company had one existing interest rate swap agreement as of June 30, 2020 with a notional amount of $100 million designated as cash flow hedges of certain LIBOR-based debt. The swap was entered into during the second quarter of 2020 and was determined to be fully effective during the period presented. Therefore, no amount of ineffectiveness has been included in net income. The aggregate fair value of the swap is recorded in derivative assets with changes in fair value recorded in other comprehensive income. The amount included in accumulated other comprehensive income would be reclassified to current earnings over the original life of the hedged item should the hedge no longer be considered effective. The Company expects the hedge to remain fully effective during the remaining term of the swap.
The Company enters into various stand-alone mortgage-banking derivatives in order to hedge the risk associated with the fluctuation of interest rates. Changes in fair value are recorded as mortgage banking revenue. Residential mortgage loans funded with interest rate lock commitments and forward commitments for the future delivery of mortgage loans to third party investors are considered derivatives. At June 30, 2020, the Company had approximately $131.1 million in interest rate lock commitments and total forward sales commitments for the future delivery of residential mortgage loans. At December 31, 2019, the Company had approximately $10.5 million in interest rate lock commitments and total forward sales commitments for the future delivery of residential mortgage loans. The following table reflects the notional amount and fair value of mortgage banking derivatives for the dates indicated:
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Commitments and Contingencies |
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies In the normal course of business, the Company is a party to financial instruments with off-balance sheet risk that are used to meet the financing needs of customers. These financial instruments include commitments to extend credit, standby letters of credit, commercial letters of credit, and commitments to fund investments in affordable housing partnerships. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the Consolidated Statements of Financial Condition. The Company’s exposure to credit loss in the event of nonperformance on commitments to extend credit and standby letters of credit is represented by the contractual notional amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as the Company does for extending loan facilities to customers. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary upon extension of credit, is based on the Company’s credit evaluation of the counterparty. The types of collateral that the Company may hold can vary and may include accounts receivable, inventory, property, plant and equipment, and income-producing properties. Commitments at June 30, 2020 and December 31, 2019 are summarized as follows:
In the normal course of business, the Company is involved in various legal claims. The Company has reviewed all legal claims against the Company with counsel and has taken into consideration the views of such counsel as to the potential outcome of the claims. Loss contingencies for all legal claims totaled $1.2 million at June 30, 2020 and $440 thousand at December 31, 2019. It is reasonably possible that the Company may incur losses in addition to the amounts currently accrued. However, at this time, the Company is unable to estimate the range of additional losses that are reasonably possible because of a number of factors, including the fact that certain of these litigation matters are still in their early stages and involve claims that the Company believes has little to no merit. The Company has considered these and other possible loss contingencies and does not expect the amounts to be material to the consolidated financial statements. |
Goodwill, Intangible Assets, and Servicing Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill, Intangible Assets, and Servicing Assets | Goodwill, Intangible Assets, and Servicing Assets Goodwill represents the excess of the purchase price over the sum of the estimated fair values of the tangible and identifiable intangible assets acquired less the estimated fair value of the liabilities assumed. Goodwill has an indefinite useful life and is evaluated for impairment annually or more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value. At December 31, 2019, the Company assessed the qualitative factors related to intangible assets and goodwill for the year to determine whether it was more-likely-than-not that the fair value of the Company was less than its carrying amount. As the Company operates as single business unit, goodwill impairment is assessed based on the Company as a whole. Based on the analysis of these factors, management determined that it was more-likely-than-not that intangible assets were not impaired and that the fair value of the Company exceeded the carrying value. Goodwill is not amortized for book purposes and is not tax deductible. Due to the recent COVID-19 pandemic, economic forecasts for future economic performance has deteriorated substantially. In addition, U.S. equity markets experienced a significant decline since the first quarter of 2020. In line with these trends, the Company’s stock price also experienced a large reduction during the six months ended June 30, 2020 where it continued to trade below the Company’s tangible book value. These factors contributed to the Company performing an interim goodwill impairment analysis during the second quarter of 2020. The Company determined that a Step 1 goodwill impairment analysis was warranted. The Company performed a Step 1 fair value assessment and determined that goodwill was not impaired as of June 30, 2020 as the fair value of the reporting unit exceeded the book value. As the Company operates as single reporting unit, the fair value of the Company as a whole was estimated. Therefore, there was no impairment of goodwill recorded during the three and six months ended June 30, 2020. The carrying amount of the Company’s goodwill as of June 30, 2020 and December 31, 2019 was $464.5 million. Core deposit intangible assets are amortized over their estimated lives, which range from to ten years. Amortization expense related to core deposit intangible assets totaled $532 thousand and $557 thousand for the three months ended June 30, 2020 and 2019, respectively. The amortization expense related to core deposit intangible assets totaled $1.1 million and $1.1 million for the six months ended June 30, 2020 and 2019, respectively. The following table provides information regarding the core deposit intangibles at June 30, 2020 and December 31, 2019:
Servicing assets are recognized when SBA and residential mortgage loans are sold with the servicing retained by the Company and the related income is recorded as a component of gains on sales of loans. Servicing assets are initially recorded at fair value based on the present value of the contractually specified servicing fee, net of servicing costs, over the estimated life of the loan, using a discount rate. The Company’s servicing costs approximates the industry average servicing costs of 40 basis points. All classes of servicing assets are subsequently measured using the amortization method which requires servicing rights to be amortized into noninterest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans. Management periodically evaluates servicing assets for impairment based upon the fair value of the rights as compared to the carrying amount. Impairment is determined by stratifying rights into groupings based on loan type. Impairment is recognized through a valuation allowance for an individual grouping, to the extent that fair value is less than the carrying amount. As of June 30, 2020 and December 31, 2019, the Company did not have a valuation allowance on it servicing assets. The changes in servicing assets for the three and six months ended June 30, 2020 and 2019 were as follows:
Loans serviced for others are not reported as assets. The principal balances of loans serviced for other institutions were $1.27 billion as of June 30, 2020 and $1.35 billion as of December 31, 2019. The Company utilizes the discounted cash flow method to calculate the initial excess servicing assets. The inputs used in evaluating servicing assets for impairment at June 30, 2020 and December 31, 2019 are presented below.
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Income Taxes |
6 Months Ended |
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Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the three months ended June 30, 2020, the Company had an income tax provision totaling $9.8 million on pretax income of $36.5 million, representing an effective tax rate of 26.75%, compared with an income tax provision of $14.3 million on pretax income of $56.9 million, representing an effective tax rate of 25.04% for the three months ended June 30, 2019. For the six months ended June 30, 2020, the Company had an income tax provision totaling $16.2 million on pretax income of $68.9 million, representing an effective tax rate of 23.55%, compared with an income tax provision of $28.7 million on pretax income of $114.1 million, representing an effective tax rate of 25.14% for the six months ended June 30, 2019. The Company reduced its projected annual pre-tax book income for 2020 taking into consideration the recent COVID-19 pandemic, which increased the tax effect of the Company’s affordable housing partnership investment tax credits, reducing the overall tax rate for the six months ended June 30, 2020 compared to the six months ended June 30, 2019. The Company and its subsidiaries are subject to U.S. federal income tax, as well as state income taxes. The Company had total unrecognized tax benefits of $103 thousand at June 30, 2020 and $141 thousand at December 31, 2019, that relate to uncertainties associated with federal and state income tax matters. The Company recognizes interest and penalties on income tax matters in income tax expense. The Company recorded approximately $18 thousand and $34 thousand, for accrued interest (no portion was related to penalties) at June 30, 2020 and December 31, 2019, respectively. Management believes it is reasonably possible that the unrecognized tax benefits may decrease by $103 thousand in the next twelve months due to a settlement with the state tax authorities. The statute of limitations for the assessment of income taxes related to the consolidated federal income tax returns is closed for all tax years up to and including 2015. The expiration of the statute of limitations for the assessment of income and franchise taxes related to the various state income and franchise tax returns varies by state. New York State Department of Taxation and Finance recently concluded the 2016, 2017, and 2018 examination with no material adjustments. The Company is currently under examination by the New York City Department of Finance for the 2016 and 2017 tax years and State of Ohio Department of Taxation for the 2015, 2016, 2017, 2018, and 2019 tax years. While the outcome of these examinations is unknown, the Company expects no material adjustments. Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities (without regard to certain changes to deferred taxes). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all, of the deferred tax asset will not be realized. In assessing the realization of deferred tax assets, management evaluates both positive and negative evidence, including the existence of any cumulative losses in the current year and the prior two years, the amount of taxes paid in available carry-back years, the forecasts of future income, applicable tax planning strategies, and assessments of current and future economic and business conditions. This analysis is updated quarterly and adjusted as necessary. Based on the analysis, the Company has determined that a valuation allowance for deferred tax assets was not required as of June 30, 2020. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date reflecting assumptions that a market participant would use when pricing an asset or liability. There are three levels of inputs that may be used to measure fair value. The fair value inputs of the instruments are classified and disclosed in one of the following categories pursuant to ASC 820: Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. The quoted price shall not be adjusted for any blockage factor (i.e., size of the position relative to trading volume). Level 2 - Pricing inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Fair value is determined through the use of models or other valuation methodologies, including the use of pricing matrices. If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability. Level 3 - Pricing inputs are unobservable for the asset or liability. Unobservable inputs are used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. The inputs into the determination of fair value require significant management judgment or estimation. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset’s or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The Company uses the following methods and assumptions in estimating fair value disclosures for financial instruments. Financial assets and liabilities recorded at fair value on a recurring and non-recurring basis are listed as follows: Securities Available for Sale The fair values of securities available for sale are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or matrix pricing, which is a technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). The fair values of the Company’s Level 3 securities available for sale were measured using an income approach valuation technique. The primary inputs and assumptions used in the fair value measurement was derived from the security’s underlying collateral, which included discount rate, prepayment speeds, payment delays, and an assessment of the risk of default of the underlying collateral, among other factors. Significant increases or decreases in any of the inputs or assumptions could result in a significant increase or decrease in the fair value measurement. Equity Investments With Readily Determinable Fair Value The fair value of the Company’s equity investments with readily determinable fair value is comprised of mutual funds. The fair value for these investments is obtained from unadjusted quoted prices in active markets on the date of measurement and is therefore classified as Level 1. Interest Rate Swaps The Company offers interest rate swaps to certain loan customers to allow them to hedge the risk of rising interest rates on their variable rate loans. The Company originates a variable rate loan and enters into a variable-to-fixed interest rate swap with the customer. The Company also enters into an offsetting swap with a correspondent bank. These back-to-back agreements are intended to offset each other and allow the Company to originate a variable rate loan, while providing a contract for fixed interest payments for the customer. The net cash flow for the Company is equal to the interest income received from a variable rate loan originated with the customer. The fair value of these derivatives is based on a discounted cash flow approach. Due to the observable nature of the inputs used in deriving the fair value of these derivative contracts, the valuation of interest rate swaps is classified as Level 2. Mortgage Banking Derivatives Mortgage banking derivative instruments consist of interest rate lock commitments and forward sale contracts that trade in liquid markets. The fair value is based on the prices available from third party investors. Due to the observable nature of the inputs used in deriving the fair value, the valuation of mortgage banking derivatives is classified as Level 2. Other Derivatives Other derivatives consist of interest rate swaps designated as cash flow hedges and sold risk participation agreements. The fair values of these other derivative financial instruments are based upon the estimated amount the Company would receive or pay to terminate the instruments, taking into account current interest rates and, when appropriate, the current credit worthiness of the counterparties. Interest rate swaps designated as cash flow hedges are classified within Level 2. Credit derivatives such as risk participation agreements are valued based on credit worthiness of the underlying borrower which is a significant unobservable input and therefore is classified as Level 3. Collateral Dependent Loans The fair values of collateral dependent loans are generally measured for ACL using the practical expedients permitted by ASC 326-20-35-5 including collateral dependent loans measured at an observable market price (if available), or at the fair value of the loan’s collateral (if the loan is collateral dependent). Fair value of the loan’s collateral, when the loan is dependent on collateral, is determined by appraisals or independent valuation, less costs to sell of 8.5%. Appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and income approach. Adjustment may be made in the appraisal process by the independent appraiser to adjust for differences between the comparable sales and income data available for similar loans and the underlying collateral. For commercial and industrial and asset backed loans, independent valuations may include a 20-60% discount for eligible accounts receivable and a 50-70% discount for inventory. These result in a Level 3 classification. OREO OREO is fair valued at the time the loan is foreclosed upon and the asset is transferred to OREO. The value is based primarily on third party appraisals, less costs to sell of up to 8.5% and result in a Level 3 classification of the inputs for determining fair value. OREO is reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted to lower of cost or market accordingly, based on the same factors identified above. Loans Held For Sale Loans held for sale are carried at the lower of cost or fair value, as determined by outstanding commitments from investors, or based on recent comparable sales (Level 2 inputs), if available, and if not available, are based on discounted cash flows using current market rates applied to the estimated life and credit risk (Level 3 inputs) or may be assessed based upon the fair value of the collateral, which is obtained from recent real estate appraisals (Level 3 inputs). These appraisals may utilize a single valuation approach or a combination of approaches including the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are typically significant and result in a Level 3 classification of the inputs for determining fair value. Assets and liabilities measured at fair value on a recurring basis are summarized below:
There were no transfers between Level 1, 2, and 3 during the three and six months ended June 30, 2020 and 2019. The table below presents a reconciliation and income statement classification of gains (losses) for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2020 and 2019:
The Company measures certain assets at fair value on a non-recurring basis including collateral dependent loans (excludes PCI loans at December 31, 2019), loans held for sale, and OREO. These fair value adjustments result from individually evaluated ACL recognized during the period, application of the lower of cost or fair value on loans held for sale, and the application of fair value less cost to sell on OREO. Assets measured at fair value on a non-recurring basis are summarized below:
For assets measured at fair value on a non-recurring basis, the total net gains (losses), which include charge offs, recoveries, recorded ACL, valuations, and recognized gains and losses on sales are summarized below:
Fair Value of Financial Instruments Carrying amounts and estimated fair values of financial instruments, not previously presented, at June 30, 2020 and December 31, 2019 were as follows:
The Company measures assets and liabilities for its fair value disclosures based on an exit price notion. Although the exit price notion represents the value that would be received to sell an asset or paid to transfer a liability, the actual price received for a sale of assets or paid to transfer liabilities could be different from exit price disclosed. The methods and assumptions used to estimate fair value are described as follows: The carrying amount is the estimated fair value for cash and cash equivalents, savings and other interest bearing demand deposits, equity investments without readily determinable fair values, customer’s and Bank’s liabilities on acceptances, noninterest bearing deposits, short-term debt, secured borrowings and variable rate loans or deposits that reprice frequently and fully. The fair value of loans is determined through a discounted cash flow analysis which incorporates probability of default and loss given default rates on an individual loan basis. The discount rate is based on the LIBOR Swap Rate for fixed rate loans, while variable loans start with the corresponding index rate and an adjustment was made on certain loans which considered factors such as servicing costs, capital charges, duration, asset type incremental costs, and use of projected cash flows. Residential real estate loans fair values include Fannie Mae and Freddie Mac prepayment speed assumptions or a third party index based on historical prepayment speeds. Fair value of time deposits is based discounted cash flow analysis using recent issuance rates over the prior three months and a market rate analysis of recent offering rates for retail products. Wholesale time deposits fair values incorporate brokered time deposit offering rates. The fair value of the Company’s debt is based on current rates for similar financing. Fair value for the Company’s convertible notes is based on the actual last traded price of the notes. The fair value of commitments to fund loans represents fees currently charged to enter into similar agreements with similar remaining maturities and is not presented herein. The fair value of these financial instruments is not material to the consolidated financial statements. |
Stockholders' Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders’ Equity | Stockholders’ Equity Total stockholders’ equity at June 30, 2020 was $2.03 billion, compared to $2.04 billion at December 31, 2019. In March 2020, the Company completed the $50.0 million repurchase plan though the repurchase of 2,716,034 shares of common stock totaling $36.2 million. There were no shares repurchased during the three months ended June 30, 2020. As of June 30, 2020, the Company had repurchased a total 12,661,581 shares of its common stock totaling $200.0 million as part of all previous repurchase programs that were authorized by the Company’s Board of Directors. The Company paid dividends of $0.14 per common share for both the second quarter of 2020 and 2019. For both the six months ended June 30, 2020 and 2019, the Company paid dividends of $0.28 per common share. The following table presents the quarterly changes to accumulated other comprehensive income (loss) for the three and six months ended June 30, 2020 and 2019:
Reclassifications for net gains realized in net income for the three and six months ended June 30, 2020 relate to gains on interest rate swaps used for cash flow hedges and is recorded in noninterest income under other income and fee in the Consolidated Statements of Income. Reclassifications for net gains realized in net income for the three and six months ended June 30, 2019 relate to investment securities sold and is recorded in net gains on sales of securities available for sale in the Consolidated Statements of Income. For the three and six months ended and June 30, 2020 and 2019, there were no other reclassifications out of accumulated other comprehensive income (loss). |
Stock-Based Compensation |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation On May 23, 2019, the Company’s stockholders approved the 2019 stock-based incentive plan (the “2019 Plan”), which provides for grants of stock options, SARs, restricted stock, performance shares, and performance units to non-employee directors, employees, and potentially consultants of the Company. Stock options may be either incentive stock options (“ISOs”), as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), or nonqualified stock options (“NQSOs”). The 2019 Plan replaces the 2016 Plan and stipulates that no further awards shall be made under prior plans. Therefore, future awards will only be issued from the 2019 Plan. The 2019 Plan provides the Company flexibility to (i) attract and retain qualified non-employee directors, executives, other key employees, and potentially consultants with appropriate equity-based awards to; (ii) motivate high levels of performance; (iii) recognize employee and potentially consultants’ contributions to the Company’s success; and (iv) align the interests of the participants with those of the Company’s stockholders. The 2019 Plan initially had 4,400,000 shares that were available for grant to participants. The exercise price for shares under an ISO may not be less than 100% of fair market value on the date the award is granted under the Code. Similarly, under the terms of the 2019 Plan, the exercise price for SARs and NQSOs may not be less than 100% of fair market value on the date of grant. Performance units are awarded to participants at the market price of the Company’s common stock on the date of award (after the lapse of the restriction period and the attainment of the performance criteria). All options not exercised generally expire 10 years after the date of grant. ISOs, SARs, and NQSOs have vesting periods of to five years and have 10-year contractual terms. Restricted stock, performance shares, and performance units are granted with a restriction period of not less than one year from the grant date for performance-based awards and not more than three years from the grant date for time-based vesting of grants. Compensation expense for awards is recognized over the vesting period. Under the 2019 Plan, 2,903,642 shares were available for future grants as of June 30, 2020. With the exception of the shares underlying stock options and restricted stock awards, the Board of Directors may choose to settle the awards by paying the equivalent cash value or by delivering the appropriate number of shares. The following is a summary of the Company’s stock option activity for the six months ended June 30, 2020:
The following is a summary of the Company’s restricted stock and performance unit activity for the six months ended June 30, 2020:
The total fair value of restricted stock and performance units vested for the six months ended June 30, 2020 and 2019 was $343 thousand and $1.2 million, respectively. In 2017, the Company adopted the Hope Employee Stock Purchase Plan (“ESPP”), which allows eligible employees to purchase the Company’s common shares through payroll deductions which build up between the offering date and the purchase date. At the purchase date, the Company uses the accumulated funds to purchase shares of the Company’s common stock on behalf of the participating employees at a 10% discount to the closing price of the Company’s common shares. The closing price is the lower of either the closing price on the first day of the offering period or the closing price on the purchase date. The dollar amount of common shares purchased under the ESPP must not exceed 20% of the participating employee’s base salary, subject to a cap of $25 thousand in stock value based on the grant date. The ESPP is considered compensatory under GAAP and compensation expense for the ESPP is recognized as part of the Company’s stock-based compensation expense. The compensation expense for the ESPP during the three months ended June 30, 2020 and 2019 was $26 thousand and $29 thousand, respectively. The compensation expense for the ESPP during the six months ended June 30, 2020 and 2019 was $97 thousand and $125 thousand, respectively. The total amount charged against income related to stock-based payment arrangements, including the ESPP, was $1.8 million and $1.5 million for the three months ended June 30, 2020 and 2019, respectively. For the six months ended June 30, 2020 and 2019, $3.8 million and $2.3 million, respectively, of stock-based payment arrangements were charged against income. The income tax benefit recognized was approximately $485 thousand and $378 thousand for the three months ended June 30, 2020 and 2019, respectively. The income tax benefit recognized for the six months ended June 30, 2020 and 2019, was approximately $896 thousand and $585 thousand, respectively. At June 30, 2020, the unrecognized compensation expense related to non-vested stock option grants was $167 thousand and is expected to be recognized over a weighted average vesting period of 1.17 years. Unrecognized compensation expense related to non-vested restricted stock and performance units was $13.2 million and is expected to be recognized over a weighted average vesting period of 1.91 years. |
Regulatory Matters |
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Banking Regulation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Matters | Regulatory Matters The Company and the Bank are subject to various regulatory capital requirements administered by the federal and state banking agencies. Failure to meet minimum capital requirements can result in certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a material and adverse effect on the Company’s and the Bank’s business, financial condition and results of operation, such as restrictions on growth or the payment of dividends or other capital distributions or management fees. 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 their assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. In July 2013, the federal bank regulatory agencies adopted final regulations, which revised their risk-based and leverage capital requirements for banking organizations to meet requirements of the Dodd-Frank Act and to implement the Basel III international agreements reached by the Basel Committee. The final rules became effective for the Company and the Bank on January 1, 2015 and were subject to a phase-in period through January 1, 2019. The final rules that had an impact on the Company and the Bank include: •An increase in the minimum Tier 1 capital ratio from 4.00% to 6.00% of risk-weighted assets; •A new category and a required 4.50% of risk-weighted assets ratio was established for “Common Equity Tier 1” as a subset of Tier 1 capital limited to common equity; •A minimum non-risk-based leverage ratio was set at 4.00%, eliminating a 3.00% exception for higher rated banks; •Changes in the permitted composition of Tier 1 capital to exclude trust preferred securities, mortgage servicing rights and certain deferred tax assets and include unrealized gains and losses on available for sale debt and equity securities; •The risk-weights of certain assets for purposes of calculating the risk-based capital ratios are changed for high volatility commercial real estate acquisition, development and construction loans, certain past due non-residential mortgage loans and certain mortgage-backed and other securities exposures; and •A new additional capital conservation buffer of 2.5% of risk weighted assets over each of the required capital ratios was added and must be met to avoid limitations on the ability of the Bank to pay dividends, repurchase shares, or pay discretionary bonuses. As of June 30, 2020, the capital conservation buffer for the Company stood at 2.50%, and the capital ratios for the Company and the Bank were sufficient to meet the fully phased-in conservation buffer. With the adoption of the on January 1, 2020, the Company recorded a Day 1 adjustment, net of taxes to retained earnings totaling $18.8 million. In accordance with the revised regulatory CECL transition guidance, the Company has elected to defer the impact of the adoption of CECL for two years, at which time the impact will be phased-in over a three year period. As of June 30, 2020 and December 31, 2019, the most recent regulatory notification categorized the Bank as “well-capitalized” under the regulatory framework for prompt corrective action. To generally be categorized as “well-capitalized”, the Bank must maintain minimum total risk-based, Tier 1 risk-based, common equity Tier 1, and Tier 1 leverage ratios as set forth in the following table. There are no conditions or events since the most recent notification from regulators that management believes has changed the institution’s category. The Company’s and the Bank’s levels and ratios are presented in the table below for the dates indicated:
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Revenue Recognition |
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Revenue Recognition | Revenue Recognition With the adoption of ASU 2014-09 (Topic 606), the Company recognizes revenue when obligations under the terms of a contract with customers are satisfied. Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities. In addition, certain noninterest income streams such as fees associated with mortgage servicing rights, financial guarantees, derivatives, and certain credit card fees are also out of scope of the new guidance. Topic 606 is applicable to noninterest revenue streams such as deposit related fees, wire transfer fees, and certain OREO related net gains or expenses. However, the recognition of these revenue streams for the Company did not change significantly upon adoption of Topic 606. Noninterest revenue streams within the scope of Topic 606 are discussed below. Service Charges on Deposit Accounts and Wire Transfer Fees Service charges on noninterest and interest bearing deposit accounts consist of monthly service charges, customer analysis charges, non-sufficient funds (“NSF”) charges, and other deposit account related charges. The Company’s performance obligation for account analysis charges and monthly service charges is generally satisfied, and the related revenue is recognized over the period in which the service is provided. NSF charges, other deposit account related charges, and wire transfer fees are transaction based, and therefore the Company’s performance obligation is satisfied at the point of the transaction, and related revenue recognized at that point in time. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers’ accounts. Service charges on deposit accounts and wire transfers are summarized below:
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Basis of Presentation (Policies) |
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Jun. 30, 2020 | |
Basis Of Presentation [Abstract] | |
Consolidation | The consolidated financial statements include the accounts of Hope Bancorp and its wholly owned subsidiaries, principally Bank of Hope. All intercompany transactions and balances have been eliminated in consolidation. The Company has made all adjustments, that in the opinion of management, are necessary to fairly present the Company’s financial position at June 30, 2020 and December 31, 2019 and the results of operations for the three and six months ended June 30, 2020 and 2019. Certain reclassifications have been made to prior period amounts to conform to the current year presentation. The results of operations for the interim periods are not necessarily indicative of results to be anticipated for the full year. |
Use of estimates | The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates. |
Pending Accounting Pronouncements | Pending Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments provide temporary, optional guidance to ease the potential burden in accounting for reference rate reform. The amendments provide optional expedients and exceptions for applying GAAP to transactions affected by reference rate reform if certain criteria are met. The amendments primarily include relief related to contract modifications and hedging relationships, as well as providing a one-time election for the sale or transfer of debt securities classified as held-to-maturity. This guidance is effective immediately and the amendments may be applied prospectively through December 31, 2022. The Company is currently in the process of evaluating ASU 2020-04 and determining the impact to the Company’s consolidated financial statements. |
Financing Receivables | On January 1, 2020 the Company adopted ASU 2016-13, “Measurement of Credit Losses on Financial Instruments”, or CECL which significantly changed the credit losses estimation model for loans and investments. The discussion below relates to the Company’s CECL allowance for credit losses (“ACL”) methodology. For a discussion of the Company’s former incurred loss allowance for loan losses methodology, please refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The Company calculates its ACL by estimating expected credit losses on a collective basis for loans that share similar risk characteristics. Loans that do not share similar risk characteristics with other loans are evaluated for credit losses on an individual basis. The Company uses a combination of a modeled and non-modeled approach that incorporates current and future economic conditions to estimate lifetime expected losses on a collective basis. The Company uses Probability of Default (“PD”), Loss Given Default (“LGD”), and Exposure at Default (“EAD”) methodologies with quantitative factors and qualitative considerations in calculation of the allowance for credit losses for collectively assessed loans. The Company uses a reasonable and supportable period of 2 years at which point loss assumptions revert back to historical loss information by means of 1 year reversion period. The ACL for the Company’s construction, credit card, and certain consumer loans is calculated based on a non-modeled approach utilizing historical loss rates to estimate losses. A non-modeled approach was chosen for these loans as fewer data points exist which could result in high levels of estimated loss volatility under a modeled approach. In aggregate, non-modeled loans represented less than 3% of the Company’s total loan portfolio as of June 30, 2020. With the adoption of CECL, the Company formed an Economic Forecast Committee (“EFC”) to review economic forecast scenarios that are incorporated in the Company’s ACL. The EFC reviews multiple scenarios provided to the Company by an independent third party and chooses a single scenario that best aligns with management’s expectation of future economic conditions. The forecast scenario contains certain macroeconomic variables that are incorporated into the Company’s modeling process, including GDP, unemployment rates, interest rates, and housing prices. As of June 30, 2020, the Company chose a forecast scenario that incorporates the effect of the recent COVID-19 pandemic into estimates of future economic conditions. The scenario assumes a large decline in GDP and an increase in unemployment for the first half of 2020 followed by a return to GDP growth in the second half of 2020, while unemployment remains slightly elevated through 2023. Subsequent to the completion of the ACL calculation as of June 30, 2020, the Company received updated macroeconomic forecast scenarios in July 2020, which reflects slightly lower projected GDP growth for the third quarter of 2020 followed by slightly higher GDP growth in the subsequent quarters. Overall the updated projections were not significantly changed from the projections incorporated into the Company’s ACL calculation. The updated July 2020 forecast scenario information was not reflected in the Company’s ACL as of June 30, 2020, but the Company expects such forecast and further updated forecasts to be reflected in future ACL calculations. Additionally, in order to systematically quantify the credit risk impact of other trends and changes within the loan portfolio, the Company utilizes qualitative adjustments to the modeled and non-modeled estimated loss approaches. The parameters for making adjustments are established under a Credit Risk Matrix that provides different possible scenarios for each of the factors below. The Credit Risk Matrix and the possible scenarios enable the Bank to qualitatively adjust the Loss Migration Ratio by as much as 25 basis points for each loan type pool. This matrix considers the following seven factors, which are patterned after the guidelines provided under the Federal Financial Institutions Examination Council (“FFIEC”) Interagency Policy Statement on the Allowance for Loan and Lease Losses, updated to reflect the adoption of CECL: •Changes in lending policies and procedures, including underwriting standards and collection, charge off, and recovery practices; •Changes in the nature and volume of the loan portfolio; •Changes in the experience, ability, and depth of lending management and staff; •Changes in the trends of the volume and severity of past due loans, classified loans, nonaccrual loans, troubled debt restructurings, and other loan modifications; •Changes in the quality of the loan review system and the degree of oversight by the Directors; •The existence and effect of any concentrations of credit and changes in the level of such concentrations; and •The effect of external factors, such as competition, legal requirements, and regulatory requirements on the level of estimated losses in the loan portfolio. As of June 30, 2020, the Company recorded additional ACL as part of its qualitative assessment to account for the additional risks associated with the increase in loan modifications related to the COVID-19 pandemic and to account for the Company’s concentration of hotel/motel loans which were particularly hard hit by the pandemic. For loans which do not share similar risk characteristics such as nonaccrual and TDR loans above $500 thousand, the Company evaluates these loans on an individual basis in accordance with ASC 326. These nonaccrual and TDR loans are considered to have different risk profiles than performing loans and therefore are evaluated separately from performing loan pools. The Company decided to collectively assess TDRs and nonaccrual loans with balances below $500 thousand along with the performing and accrual loans in order to reduce the operational burden of individually assessing small TDR and nonaccrual loans with immaterial balances. For individually assessed loans, the ACL is measured using 1) the present value of future cash flows discounted at the loan’s effective interest rate; 2) the loan’s observable market price; or 3) the fair value of the collateral, if the loan is collateral dependent. For the collateral dependent loans, the Company obtains a new appraisal to determine the fair value of collateral. The appraisals are based on an “as-is” valuation. To ensure that appraised values remain current, the Company either obtains updated appraisals every twelve months from a qualified independent appraiser or an internal evaluation of the collateral is performed by qualified personnel. If the third party market data indicates that the value of the collateral property has declined since the most recent valuation date, management adjusts the value of the property downward to reflect current market conditions. If the fair value of the collateral is less than the amortized balance of the loan, the Company recognizes an ACL with a corresponding charge to the provision for credit losses. The Company maintains a separate ACL for its off-balance sheet unfunded loan commitments. The Company uses a funding rate to allocate the allowance to undrawn exposures. This funding rate is used as a credit conversion factor to capture how much undrawn can potentially become drawn at any point. Funding rate is determined based on a lookback period of 8 quarters. Credit loss is not estimated for off-balance sheet credit exposures that are unconditionally cancellable by the Company. |
Earnings Per Share (Tables) |
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of basic and diluted EPS | The following tables show the computation of basic and diluted EPS for the three and six months ended June 30, 2020 and 2019.
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Equity Investments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Change In Fair Value For Equity Investment Securities | The changes in fair value for equity investments with readily determinable fair values for the three and six ended June 30, 2020 and 2019 were recorded in other noninterest income and fees as summarized in the table below:
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Securities Available for Sale (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Securities, Available-for-sale [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Securities Available for Sale | The following is a summary of securities available for sale as of the dates indicated:
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Investments Classified by Contractual Maturity Date | The amortized cost and estimated fair value of investment securities at June 30, 2020, by contractual maturity, is presented in the table below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations, with or without call or prepayment penalties. Collateralized mortgage obligations and mortgage-backed securities are not due at a single maturity date and their total balances are shown separately.
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Schedule of Gross Unrealized Losses and Estimated Fair Values of Investments | The following tables show the Company’s investments’ gross unrealized losses and estimated fair values, aggregated by investment category and the length of time that the individual securities have been in a continuous unrealized loss position as of the dates indicated.
__________________________________ * Investments in U.S. Government agency and U.S. Government sponsored enterprises
__________________________________ * Investments in U.S. Government agency and U.S. Government sponsored enterprises |
Loans Receivable and Allowance for Credit Losses (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Loans Receivable by Major Category | The following is a summary of loans receivable by major category:
__________________________________ 1 Commercial Business loans as of June 30, 2020 includes $473.9 million in SBA Paycheck Protection Program Loans |
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Allowance for Credit Losses by Portfolio Segment | The tables below details the activity in the allowance for credit losses by portfolio segment for the three and six months ended June 30, 2020 and 2019. Accrued interest receivable on loans totaled $48.3 million at June 30, 2020 and is excluded from the estimate of credit losses.
The following tables break out the allowance for credit losses and loan balance by measurement methodology at June 30, 2020 and December 31, 2019:
The following tables present a breakdown of loans by recorded ACL, broken out by loans evaluated individually and collectively at June 30, 2020 and December 31, 2019:
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Schedule of Nonaccrual Loans and Loans Past Due 90 or More Days And Still on Accrual Status | The tables below represent the recorded investment of nonaccrual loans and loans past due 90 or more days and still on accrual status by class of loans and broken out by loans with an ACL and those without a recorded ACL as of June 30, 2020 and total nonaccrual loans and loans past due 90 or more days and still on accrual status by class of loans as of December 31, 2019.
__________________________________ (1) Total nonaccrual loans exclude the guaranteed portion of SBA loans that are in liquidation totaling $30.3 million and $28.1 million, at June 30, 2020 and December 31, 2019, respectively. (2) Nonaccrual loans exclude PCI loans of $13.2 million at December 31, 2019. |
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Amortized Cost Basis of Collateral-Dependent Loans | The following table presents the amortized cost basis of collateral-dependent loans as of June 30, 2020:
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Aging of Past Due Loans | The following table presents the recorded investment of past due loans, including nonaccrual loans past due 30 or more days, by the number of days past due as of June 30, 2020 and December 31, 2019 by class of loans:
__________________________________ (1) Past due loans at December 31, 2019 exclude PCI loans totaling $15.0 million. |
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Financing Receivable Credit Quality Indicators | The following presents the amortized cost basis of loans receivable by class, credit quality indicator, and year of origination as of June 30, 2020.
The following presents by loan class and credit quality indicator, the recorded investment in the Company’s loans and leases as of December 31, 2019.
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Loans Sold From Loans Held For Investment | The breakdown of loans by type that were reclassified from held for investment to held for sale for the three and six months ended June 30, 2020 and 2019 is presented in the following table:
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Troubled Debt Restructurings | A summary of the recorded investment of TDR loans on accrual and nonaccrual status by type of concession as of June 30, 2020 and December 31, 2019 is presented below:
The following tables present the recorded investment of loans classified as TDR during the three and six months ended June 30, 2020 and 2019 by class of loans:
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Summary of Troubled Debt Restructurings with Subsequent Payment Default | The following tables present loans modified as TDRs within the previous twelve months ended June 30, 2020 and 2019 that subsequently had payment defaults during the three and six months ended June 30, 2020 and 2019:
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Leases (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Net Lease Cost and Other Information | The table below summarizes the Company’s net lease cost:
The table below summarizes other information related to the Company’s operating leases:
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Maturity of Remaining Lease Liabilities | The table below summarizes the maturity of remaining lease liabilities:
|
Borrowings (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
Contractual Maturities for FHLB-SF Borrowings | At June 30, 2020, the contractual maturities for outstanding FHLB advances were as follows:
|
Subordinated Debentures and Convertible Notes (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subordinated Borrowings [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Trust Preferred Securities and Debentures | The following table is a summary of trust preferred securities and Debentures at June 30, 2020:
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Convertible Debt | The value of the convertible note at issuance and the carrying value as of June 30, 2020 and December 31, 2019 is presented in the tables below:
|
Derivative Financial Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Interest Rate Swaps Related to Hedging Program | At June 30, 2020 and December 31, 2019, interest rate swaps related to the Company’s loan hedging program that were outstanding are presented in the following table:
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments |
The following table reflects the notional amount and fair value of mortgage banking derivatives for the dates indicated:
|
Commitments and Contingencies (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments | Commitments at June 30, 2020 and December 31, 2019 are summarized as follows:
|
Goodwill, Intangible Assets, and Servicing Assets (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets | The following table provides information regarding the core deposit intangibles at June 30, 2020 and December 31, 2019:
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Schedule of Servicing Assets | The changes in servicing assets for the three and six months ended June 30, 2020 and 2019 were as follows:
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Summary of Fair Value Inputs | The inputs used in evaluating servicing assets for impairment at June 30, 2020 and December 31, 2019 are presented below.
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Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Assets and liabilities measured at fair value on a recurring basis are summarized below:
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Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The table below presents a reconciliation and income statement classification of gains (losses) for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2020 and 2019:
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets Measured at Fair Value on a Non-recurring Basis | Assets measured at fair value on a non-recurring basis are summarized below:
For assets measured at fair value on a non-recurring basis, the total net gains (losses), which include charge offs, recoveries, recorded ACL, valuations, and recognized gains and losses on sales are summarized below:
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Carrying Amounts and Estimated Fair Values of Financial Instruments | Carrying amounts and estimated fair values of financial instruments, not previously presented, at June 30, 2020 and December 31, 2019 were as follows:
|
Stockholders’ Equity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table presents the quarterly changes to accumulated other comprehensive income (loss) for the three and six months ended June 30, 2020 and 2019:
|
Stock-Based Compensation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock Option Activity Under the Plan | The following is a summary of the Company’s stock option activity for the six months ended June 30, 2020:
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Summary of Restricted Stock and Performance Unit Activity Under the Plan | The following is a summary of the Company’s restricted stock and performance unit activity for the six months ended June 30, 2020:
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Regulatory Matters (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Banking Regulation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations | The Company’s and the Bank’s levels and ratios are presented in the table below for the dates indicated:
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Revenue Recognition (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | Service charges on deposit accounts and wire transfers are summarized below:
|
Equity Investments - Change in Fair Value of Equity Investments (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Investments, Debt and Equity Securities [Abstract] | ||||
Net change in fair value recorded during the period on equity investments with readily determinable fair value | $ 188,000 | $ 313,000 | $ 542,000 | $ 1,225,000 |
Net change in fair value recorded on equity investments sold during the period | 0 | 0 | 0 | 0 |
Net change in fair value on equity investments with readily determinable fair values | $ 188,000 | $ 313,000 | $ 542,000 | $ 1,225,000 |
Loans Receivable and Allowance for Credit Losses - Loans Held For Investment - Reclassification to Held for Sale (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Transfer of loans held for investment to held for sale | $ 0 | $ 49,601 | $ 1,002 | $ 82,991 |
Residential mortgage | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Transfer of loans held for investment to held for sale | $ 0 | $ 49,601 | $ 1,002 | $ 82,991 |
Leases - Additional Information (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|---|
Jun. 30, 2020
USD ($)
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2020
USD ($)
lease
|
Jun. 30, 2019
USD ($)
|
Dec. 31, 2019
USD ($)
|
Dec. 31, 2018 |
Jan. 01, 2019
USD ($)
|
|
Lessee, Lease, Description [Line Items] | |||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | us-gaap:AccountingStandardsUpdate201613Member | us-gaap:AccountingStandardsUpdate201602Member | ||||
Operating lease right-of-use assets | $ 55,328 | $ 55,328 | $ 58,593 | $ 64,200 | |||
Extension options, term of extension | 5 years | ||||||
Operating lease liabilities | 57,672 | $ 57,672 | $ 60,506 | ||||
Short-term operating lease liability | 13,400 | 13,400 | |||||
Long-term operating lease liability | 44,200 | $ 44,200 | |||||
Number of leases extended | lease | 4 | ||||||
Number of new leases | lease | 0 | ||||||
Rent expense | $ 9,100 | $ 9,500 | $ 4,500 | $ 4,700 | |||
Minimum | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Remaining lease term for operating leases | 1 year | 1 year | |||||
Maximum | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Remaining lease term for operating leases | 11 years | 11 years |
Leases - Net Lease Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Leases [Abstract] | ||||
Operating lease cost | $ 3,879 | $ 4,157 | $ 7,824 | $ 8,280 |
Short term lease cost | 0 | 0 | 0 | 9 |
Variable lease cost | 772 | 833 | 3,397 | 1,536 |
Sublease income | (214) | (156) | (426) | (313) |
Net lease cost | $ 4,437 | $ 4,834 | $ 10,795 | $ 9,512 |
Leases - Other Information (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash outflows for operating leases | $ 7,392 | $ 7,372 |
Right-of-use assets obtained in exchange for lease liabilities, net | $ 1,541 | $ 65,263 |
Weighted-average remaining lease term - operating leases | 5 years 6 months | 6 years 2 months 12 days |
Weighted-average discount rate - operating leases | 3.01% | 3.20% |
Leases - Maturities of Remaining Lease Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Leases [Abstract] | ||
2020 | $ 7,511 | |
2021 | 14,579 | |
2022 | 10,504 | |
2023 | 8,331 | |
2024 | 6,769 | |
2025 and thereafter | 15,251 | |
Total lease payments | 62,945 | |
Less: imputed interest | 5,273 | |
Total lease obligations | $ 57,672 | $ 60,506 |
Deposits (Details) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Deposits Disclosure [Line Items] | ||
Time Deposits, $250,000 or More | $ 1,780.0 | $ 1,860.0 |
Securities pledged as collateral | 346.0 | 340.9 |
Brokered deposits | 1,870.0 | 1,480.0 |
Money market and NOW accounts | ||
Deposits Disclosure [Line Items] | ||
Brokered deposits | 840.6 | 538.2 |
Time deposit accounts | ||
Deposits Disclosure [Line Items] | ||
Brokered deposits | 1,030.0 | 940.5 |
California State Treasurer | ||
Deposits Disclosure [Line Items] | ||
Time Deposits, $250,000 or More | $ 300.0 | 300.0 |
Required eligible collateral pledge on outstanding deposits, minimum percentage | 110.00% | |
Securities pledged as collateral | $ 332.0 | $ 333.2 |
Borrowings - Maturities of FHLB Borrowings (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Debt Disclosure [Abstract] | ||
2020 | $ 205,000 | |
2021 | 150,000 | |
2022 | 145,000 | |
FHLB advances | $ 500,000 | $ 625,000 |
Subordinated Debentures and Convertible Notes - Schedule of Convertible Debt (Details) - Convertible Notes - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Jun. 07, 2018 |
Jun. 30, 2020 |
Dec. 31, 2019 |
|
Debt Instrument [Line Items] | |||
Amortization/ Capitalization Period | 5 years | 5 years | 5 years |
Gross Carrying Amount | |||
Convertible notes principal balance | $ 217,500 | $ 217,500 | |
Discount | (21,880) | (21,880) | |
Issuance costs to be capitalized | (4,119) | (4,119) | |
Carrying balance of convertible notes | 191,501 | 191,501 | |
Accumulated Amortization / Capitalization | |||
Discount | 8,783 | 6,659 | |
Issuance costs to be capitalized | 1,703 | 1,298 | |
Carrying balance of convertible notes | 10,486 | 7,957 | |
Carrying Amount | |||
Convertible notes principal balance | 217,500 | 217,500 | |
Discount | (13,097) | (15,221) | |
Issuance costs to be capitalized | (2,416) | (2,821) | |
Carrying balance of convertible notes | $ 201,987 | $ 199,458 |
Derivative Financial Instruments - Summary of Derivative Notional Amounts and Fair Values (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Interest rate lock commitments | ||
Derivative [Line Items] | ||
Notional amount, derivative asset | $ 131,043 | $ 10,540 |
Fair value, derivative asset | 2,238 | 84 |
Notional amount, derivative liability | 100 | 0 |
Fair value, derivative liability | 0 | 0 |
Forward sale contracts related to mortgage banking | Short | ||
Derivative [Line Items] | ||
Notional amount, derivative asset | 16,335 | 4,532 |
Fair value, derivative asset | 28 | 11 |
Notional amount, derivative liability | 114,807 | 6,008 |
Fair value, derivative liability | $ (1,028) | $ (16) |
Commitments and Contingencies (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Supply Commitment [Line Items] | ||
Loss contingencies for all legal claims | $ 1,200 | $ 440 |
Commitments to extend credit | ||
Supply Commitment [Line Items] | ||
Commitments and letters of credit | 1,662,376 | 1,864,947 |
Standby letters of credit | ||
Supply Commitment [Line Items] | ||
Commitments and letters of credit | 117,071 | 113,720 |
Other letters of credit | ||
Supply Commitment [Line Items] | ||
Commitments and letters of credit | 30,508 | 37,627 |
Commitments to fund investments in affordable housing partnerships | ||
Supply Commitment [Line Items] | ||
Commitments and letters of credit | $ 20,078 | $ 28,480 |
Goodwill, Intangible Assets, and Servicing Assets - Servicing Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Servicing Asset at Amortized Cost, Balance [Roll Forward] | |||||
Balance at beginning of period | $ 14,847 | $ 21,407 | $ 16,417 | $ 23,132 | $ 23,132 |
Additions through originations of servicing assets | 759 | 619 | 1,136 | 946 | |
Amortization | (1,442) | (2,029) | (3,389) | (4,081) | |
Balance at end of period | 14,164 | $ 19,997 | 14,164 | $ 19,997 | 16,417 |
Principal balances of loans serviced for other institutions | $ 1,270,000 | $ 1,270,000 | $ 1,350,000 | ||
SBA Servicing Assets: Weighted-average discount rate | 10.41% | 9.19% | |||
SBA Servicing Assets: Constant prepayment rate | 14.92% | 14.17% | |||
Mortgage Servicing Assets: Weighted-average discount rate | 8.63% | 9.25% | |||
Mortgage Servicing Assets: Constant prepayment rate | 9.01% | 9.57% |
Income Taxes - Narrative (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Income Tax Disclosure [Abstract] | |||||
Income tax provision | $ 9,771,000 | $ 14,256,000 | $ 16,233,000 | $ 28,695,000 | |
Pretax income | $ 36,524,000 | $ 56,937,000 | $ 68,939,000 | $ 114,134,000 | |
Effective income tax rate | 26.75% | 25.04% | 23.55% | 25.14% | |
Unrecognized tax benefits | $ 103,000 | $ 103,000 | $ 141,000 | ||
Interest accrued | 18,000 | 18,000 | 34,000 | ||
Penalties accrued | 0 | 0 | $ 0 | ||
Decrease in unrecognized tax benefits is reasonably possible | $ 103,000 | $ 103,000 |
Fair Value Measurements - Rollforward of Level 3 Assets (Details) - Level 3 - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning Balance | $ 1,079 | $ 1,068 | $ 1,076 | $ 1,059 |
Change in fair value included in other comprehensive income (loss) | (13) | 19 | (10) | 28 |
Ending Balance | $ 1,066 | $ 1,087 | $ 1,066 | $ 1,087 |
Stockholders' Equity - Discussion of Equity (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 13 Months Ended | ||||
---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2018 |
Jun. 30, 2020 |
Dec. 31, 2019 |
Mar. 31, 2019 |
|
Equity [Abstract] | |||||||||
Total stockholders’ equity | $ 2,018,088,000 | $ 2,030,776,000 | $ 1,995,172,000 | $ 2,030,776,000 | $ 1,995,172,000 | $ 1,903,211,000 | $ 2,030,776,000 | $ 2,036,011,000 | $ 1,946,211,000 |
Share repurchase program, authorized amount | $ 50,000,000.0 | $ 50,000,000.0 | $ 50,000,000.0 | 150,000,000.0 | |||||
Common stock repurchased and recorded as treasury stock (in shares) | 2,716,034 | 0 | 12,661,581 | ||||||
Repurchase of treasury stock | $ 36,200,000 | $ 36,180,000 | $ 150,000,000.0 | $ 200,000,000.0 | |||||
Dividends paid (in dollars per share) | $ 0.14 | $ 0.14 | $ 0.28 | $ 0.28 |
Stockholders' Equity - Changes in Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | $ 2,018,088,000 | $ 1,946,211,000 | $ 2,036,011,000 | $ 1,903,211,000 |
Unrealized gain on securities available for sale | 3,270,000 | 32,523,000 | 42,123,000 | 57,189,000 |
Unrealized loss on interest rate swaps used for cash flow hedge | (711,000) | 0 | (711,000) | 0 |
Reclassification adjustments for net gains realize in net income | (139,000) | (129,000) | (139,000) | (129,000) |
Tax effect | (720,000) | (9,613,000) | (12,273,000) | (16,932,000) |
Other comprehensive income, net of tax | 1,700,000 | 22,781,000 | 29,000,000 | 40,128,000 |
Balance at end of period | 2,030,776,000 | 1,995,172,000 | 2,030,776,000 | 1,995,172,000 |
Other reclassifications out of accumulated other comprehensive income (loss) | 0 | 0 | 0 | 0 |
Accumulated other comprehensive (loss) income, net | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | 36,449,000 | (15,358,000) | 9,149,000 | (32,705,000) |
Other comprehensive income, net of tax | 1,700,000 | 22,781,000 | 29,000,000 | 40,128,000 |
Balance at end of period | $ 38,149,000 | $ 7,423,000 | $ 38,149,000 | $ 7,423,000 |
Revenue Recognition - OREO Income (Expense) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Revenue from Contract with Customer [Abstract] | ||||
Net losses on sales of OREO | $ 20 | $ 16 | $ 81 | $ 13 |
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