(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(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. Investment Securities | ||||||||
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) | |||||||||||
September 30, 2022 | December 31, 2021 | ||||||||||
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 | |||||||||||
Investment securities available for sale, at fair value | |||||||||||
Investment securities held to maturity, at amortized cost; fair value of $ | |||||||||||
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 | $ | $ | |||||||||
(Unaudited) | |||||||||||
September 30, 2022 | December 31, 2021 | ||||||||||
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 and FRB borrowings | |||||||||||
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 loss, net | ( | ( | |||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||||||
INTEREST INCOME: | |||||||||||||||||||||||
Interest and fees on loans | $ | $ | $ | $ | |||||||||||||||||||
Interest on investment securities | |||||||||||||||||||||||
Interest on other investments | |||||||||||||||||||||||
Total interest income | |||||||||||||||||||||||
INTEREST EXPENSE: | |||||||||||||||||||||||
Interest on deposits | |||||||||||||||||||||||
Interest on FHLB and FRB borrowings | |||||||||||||||||||||||
Interest on other borrowings and convertible notes | |||||||||||||||||||||||
Total interest expense | |||||||||||||||||||||||
NET INTEREST INCOME BEFORE PROVISION (CREDIT) FOR CREDIT LOSSES | |||||||||||||||||||||||
PROVISION (CREDIT) FOR CREDIT LOSSES | ( | ( | |||||||||||||||||||||
NET INTEREST INCOME AFTER PROVISION (CREDIT) 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 SBA loans | |||||||||||||||||||||||
Net gains on sales of residential mortgage loans | |||||||||||||||||||||||
Net gains (losses) on sales of other loans | ( | ||||||||||||||||||||||
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 partnership expenses | |||||||||||||||||||||||
FDIC assessments | |||||||||||||||||||||||
Credit related expenses | |||||||||||||||||||||||
OREO expense, net | |||||||||||||||||||||||
Software impairment | |||||||||||||||||||||||
Earnings credit rebate | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total noninterest expense | |||||||||||||||||||||||
INCOME BEFORE INCOME TAXES | |||||||||||||||||||||||
INCOME TAX PROVISION | |||||||||||||||||||||||
NET INCOME | $ | $ | $ | $ | |||||||||||||||||||
EARNINGS PER COMMON SHARE | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive loss: | |||||||||||||||||||||||
Change in unrealized net holding losses on securities available for sale | ( | ( | ( | ( | |||||||||||||||||||
Change in unrealized net holding losses on securities transferred from available for sale to held to maturity | ( | ||||||||||||||||||||||
Change in unrealized net holding gains on interest rate swaps used in cash flow hedges | |||||||||||||||||||||||
Reclassification adjustments for net losses realized in net income | |||||||||||||||||||||||
Tax effect | |||||||||||||||||||||||
Other comprehensive loss, net of tax | ( | ( | ( | ( | |||||||||||||||||||
Total comprehensive (loss) income | $ | ( | $ | $ | ( | $ |
Common stock | Additional paid-in capital | Retained earnings | Treasury stock | Accumulated other comprehensive income (loss), net | Total stockholders’ equity | |||||||||||||||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands, except share and per share data) | ||||||||||||||||||||||||||||||||||||||||||||
BALANCE, JUNE 30, 2021 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||
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 loss | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Repurchase of treasury stock | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
BALANCE, SEPTEMBER 30, 2021 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||
BALANCE, JUNE 30, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
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 loss: | ||||||||||||||||||||||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
BALANCE, SEPTEMBER 30, 2022 | $ | $ | $ | $ | ( | $ | ( | $ |
Common stock | Additional paid-in capital | Retained earnings | Treasury stock | Accumulated other comprehensive income (loss), net | Total stockholders’ equity | |||||||||||||||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands, except share and per share data) | ||||||||||||||||||||||||||||||||||||||||||||
BALANCE, DECEMBER 31, 2020 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||
Adoption of ASU 2020-06 | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Adoption of ASU 2020-06 tax adjustment | ||||||||||||||||||||||||||||||||||||||||||||
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 loss | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Repurchase of treasury stock | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
BALANCE, SEPTEMBER 30, 2021 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||
BALANCE, DECEMBER 31, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
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 loss: | ||||||||||||||||||||||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Repurchase of treasury stock | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
BALANCE, SEPTEMBER 30, 2022 | $ | $ | $ | $ | ( | $ | ( | $ |
Nine Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
(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 (credit) for credit losses | ( | ||||||||||
Provision for unfunded loan commitments | |||||||||||
Provision for accrued interest receivables on loans | |||||||||||
Valuation adjustment of OREO | |||||||||||
Net gains on sales of loans | ( | ( | |||||||||
Losses on BOLI | |||||||||||
Net change in fair value of derivatives | ( | ||||||||||
Net losses on sale and disposal of premises and equipment | |||||||||||
Net losses (gains) on sales of OREO | ( | ||||||||||
Net change in fair value of equity investments with readily determinable fair value | |||||||||||
Losses on investments in affordable housing partnerships | |||||||||||
Software impairment | |||||||||||
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 | |||||||||||
Investment securities available for sale: | |||||||||||
Purchase of securities | ( | ( | |||||||||
Proceeds from matured, called, or paid-down securities | |||||||||||
Investment securities held to maturity: | |||||||||||
Purchase of securities | ( | ||||||||||
Proceeds from matured, called, or paid-down securities | |||||||||||
Proceeds from sale of equity investments | |||||||||||
Purchase of equity investments | ( | ||||||||||
Proceeds from sales of other loans held for sale previously classified as held for investment | |||||||||||
Purchase of loans receivable | ( | ( | |||||||||
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 investing activities | ( | ( | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||
Net change in deposits | |||||||||||
Proceeds from FHLB advances | |||||||||||
Repayment of FHLB advances | ( | ( | |||||||||
Proceeds from FRB borrowings | |||||||||||
Repayment of FRB borrowings | ( | ||||||||||
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 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 loans held for sale | $ | $ | |||||||||
Transfer from loans held for sale to loans receivable | $ | $ | |||||||||
Transfer from investment securities available for sale to held to maturity, at fair value | $ | $ | |||||||||
Lease liabilities arising from obtaining right-of-use assets | $ | $ | |||||||||
Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||||||||
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 | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||||||||
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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Net change in fair value recorded during the period on equity investments with readily determinable fair value | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
Less: 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 held at the end of the period | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
September 30, 2022 | |||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Debt securities available for sale: | |||||||||||||||||||||||
U.S. Treasury securities | $ | $ | $ | ( | $ | ||||||||||||||||||
U.S. Government agency and U.S. Government sponsored enterprises: | |||||||||||||||||||||||
Agency securities | ( | ||||||||||||||||||||||
Collateralized mortgage obligations | ( | ||||||||||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||
Residential | ( | ||||||||||||||||||||||
Commercial | ( | ||||||||||||||||||||||
Asset-backed securities | ( | ||||||||||||||||||||||
Corporate securities | ( | ||||||||||||||||||||||
Municipal securities | ( | ||||||||||||||||||||||
Total investment securities available for sale | $ | $ | $ | ( | $ | ||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Debt securities held to maturity: | |||||||||||||||||||||||
U.S. Government agency and U.S. Government sponsored enterprises: | |||||||||||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||
Residential | $ | $ | $ | ( | $ | ||||||||||||||||||
Commercial | ( | ||||||||||||||||||||||
Total investment securities held to maturity | $ | $ | $ | ( | $ | ||||||||||||||||||
December 31, 2021 | |||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Debt securities available for sale: | |||||||||||||||||||||||
U.S. Government agency and U.S. Government sponsored enterprises: | |||||||||||||||||||||||
Collateralized mortgage obligations | $ | $ | $ | ( | $ | ||||||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||
Residential | ( | ||||||||||||||||||||||
Commercial | ( | ||||||||||||||||||||||
Asset-backed securities | ( | ||||||||||||||||||||||
Corporate securities | ( | ||||||||||||||||||||||
Municipal securities | ( | ||||||||||||||||||||||
Total investment securities available for sale | $ | $ | $ | ( | $ | ||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Interest income on investment securities | |||||||||||||||||||||||
Taxable | $ | $ | $ | $ | |||||||||||||||||||
Nontaxable | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Available for Sale | Held to Maturity | ||||||||||||||||||||||
Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Debt securities: | |||||||||||||||||||||||
Due within one year | $ | $ | $ | $ | |||||||||||||||||||
Due after one year through five years | |||||||||||||||||||||||
Due after five years through ten years | |||||||||||||||||||||||
Due after ten years | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
September 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description of Securities AFS | 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) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Treasury securities | $ | $ | ( | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Agency securities* | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Collateralized mortgage obligations* | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential* | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial* | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset-backed securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Municipal securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( | $ | $ | ( |
December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description of Securities AFS | 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* | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset-backed securities | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Municipal securities | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( | $ | $ | ( |
September 30, 2022 | December 31, 2021 | ||||||||||
(Dollars in thousands) | |||||||||||
Loan portfolio composition | |||||||||||
Real estate loans: | |||||||||||
Residential | $ | $ | |||||||||
Commercial | |||||||||||
Construction | |||||||||||
Total real estate loans | |||||||||||
Commercial business * | |||||||||||
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 September 30, 2022 | |||||||||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Provision (credit) for credit losses | ( | ||||||||||||||||||||||||||||
Loans charged off | ( | ( | ( | ( | ( | ||||||||||||||||||||||||
Recoveries of charge offs | |||||||||||||||||||||||||||||
Balance, end of period | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Nine Months Ended September 30, 2022 | |||||||||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Provision (credit) 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 September 30, 2021 | |||||||||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Provision (credit) for credit losses | ( | ( | ( | ||||||||||||||||||||||||||
Loans charged off | ( | ( | ( | ( | ( | ||||||||||||||||||||||||
Recoveries of charge offs | |||||||||||||||||||||||||||||
Balance, end of period | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Nine Months Ended September 30, 2021 | |||||||||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Provision (credit) for credit losses | ( | ( | ( | ( | |||||||||||||||||||||||||
Loans charged off | ( | ( | ( | ( | ( | ||||||||||||||||||||||||
Recoveries of charge offs | |||||||||||||||||||||||||||||
Balance, end of period | $ | $ | $ | $ | $ |
September 30, 2022 | |||||||||||||||||||||||||||||
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, 2021 | |||||||||||||||||||||||||||||
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 | $ | $ | $ | $ | $ |
September 30, 2022 | ||||||||||||||||||||||||||
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, 2021 | ||||||||||||||||||||||||||
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 | $ | $ | $ | $ |
September 30, 2022 | December 31, 2021 | |||||||||||||||||||||||||||||||||||||
Real Estate Collateral | Other Collateral | Total | 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 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Real estate | $ | $ | $ | $ | |||||||||||||||||||
Commercial business | |||||||||||||||||||||||
Residential mortgage | ( | ||||||||||||||||||||||
Consumer and other | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
September 30, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||
(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 | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
September 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Term Loan by Origination Year | Revolving Loans | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | 2020 | 2019 | 2018 | 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 | $ | $ | $ | $ | $ | $ | $ | $ |
December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Term Loan by Origination Year | Revolving Loans | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2019 | 2018 | 2017 | 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 | $ | $ | $ | $ | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Transfer of loans held for investment to held for sale | (Dollars in thousands) | ||||||||||||||||||||||
Real estate - commercial | $ | $ | $ | $ | |||||||||||||||||||
Commercial business | |||||||||||||||||||||||
Residential mortgage | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Risk Characteristics | |||||
Real estate | Property type, location, owner occupied status | ||||
Commercial business | Delinquency status, risk rating, industry type | ||||
Residential mortgage | FICO score, LTV, delinquency status, maturity date, collateral value, location | ||||
Consumer and other | Historical losses |
September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||
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 | % | N/A | % | % | % | % | ||||||||||||||||||||||||||||||||||
Collectively evaluated loans | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
ACL on collectively evaluated loans | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Collectively evaluated loans ACL coverage | % | % | % | % | % | % | % | ||||||||||||||||||||||||||||||||||
Total loans | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Total ACL | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Total ACL to total loans | % | % | % | % | % | % | % |
December 31, 2021 | |||||||||||||||||||||||||||||||||||||||||
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 | % | N/A | % | % | % | % | ||||||||||||||||||||||||||||||||||
Collectively evaluated loans | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
ACL on collectively evaluated loans | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Collectively evaluated loans ACL coverage | % | % | % | % | % | % | % | ||||||||||||||||||||||||||||||||||
Total loans | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Total ACL | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Total ACL to total loans | % | % | % | % | % | % | % |
September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | $ | $ | $ | $ | $ | $ | $ | $ | $ |
December 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Nine Months Ended September 30, 2022 | Nine Months Ended September 30, 2021 | ||||||||||||||||||||||
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 September 30, 2022 | Three Months Ended September 30, 2021 | ||||||||||||||||||||||
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 | $ | $ | |||||||||||||||||||||
Nine Months Ended September 30, 2022 | Nine Months Ended September 30, 2021 | ||||||||||||||||||||||
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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Operating lease cost | $ | $ | $ | $ | |||||||||||||||||||
Short term lease cost | |||||||||||||||||||||||
Variable lease cost | |||||||||||||||||||||||
Sublease income | ( | ( | ( | ( | |||||||||||||||||||
Net lease cost | $ | $ | $ | $ |
At or for the Nine Months Ended September 30, 2022 | At or for the Nine Months Ended September 30, 2021 | ||||||||||
(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 | % | % |
September 30, 2022 | |||||
(Dollars in thousands) | |||||
2022 | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 and thereafter | |||||
Total lease payments | |||||
Less: imputed interest | |||||
Total lease obligations | $ | ||||
September 30, 2022 | December 31, 2021 | ||||||||||||||||||||||
Balance | Percentage (%) | Balance | Percentage (%) | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Noninterest bearing demand deposits | $ | % | $ | % | |||||||||||||||||||
Money market and NOW accounts | % | % | |||||||||||||||||||||
Saving deposits | % | % | |||||||||||||||||||||
Time deposits | % | % | |||||||||||||||||||||
Total deposits | $ | % | $ | % | |||||||||||||||||||
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 | $ | $ |
September 30, 2022 | ||||||||||||||||||||||||||
Capitalization Period | Gross Carrying Amount | Total Capitalization | Carrying Amount | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Convertible notes principal balance | $ | $ | ||||||||||||||||||||||||
Issuance costs to be capitalized | ( | $ | ( | |||||||||||||||||||||||
Carrying balance of convertible notes | $ | $ | $ |
December 31, 2021 | ||||||||||||||||||||||||||
Capitalization Period | Gross Carrying Amount | Total Capitalization | Carrying Amount | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Convertible notes principal balance | $ | $ | ||||||||||||||||||||||||
Issuance costs to be capitalized | ( | $ | ( | |||||||||||||||||||||||
Carrying balance of convertible notes | $ | $ | $ |
September 30, 2022 | December 31, 2021 | |||||||||||||
(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 | $ | $ | ||||||||||||
September 30, 2022 | December 31, 2021 | |||||||||||||
(Dollars in thousands) | ||||||||||||||
Interest rate swaps designated as cash flow hedge (included in other assets) | ||||||||||||||
Notional amount | $ | $ | ||||||||||||
Weighted average remaining term (years) | ||||||||||||||
Received variable rate (weighted average) | % | % | ||||||||||||
Pay fixed rate (weighted average) | % | % | ||||||||||||
Estimated fair value | $ | $ | ||||||||||||
September 30, 2022 | December 31, 2021 | ||||||||||||||||||||||
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 | ( | ( |
September 30, 2022 | December 31, 2021 | ||||||||||
(Dollars in thousands) | |||||||||||
Commitments to extend credit | $ | $ | |||||||||
Standby letters of credit | |||||||||||
Other letters of credit | |||||||||||
Commitments to fund investments in affordable housing partnerships |
September 30, 2022 | December 31, 2021 | |||||||||||||||||||||||||||||||||||||
Core Deposit Intangibles Related To: | Amortization Period | Gross Amount | Accumulated Amortization | Carrying Amount | Accumulated Amortization | Carrying Amount | ||||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||
Foster Bankshares acquisition | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||
Wilshire Bancorp acquisition | ( | ( | ||||||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | ||||||||||||||||||||||
Additions through originations of servicing assets | ||||||||||||||||||||||||||
Amortization | ( | ( | ( | ( | ||||||||||||||||||||||
Balance at end of period | $ | $ | $ | $ |
September 30, 2022 | December 31, 2021 | |||||||||||||
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 | |||||||||||||||||||||||
September 30, 2022 | 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. Treasury securities | $ | $ | $ | $ | |||||||||||||||||||
U.S. Government agency and U.S. Government sponsored enterprises: | |||||||||||||||||||||||
Agency securities | |||||||||||||||||||||||
Collateralized mortgage obligations | |||||||||||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||
Residential | |||||||||||||||||||||||
Commercial | |||||||||||||||||||||||
Asset-backed securities | |||||||||||||||||||||||
Corporate securities | |||||||||||||||||||||||
Municipal securities | |||||||||||||||||||||||
Equity investments with readily determinable fair value | |||||||||||||||||||||||
Interest rate swaps | |||||||||||||||||||||||
Mortgage banking derivatives | |||||||||||||||||||||||
Other derivatives | |||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Interest rate swaps | |||||||||||||||||||||||
Mortgage banking derivatives | |||||||||||||||||||||||
Other derivatives | |||||||||||||||||||||||
Fair Value Measurements at the End of the Reporting Period Using | |||||||||||||||||||||||
December 31, 2021 | 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 | |||||||||||||||||||||||
Asset-backed securities | |||||||||||||||||||||||
Corporate securities | |||||||||||||||||||||||
Municipal securities | |||||||||||||||||||||||
Equity investments with readily determinable fair value | |||||||||||||||||||||||
Interest rate swaps | |||||||||||||||||||||||
Mortgage banking derivatives | |||||||||||||||||||||||
Other derivatives | |||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Interest rate swaps | |||||||||||||||||||||||
Mortgage banking derivatives | |||||||||||||||||||||||
Other derivatives | |||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Municipal securities: | ||||||||||||||||||||||||||
Beginning Balance | $ | $ | $ | $ | ||||||||||||||||||||||
Change in fair value included in other comprehensive income (loss) | ( | ( | ( | |||||||||||||||||||||||
Ending Balance | $ | $ | $ | $ | ||||||||||||||||||||||
Risk participation agreements: | ||||||||||||||||||||||||||
Beginning Balance | $ | $ | $ | $ | ||||||||||||||||||||||
Change in fair value included in income (expense) | ( | ( | ( | ( | ||||||||||||||||||||||
Ending Balance | $ | $ | $ | $ | ||||||||||||||||||||||
Fair Value Measurements at the End of the Reporting Period Using | |||||||||||||||||||||||
September 30, 2022 | 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, 2021 | 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 | |||||||||||||||||||||||
Loans held for sale, net | |||||||||||||||||||||||
OREO |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Collateral dependent loans at fair value: | |||||||||||||||||||||||
Real estate loans | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Commercial business | ( | ( | ( | ( | |||||||||||||||||||
Loans held for sale, net | ( | ( | |||||||||||||||||||||
OREO | ( | ( | ( | ( |
September 30, 2022 | |||||||||||||||||
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 | ||||||||||||||||
Investment securities HTM | 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 and FRB borrowings | Level 2 | ||||||||||||||||
Convertible notes, net | Level 1 | ||||||||||||||||
Subordinated debentures | Level 2 | ||||||||||||||||
Accrued interest payable | Level 2 | ||||||||||||||||
Acceptances outstanding | Level 2 | ||||||||||||||||
December 31, 2021 | |||||||||||||||||
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, | Nine Months Ended, | ||||||||||||||||||||||
September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Balance at beginning of period | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Unrealized net losses on securities available for sale | ( | ( | ( | ( | |||||||||||||||||||
Unrealized net losses on securities available for sale transferred to held to maturity | ( | ||||||||||||||||||||||
Unrealized net gains on interest rate swaps used for cash flow hedge | |||||||||||||||||||||||
Reclassification adjustments for net losses realized in net income | |||||||||||||||||||||||
Tax effect | |||||||||||||||||||||||
Other comprehensive loss, net of tax | ( | ( | ( | ( | |||||||||||||||||||
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, 2022 | $ | ||||||||||||||||||||||
Granted | |||||||||||||||||||||||
Exercised | ( | ||||||||||||||||||||||
Expired | ( | ||||||||||||||||||||||
Forfeited | |||||||||||||||||||||||
Outstanding - September 30, 2022 | $ | $ | |||||||||||||||||||||
Options exercisable - September 30, 2022 | $ | $ |
Number of Shares | Weighted-Average Grant Date Fair Value | ||||||||||
Outstanding (unvested) - January 1, 2022 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Outstanding (unvested) - September 30, 2022 | $ |
Actual | Required For Capital Adequacy Purposes | Minimum Capital Adequacy With Capital Conservation Buffer | Required To Be Well Capitalized Under Prompt Corrective Action Provisions | ||||||||||||||||||||||||||||||||||||||||||||
September 30, 2022 | 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 | ||||||||||||||||||||||||||||||||||||||||||||
December 31, 2021 | 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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(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 September 30, | At or for the Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(Dollars in thousands, except share and per share data) | |||||||||||||||||||||||
Income Statement Data: | |||||||||||||||||||||||
Interest income | $ | 189,182 | $ | 142,866 | $ | 491,878 | $ | 421,363 | |||||||||||||||
Interest expense | 35,996 | 12,570 | 63,978 | 41,911 | |||||||||||||||||||
Net interest income | 153,186 | 130,296 | 427,900 | 379,452 | |||||||||||||||||||
Provision (credit) for credit losses | 9,200 | (10,000) | 1,400 | (13,700) | |||||||||||||||||||
Net interest income after provision (credit) for credit losses | 143,986 | 140,296 | 426,500 | 393,152 | |||||||||||||||||||
Noninterest income | 13,355 | 10,617 | 39,287 | 30,497 | |||||||||||||||||||
Noninterest expense | 83,914 | 75,502 | 239,652 | 219,056 | |||||||||||||||||||
Income before income tax provision | 73,427 | 75,411 | 226,135 | 204,593 | |||||||||||||||||||
Income tax provision | 19,679 | 19,912 | 59,561 | 51,644 | |||||||||||||||||||
Net income | $ | 53,748 | $ | 55,499 | $ | 166,574 | $ | 152,949 | |||||||||||||||
Per Share Data: | |||||||||||||||||||||||
Earnings per common share - basic | $ | 0.45 | $ | 0.45 | $ | 1.39 | $ | 1.24 | |||||||||||||||
Earnings per common share - diluted | $ | 0.45 | $ | 0.45 | $ | 1.38 | $ | 1.23 | |||||||||||||||
Book value per common share (period end) | $ | 16.54 | $ | 17.26 | $ | 16.54 | $ | 17.26 | |||||||||||||||
Cash dividends declared per common share | $ | 0.14 | $ | 0.14 | $ | 0.42 | $ | 0.42 | |||||||||||||||
Tangible book value per common share (period end) (1) | $ | 12.60 | $ | 13.33 | $ | 12.60 | $ | 13.33 | |||||||||||||||
Number of common shares outstanding (period end) | 119,479,253 | 120,198,061 | 119,479,253 | 120,198,061 | |||||||||||||||||||
Weighted average shares - basic | 119,476,035 | 122,244,948 | 119,940,044 | 123,050,174 | |||||||||||||||||||
Weighted average shares - diluted | 119,996,523 | 122,908,536 | 120,595,988 | 123,848,512 | |||||||||||||||||||
Tangible common equity to tangible assets (1) | 8.09 | % | 9.24 | % | 8.09 | % | 9.24 | % | |||||||||||||||
Average Balance Sheet Data: | |||||||||||||||||||||||
Assets | $ | 18,428,874 | $ | 17,745,066 | $ | 18,018,588 | $ | 17,344,095 | |||||||||||||||
Investment securities | 2,366,696 | 2,370,672 | 2,469,858 | 2,297,450 | |||||||||||||||||||
Loans receivable and loans held for sale | 14,925,298 | 13,286,382 | 14,378,774 | 13,308,526 | |||||||||||||||||||
Deposits | 15,445,345 | 14,993,710 | 15,068,069 | 14,612,792 | |||||||||||||||||||
Stockholders’ equity | 2,032,362 | 2,092,018 | 2,046,351 | 2,068,676 | |||||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Selected Performance Ratios: | |||||||||||||||||||||||
Return on average assets (2) | 1.17 | % | 1.25 | % | 1.23 | % | 1.18 | % | |||||||||||||||
Return on average stockholders’ equity (2) | 10.58 | % | 10.61 | % | 10.85 | % | 9.86 | % | |||||||||||||||
Return on average tangible equity (1) (2) | 13.77 | % | 13.71 | % | 14.10 | % | 12.78 | % | |||||||||||||||
Dividend payout ratio (dividends per share/diluted EPS) | 31.26 | % | 31.00 | % | 30.41 | % | 34.01 | % | |||||||||||||||
Efficiency ratio (3) | 50.39 | % | 53.58 | % | 51.30 | % | 53.43 | % | |||||||||||||||
Net interest spread | 2.95 | % | 2.84 | % | 3.01 | % | 2.84 | % | |||||||||||||||
Net interest margin (4) | 3.49 | % | 3.07 | % | 3.36 | % | 3.08 | % | |||||||||||||||
September 30, 2022 | September 30, 2021 | ||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Statement of Financial Condition Data - at Period End: | |||||||||||||||||||||||
Assets | $ | 19,083,388 | $ | 17,799,026 | |||||||||||||||||||
Investment securities AFS and HTM | 2,264,533 | 2,669,489 | |||||||||||||||||||||
Loans receivable | 15,491,187 | 13,418,691 | |||||||||||||||||||||
Deposits | 15,502,209 | 15,062,527 | |||||||||||||||||||||
FHLB and FRB borrowings | 1,072,000 | 200,000 | |||||||||||||||||||||
Convertible notes, net | 216,913 | 215,974 | |||||||||||||||||||||
Subordinated debentures | 106,258 | 105,057 | |||||||||||||||||||||
Stockholders’ equity | 1,975,725 | 2,074,398 | |||||||||||||||||||||
Regulatory Capital Ratios (5) | |||||||||||||||||||||||
Leverage capital ratio (6) | 10.25 | % | 9.98 | % | |||||||||||||||||||
Common equity Tier 1 capital ratio | 10.32 | % | 11.01 | % | |||||||||||||||||||
Tier 1 risk-based capital ratio | 10.92 | % | 11.70 | % | |||||||||||||||||||
Total risk-based capital ratio | 11.72 | % | 12.42 | % | |||||||||||||||||||
Asset Quality Ratios: | |||||||||||||||||||||||
Allowance for credit losses to loans receivable | 1.04 | % | 1.02 | % | |||||||||||||||||||
Allowance for credit losses to nonaccrual loans | 248.66 | % | 251.52 | % | |||||||||||||||||||
Allowance for credit losses to nonperforming loans | 168.11 | % | 138.92 | % | |||||||||||||||||||
Allowance for credit losses to nonperforming assets (7) | 165.55 | % | 120.33 | % | |||||||||||||||||||
Nonaccrual loans to loans receivable | 0.42 | % | 0.41 | % | |||||||||||||||||||
Nonperforming loans to loans receivable | 0.62 | % | 0.73 | % | |||||||||||||||||||
Nonperforming assets to loans receivable and OREO (7) | 0.63 | % | 0.85 | % | |||||||||||||||||||
Nonperforming assets to total assets (7) | 0.51 | % | 0.64 | % |
September 30, 2022 | September 30, 2021 | ||||||||||
(Dollars in thousands, except share data) | |||||||||||
Total stockholders’ equity | $ | 1,975,725 | $ | 2,074,398 | |||||||
Less: Goodwill and core deposit intangible assets, net | (470,662) | (472,630) | |||||||||
Tangible common equity | $ | 1,505,063 | $ | 1,601,768 | |||||||
Total assets | $ | 19,083,388 | $ | 17,799,026 | |||||||
Less: Goodwill and core deposit intangible assets, net | (470,662) | (472,630) | |||||||||
Tangible Assets | $ | 18,612,726 | $ | 17,326,396 | |||||||
Common shares outstanding | 119,479,253 | 120,198,061 | |||||||||
Tangible book value per common share | $ | 12.60 | $ | 13.33 | |||||||
Tangible common equity to tangible assets | 8.09 | % | 9.24 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Net income | $ | 53,748 | $ | 55,499 | $ | 166,574 | $ | 152,949 | |||||||||||||||
Average stockholders’ equity | $ | 2,032,362 | $ | 2,092,018 | $ | 2,046,351 | $ | 2,068,676 | |||||||||||||||
Less: Average goodwill and core deposit intangible assets, net | (470,941) | (472,918) | (471,424) | (473,438) | |||||||||||||||||||
Average tangible equity | $ | 1,561,421 | $ | 1,619,100 | $ | 1,574,927 | $ | 1,595,238 | |||||||||||||||
Return on average tangible equity (annualized) | 13.77 | % | 13.71 | % | 14.10 | % | 12.78 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Accretion on acquired loans (including acquired credit deteriorated loans) | $ | 749 | $ | 2,461 | 2,631 | 7,975 | |||||||||||||||||
Amortization of premium on low income housing tax credits | (76) | (73) | (227) | (220) | |||||||||||||||||||
Accretion of discount on acquired subordinated debt | (305) | (295) | (904) | (879) | |||||||||||||||||||
Amortization of core deposit intangibles | (486) | (509) | (1,459) | (1,528) | |||||||||||||||||||
Total | $ | (118) | $ | 1,584 | $ | 41 | $ | 5,348 | |||||||||||||||
Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||||||||
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) | $ | 14,925,298 | $ | 175,078 | 4.65 | % | $ | 13,286,382 | $ | 132,794 | 3.97 | % | |||||||||||||||||||||||
Investment securities AFS and HTM(3) | 2,366,696 | 13,498 | 2.26 | % | 2,370,672 | 9,207 | 1.54 | % | |||||||||||||||||||||||||||
FHLB stock and other investments | 107,724 | 606 | 2.23 | % | 1,197,537 | 865 | 0.29 | % | |||||||||||||||||||||||||||
Total interest earning assets | 17,399,718 | 189,182 | 4.31 | % | 16,854,591 | 142,866 | 3.36 | % | |||||||||||||||||||||||||||
Total noninterest earning assets | 1,029,156 | 890,475 | |||||||||||||||||||||||||||||||||
Total assets | $ | 18,428,874 | $ | 17,745,066 | |||||||||||||||||||||||||||||||
INTEREST BEARING LIABILITIES: | |||||||||||||||||||||||||||||||||||
Deposits: | |||||||||||||||||||||||||||||||||||
Demand, interest bearing | $ | 6,255,271 | $ | 19,614 | 1.24 | % | $ | 5,919,225 | $ | 5,946 | 0.40 | % | |||||||||||||||||||||||
Savings | 324,487 | 969 | 1.18 | % | 310,525 | 920 | 1.18 | % | |||||||||||||||||||||||||||
Time deposits | 3,146,432 | 10,084 | 1.27 | % | 2,914,977 | 2,774 | 0.38 | % | |||||||||||||||||||||||||||
Total interest bearing deposits | 9,726,190 | 30,667 | 1.25 | % | 9,144,727 | 9,640 | 0.42 | % | |||||||||||||||||||||||||||
FHLB and FRB borrowings | 448,837 | 2,393 | 2.12 | % | 200,000 | 640 | 1.27 | % | |||||||||||||||||||||||||||
Convertible notes, net | 216,762 | 1,322 | 2.39 | % | 215,840 | 1,321 | 2.39 | % | |||||||||||||||||||||||||||
Other borrowings, net | 102,182 | 1,614 | 6.18 | % | 100,993 | 969 | 3.75 | % | |||||||||||||||||||||||||||
Total interest bearing liabilities | 10,493,971 | 35,996 | 1.36 | % | 9,661,560 | 12,570 | 0.52 | % | |||||||||||||||||||||||||||
Noninterest bearing liabilities and equity: | |||||||||||||||||||||||||||||||||||
Noninterest bearing demand deposits | 5,719,155 | 5,848,983 | |||||||||||||||||||||||||||||||||
Other liabilities | 183,386 | 142,505 | |||||||||||||||||||||||||||||||||
Stockholders’ equity | 2,032,362 | 2,092,018 | |||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 18,428,874 | $ | 17,745,066 | |||||||||||||||||||||||||||||||
Net interest income/net interest spread | $ | 153,186 | 2.95 | % | $ | 130,296 | 2.84 | % | |||||||||||||||||||||||||||
Net interest margin | 3.49 | % | 3.07 | % | |||||||||||||||||||||||||||||||
Cost of deposits | 0.79 | % | 0.26 | % |
Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||||||||
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) | $ | 14,378,774 | $ | 452,774 | 4.21 | % | $ | 13,308,526 | $ | 394,353 | 3.96 | % | |||||||||||||||||||||||
Investment securities AFS and HTM(3) | 2,469,858 | 37,462 | 2.03 | % | 2,297,450 | 24,835 | 1.45 | % | |||||||||||||||||||||||||||
FHLB stock and other investments | 197,287 | 1,642 | 1.11 | % | 867,745 | 2,175 | 0.34 | % | |||||||||||||||||||||||||||
Total interest earning assets | 17,045,919 | 491,878 | 3.86 | % | 16,473,721 | 421,363 | 3.42 | % | |||||||||||||||||||||||||||
Total noninterest earning assets | 972,669 | 870,374 | |||||||||||||||||||||||||||||||||
Total assets | $ | 18,018,588 | $ | 17,344,095 | |||||||||||||||||||||||||||||||
INTEREST BEARING LIABILITIES: | |||||||||||||||||||||||||||||||||||
Deposits: | |||||||||||||||||||||||||||||||||||
Demand, interest bearing | $ | 6,360,040 | $ | 33,970 | 0.71 | % | $ | 5,555,711 | $ | 17,345 | 0.42 | % | |||||||||||||||||||||||
Savings | 322,058 | 2,834 | 1.18 | % | 306,780 | 2,678 | 1.17 | % | |||||||||||||||||||||||||||
Time deposits | 2,683,217 | 14,759 | 0.74 | % | 3,298,393 | 13,083 | 0.53 | % | |||||||||||||||||||||||||||
Total interest bearing deposits | 9,365,315 | 51,563 | 0.74 | % | 9,160,884 | 33,106 | 0.48 | % | |||||||||||||||||||||||||||
FHLB and FRB borrowings | 423,875 | 4,537 | 1.43 | % | 205,971 | 1,913 | 1.24 | % | |||||||||||||||||||||||||||
Convertible notes, net | 216,538 | 3,967 | 2.42 | % | 215,483 | 3,967 | 2.43 | % | |||||||||||||||||||||||||||
Other borrowings, net | 101,882 | 3,911 | 5.06 | % | 100,697 | 2,925 | 3.83 | % | |||||||||||||||||||||||||||
Total interest bearing liabilities | 10,107,610 | 63,978 | 0.85 | % | 9,683,035 | 41,911 | 0.58 | % | |||||||||||||||||||||||||||
Noninterest bearing liabilities and equity: | |||||||||||||||||||||||||||||||||||
Noninterest bearing demand deposits | 5,702,754 | 5,451,908 | |||||||||||||||||||||||||||||||||
Other liabilities | 161,873 | 140,476 | |||||||||||||||||||||||||||||||||
Stockholders’ equity | 2,046,351 | 2,068,676 | |||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 18,018,588 | $ | 17,344,095 | |||||||||||||||||||||||||||||||
Net interest income/net interest spread | $ | 427,900 | 3.01 | % | $ | 379,452 | 2.84 | % | |||||||||||||||||||||||||||
Net interest margin | 3.36 | % | 3.08 | % | |||||||||||||||||||||||||||||||
Cost of deposits | 0.46 | % | 0.30 | % | |||||||||||||||||||||||||||||||
Three Months Ended September 30, 2022 over September 30, 2021 | |||||||||||||||||
Net Increase (Decrease) | Change due to: | ||||||||||||||||
Rate | Volume | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
INTEREST INCOME: | |||||||||||||||||
Loans, including fees | $ | 42,284 | $ | 24,722 | $ | 17,562 | |||||||||||
Investment securities AFS and HTM | 4,291 | 4,306 | (15) | ||||||||||||||
FHLB stock and other investments | (259) | 1,160 | (1,419) | ||||||||||||||
Total interest income | $ | 46,316 | $ | 30,188 | $ | 16,128 | |||||||||||
INTEREST EXPENSE: | |||||||||||||||||
Demand, interest bearing | $ | 13,668 | $ | 13,312 | $ | 356 | |||||||||||
Savings | 49 | 7 | 42 | ||||||||||||||
Time deposits | 7,310 | 7,073 | 237 | ||||||||||||||
FHLB and FRB borrowings | 1,753 | 611 | 1,142 | ||||||||||||||
Convertible notes, net | 1 | (5) | 6 | ||||||||||||||
Other borrowings, net | 645 | 633 | 12 | ||||||||||||||
Total interest expense | $ | 23,426 | $ | 21,631 | $ | 1,795 | |||||||||||
NET INTEREST INCOME | $ | 22,890 | $ | 8,557 | $ | 14,333 |
Nine Months Ended September 30, 2022 over September 30, 2021 | |||||||||||||||||
Net Increase (Decrease) | Change due to: | ||||||||||||||||
Rate | Volume | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
INTEREST INCOME: | |||||||||||||||||
Loans, including fees | $ | 58,421 | $ | 25,591 | $ | 32,830 | |||||||||||
Investment securities AFS and HTM | 12,627 | 10,645 | 1,982 | ||||||||||||||
FHLB stock and other investments | (533) | 2,122 | (2,655) | ||||||||||||||
Total interest income | $ | 70,515 | $ | 38,358 | $ | 32,157 | |||||||||||
INTEREST EXPENSE: | |||||||||||||||||
Demand, interest bearing | $ | 16,625 | $ | 13,812 | $ | 2,813 | |||||||||||
Savings | 156 | 22 | 134 | ||||||||||||||
Time deposits | 1,676 | 4,423 | (2,747) | ||||||||||||||
FHLB and FRB borrowings | 2,624 | 330 | 2,294 | ||||||||||||||
Convertible notes, net | — | (19) | 19 | ||||||||||||||
Other borrowings, net | 986 | 951 | 35 | ||||||||||||||
Total interest expense | $ | 22,067 | $ | 19,519 | $ | 2,548 | |||||||||||
NET INTEREST INCOME | $ | 48,448 | $ | 18,839 | $ | 29,609 |
Three Months Ended September 30, | Increase (Decrease) | ||||||||||||||||||||||
2022 | 2021 | Amount | Percent (%) | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Service fees on deposit accounts | $ | 2,535 | $ | 1,814 | $ | 721 | 39.7 | % | |||||||||||||||
International service fees | 834 | 889 | (55) | (6.2) | % | ||||||||||||||||||
Loan servicing fees, net | 981 | 642 | 339 | 52.8 | % | ||||||||||||||||||
Wire transfer fees | 856 | 836 | 20 | 2.4 | % | ||||||||||||||||||
Swap fees | 1,193 | 293 | 900 | 307.2 | % | ||||||||||||||||||
Net gains on sales of SBA loans | 2,782 | 2,459 | 323 | 13.1 | % | ||||||||||||||||||
Net gains on sales of residential mortgage loans | 29 | 781 | (752) | (96.3) | % | ||||||||||||||||||
Net gains on sales of other loans | 117 | — | 117 | 100.0 | % | ||||||||||||||||||
Other income and fees | 4,028 | 2,903 | 1,125 | 38.8 | % | ||||||||||||||||||
Total noninterest income | $ | 13,355 | $ | 10,617 | $ | 2,738 | 25.8 | % | |||||||||||||||
Nine Months Ended September 30, | Increase (Decrease) | ||||||||||||||||||||||
2022 | 2021 | Amount | Percent (%) | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Service fees on deposit accounts | $ | 6,779 | $ | 5,381 | $ | 1,398 | 26.0 | % | |||||||||||||||
International service fees | 2,372 | 2,525 | (153) | (6.1) | % | ||||||||||||||||||
Loan servicing fees, net | 2,660 | 2,620 | 40 | 1.5 | % | ||||||||||||||||||
Wire transfer fees | 2,614 | 2,603 | 11 | 0.4 | % | ||||||||||||||||||
Swap fees | 2,153 | 525 | 1,628 | 310.1 | % | ||||||||||||||||||
Net gains on sales of SBA loans | 14,189 | 4,834 | 9,355 | 193.5 | % | ||||||||||||||||||
Net gains on sales of residential mortgage loans | 862 | 3,905 | (3,043) | (77.9) | % | ||||||||||||||||||
Net losses on sales of other loans | (430) | — | (430) | 100.0 | % | ||||||||||||||||||
Other income and fees | 8,088 | 8,104 | (16) | (0.2) | % | ||||||||||||||||||
Total noninterest income | $ | 39,287 | $ | 30,497 | $ | 8,790 | 28.8 | % |
Three Months Ended September 30, | Increase (Decrease) | ||||||||||||||||||||||
2022 | 2021 | Amount | Percent (%) | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Salaries and employee benefits | $ | 53,222 | $ | 47,018 | $ | 6,204 | 13.2 | % | |||||||||||||||
Occupancy | 6,682 | 7,473 | (791) | (10.6) | % | ||||||||||||||||||
Furniture and equipment | 4,967 | 4,429 | 538 | 12.1 | % | ||||||||||||||||||
Advertising and marketing | 1,739 | 2,656 | (917) | (34.5) | % | ||||||||||||||||||
Data processing and communications | 2,469 | 2,394 | 75 | 3.1 | % | ||||||||||||||||||
Professional fees | 1,196 | 2,431 | (1,235) | (50.8) | % | ||||||||||||||||||
Investments in affordable housing partnership expenses | 2,329 | 2,646 | (317) | (12.0) | % | ||||||||||||||||||
FDIC assessments | 1,633 | 1,204 | 429 | 35.6 | % | ||||||||||||||||||
Credit related expenses | 873 | 1,266 | (393) | (31.0) | % | ||||||||||||||||||
OREO expense, net | 378 | 248 | 130 | 52.4 | % | ||||||||||||||||||
Earnings credit rebates | 4,685 | 407 | 4,278 | 1,051.1 | % | ||||||||||||||||||
Other | 3,741 | 3,330 | 411 | 12.3 | % | ||||||||||||||||||
Total noninterest expense | $ | 83,914 | $ | 75,502 | $ | 8,412 | 11.1 | % | |||||||||||||||
Nine Months Ended September 30, | Increase (Decrease) | ||||||||||||||||||||||
2022 | 2021 | Amount | Percent (%) | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Salaries and employee benefits | $ | 152,025 | $ | 130,543 | $ | 21,482 | 16.5 | % | |||||||||||||||
Occupancy | 21,195 | 21,507 | (312) | (1.5) | % | ||||||||||||||||||
Furniture and equipment | 14,389 | 13,437 | 952 | 7.1 | % | ||||||||||||||||||
Advertising and marketing | 5,601 | 6,378 | (777) | (12.2) | % | ||||||||||||||||||
Data processing and communications | 7,823 | 7,542 | 281 | 3.7 | % | ||||||||||||||||||
Professional fees | 4,989 | 9,729 | (4,740) | (48.7) | % | ||||||||||||||||||
Investments in affordable housing partnership expenses | 6,192 | 8,300 | (2,108) | (25.4) | % | ||||||||||||||||||
FDIC assessments | 4,652 | 3,743 | 909 | 24.3 | % | ||||||||||||||||||
Credit related expenses | 4,857 | 3,527 | 1,330 | 37.7 | % | ||||||||||||||||||
OREO expense, net | 740 | 827 | (87) | (10.5) | % | ||||||||||||||||||
Earnings credit rebates | 5,996 | 1,287 | 4,709 | 365.9 | % | ||||||||||||||||||
Software impairment | — | 2,146 | (2,146) | (100.0) | % | ||||||||||||||||||
Other | 11,193 | 10,090 | 1,103 | 10.9 | % | ||||||||||||||||||
Total noninterest expense | $ | 239,652 | $ | 219,056 | $ | 20,596 | 9.4 | % |
September 30, 2022 | December 31, 2021 | ||||||||||||||||||||||
Amount | Percent (%) | Amount | Percent (%) | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Loan portfolio composition | |||||||||||||||||||||||
Real estate loans: | |||||||||||||||||||||||
Residential | $ | 75,488 | — | % | $ | 69,199 | — | % | |||||||||||||||
Commercial | 9,216,194 | 60 | % | 8,816,080 | 63 | % | |||||||||||||||||
Construction | 213,211 | 1 | % | 220,652 | 2 | % | |||||||||||||||||
Total real estate loans | 9,504,893 | 61 | % | 9,105,931 | 65 | % | |||||||||||||||||
Commercial business | 5,124,421 | 33 | % | 4,208,674 | 30 | % | |||||||||||||||||
Residential mortgage | 823,809 | 6 | % | 579,626 | 5 | % | |||||||||||||||||
Consumer and other | 38,064 | — | % | 58,512 | — | % | |||||||||||||||||
Total loans receivable, net of deferred costs and fees | 15,491,187 | 100 | % | 13,952,743 | 100 | % | |||||||||||||||||
Allowance for credit losses | (160,561) | (140,550) | |||||||||||||||||||||
Loans receivable, net of allowance for credit losses | $ | 15,330,626 | $ | 13,812,193 |
September 30, 2022 | December 31, 2021 | ||||||||||
(Dollars in thousands) | |||||||||||
Commitments to extend credit | $ | 2,787,710 | $ | 2,329,421 | |||||||
Standby letters of credit | 135,056 | 126,137 | |||||||||
Other commercial letters of credit | 26,937 | 56,333 | |||||||||
Total | $ | 2,949,703 | $ | 2,511,891 |
September 30, 2022 | December 31, 2021 | ||||||||||
(Dollars in thousands) | |||||||||||
Nonaccrual loans (1) | $ | 64,571 | $ | 54,616 | |||||||
Loans 90 days or more days past due, still accruing | 5,306 | 2,131 | |||||||||
Accruing restructured loans | 25,631 | 52,418 | |||||||||
Total nonperforming loans | 95,508 | 109,165 | |||||||||
OREO | 1,480 | 2,597 | |||||||||
Total nonperforming assets | $ | 96,988 | $ | 111,762 | |||||||
Nonaccrual loans to loans receivable | 0.42 | % | 0.39 | % | |||||||
Nonperforming loans to loans receivable | 0.62 | % | 0.78 | % | |||||||
Nonperforming assets to loans receivable and OREO | 0.63 | % | 0.80 | % | |||||||
Nonperforming assets to total assets | 0.51 | % | 0.62 | % | |||||||
Allowance for credit losses to nonaccrual loans | 248.66 | % | 257.34 | % | |||||||
Allowance for credit losses to nonperforming loans | 168.11 | % | 128.75 | % | |||||||
Allowance for credit losses to nonperforming assets | 165.55 | % | 125.76 | % |
September 30, 2022 | June 30, 2022 | December 31, 2021 | |||||||||||||||||||||||||||||||||
Allowance for Credit Losses | Percent of Allowance to Loans Receivable * | Allowance for Credit Losses | Percent of Allowance to Loans Receivable * | Allowance for Credit Losses | Percent of Allowance to Loans Receivable * | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Loan Type | |||||||||||||||||||||||||||||||||||
Real estate – residential | $ | 850 | 1.13 | % | $ | 756 | 1.01 | % | $ | 729 | 1.05 | % | |||||||||||||||||||||||
Real estate – commercial | 97,535 | 1.06 | % | 97,553 | 1.08 | % | 106,170 | 1.20 | % | ||||||||||||||||||||||||||
Real estate – construction | 1,539 | 0.72 | % | 1,515 | 0.69 | % | 1,541 | 0.70 | % | ||||||||||||||||||||||||||
Commercial business | 53,013 | 1.03 | % | 44,852 | 1.02 | % | 27,811 | 0.66 | % | ||||||||||||||||||||||||||
Residential mortgage | 6,894 | 0.84 | % | 6,079 | 0.79 | % | 3,316 | 0.57 | % | ||||||||||||||||||||||||||
Consumer and other | 730 | 1.92 | % | 825 | 1.97 | % | 983 | 1.68 | % | ||||||||||||||||||||||||||
Total | $ | 160,561 | 1.04 | % | $ | 151,580 | 1.04 | % | $ | 140,550 | 1.01 | % |
At or for the Three Months Ended September 30, | At or for the Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
LOANS: | |||||||||||||||||||||||
Average loans | $ | 14,925,298 | $ | 13,286,382 | $ | 14,378,774 | $ | 13,308,526 | |||||||||||||||
Loans receivable | $ | 15,491,187 | $ | 13,418,691 | $ | 15,491,187 | $ | 13,418,691 | |||||||||||||||
ALLOWANCE: | |||||||||||||||||||||||
Balance, beginning of period | $ | 151,580 | $ | 189,452 | $ | 140,550 | $ | 206,741 | |||||||||||||||
Less loan charge offs: | |||||||||||||||||||||||
Real estate – commercial | (185) | (41,655) | (1,936) | (56,645) | |||||||||||||||||||
Commercial business | (262) | (1,895) | (611) | (3,077) | |||||||||||||||||||
Residential mortgage | (22) | (923) | (22) | (923) | |||||||||||||||||||
Consumer and other | (81) | (110) | (196) | (251) | |||||||||||||||||||
Total loan charge offs | (550) | (44,583) | (2,765) | (60,896) | |||||||||||||||||||
Plus loan recoveries: | |||||||||||||||||||||||
Real estate – commercial | 176 | 1,113 | 18,853 | 2,588 | |||||||||||||||||||
Commercial business | 147 | 778 | 2,486 | 1,859 | |||||||||||||||||||
Residential mortgage | — | — | — | — | |||||||||||||||||||
Consumer and other | 8 | 14 | 37 | 182 | |||||||||||||||||||
Total loans recoveries | 331 | 1,905 | 21,376 | 4,629 | |||||||||||||||||||
Net loan (charge offs) recoveries | (219) | (42,678) | 18,611 | (56,267) | |||||||||||||||||||
Provision (credit) for credit losses | 9,200 | (10,000) | 1,400 | (13,700) | |||||||||||||||||||
Balance, end of period | $ | 160,561 | $ | 136,774 | $ | 160,561 | $ | 136,774 | |||||||||||||||
Net loan charge offs (recoveries) to average loans* | 0.01 | % | 1.28 | % | (0.17) | % | 0.56 | % | |||||||||||||||
Allowance for credit losses to loans receivable at end of period | 1.04 | % | 1.02 | % | 1.04 | % | 1.02 | % | |||||||||||||||
Net loan charge offs (recoveries) to allowance for credit losses* | 0.55 | % | 124.81 | % | (15.45) | % | 54.85 | % | |||||||||||||||
Net loan charge offs (recoveries) to provision (credit) for credit losses | 2.38 | % | (426.78) | % | (1,329.36) | % | (410.71) | % | |||||||||||||||
September 30, 2022 | |||||||||||
Balance | Percent (%) | ||||||||||
(Dollars in thousands) | |||||||||||
Three months or less | $ | 1,360,953 | 37 | % | |||||||
Over three months through six months | 954,327 | 26 | % | ||||||||
Over six months through nine months | 400,039 | 11 | % | ||||||||
Over nine months through twelve months | 972,330 | 25 | % | ||||||||
Over twelve months | 20,674 | 1 | % | ||||||||
Total time deposits | $ | 3,708,323 | 100 | % |
September 30, 2022 | |||||||||||||||||||||||||||||||||||
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) | $ | 1,760,843 | 10.32 | % | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||
Total risk-based capital ratio (to risk-weighted assets) | $ | 2,000,653 | 11.72 | % | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||
Tier 1 risk-based capital ratio (to risk-weighted assets) | $ | 1,863,200 | 10.92 | % | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||
Tier 1 capital to total assets (to average assets) | $ | 1,863,200 | 10.25 | % | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||
Bank of Hope | |||||||||||||||||||||||||||||||||||
Common equity Tier 1 capital ratio (to risk-weighted assets) | $ | 2,014,788 | 11.81 | % | $ | 1,108,875 | 6.50 | % | $ | 905,913 | 5.31 | % | |||||||||||||||||||||||
Total risk-based capital ratio (to risk-weighted assets) | $ | 2,152,241 | 12.62 | % | $ | 1,705,961 | 10.00 | % | $ | 446,280 | 2.62 | % | |||||||||||||||||||||||
Tier 1 risk-based capital ratio (to risk-weighted assets) | $ | 2,014,788 | 11.81 | % | $ | 1,364,769 | 8.00 | % | $ | 650,019 | 3.81 | % | |||||||||||||||||||||||
Tier 1 capital to total assets (to average assets) | $ | 2,014,788 | 11.08 | % | $ | 909,000 | 5.00 | % | $ | 1,105,788 | 6.08 | % | |||||||||||||||||||||||
December 31, 2021 | |||||||||||||||||||||||||||||||||||
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) | $ | 1,657,754 | 11.03 | % | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||
Total risk-based capital ratio (to risk-weighted assets) | $ | 1,867,968 | 12.42 | % | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||
Tier 1 risk-based capital ratio (to risk-weighted assets) | $ | 1,759,207 | 11.70 | % | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||
Tier 1 capital to total assets (to average assets) | $ | 1,759,207 | 10.11 | % | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||
Bank of Hope | |||||||||||||||||||||||||||||||||||
Common equity Tier 1 capital ratio (to risk-weighted assets) | $ | 1,947,914 | 12.96 | % | $ | 976,919 | 6.50 | % | $ | 970,995 | 6.46 | % | |||||||||||||||||||||||
Total risk-based capital ratio (to risk-weighted assets) | $ | 2,056,675 | 13.68 | % | $ | 1,502,952 | 10.00 | % | $ | 553,723 | 3.68 | % | |||||||||||||||||||||||
Tier 1 risk-based capital ratio (to risk-weighted assets) | $ | 1,947,914 | 12.96 | % | $ | 1,202,361 | 8.00 | % | $ | 745,553 | 4.96 | % | |||||||||||||||||||||||
Tier 1 capital to total assets (to average assets) | $ | 1,947,914 | 11.20 | % | $ | 869,491 | 5.00 | % | $ | 1,078,423 | 6.20 | % | |||||||||||||||||||||||
September 30, 2022 | December 31, 2021 | ||||||||||||||||||||||
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 | 6.53 | % | (5.61) | % | 6.95 | % | 0.84 | % | |||||||||||||||
+ 100 basis points | 3.31 | % | (2.36) | % | 3.52 | % | 1.55 | % | |||||||||||||||
- 100 basis points | (3.29) | % | 1.38 | % | (2.62) | % | (5.94) | % | |||||||||||||||
- 200 basis points | (6.59) | % | 0.67 | % | (4.25) | % | (15.71) | % |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program | ||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
July 1, 2022 to July 31, 2022 | — | $ | — | — | $ | 35,333 | ||||||||||||||||||||
August 1, 2022 to August 31, 2022 | — | — | — | 35,333 | ||||||||||||||||||||||
September 1, 2022 to September 30, 2022 | — | — | — | 35,333 | ||||||||||||||||||||||
Total | — | $ | — | — | ||||||||||||||||||||||
Exhibit No. | Description | |||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
32.2 | ||||||||
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)* |
* | Filed herewith | ||||
** | Furnished herewith | ||||
HOPE BANCORP, INC. | |||||||||||
Date: | November 4, 2022 | /s/ Kevin S. Kim | |||||||||
Kevin S. Kim | |||||||||||
Chairman, President, and Chief Executive Officer | |||||||||||
Date: | November 4, 2022 | /s/ Alex Ko | |||||||||
Alex Ko | |||||||||||
Senior 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 | ||
Senior 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 | ||
Senior Executive Vice President and Chief Financial Officer |
Consolidated Statements Of Financial Condition (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Debt Securities, Held-to-maturity, Fair Value | $ 258,677 | $ 0 |
Allowance for credit loss | $ 160,561 | $ 140,550 |
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) | 136,862,088 | 136,350,301 |
Common stock, shares outstanding (in shares) | 119,479,253 | 120,006,452 |
Treasury stock, at cost, shares repurchased (in shares) | 17,382,835 | 16,343,849 |
Consolidated Statements Of Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
INTEREST INCOME: | ||||
Interest and fees on loans | $ 175,078 | $ 132,794 | $ 452,774 | $ 394,353 |
Interest on investment securities | 13,498 | 9,207 | 37,462 | 24,835 |
Interest on other investments | 606 | 865 | 1,642 | 2,175 |
Total interest income | 189,182 | 142,866 | 491,878 | 421,363 |
INTEREST EXPENSE: | ||||
Interest on deposits | 30,667 | 9,640 | 51,563 | 33,106 |
Interest Expense, FHLB and FRB borrowings | 2,393 | 640 | 4,537 | 1,913 |
Interest on other borrowings and convertible notes | 2,936 | 2,290 | 7,878 | 6,892 |
Total interest expense | 35,996 | 12,570 | 63,978 | 41,911 |
NET INTEREST INCOME BEFORE PROVISION (CREDIT) FOR CREDIT LOSSES | 153,186 | 130,296 | 427,900 | 379,452 |
PROVISION (CREDIT) FOR CREDIT LOSSES | 9,200 | (10,000) | 1,400 | (13,700) |
NET INTEREST INCOME AFTER PROVISION (CREDIT) FOR CREDIT LOSSES | 143,986 | 140,296 | 426,500 | 393,152 |
NONINTEREST INCOME: | ||||
Service fees on deposit accounts | 2,535 | 1,814 | 6,779 | 5,381 |
International service fees | 834 | 889 | 2,372 | 2,525 |
Loan servicing fees, net | 981 | 642 | 2,660 | 2,620 |
Wire transfer fees | 856 | 836 | 2,614 | 2,603 |
Swap fees | 1,193 | 293 | 2,153 | 525 |
Net gains on sales of SBA loans | 2,782 | 2,459 | 14,189 | 4,834 |
Gain (Loss) on Sale of Mortgage Loans | 29 | 781 | 862 | 3,905 |
Net gains on sales of residential mortgage loans | 117 | 0 | (430) | 0 |
Other income and fees | 4,028 | 2,903 | 8,088 | 8,104 |
Total noninterest income | 13,355 | 10,617 | 39,287 | 30,497 |
NONINTEREST EXPENSE: | ||||
Salaries and employee benefits | 53,222 | 47,018 | 152,025 | 130,543 |
Occupancy | 6,682 | 7,473 | 21,195 | 21,507 |
Furniture and equipment | 4,967 | 4,429 | 14,389 | 13,437 |
Advertising and marketing | 1,739 | 2,656 | 5,601 | 6,378 |
Data processing and communications | 2,469 | 2,394 | 7,823 | 7,542 |
Professional fees | 1,196 | 2,431 | 4,989 | 9,729 |
Investments in affordable housing partnership expenses | 2,329 | 2,646 | 6,192 | 8,300 |
FDIC assessments | 1,633 | 1,204 | 4,652 | 3,743 |
Credit related expenses | 873 | 1,266 | 4,857 | 3,527 |
OREO expense, net | 378 | 248 | 740 | 827 |
Software impairment | 0 | 0 | 0 | 2,146 |
Earnings credit rebate | 4,685 | 407 | 5,996 | 1,287 |
Other | 3,741 | 3,330 | 11,193 | 10,090 |
Total noninterest expense | 83,914 | 75,502 | 239,652 | 219,056 |
INCOME BEFORE INCOME TAXES | 73,427 | 75,411 | 226,135 | 204,593 |
INCOME TAX PROVISION | 19,679 | 19,912 | 59,561 | 51,644 |
NET INCOME | $ 53,748 | $ 55,499 | $ 166,574 | $ 152,949 |
EARNINGS PER COMMON SHARE | ||||
Basic (in dollars per share) | $ 0.45 | $ 0.45 | $ 1.39 | $ 1.24 |
Diluted (in dollars per share) | $ 0.45 | $ 0.45 | $ 1.38 | $ 1.23 |
Consolidated Statements Of Comprehensive Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 53,748 | $ 55,499 | $ 166,574 | $ 152,949 |
Other comprehensive loss: | ||||
Change in unrealized net holding losses on securities available for sale | (112,043) | (16,433) | (308,974) | (43,050) |
OCI, Debt Securities. Transferred to Held to Maturity Adjustment including Amortization of Unrealized Gains (Losses), before Tax | 0 | 0 | (36,576) | 0 |
Change in unrealized net holding gains on interest rate swaps used in cash flow hedges | 18,893 | 120 | 24,901 | 1,643 |
Reclassification adjustments for net losses realized in net income | 662 | 88 | 688 | 227 |
Tax effect | 27,660 | 4,717 | 94,838 | 11,970 |
Other comprehensive loss, net of tax | (64,828) | (11,508) | (225,123) | (29,210) |
Total comprehensive (loss) income | $ (11,080) | $ 43,991 | $ (58,549) | $ 123,739 |
Dividends paid (in dollars per share) | $ 0.14 | $ 0.14 | $ 0.42 | $ 0.42 |
Consolidated Statements Of Changes In Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
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Statement of Stockholders' Equity [Abstract] | ||||
Cash dividends declared on common stock (in dollars per share) | $ 0.14 | $ 0.14 | $ 0.42 | $ 0.42 |
Hope Bancorp, Inc. |
9 Months Ended |
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Sep. 30, 2022 | |
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 September 30, 2022, the Bank operated branches in California, New York/New Jersey, Illinois, Washington, Texas, Virginia, Alabama and Georgia, loan production offices in Colorado, Texas, Oregon, Washington, Georgia, 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 |
9 Months Ended |
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Sep. 30, 2022 | |
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, 2021 which was from the audited financial statements included in the Company’s 2021 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 September 30, 2022 and December 31, 2021 and the results of operations for the three and nine months ended September 30, 2022 and 2021. 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. These unaudited consolidated financial statements should be read along with the audited consolidated financial statements and accompanying notes included in the Company’s 2021 Annual Report on Form 10-K. Pending Accounting Pronouncements In March 2022, the FASB issued ASU 2022-02, Financial Instruments-Credit Losses (Topic 326). The standard addresses the following: 1) eliminates the accounting guidance for TDRs, will require an entity to determine whether a modification results in a new loan or a continuation of an existing loan, 2) expands disclosures related to modifications, and 3) will require disclosure of current period gross write-offs of financing receivables within the vintage disclosures table. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years and are applied prospectively, except with respect to the recognition and measurement of TDRs, where an entity has the option to apply a modified retrospective transition method. Early adoption of the amendments in this update is permitted. An entity may elect to early adopt the amendments regarding TDRs and related disclosure enhancements separately from the amendments related to vintage disclosures. The Company is assessing the impact that the adoption of ASU 2022-02 will have on its consolidated financial statements.
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Earnings Per Share ("EPS") |
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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, employee stock purchase program (“ESPP”) shares, 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 September 30, 2022 and 2021, stock options and restricted share awards of 751,973 and 934,036 shares of common stock, respectively, were excluded in computing diluted earnings per common share because they were anti-dilutive. For the nine months ended September 30, 2022 and 2021, stock options and restricted share awards of 715,058 and 743,553 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). With the adoption of ASU 2020-06, the if-converted method is required for calculating dilutive EPS for all convertible instruments since the treasury stock method is no longer available. Under the if-converted method, the denominator of the diluted EPS calculation is adjusted to reflect the full number of common shares issuable upon conversion, while the numerator is adjusted to add back after-tax interest expense for the period. For the three and nine months ended September 30, 2022 and 2021, 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 based on the Company’s common stock price during the three and nine months ended September 30, 2022 and 2021 as the conversion price exceeded the market price of the Company’s stock. The following tables show the computation of basic and diluted EPS for the three and nine months ended September 30, 2022 and 2021.
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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 September 30, 2022 and December 31, 2021, consisted of mutual funds in the amounts of $4.3 million and $26.8 million, respectively, and were included in “Equity investments” on the Consolidated Statements of Financial Condition. The changes in fair value for equity investments with readily determinable fair values for the three and nine months ended September 30, 2022 and 2021 were recorded in other noninterest income and fees as summarized in the table below:
The decline in fair value of the Company’s equity investments with readily determinable fair values was due to the recent increases in market interest rates over the yield available at the time the equity investments were purchased. For the three and nine months ended September 30, 2022, the Company received proceeds of $20.6 million from the sale of equity investments with readily determinable fair values and recognized a net realized gain of $375 thousand. At September 30, 2022 and December 31, 2021, the Company also had equity investments without readily determinable fair values which are carried at cost less any determined impairment. The balance of these investments is adjusted for changes in subsequent observable prices. At September 30, 2022, the total balance of equity investments without readily determinable fair values included in “Equity investments” on the Consolidated Statements of Financial Condition was $38.0 million, consisting of $370 thousand in correspondent bank stock, $1.0 million in Community Development Financial Institutions (“CDFI”) investments, and $36.7 million in Community Reinvestment Act (“CRA”) investments. At December 31, 2021, the total balance of equity investments without readily determinable fair values was $31.0 million, consisting of $370 thousand in correspondent bank stock, $1.0 million in CDFI investments, and $29.7 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 nine months ended September 30, 2022 and 2021.
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Securities Available for Sale |
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Debt Securities, Available-for-Sale [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities Available for Sale | Investment Securities The following is a summary of investment securities as of the dates indicated:
During the second quarter of 2022, the Company transferred $238.9 million in fair value of debt securities from available for sale (“AFS”) to held to maturity (“HTM”). The transferred securities had an amortized cost of $275.5 million with a pre-tax net unrealized loss of $36.6 million, which was recorded as a discount subsequent to the transfer and will be amortized as an adjustment of yield. The unrealized holding loss at the date of transfer will continue to be reported, net of taxes, in accumulated other comprehensive income (“AOCI”) as a component of stockholders’ equity, and will be amortized over the remaining life of the securities as an adjustment of yield, offsetting the impact on yield of the corresponding discount amortization. The Company has the ability and intent to hold these securities to maturity. At the time of transfer, there was no previously recorded allowance for credit losses on investment securities AFS transferred to HTM. The Company has elected to exclude accrued interest from the amortized cost of its investment debt securities. Accrued interest receivable for investment debt securities at September 30, 2022 and December 31, 2021 totaled $6.5 million and $5.6 million, respectively. As of September 30, 2022 and December 31, 2021, 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. At September 30, 2022 and December 31, 2021, $230.8 million and $13.0 million in unrealized losses on investment securities AFS, net of taxes, respectively, were included in accumulated other comprehensive income (loss). For the three and nine months ended September 30, 2022 and 2021, there were no reclassifications out of accumulated other comprehensive income (loss) into earnings resulting from the sale of investments securities AFS. The following table presents a breakdown of interest income recorded for investment securities that are taxable and nontaxable.
The amortized cost and estimated fair value of investment securities at September 30, 2022, by contractual maturity, are presented in the table below. Collateralized mortgage obligations, mortgage-backed securities, and asset-backed securities are presented by final maturity. 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.
Securities with carrying values of approximately $369.5 million and $362.2 million at September 30, 2022 and December 31, 2021, 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. The length of time that the individual securities have been in a continuous unrealized loss position is not a factor in determining credit impairment with the adoption of current expected credit losses (“CECL”).
__________________________________ * Investments in U.S. Government agency and U.S. Government sponsored enterprises The Company had collateralized mortgage obligations, mortgage-backed, asset-backed, corporate, and municipal securities classified as AFS that were in a continuous loss position for twelve months or longer at September 30, 2022. The collateralized mortgage obligations and mortgage-backed securities were investments in U.S. Government agency and U.S. Government sponsored enterprises and have high credit ratings (“AA” grade or better). The interest on other securities that were in an unrealized loss position have been paid as agreed, and the Company believes this will continue in the future and that the securities will be paid in full as scheduled. The market value declines for these securities were primarily due to movements in interest rates and are not reflective of management’s expectations of the Company’s ability to fully recover any unrealized losses, which may be at maturity. 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. Allowance for Credit Losses on Securities Available for Sale—The Company evaluates investment securities AFS in unrealized loss positions for impairment related to credit losses on at least a quarterly basis. Investment securities AFS in unrealized loss positions are first assessed as to whether the Company intends to sell, or if it is more likely than not that the Company 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, the Company compares the present value of cash flows expected to be collected from the security with the amortized cost basis. 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. Unrealized losses that have not been recorded through an allowance for credit losses is recognized in other comprehensive income, net of applicable taxes. The Company did not have an allowance for credit losses on investment securities AFS as of September 30, 2022 and December 31, 2021. Approximately 85% of the Company’s investment portfolio at September 30, 2022 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 is subject to a cap as part of the agreement entered into in 2008. Nonetheless, at this time the Company does 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. In addition, the Company had one U.S. Treasury note issued and guaranteed by the U.S. government. Therefore, the Company concluded that a zero allowance approach for these investments was appropriate. The Company also had 18 asset-backed securities, six corporate securities, and 74 municipal bonds in unrealized loss positions at September 30, 2022. The Company performed an assessment of investments in unrealized loss positions for credit impairment and concluded that no allowance for credit losses was required at September 30, 2022. Allowance for Credit Losses on Securities Held to Maturity—For each major HTM debt security type, the allowance for credit losses is estimated collectively for groups of securities with similar risk characteristics. For securities that do not share similar risk characteristics, the losses are estimated individually. Debt securities that are issued by the U.S. government or government-sponsored enterprises, are highly rated by major rating agencies, and have a long history of no credit losses are an example of such securities to which the Company applies a zero credit loss assumption. Any expected credit loss is provided through the allowance for credit losses on investment securities HTM and deducted from the amortized cost basis of the security, so that the balance sheet reflects the net amount the Company expects to collect. At September 30, 2022, all of the Company’s investment securities HTM are issued by the U.S. government or government-sponsored enterprises. The Company did not have an allowance for credit losses on investment securities HTM as of September 30, 2022.
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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:
__________________________________ * Commercial business loans as of September 30, 2022 and December 31, 2021 include $5.9 million and $228.1 million, respectively, 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, and purchase accounting fair value adjustments. The Company had net deferred fees of $9.3 million and $6.2 million at September 30, 2022 and December 31, 2021, respectively. Net loan fees related to SBA Paycheck Protection Program (“PPP”) loans totaled $130 thousand at September 30, 2022 compared to $6.7 million at December 31, 2021 and included fees from the origination of SBA PPP loans net of deferred origination costs. 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 includes warehouse lines of credit and SBA 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. Loans receivable increased $1.54 billion from December 31, 2021 to $15.49 billion as of September 30, 2022. The increase in loans receivable during the nine months ended September 30, 2022 was due to an increase in all loan types apart from consumer and other loans. Record loan originations in 2022 contributed to the growth of the Company’s loan portfolio as of September 30, 2022 compared to December 31, 2021. The Company had $42.0 million in loans held for sale as of September 30, 2022 compared to $99.0 million at December 31, 2021. Loans held for sale at September 30, 2022 consisted of $41.1 million in SBA guaranteed loans and $900 thousand in residential mortgage loans. The tables below detail the activity in the allowance for credit losses (“ACL”) by portfolio segment for the three and nine months ended September 30, 2022 and 2021. Recoveries for the nine months ended September 30, 2022 included $17.3 million in recoveries from a single lending relationship that had $29.6 million in charge-offs in the third quarter of 2021.
The following tables break out the allowance for credit losses and loan balance by measurement methodology at September 30, 2022 and December 31, 2021:
As of September 30, 2022 and December 31, 2021, reserves for unfunded loan commitments recorded in other liabilities were $1.2 million and $1.1 million, respectively. For the three months ended September 30, 2022, the Company recorded a credit for unfunded commitments in credit related expenses totaling $250 thousand and recorded for the nine months ended September 30, 2022, additions to reserves for unfunded commitments totaling $130 thousand. For the three and nine months ended September 30, 2021, the Company recorded additions to reserves for unfunded commitments totaling $0 and $105 thousand, respectively. 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 amortized cost 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 a recorded ACL and those without a recorded ACL as of September 30, 2022 and December 31, 2021.
__________________________________ (1) Total nonaccrual loans exclude the guaranteed portion of SBA loans that are in liquidation totaling $9.9 million and $19.5 million, at September 30, 2022 and December 31, 2021, respectively. The following table presents the amortized cost of collateral dependent loans as of September 30, 2022 and December 31, 2021:
Collateral on loans is a significant portion of what secures collateral dependent loans and significant changes to the fair value of the collateral can potentially impact ACL. During the nine months ended September 30, 2022, the Company did not have any significant changes to the extent to which collateral secures its collateral dependent loans due to general deterioration or from other factors. Accrued interest receivables on loans totaled $35.7 million at September 30, 2022 and $36.2 million at December 31, 2021. With the adoption of CECL, the Company elected not to consider accrued interest receivable in its estimates of expected credit losses because the Company writes off uncollectible accrued interest receivable in a timely manner. The Company considers writing off accrued interest amounts once the amounts become 90 days past due to be considered within a timely manner. The Company has elected to write off accrued interest receivables by reversing interest income. The following table presents interest income reversals, due to loans being placed on nonaccrual status, by loan segment for the three and nine months ended September 30, 2022 and 2021:
The following table presents the amortized cost of past due loans, including nonaccrual loans past due 30 or more days, by the number of days past due as of September 30, 2022 and December 31, 2021 by class of loans:
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 table presents the amortized cost basis of loans receivable by class, credit quality indicator, and year of origination as of September 30, 2022 and December 31, 2021.
For the three and nine months ended September 30, 2022 and the twelve months ended December 31, 2021, there were no revolving loans converted to term loans. 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 nine months ended September 30, 2022 and 2021 is presented in the following table:
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 differentiates its loan segments based on shared risk characteristics for which allowance for credit losses is measured on a collective 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. Included in the quantitative portion of the analysis of the allowance for credit losses are key inputs including borrowers’ net operating income, debt coverage ratios, real estate collateral values, as well as key inputs that are more subjective or require management’s judgement including key macroeconomic variables from Moody’s forecast scenarios including GDP, unemployment rates, interest rates, and commercial real estate prices. These key inputs are utilized in the Company’s models to develop PD and LGD assumptions used in the calculation of estimated quantitative losses. 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 2% of the Company’s total loan portfolio as of September 30, 2022. The Company’s Economic Forecast Committee (“EFC”) reviews 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. As of September 30, 2022, the Company utilized the Consensus economic forecast scenario from Moody’s as it best aligned with management’s expectations of future forecasts. The Company also utilized Moody’s Consensus economic forecast for the calculation of the December 31, 2021 ACL. The Consensus economic forecast projects that GDP growth will decline to less than 1.0% in 2023 then grow to over 2.0% by the end of 2024 with unemployment rising to the peak of 4.0% in 2023 and 2024. Commercial real estate prices in the Consensus scenario is expected to see a substantial reduction with the commercial real estate price index declining to -0.4% for 2023 before increasing to 4.5% for 2024. 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. For loans which do not share similar risk characteristics such as nonaccrual and TDR loans above $1.0 million, 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. The Company decided to collectively assess TDRs and nonaccrual loans with balances below $1.0 million 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 either 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 an estimated funding rate to allocate an allowance to undrawn exposures. This funding rate is used as a credit conversion factor to capture how much undrawn lines of credit can potentially become drawn at any point. The 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 September 30, 2022 and December 31, 2021:
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. 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 September 30, 2022, TDR loans totaled $53.6 million, compared to $65.5 million at December 31, 2021. The balance of loans with modified terms due to COVID-19 as of September 30, 2022 totaled $800 thousand compared to $22.8 million at December 31, 2021. The 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 January 1, 2022 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 September 30, 2022 and December 31, 2021, unless the loans were TDR prior to the COVID-19 modification or borrowers were identified to be experiencing financial difficulty prior to the COVID-19 pandemic. As of September 30, 2022, there was only one remaining commercial real estate loan modified due to COVID-19 (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 amortized cost of TDR loans on accrual and nonaccrual status by type of concession as of September 30, 2022 and December 31, 2021 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 and if the prior performance met or exceeded the modified terms. TDR loans on accrual status at September 30, 2022 were comprised of 28 commercial real estate loans totaling $15.5 million, 13 commercial business loans totaling $9.9 million, and 9 consumer and other loans totaling $272 thousand. TDR loans on accrual status at December 31, 2021 were comprised of 31 commercial real estate loans totaling $43.8 million, 19 commercial business loans totaling $8.4 million, and 10 consumer and other loans totaling $199 thousand. The Company expects that TDR loans on accrual status as of September 30, 2022, 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 $4.0 million and $2.7 million for TDR loans as of September 30, 2022 and December 31, 2021, respectively. The following tables present the amortized cost of loans classified as TDR during the nine months ended September 30, 2022 and 2021 by class of loans. There were no loans classified as TDR during the three months ended September 30, 2022 and 2021.
For the TDRs modified during the nine months ended September 30, 2022, the Company recorded $782 thousand in ACL. Total charge-offs of TDR loans modified during the nine months ended September 30, 2022 totaled $0. For TDR loans modified during the three and nine months ended September 30, 2021, the Company recorded $0 thousand and $89 thousand in ACL, respectively. Total charge-offs of TDR loans modified during the three and nine months ended September 30, 2021 totaled $0. There were no new TDR loans modified during the three months ended September 30, 2022 and 2021. There was one new TDR loan modified with a payment concession totaling $2.0 million and two new TDR loans modified with maturity concessions totaling $3.5 million during the nine months ended September 30, 2022. For the nine months ended September 30, 2021, there were seven TDR loans modified with payment concessions totaling $643 thousand and seven TDR loans modified through maturity concessions totaling $11.9 million. The following tables present the amortized cost balance of loans modified as TDRs within the previous twelve months ended September 30, 2022 and 2021 that subsequently had payment defaults during the three and nine months ended September 30, 2022 and 2021:
A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms. The Company recorded $771 thousand in ACL for TDR loans that had payment defaults during the three and nine months ended September 30, 2022. Total charge offs for TDR loans that had payment defaults during the three and nine months ended September 30, 2022 was $0. The Company recorded $51 thousand and $84 thousand in ACL for TDR loans that had payment defaults during the three and nine months ended September 30, 2021, respectively. Total charge offs for TDR loans that had payment defaults during the three and nine months ended September 30, 2021 totaled $0. There was one TDR loan that subsequently defaulted during the three months ended September 30, 2022 modified through maturity concessions. There were two TDR loans that subsequently defaulted modified through maturity concessions during the nine months ended September 30, 2022 consisting of one commercial real estate loan totaling $1.1 million and one commercial business loan totaling $2.9 million. There were eight TDR loans that subsequently defaulted during the three months ended September 30, 2021. Four commercial real estate loans were modified through maturity concessions totaling $11.4 million. Four TDR loans that subsequently defaulted were modified through payment concessions which were comprised of one commercial real estate loan totaling to $221 thousand and three consumer and other loans totaling to $30 thousand. There were ten TDR loans that subsequently defaulted during the nine months ended September 30, 2021. Four commercial real estate loans were modified through maturity concessions totaling $11.4 million. Six TDR loans that subsequently defaulted were modified through payment concessions which were comprised of one commercial business loan totaling to $120 thousand, one commercial real estate loan totaling to $221 thousand and four consumer and other loans totaling to $41 thousand.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases 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 10 years as of September 30, 2022. 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 September 30, 2022, ROU assets and related liabilities were $55.4 million and $59.3 million, respectively. At December 31, 2021, ROU assets and related liabilities were $52.7 million and $57.3 million, respectively. At September 30, 2022, the short term operating lease liability totaled $13.6 million and the long-term operating lease liability totaled $45.7 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 September 30, 2022 and December 31, 2021. During the nine months ended September 30, 2022, the Company extended nine leases and entered into one new lease contract. Lease extension terms ranged from to six years 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 Federal Home Loan Bank (“FHLB”) borrowing interest rate at a given period. The table below summarizes the Company’s net lease cost:
Rent expense for the three and nine months ended September 30, 2022 was $4.0 million and $13.3 million, respectively. Rent expense for the three and nine months ended September 30, 2021 was $4.6 million and $13.6 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 September 30, 2022, the Company had three operating lease commitments that have not yet commenced totaling $3.3 million in lease payments over terms ranging between and ten years.
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Deposits |
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Deposits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits | Deposits The aggregate amounts of time deposits in denominations of more than $250 thousand at September 30, 2022 and December 31, 2021, was $1.45 billion and $1.49 billion, respectively. Included in time deposits of more than $250 thousand were $300.0 million in California State Treasurer’s deposits at September 30, 2022 and December 31, 2021. 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 September 30, 2022 and December 31, 2021, securities with fair values of approximately $357.1 million and $359.8 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 September 30, 2022 and December 31, 2021, totaled $1.56 billion and $810.9 million, respectively. Brokered deposits at September 30, 2022 consisted of $314.7 million in money market and NOW accounts and $1.25 billion in time deposit accounts. Brokered deposits at December 31, 2021 consisted of $770.0 million in money market and NOW accounts and $40.9 million in time deposit accounts. The following is a breakdown of the Company’s deposits at September 30, 2022 and December 31, 2021:
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Borrowings |
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Debt Disclosure [Abstract] | |||||||||||||
Borrowings | Borrowings At September 30, 2022, borrowings totaled $1.07 billion consisting of $700.0 million in FHLB borrowings and $372.0 million in borrowings from the FRB compared to $300.0 million in FHLB borrowings at December 31, 2021. There were no borrowings from the FRB at December 31, 2021. The Company maintains a line of credit with the FHLB of San Francisco as a secondary source of funds. The borrowing capacity with the FHLB is limited to the lower of either 25% of the Bank’s total assets or the Bank’s collateral capacity, and was $4.52 billion at September 30, 2022, and $4.45 billion at December 31, 2021. 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 September 30, 2022 and December 31, 2021. At September 30, 2022 and December 31, 2021, loans with a carrying amount of approximately $7.85 billion and $6.96 billion, respectively, were pledged at the FHLB for outstanding advances and remaining borrowing capacity. At September 30, 2022 and December 31, 2021, 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 total asset size and outstanding borrowings. FHLB advances had weighted average interest rates of 3.04% and 0.92%, at September 30, 2022 and December 31, 2021, respectively. FHLB advances at September 30, 2022 and December 31, 2021 had various maturities through December 2022. The interest rates of FHLB advances as of September 30, 2022 ranged between 2.39% and 3.22%. At September 30, 2022, the Company’s remaining borrowing capacity with the FHLB was $3.81 billion. 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 99% of the fair market value of the qualifying loans and securities that are pledged. At September 30, 2022, the outstanding principal balance of the qualifying loans pledged at the FRB was $923.2 million and there was one investment security pledged at the discount window with a fair value of $1.1 million. At September 30, 2022 and December 31, 2021, the total remaining available borrowing capacity at the FRB discount window was $420.6 million and $606.6 million, respectively. The Company had $372.0 million and $0 in borrowings from the FRB discount window at September 30, 2022 and December 31, 2021, respectively. The FRB borrowing outstanding at September 30, 2022 was an overnight borrowing and had an interest rate of 3.25%. The Company also maintains unsecured borrowing lines with other banks. There were no unsecured borrowings from other banks at September 30, 2022 and December 31, 2021.
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Subordinated Debentures and Convertible Notes |
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Subordinated Debentures and Convertible Notes | Subordinated Debentures and Convertible Notes Subordinated Debt At September 30, 2022, 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 September 30, 2022:
The carrying value of Debentures at September 30, 2022 and December 31, 2021 was $106.3 million and $105.4 million, respectively. At September 30, 2022 and December 31, 2021, acquired Debentures had remaining discounts of $23.6 million and $24.5 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 September 30, 2022 and December 31, 2021 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 $217.5 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. 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 22.50% 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. The convertible notes issued by the Company were initially 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 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. On January 1, 2021, the Company early adopted ASU 2020-06 under the modified retrospective approach. Subsequently, the Company accounts for its convertible notes as a single debt instrument. At the adoption of ASU 2020-06, portions previously allocated to equity and the remaining convertible notes discount were both reversed. The reversal of the equity portions of the convertible notes totaled $18.3 million, net of taxes which was recorded as a reduction to additional paid-in capital. The adoption of ASU 2020-06 resulted in a $10.7 million net adjustment to beginning retained earnings. The value of the convertible notes at issuance and the carrying value as of September 30, 2022 and December 31, 2021 are presented in the tables below:
Interest expense on the convertible notes for the three and nine months ended September 30, 2022 totaled $1.3 million and $4.0 million, respectively. Interest expense on the convertible notes for the three and nine months ended September 30, 2021 totaled $1.3 million and $4.0 million, respectively. With the adoption of ASU 2020-06, interest expense for the Company’s convertible notes consists of accrued interest on the convertible note coupon and interest expense from capitalized issuance costs. Issuance cost capitalization expense will only be recorded for the first outstanding years of the convertible notes.
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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 change in fair value is recognized in the income statement as other income and fees. At September 30, 2022 and December 31, 2021, interest rate swaps related to the Company’s loan hedging program that were outstanding are presented in the following table:
The Company offers foreign exchange contracts to customers to purchase and/or sell foreign currencies at set rates in the future. The foreign exchange contracts allow customers to hedge the foreign exchange rate risk of their deposits and loans denominated in foreign currencies. In conjunction with this, the Company also enters into offsetting back-to-back contracts with institutional counterparties to hedge our foreign exchange rate risk. These back-to-back contracts are intended to offset each other and allow us to offer our customers foreign exchange products. These foreign exchange contracts are not designated as hedging instruments and are recorded at fair value in other assets and other liabilities. During the three and nine months ended September 30, 2022, the changes in fair value on foreign exchange contracts were gains of $9 thousand and $9 thousand, respectively, and were recognized in the income statement as other income and fees. At September 30, 2022, $130 thousand and $21 thousand in back to back foreign exchange contracts with correspondent banks, with notional amounts of $2.6 million and $338 thousand, were included in other assets and other liabilities, respectively. At September 30, 2022, $21 thousand and $122 thousand in back to back foreign exchange contracts with customers, with notional amounts of $338 thousand and $2.6 million, were included in other assets and other liabilities, respectively. At December 31, 2021, there were no back to back foreign exchange contracts outstanding. At September 30, 2022, the Company had risk participation agreements 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 September 30, 2022, the notional amount of the risk participation agreements sold was $127.4 million with a credit valuation adjustment of $20 thousand. At December 31, 2021, the notional amount of the risk participation agreements sold was $123.9 million with a credit valuation adjustment of $93 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 non-forward starting interest rate swap agreement as of September 30, 2022 and December 31, 2021 with a notional amount of $100.0 million designated as cash flow hedges of certain LIBOR-based debt. At September 30, 2022, the Company had forward starting interest rate swap agreements with a total notional amount of $475.0 million designated as cash flow hedges of liabilities tied to the federal funds rate. The weighted average term for forward starting interest rate swap agreements was 4.5 years. The Company’s swaps were determined to be fully effective during the periods presented. The aggregate fair value of the swaps are recorded in assets or liabilities with changes in fair value recorded in other comprehensive income. The gain or loss on derivatives is recorded in accumulated other comprehensive income (“AOCI”) and is subsequently reclassified into interest expense and interest income in the period during which the hedged forecasted transaction affects earnings. Amounts reported in AOCI related to interest rate swap derivatives will be reclassified to interest income and interest expense as interest payments are received or paid on the Company’s derivatives. The Company expects the hedges to remain fully effective throughout the remaining terms. For the three and nine months ended September 30, 2022, the Company reclassified $511 thousand and $561 thousand, respectively, from accumulated other comprehensive income to interest expense. For the three and nine months ended September 30, 2021, the Company reclassified $88 thousand and $227 thousand, respectively, from accumulated other comprehensive income to interest expense. At September 30, 2022 and December 31, 2021, interest rate swaps designated as cash flow hedges are presented in the following table:
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 September 30, 2022, the Company had approximately $1.5 million in interest rate lock commitments and total forward sales commitments for the future delivery of residential mortgage loans. At December 31, 2021, the Company had approximately $17.4 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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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 September 30, 2022 and December 31, 2021 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 $20 thousand at September 30, 2022 and $52 thousand at December 31, 2021. It is reasonably possible that the Company may incur losses in excess of 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.
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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, 2021, the Company performed a qualitative assessment to test for impairment and the management has concluded that there was no impairment. As the Company operates as single business unit, goodwill impairment was assessed based on the Company as a whole. Goodwill is not amortized for book purposes and is not tax deductible. The carrying amount of the Company’s goodwill as of September 30, 2022 and December 31, 2021 was $464.5 million. There was no impairment of goodwill recorded during the three and nine months ended September 30, 2022. Core deposit intangible assets are amortized over their estimated lives or ten years. Amortization expense related to core deposit intangible assets totaled $486 thousand and $1.5 million for the three and nine months ended September 30, 2022, respectively. Amortization expense related to core deposit intangible assets totaled $509 thousand and $1.5 million for the three and nine months ended September 30, 2021, respectively. The following table provides information regarding the core deposit intangibles at September 30, 2022 and December 31, 2021:
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 September 30, 2022 and December 31, 2021, the Company did not have a valuation allowance on its servicing assets. The changes in servicing assets for the three and nine months ended September 30, 2022 and 2021 were as follows:
Loans serviced for others are not reported as assets. The principal balances of loans serviced for other institutions were $1.10 billion as of September 30, 2022 and $1.04 billion as of December 31, 2021. 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 September 30, 2022 and December 31, 2021 are presented below.
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Income Taxes |
9 Months Ended |
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Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the three months ended September 30, 2022, the Company had an income tax provision totaling $19.7 million on pretax income of $73.4 million, representing an effective tax rate of 26.80%, compared with an income tax provision of $19.9 million on pretax income of $75.4 million, representing an effective tax rate of 26.40% for the three months ended September 30, 2021. For the nine months ended September 30, 2022, the Company had an income tax provision totaling $59.6 million on pretax income of $226.1 million, representing an effective tax rate of 26.34%, compared with an income tax provision of $51.6 million on pretax income of $204.6 million, representing an effective tax rate of 25.24% for the nine months ended September 30, 2021. The increase in effective tax rate for the three and nine months ended September 30, 2022 compared to the three and nine months ended September 30, 2021 was primarily due to a decrease in affordable housing tax credits compared with the prior year. 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 $3.3 million at both September 30, 2022 and December 31, 2021 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 $475 thousand and $387 thousand, for accrued interest (no portion was related to penalties) at September 30, 2022 and December 31, 2021, respectively. Management believes it is reasonably possible that the unrecognized tax benefits may decrease by $789 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 return is closed for all tax years up to and including 2017. 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. The Company is currently under examination by the New York City Department of Finance for the 2016, 2017, and 2018 tax years. While the outcome of the examination is unknown, the Company expects no material adjustments. New York State Department of Taxation and Finance recently completed the examination for the 2017 tax year with no adjustment to the tax return filed. 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 September 30, 2022
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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: Investment Securities The fair values of investment securities available for sale and held to maturity 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 value of the Company’s Level 3 security available for sale was 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, foreign exchange contracts and 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, foreign exchange rates and, when appropriate, the current credit worthiness of the counterparties. Interest rate swaps designated as cash flow hedges and foreign exchange contracts are classified within Level 2 due to the observable nature of the inputs used in deriving the fair value of these contracts. 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 Levels 1, 2, and 3 during the three and nine months ended September 30, 2022 and 2021. The table below presents a reconciliation and income statement classification of gains (losses) for the municipal security and risk participation agreements measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2022 and 2021:
The Company measures certain assets at fair value on a non-recurring basis including collateral dependent loans, 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 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 September 30, 2022 and December 31, 2021 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 on 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 deposit 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.
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Stockholders' Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders’ Equity | Stockholders’ Equity Total stockholders’ equity at September 30, 2022 was $1.98 billion, compared to $2.09 billion at December 31, 2021. In January 2022, the Company’s Board of Directors approved a share repurchase program that authorizes the Company to repurchase up to $50.0 million of its common stock. During the three and nine months ended September 30, 2022, the Company repurchased 0 and 1,038,986 shares of common stock totaling $0 and $14.7 million as part of this program which was recorded as treasury stock. For the three months ended September 30, 2022 and 2021, the Company paid cash dividends of $0.14 per common share. For both the nine months ended September 30, 2022 and 2021, the Company paid cash dividends of $0.42 per common share. The following table presents the quarterly changes to accumulated other comprehensive income for the three and nine months ended September 30, 2022 and 2021:
Reclassifications for net losses realized in net income for the three and nine months ended September 30, 2022 and 2021 relate to net gains on interest rate swaps used for cash flow hedges and amortization on unrealized loss from transferred investment securities to HTM. Gains and losses on interest rate swaps are recorded in noninterest income under other income and fees in the Consolidated Statements of Income. The unrealized holding loss at the date of transfer on securities held to maturity will continue to be reported, net of taxes, in accumulated other comprehensive income (“AOCI”) as a component of stockholders’ equity, and amortized over the remaining life of the securities as an adjustment of yield, offsetting the impact on yield of the corresponding discount amortization. For the three and nine months ended September 30, 2022, the Company recorded reclassification adjustments of $511 thousand and $561 thousand, respectively, from other comprehensive income to gains from cash flow hedge relationships. For the three and nine months ended September 30, 2021, the Company recorded reclassification adjustments of $88 thousand and $227 thousand, respectively, from other comprehensive income to losses from cash flow hedge relationships. For the three and nine months ended September 30, 2022, the Company recorded reclassification adjustments of $1.2 million and $1.2 million, respectively, from other comprehensive losses to interest expense to amortize transferred unrealized losses to investment securities HTM, compared to zero for the same periods in 2021.
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Stock-Based Compensation |
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Stock-Based Compensation | Stock-Based Compensation In 2019, the Company’s stockholders approved the 2019 stock-based incentive plan (the “2019 Plan”), which provides for grants of stock options, stock appreciation rights (“SAR”), 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 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, 1,463,349 shares were available for future grants as of September 30, 2022. 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 nine months ended September 30, 2022:
The following is a summary of the Company’s restricted stock and performance unit activity for the nine months ended September 30, 2022:
The total fair value of restricted stock and performance units vested as of September 30, 2022 and 2021 was $9.5 million and $9.4 million, respectively. The Company maintains 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 and nine months ended September 30, 2022 was $50 thousand and $284 thousand, respectively. The compensation expense for the ESPP during the three and nine months ended September 30, 2021 was $219 thousand and $296 thousand, respectively. The Company discontinued the ESPP program in July 2022. The total amounts charged against income related to stock-based payment arrangements, including the ESPP, were $3.2 million and $9.3 million for the three and nine months ended September 30, 2022, respectively. For the three and nine months ended September 30, 2021, $2.2 million and $6.8 million, respectively, of stock-based payment arrangements were charged against income. The income tax benefit recognized was approximately $865 thousand and $2.4 million for the three and nine months ended September 30, 2022, respectively. The income tax benefit recognized for the three and nine months ended September 30, 2021, was approximately $579 thousand and $1.7 million, respectively. At September 30, 2022, there was no unrecognized compensation expense related to non-vested stock option grants. Unrecognized compensation expense related to non-vested restricted stock and performance units was $16.5 million and is expected to be recognized over a weighted average vesting period of 1.90 years.
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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 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 September 30, 2022, the capital ratios for the Company and the Bank were in excess of all regulatory minimum capital ratios with the addition of the conservation buffer. On January 1, 2020, the Company adopted ASU 2016-13 and implemented the CECL methodology. In response to the COVID-19 pandemic, federal regulatory agencies published a final rule that provides the option to delay the cumulative effect of the day 1 impact of CECL adoption on regulatory capital, along with 25% of the change in the adjusted allowance for credit losses (as computed for regulatory capital purposes which excludes purchased credit deteriorated (“PCD”) loans), for two years, followed by a three-year phase-in period. The Company has elected the five-year transition period consistent with the final rule issued by the federal regulatory agencies. As of September 30, 2022 and December 31, 2021, 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 tables below for the dates indicated and include the effects of the Company’s election to utilize the five-year transition described above:
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Revenue Recognition |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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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 September 30, 2022 and December 31, 2021 and the results of operations for the three and nine months ended September 30, 2022 and 2021. 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 PronouncementsIn March 2022, the FASB issued ASU 2022-02, Financial Instruments-Credit Losses (Topic 326). The standard addresses the following: 1) eliminates the accounting guidance for TDRs, will require an entity to determine whether a modification results in a new loan or a continuation of an existing loan, 2) expands disclosures related to modifications, and 3) will require disclosure of current period gross write-offs of financing receivables within the vintage disclosures table. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years and are applied prospectively, except with respect to the recognition and measurement of TDRs, where an entity has the option to apply a modified retrospective transition method. Early adoption of the amendments in this update is permitted. An entity may elect to early adopt the amendments regarding TDRs and related disclosure enhancements separately from the amendments related to vintage disclosures. The Company is assessing the impact that the adoption of ASU 2022-02 will have on its consolidated financial statements. | ||||||||||||||||||||||||||||||||||||
Financing Receivables | 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 differentiates its loan segments based on shared risk characteristics for which allowance for credit losses is measured on a collective 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. Included in the quantitative portion of the analysis of the allowance for credit losses are key inputs including borrowers’ net operating income, debt coverage ratios, real estate collateral values, as well as key inputs that are more subjective or require management’s judgement including key macroeconomic variables from Moody’s forecast scenarios including GDP, unemployment rates, interest rates, and commercial real estate prices. These key inputs are utilized in the Company’s models to develop PD and LGD assumptions used in the calculation of estimated quantitative losses. 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 2% of the Company’s total loan portfolio as of September 30, 2022. The Company’s Economic Forecast Committee (“EFC”) reviews 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. As of September 30, 2022, the Company utilized the Consensus economic forecast scenario from Moody’s as it best aligned with management’s expectations of future forecasts. The Company also utilized Moody’s Consensus economic forecast for the calculation of the December 31, 2021 ACL. The Consensus economic forecast projects that GDP growth will decline to less than 1.0% in 2023 then grow to over 2.0% by the end of 2024 with unemployment rising to the peak of 4.0% in 2023 and 2024. Commercial real estate prices in the Consensus scenario is expected to see a substantial reduction with the commercial real estate price index declining to -0.4% for 2023 before increasing to 4.5% for 2024. 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. For loans which do not share similar risk characteristics such as nonaccrual and TDR loans above $1.0 million, 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. The Company decided to collectively assess TDRs and nonaccrual loans with balances below $1.0 million 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 either 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 an estimated funding rate to allocate an allowance to undrawn exposures. This funding rate is used as a credit conversion factor to capture how much undrawn lines of credit can potentially become drawn at any point. The 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.
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Earnings Per Share (Tables) |
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 nine months ended September 30, 2022 and 2021.
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Equity Investments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 nine months ended September 30, 2022 and 2021 were recorded in other noninterest income and fees as summarized in the table below:
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Securities Available for Sale (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Debt Securities, Available-for-Sale [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Securities Available for Sale | The following is a summary of investment securities as of the dates indicated:
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Interest Income | The following table presents a breakdown of interest income recorded for investment securities that are taxable and nontaxable.
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Investments Classified by Contractual Maturity Date | The amortized cost and estimated fair value of investment securities at September 30, 2022, by contractual maturity, are presented in the table below. Collateralized mortgage obligations, mortgage-backed securities, and asset-backed securities are presented by final maturity. 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.
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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. The length of time that the individual securities have been in a continuous unrealized loss position is not a factor in determining credit impairment with the adoption of current expected credit losses (“CECL”).
__________________________________ * Investments in U.S. Government agency and U.S. Government sponsored enterprises
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Loans Receivable and Allowance for Credit Losses (Tables) |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Loans Receivable by Major Category | The following is a summary of loans receivable by major category:
__________________________________ * Commercial business loans as of September 30, 2022 and December 31, 2021 include $5.9 million and $228.1 million, respectively, in SBA Paycheck Protection Program loans
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Allowance for Credit Losses by Portfolio Segment | The tables below detail the activity in the allowance for credit losses (“ACL”) by portfolio segment for the three and nine months ended September 30, 2022 and 2021. Recoveries for the nine months ended September 30, 2022 included $17.3 million in recoveries from a single lending relationship that had $29.6 million in charge-offs in the third quarter of 2021.
The following tables break out the allowance for credit losses and loan balance by measurement methodology at September 30, 2022 and December 31, 2021:
The following tables present a breakdown of loans by recorded ACL, broken out by loans evaluated individually and collectively at September 30, 2022 and December 31, 2021:
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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 amortized cost 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 a recorded ACL and those without a recorded ACL as of September 30, 2022 and December 31, 2021.
__________________________________ (1) Total nonaccrual loans exclude the guaranteed portion of SBA loans that are in liquidation totaling $9.9 million and $19.5 million, at September 30, 2022 and December 31, 2021, respectively.
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Amortized Cost Basis of Collateral-Dependent Loans | The following table presents the amortized cost of collateral dependent loans as of September 30, 2022 and December 31, 2021:
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Aging of Past Due Loans | The following table presents the amortized cost of past due loans, including nonaccrual loans past due 30 or more days, by the number of days past due as of September 30, 2022 and December 31, 2021 by class of loans:
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Financing Receivable Credit Quality Indicators | The following table presents the amortized cost basis of loans receivable by class, credit quality indicator, and year of origination as of September 30, 2022 and December 31, 2021.
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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 nine months ended September 30, 2022 and 2021 is presented in the following table:
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Troubled Debt Restructurings | A summary of the amortized cost of TDR loans on accrual and nonaccrual status by type of concession as of September 30, 2022 and December 31, 2021 is presented below:
The following tables present the amortized cost of loans classified as TDR during the nine months ended September 30, 2022 and 2021 by class of loans. There were no loans classified as TDR during the three months ended September 30, 2022 and 2021.
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Summary of Troubled Debt Restructurings with Subsequent Payment Default | The following tables present the amortized cost balance of loans modified as TDRs within the previous twelve months ended September 30, 2022 and 2021 that subsequently had payment defaults during the three and nine months ended September 30, 2022 and 2021:
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interest income reversal, nonaccrual, by loan segment | The following table presents interest income reversals, due to loans being placed on nonaccrual status, by loan segment for the three and nine months ended September 30, 2022 and 2021:
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Leases (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
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Financial Services, Banking and Thrift (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Deposits | The following is a breakdown of the Company’s deposits at September 30, 2022 and December 31, 2021:
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Subordinated Debentures and Convertible Notes (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subordinated Borrowings [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Trust Preferred Securities and Debentures | The following table is a summary of trust preferred securities and Debentures at September 30, 2022:
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Convertible Debt | The value of the convertible notes at issuance and the carrying value as of September 30, 2022 and December 31, 2021 are presented in the tables below:
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Derivative Financial Instruments (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Interest Rate Swaps Related to Hedging Program | At September 30, 2022 and December 31, 2021, 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:
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Commitments and Contingencies (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments | Commitments at September 30, 2022 and December 31, 2021 are summarized as follows:
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Goodwill, Intangible Assets, and Servicing Assets (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets | The following table provides information regarding the core deposit intangibles at September 30, 2022 and December 31, 2021:
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Schedule of Servicing Assets | The changes in servicing assets for the three and nine months ended September 30, 2022 and 2021 were as follows:
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Summary of Fair Value Inputs | The inputs used in evaluating servicing assets for impairment at September 30, 2022 and December 31, 2021 are presented below.
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Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 the municipal security and risk participation agreements measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2022 and 2021:
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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 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 September 30, 2022 and December 31, 2021 were as follows:
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Stockholders’ Equity (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table presents the quarterly changes to accumulated other comprehensive income for the three and nine months ended September 30, 2022 and 2021:
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Stock-Based Compensation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 nine months ended September 30, 2022:
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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 nine months ended September 30, 2022:
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Regulatory Matters (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 tables below for the dates indicated and include the effects of the Company’s election to utilize the five-year transition described above:
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Revenue Recognition (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | Service charges on deposit accounts and wire transfers are summarized below:
|
Basis of Presentation (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 9 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Jun. 30, 2022 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Interest on other borrowings and convertible notes | $ 2,936 | $ 2,290 | $ 7,878 | $ 6,892 | |
Retained earnings | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Convertible debt, cumulative effect on retained earnings before tax | $ 10,715 | ||||
Retained earnings | Accounting Standards Update 2020-06 | Cumulative Effect, Period of Adoption, Adjustment | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Convertible debt, cumulative effect on retained earnings before tax | $ 10,700 |
Equity Investments - Change in Fair Value of Equity Investments (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Investments, Debt and Equity Securities [Abstract] | ||||
Net change in fair value recorded during the period on equity investments with readily determinable fair value | $ 186 | $ (127) | $ (1,926) | $ (534) |
Less: Net change in fair value recorded on equity investments sold during the period | 375 | 0 | (1,354) | 0 |
Net change in fair value on equity investments with readily determinable fair values held at the end of the period | $ (189) | $ (127) | $ (572) | $ (534) |
Securities Available for Sale - Interest Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Debt Securities, Available-for-Sale [Abstract] | ||||
Taxable | $ 12,907 | $ 9,025 | $ 36,303 | $ 24,182 |
Nontaxable | 591 | 182 | 1,159 | 653 |
Total | $ 13,498 | $ 9,207 | $ 37,462 | $ 24,835 |
Held to Maturity (Details) - USD ($) |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Investments, Debt and Equity Securities [Abstract] | ||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss, Excluding Accrued Interest | $ 0 | $ 0 |
Loans Receivable and Allowance for Credit Losses - Interest Income Reversals (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Interest income reversals | $ 328 | $ 1,083 | $ 1,745 | $ 2,806 |
Real estate | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Interest income reversals | 154 | 1,071 | 1,406 | 2,761 |
Commercial business | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Interest income reversals | 21 | 12 | 47 | 49 |
Residential mortgage | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Interest income reversals | 153 | 0 | 292 | (4) |
Consumer | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Interest income reversals | $ 0 | $ 0 | $ 0 | $ 0 |
Leases - Net Lease Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Leases [Abstract] | ||||
Operating lease cost | $ 3,796 | $ 3,778 | $ 11,623 | $ 11,498 |
Short term lease cost | 0 | 0 | 0 | 0 |
Variable lease cost | 855 | 892 | 2,434 | 2,393 |
Sublease income | (104) | (102) | (312) | (354) |
Net lease cost | $ 4,547 | $ 4,568 | $ 13,745 | $ 13,537 |
Leases - Other Information (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash outflows for operating leases | $ 11,954 | $ 10,991 |
Right-of-use assets obtained in exchange for lease liabilities, net | $ 13,698 | $ 965 |
Weighted-average remaining lease term - operating leases | 4 years 8 months 12 days | 5 years 4 months 24 days |
Weighted-average discount rate - operating leases | 2.31% | 2.56% |
Leases - Maturities of Remaining Lease Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Leases [Abstract] | ||
2022 | $ 3,838 | |
2023 | 14,533 | |
2024 | 13,431 | |
2025 | 11,680 | |
2026 | 10,973 | |
2027 and thereafter | 8,666 | |
Total lease payments | 63,121 | |
Less: imputed interest | 3,787 | |
Total lease obligations | $ 59,334 | $ 57,303 |
Subordinated Debentures and Convertible Notes - Schedule of Convertible Debt (Details) - Convertible Notes - USD ($) $ in Thousands |
6 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 07, 2018 |
Jun. 30, 2022 |
Sep. 30, 2022 |
Dec. 31, 2021 |
|
Debt Instrument [Line Items] | ||||
Capitalization Period | 5 years | 5 years | 5 years | |
Gross Carrying Amount | ||||
Convertible notes principal balance | $ 217,500 | $ 217,500 | ||
Issuance costs to be capitalized | (4,119) | (4,119) | ||
Carrying balance of convertible notes | 213,381 | 213,381 | ||
Total Capitalization | ||||
Issuance costs to be capitalized | 3,532 | 2,828 | ||
Carrying balance of convertible notes | 3,532 | 2,828 | ||
Carrying Amount | ||||
Convertible notes principal balance | 217,500 | 217,500 | ||
Issuance costs to be capitalized | (587) | (1,291) | ||
Carrying balance of convertible notes | $ 216,913 | $ 216,209 |
Derivative Financial Instruments - Summary of Derivative Assets and Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Interest Rate Lock Commitments | ||
Derivative [Line Items] | ||
Notional amount, derivative asset | $ 468 | $ 16,518 |
Fair value, derivative asset | 1 | 230 |
Notional amount, derivative liability | 1,220 | 907 |
Fair value, derivative liability | (39) | (2) |
Forward Contracts | Short | ||
Derivative [Line Items] | ||
Notional amount, derivative asset | 1,000 | 6,392 |
Fair value, derivative asset | 41 | 17 |
Notional amount, derivative liability | 500 | 25,305 |
Fair value, derivative liability | $ (3) | $ (74) |
Commitments and Contingencies (Details) - USD ($) |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Supply Commitment [Line Items] | ||
Loss contingencies for all legal claims | $ 20,000 | $ 52,000 |
Loss contingencies for all legal claims | 20,000 | 52,000 |
Commitments to extend credit | ||
Supply Commitment [Line Items] | ||
Commitments and letters of credit | 2,787,710,000 | 2,329,421,000 |
Standby letters of credit | ||
Supply Commitment [Line Items] | ||
Commitments and letters of credit | 135,056,000 | 126,137,000 |
Other letters of credit | ||
Supply Commitment [Line Items] | ||
Commitments and letters of credit | 26,937,000 | 56,333,000 |
Commitments to fund investments in affordable housing partnerships | ||
Supply Commitment [Line Items] | ||
Commitments and letters of credit | $ 12,399,000 | $ 9,514,000 |
Goodwill, Intangible Assets, and Servicing Assets - Servicing Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Jun. 30, 2022 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2021 |
|
Servicing Asset at Amortized Cost, Balance [Roll Forward] | ||||||
Balance at beginning of period | $ 11,215 | $ 11,566 | $ 10,418 | $ 10,418 | $ 12,692 | |
Additions through originations of servicing assets | 1,338 | 710 | 4,228 | 2,039 | ||
Amortization | (952) | (1,489) | (3,045) | (3,944) | ||
Balance at end of period | 11,601 | $ 10,787 | $ 11,215 | 11,601 | $ 10,787 | |
Principal balances of loans serviced for other institutions | $ 1,100,000 | $ 1,100,000 | $ 1,040,000 | |||
SBA Servicing Assets: Weighted-average discount rate | 11.20% | 9.67% | ||||
SBA Servicing Assets: Constant prepayment rate | 14.64% | 12.05% | ||||
Mortgage Servicing Assets: Weighted-average discount rate | 8.63% | 11.88% | ||||
Mortgage Servicing Assets: Constant prepayment rate | 9.58% | 9.63% |
Income Taxes - Narrative (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2021 |
|
Income Tax Disclosure [Abstract] | |||||
Income tax provision | $ 19,679,000 | $ 19,912,000 | $ 59,561,000 | $ 51,644,000 | |
Pretax income | $ 73,427,000 | $ 75,411,000 | $ 226,135,000 | $ 204,593,000 | |
Effective income tax rate | 26.80% | 26.40% | 26.34% | 25.24% | |
Unrecognized tax benefits | $ 3,300,000 | $ 3,300,000 | $ 3,300,000 | ||
Interest accrued | 475,000 | $ 387,000 | 475,000 | $ 387,000 | |
Penalties accrued | 0 | 0 | $ 0 | ||
Decrease in unrecognized tax benefits is reasonably possible | $ 789,000 | $ 789,000 |
Fair Value Measurements - Total Net Gains Losses on Assets Measured at Fair Value on a Non-Recurring Basis (Details) - Change during period - Non-recurring basis - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Loans Receivable | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total gains (losses), fair value | $ 0 | $ (6,121) | $ 0 | $ (17,900) |
Loans Receivable | Real estate loans | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total gains (losses), fair value | (962) | (1,083) | (1,573) | (1,496) |
Loans Receivable | Commercial business | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total gains (losses), fair value | (3,323) | (2,025) | (3,323) | (2,025) |
OREO | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total gains (losses), fair value | $ (337) | $ (259) | $ (593) | $ (582) |
Stockholders' Equity - Discussion of Equity (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Jun. 30, 2022 |
Dec. 31, 2021 |
Jun. 30, 2021 |
Dec. 31, 2020 |
|
Equity [Abstract] | ||||||||
Total stockholders’ equity | $ 1,975,725 | $ 2,074,398 | $ 1,975,725 | $ 2,074,398 | $ 2,000,369 | $ 2,092,983 | $ 2,092,870 | $ 2,053,745 |
Dividends paid (in dollars per share) | $ 0.14 | $ 0.14 | $ 0.42 | $ 0.42 | ||||
Allocated share-based compensation expense | $ 3,200 | $ 2,200 | $ 9,300 | $ 6,800 | ||||
Gains (Losses) on Sales of Other Real Estate | 198 | $ 12 | 178 | (1) | ||||
Repurchase of treasury stock | $ 0 | $ 14,667 | $ 47,198 | |||||
Common stock repurchased and recorded as treasury stock (in shares) | 0 | 1,038,986 |
Revenue Recognition - OREO Income (Expense) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Revenue from Contract with Customer [Abstract] | ||||
Net losses (gains) on sales of OREO | $ (198) | $ (12) | $ (178) | $ 1 |
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