(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. Convertible Notes and Subordinated Debentures | ||||||||
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 | ||||||||
20. Subsequent Events | ||||||||
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) | |||||||||||
March 31, 2024 | December 31, 2023 | ||||||||||
ASSETS | (Dollars in thousands, except share data) | ||||||||||
Cash and cash equivalents: | |||||||||||
Cash and due from banks | $ | $ | |||||||||
Interest earning cash in other banks | |||||||||||
Total cash and cash equivalents | |||||||||||
Investment securities available for sale (“AFS”), at fair value | |||||||||||
Investment securities held to maturity (“HTM”), at amortized cost; fair value of $ | |||||||||||
Equity investments | |||||||||||
Loans held for sale, at 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 (“ROU”), net | |||||||||||
Goodwill | |||||||||||
Core deposit intangible assets, net | |||||||||||
Servicing assets, net | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
(Unaudited) | |||||||||||
March 31, 2024 | December 31, 2023 | ||||||||||
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 Federal Reserve Bank (“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 March 31, | |||||||||||
2024 | 2023 | ||||||||||
(Dollars in thousands, except per share data) | |||||||||||
INTEREST INCOME: | |||||||||||
Interest and fees on loans | $ | $ | |||||||||
Interest on investment securities | |||||||||||
Interest on cash and deposits at other banks | |||||||||||
Interest on other investments | |||||||||||
Total interest income | |||||||||||
INTEREST EXPENSE: | |||||||||||
Interest on deposits | |||||||||||
Interest on FHLB and FRB borrowings | |||||||||||
Interest on other borrowings and debt | |||||||||||
Total interest expense | |||||||||||
NET INTEREST INCOME BEFORE PROVISION FOR CREDIT LOSSES | |||||||||||
PROVISION FOR CREDIT LOSSES | |||||||||||
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | |||||||||||
NONINTEREST INCOME: | |||||||||||
Service fees on deposit accounts | |||||||||||
International service fees | |||||||||||
Wire transfer fees | |||||||||||
Swap fees | |||||||||||
Net gains on sales of SBA loans | |||||||||||
Net gains on sales of residential mortgage loans | |||||||||||
Other income and fees | |||||||||||
Total noninterest income | |||||||||||
NONINTEREST EXPENSE: | |||||||||||
Salaries and employee benefits | |||||||||||
Occupancy | |||||||||||
Furniture and equipment | |||||||||||
Data processing and communications | |||||||||||
Professional fees | |||||||||||
Amortization of investments in affordable housing partnerships | |||||||||||
FDIC assessments | |||||||||||
FDIC special assessment | |||||||||||
Earned interest credit | |||||||||||
Restructuring costs | |||||||||||
Merger related costs | |||||||||||
Other noninterest expense | |||||||||||
Total noninterest expense | |||||||||||
INCOME BEFORE INCOME TAXES | |||||||||||
INCOME TAX PROVISION | |||||||||||
NET INCOME | $ | $ | |||||||||
EARNINGS PER COMMON SHARE | |||||||||||
Basic | $ | $ | |||||||||
Diluted | $ | $ |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
(Dollars in thousands) | |||||||||||
Net income | $ | $ | |||||||||
Other comprehensive (loss) income: | |||||||||||
Change in unrealized net holding (losses) gains on securities AFS | ( | ||||||||||
Change in unrealized net holding losses on interest rate contracts used in cash flow hedges | ( | ( | |||||||||
Reclassification adjustments for net gains realized in net income | ( | ( | |||||||||
Tax effect | ( | ||||||||||
Other comprehensive (loss) income, net of tax | ( | ||||||||||
Total comprehensive income | $ | $ |
Common stock | Additional paid-in capital | Retained earnings | Treasury stock | Accumulated other comprehensive loss, net | Total stockholders’ equity | |||||||||||||||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands, except share and per share data) | ||||||||||||||||||||||||||||||||||||||||||||
BALANCE, DECEMBER 31, 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 income: | ||||||||||||||||||||||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | ||||||||||||||||||||||||||||||||||||||||||||
BALANCE, MARCH 31, 2023 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
BALANCE, DECEMBER 31, 2023 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
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 | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
BALANCE, MARCH 31, 2024 | $ | $ | $ | $ | ( | $ | ( | $ |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
(Dollars in thousands) | |||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash from operating activities: | |||||||||||
Discount accretion, net of depreciation and amortization | |||||||||||
Stock-based compensation expense | |||||||||||
Provision for credit loss on loans | |||||||||||
(Credit) provision for unfunded loan commitments | ( | ||||||||||
Net gains on sales of loans | ( | ( | |||||||||
Net change in fair value of derivatives | ( | ( | |||||||||
Amortization of investments in affordable housing partnerships | |||||||||||
Net change in deferred income taxes | |||||||||||
Proceeds from sales of loans held for sale | |||||||||||
Originations of loans held for sale | ( | ( | |||||||||
Originations of servicing assets | ( | ( | |||||||||
Net change in accrued interest receivable | ( | ||||||||||
Net change in other assets | |||||||||||
Net change in accrued interest payable | ( | ||||||||||
Net change in other liabilities | ( | ||||||||||
Net cash provided by operating activities | |||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||
Redemption of interest earning 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 | |||||||||||
Purchase of equity investments | ( | ( | |||||||||
Proceeds from sales of other loans held for sale previously classified as held for investment | |||||||||||
Net change in loans receivable | |||||||||||
Proceeds from sales of OREO | |||||||||||
Purchase of FHLB stock | ( | ||||||||||
Redemption of FHLB stock | |||||||||||
Purchase of premises and equipment | ( | ( | |||||||||
Purchase of BOLI policy | ( | ||||||||||
Proceeds from BOLI death benefits | |||||||||||
Investments in affordable housing partnerships | ( | ( | |||||||||
Net cash provided by 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 | ( | ( | |||||||||
Repurchase of convertible notes | ( | ||||||||||
Cash dividends paid on common stock | ( | ( | |||||||||
Taxes paid in net settlement of restricted stock | ( | ( | |||||||||
Net cash (used in) 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 | $ | $ | |||||||||
Lease liabilities arising from obtaining ROU assets | |||||||||||
Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||||||||||||||
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 and restricted stock | |||||||||||||||||||||||||||||||||||
Diluted EPS - common stock | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
(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 | $ | ( | $ | ||||||||
March 31, 2024 | December 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Debt securities AFS: | |||||||||||||||||||||||||||||||||||||||||||||||
U.S. Treasury securities | $ | $ | $ | ( | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||
U.S. Government agency and U.S. Government sponsored enterprises: | |||||||||||||||||||||||||||||||||||||||||||||||
Agency securities | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Collateralized mortgage obligations (“CMO”) | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities (“MBS”): | |||||||||||||||||||||||||||||||||||||||||||||||
Residential | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Commercial | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Asset-backed securities | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Corporate securities | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Municipal securities | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Total investment securities AFS | $ | $ | $ | ( | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||
Debt securities HTM: | |||||||||||||||||||||||||||||||||||||||||||||||
U.S. Government agency and U.S. Government sponsored enterprises: | |||||||||||||||||||||||||||||||||||||||||||||||
MBS: | |||||||||||||||||||||||||||||||||||||||||||||||
Residential | $ | $ | $ | ( | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||
Commercial | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Total investment securities HTM | $ | $ | $ | ( | $ | $ | $ | $ | ( | $ |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
(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 | $ | $ | $ | $ |
March 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | $ | $ | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Government agency and U.S. Government sponsored enterprises: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Agency securities | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
CMOs | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
MBS: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset-backed securities | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate securities | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Municipal securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( | $ | $ | ( |
December 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | $ | $ | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Government agency and U.S. Government sponsored enterprises: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Agency securities | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
CMOs | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
MBS: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset-backed securities | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate securities | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Municipal securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( | $ | $ | ( |
March 31, 2024 | December 31, 2023 | ||||||||||
(Dollars in thousands) | |||||||||||
Loan portfolio composition | |||||||||||
Commercial real estate (“CRE”) loans | $ | $ | |||||||||
Commercial and industrial (“C&I”) loans | |||||||||||
Residential mortgage loans | |||||||||||
Consumer and other loans | |||||||||||
Total loans receivable, net of deferred costs and fees | |||||||||||
Allowance for credit losses | ( | ( | |||||||||
Loans receivable, net of allowance for credit losses | $ | $ |
CRE Loans | C&I Loans | Residential Mortgage Loans | Consumer and Other Loans | Total | |||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Three Months Ended March 31, 2024 | |||||||||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Provision (credit) for credit loss on loans | ( | ( | ( | ||||||||||||||||||||||||||
Loans charged off | ( | ( | ( | ( | |||||||||||||||||||||||||
Recoveries of charge offs | |||||||||||||||||||||||||||||
Balance, end of period | $ | $ | $ | $ | $ |
CRE Loans | C&I Loans | Residential Mortgage Loans | Consumer and Other Loans | Total | |||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
ASU 2022-02 day 1 adoption adjustment | ( | $ | ( | ||||||||||||||||||||||||||
Provision (credit) for credit loss on loans | ( | ||||||||||||||||||||||||||||
Loans charged off | ( | ( | ( | ||||||||||||||||||||||||||
Recoveries of charge offs | |||||||||||||||||||||||||||||
Balance, end of period | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
March 31, 2024 | |||||||||||||||||||||||||||||
CRE Loans | C&I Loans | Residential Mortgage Loans | Consumer and Other Loans | Total | |||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Allowance for credit losses: | |||||||||||||||||||||||||||||
Individually evaluated | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Collectively evaluated | |||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Loans outstanding: | |||||||||||||||||||||||||||||
Individually evaluated | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Collectively evaluated | |||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
December 31, 2023 | |||||||||||||||||||||||||||||
CRE Loans | C&I Loans | Residential Mortgage Loans | Consumer and Other Loans | Total | |||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Allowance for credit losses: | |||||||||||||||||||||||||||||
Individually evaluated | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Collectively evaluated | |||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Loans outstanding: | |||||||||||||||||||||||||||||
Individually evaluated | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Collectively evaluated | |||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
March 31, 2024 | ||||||||||||||||||||||||||
Nonaccrual with No ACL | Nonaccrual with an ACL | Total Nonaccrual (1) | Accruing Loans Past Due 90 Days or More | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
CRE loans | $ | $ | $ | $ | ||||||||||||||||||||||
C&I loans | ||||||||||||||||||||||||||
Residential mortgage loans | ||||||||||||||||||||||||||
Consumer and other loans | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
December 31, 2023 | ||||||||||||||||||||||||||
Nonaccrual with No ACL | Nonaccrual with an ACL | Total Nonaccrual (1) | Accruing Loans Past Due 90 Days or More | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
CRE loans | $ | $ | $ | $ | ||||||||||||||||||||||
C&I loans | ||||||||||||||||||||||||||
Residential mortgage loans | ||||||||||||||||||||||||||
Consumer and other loans | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
March 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||||||||||||||
Real Estate Collateral | Other Collateral | Total | Real Estate Collateral | Other Collateral | Total | |||||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||
CRE loans | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
C&I loans | ||||||||||||||||||||||||||||||||||||||
Residential mortgage loans | ||||||||||||||||||||||||||||||||||||||
Consumer and other loans | ||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
(Dollars in thousands) | |||||||||||
CRE loans | $ | $ | |||||||||
C&I loans | |||||||||||
Residential mortgage loans | |||||||||||
Total | $ | $ |
March 31, 2024 | December 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
30-59 Days Past Due | 60-89 Days Past Due | 90 Days or More Past Due | Total Past Due | 30-59 Days Past Due | 60-89 Days Past Due | 90 Days or More Past Due | Total Past Due | ||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
CRE loans | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
C&I loans | |||||||||||||||||||||||||||||||||||||||||||||||
Residential mortgage loans | |||||||||||||||||||||||||||||||||||||||||||||||
Consumer and other loans | |||||||||||||||||||||||||||||||||||||||||||||||
Total Past Due | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
March 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Term Loan by Year | Revolving Loans | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
2024 | 2023 | 2022 | 2021 | 2020 | Prior | |||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||
CRE loans | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Year-to-date gross charge offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
C&I loans | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Year-to-date gross charge offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Residential mortgage loans | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Year-to-date gross charge offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Consumer and other loans | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Year-to-date gross charge offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Total loans | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Total year-to-date gross charge offs | $ | $ | $ | $ | $ | $ | $ | $ |
December 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Term Loan by Year | Revolving Loans | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | Prior | |||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||
CRE loans | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Year-to-date gross charge offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
C&I loans | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Year-to-date gross charge offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Residential mortgage loans | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Year-to-date gross charge offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Consumer and other loans | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Year-to-date gross charge offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Total loans | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Total year-to-date gross charge offs | $ | $ | $ | $ | $ | $ | $ | $ |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Transfer of loans held for investment to held for sale | (Dollars in thousands) | ||||||||||
CRE loans | $ | $ | |||||||||
C&I loans | |||||||||||
Total | $ | $ |
Risk Characteristics | |||||
CRE loans | Property type, location, owner-occupied status | ||||
C&I loans | Delinquency status, risk rating, industry type | ||||
Residential mortgage loans | FICO score, LTV, delinquency status, maturity date, collateral value, location | ||||
Consumer and other loans | Historical losses |
Three Months Ended March 31, 2024 | |||||||||||||||||||||||||||||
CRE Loans | C&I Loans | Residential Mortgage Loans | Consumer and Other Loans | Total | |||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Principal forgiveness | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Interest rate reduction | |||||||||||||||||||||||||||||
Payment delay | |||||||||||||||||||||||||||||
Term extension | |||||||||||||||||||||||||||||
Total Loan Modifications | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
% of Loan Class | % | % | % | % | % |
Three Months Ended March 31, 2024 | ||||||||
Modification & Loan Types | Financial Effect | |||||||
Principal forgiveness: | ||||||||
C&I loans | Forgiveness of principal totaling $ | |||||||
March 31, 2024 | December 31, 2023 | ||||||||||
(Dollars in thousands) | |||||||||||
Operating lease ROU assets | $ | $ | |||||||||
Current portion of long-term lease liabilities | |||||||||||
Long-term lease liabilities | |||||||||||
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
(Dollars in thousands) | |||||||||||
Operating lease cost | $ | $ | |||||||||
Variable lease cost | |||||||||||
Sublease income | ( | ( | |||||||||
Net lease cost | $ | $ |
At or for the Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
(Dollars in thousands) | |||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
Operating cash outflows for operating leases | $ | $ | |||||||||
ROU assets obtained in exchange for lease liabilities, net | |||||||||||
Weighted-average remaining lease term - operating leases | |||||||||||
Weighted-average discount rate - operating leases | % | % |
March 31, 2024 | |||||
(Dollars in thousands) | |||||
2024 | $ | ||||
2025 | |||||
2026 | |||||
2027 | |||||
2028 | |||||
2029 and thereafter | |||||
Total lease payments | |||||
Less: imputed interest | |||||
Total lease obligations | $ |
March 31, 2024 | December 31, 2023 | ||||||||||||||||||||||
Balance | Percentage (%) | Balance | Percentage (%) | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Noninterest bearing demand deposits | $ | % | $ | % | |||||||||||||||||||
Money market and NOW accounts | % | % | |||||||||||||||||||||
Savings deposits | % | % | |||||||||||||||||||||
Time deposits | % | % | |||||||||||||||||||||
Total deposits | $ | % | $ | % | |||||||||||||||||||
March 31, 2024 | |||||||||||||||||||||||
Total Borrowing Capacity | Borrowings Outstanding | Available Borrowing Capacity | |||||||||||||||||||||
Amount | Weighted Average Rate | ||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
FHLB | $ | $ | % | $ | |||||||||||||||||||
FRB Discount Window | % | ||||||||||||||||||||||
FRB Bank Term Funding Program (“BTFP”) | % | ||||||||||||||||||||||
Unsecured Federal Funds lines | % | ||||||||||||||||||||||
Total | $ | $ | % | $ | |||||||||||||||||||
December 31, 2023 | |||||||||||||||||||||||
Total Borrowing Capacity | Borrowings Outstanding | Available Borrowing Capacity | |||||||||||||||||||||
Amount | Weighted Average Rate | ||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
FHLB | $ | $ | % | $ | |||||||||||||||||||
FRB Discount Window | % | ||||||||||||||||||||||
BTFP | % | ||||||||||||||||||||||
Unsecured Federal Funds lines | % | ||||||||||||||||||||||
Total | $ | $ | % | $ | |||||||||||||||||||
Issuance Trust | Issuance Date | Trust Preferred Security Amount | Carrying Value of Subordinated 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 | $ | $ |
March 31, 2024 | |||||||||||||||||
Notional Amount | Fair Value(1) | ||||||||||||||||
Other Assets | Other Liabilities | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Derivatives designated as cash flow hedges | |||||||||||||||||
Interest rate swaps | $ | $ | $ | ||||||||||||||
Interest rate collars | |||||||||||||||||
Forward interest rate swaps | |||||||||||||||||
Total | $ | $ | $ | ||||||||||||||
Derivatives not designated as hedges | |||||||||||||||||
Interest rate contracts with correspondent banks | $ | $ | $ | ||||||||||||||
Interest rate contracts with customers | |||||||||||||||||
Foreign exchange contracts with correspondent banks | |||||||||||||||||
Foreign exchange contracts with customers | |||||||||||||||||
Risk participation agreement | |||||||||||||||||
Mortgage banking derivatives | |||||||||||||||||
Total | $ | $ | $ |
December 31, 2023 | |||||||||||||||||
Notional Amount | Fair Value(1) | ||||||||||||||||
Other Assets | Other Liabilities | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Derivatives designated as cash flow hedges | |||||||||||||||||
Interest rate swaps | $ | $ | $ | ||||||||||||||
Interest rate collars | |||||||||||||||||
Forward interest rate swaps | |||||||||||||||||
Forward interest rate collars | |||||||||||||||||
Total | $ | $ | $ | ||||||||||||||
Derivatives not designated as hedges | |||||||||||||||||
Interest rate contracts with correspondent banks | $ | $ | $ | ||||||||||||||
Interest rate contracts with customers | |||||||||||||||||
Foreign exchange contracts with correspondent banks | |||||||||||||||||
Foreign exchange contracts with customers | |||||||||||||||||
Risk participation agreement | |||||||||||||||||
Mortgage banking derivatives | |||||||||||||||||
Total | $ | $ | $ |
Derivative Instruments Designated as Cash Flow Hedges | Location of Gain (Loss) Recognized in Income | Three Months Ended March 31, | ||||||||||||||||||
2024 | 2023 | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Interest rate contracts | Interest income and fees on loans | $ | ( | $ | ||||||||||||||||
Interest rate contracts | Interest expense on deposits | |||||||||||||||||||
Interest rate contracts | Interest expense on FHLB and FRB borrowings | |||||||||||||||||||
Total | $ | $ |
March 31, 2024 | December 31, 2023 | ||||||||||
(Dollars in thousands) | |||||||||||
Commitments to extend credit | $ | $ | |||||||||
Standby letters of credit | |||||||||||
Other letters of credit | |||||||||||
Commitments to fund investments in affordable housing partnerships |
March 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||||||||||||||
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 March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
(Dollars in thousands) | ||||||||||||||
Balance at beginning of period | $ | $ | ||||||||||||
Additions through originations of servicing assets | ||||||||||||||
Amortization | ( | ( | ||||||||||||
Balance at end of period | $ | $ |
March 31, 2024 | December 31, 2023 | |||||||||||||
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 | |||||||||||||||||||||||
March 31, 2024 | 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: | |||||||||||||||||||||||
Investment securities AFS: | |||||||||||||||||||||||
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 contracts | |||||||||||||||||||||||
Mortgage banking derivatives | |||||||||||||||||||||||
Other derivatives | |||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Interest rate contracts | |||||||||||||||||||||||
Mortgage banking derivatives | |||||||||||||||||||||||
Other derivatives | |||||||||||||||||||||||
Fair Value Measurements at the End of the Reporting Period Using | |||||||||||||||||||||||
December 31, 2023 | 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: | |||||||||||||||||||||||
Investment securities AFS: | |||||||||||||||||||||||
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 contracts | |||||||||||||||||||||||
Mortgage banking derivatives | |||||||||||||||||||||||
Other derivatives | |||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Interest rate contracts | |||||||||||||||||||||||
Mortgage banking derivatives | |||||||||||||||||||||||
Other derivatives | |||||||||||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
(Dollars in thousands) | ||||||||||||||
Municipal securities: | ||||||||||||||
Beginning Balance | $ | $ | ||||||||||||
Change in fair value included in other comprehensive income | ( | |||||||||||||
Ending Balance | $ | $ | ||||||||||||
Risk participation agreements: | ||||||||||||||
Beginning Balance | $ | $ | ||||||||||||
Change in fair value included in income | ( | |||||||||||||
Ending Balance | $ | $ | ||||||||||||
Fair Value Measurements at the End of the Reporting Period Using | |||||||||||||||||||||||
March 31, 2024 | 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 receivable at fair value: | |||||||||||||||||||||||
CRE loans | $ | $ | $ | $ | |||||||||||||||||||
C&I loans | |||||||||||||||||||||||
Fair Value Measurements at the End of the Reporting Period Using | |||||||||||||||||||||||
December 31, 2023 | 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 receivable at fair value: | |||||||||||||||||||||||
CRE loans | $ | $ | $ | $ | |||||||||||||||||||
C&I loans | |||||||||||||||||||||||
Loans held for sale, net | |||||||||||||||||||||||
OREO |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
(Dollars in thousands) | |||||||||||
Assets: | |||||||||||
Collateral-dependent loans receivable at fair value: | |||||||||||
CRE loans | $ | ( | $ | ( | |||||||
C&I loans | ( | ( | |||||||||
OREO | ( |
March 31, 2024 | |||||||||||||||||
Carrying Amount | Estimated Fair Value | Fair Value Measurement Using | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Financial Assets: | |||||||||||||||||
Cash and cash equivalents | $ | $ | Level 1 | ||||||||||||||
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 | ||||||||||||||
Money market, interest bearing demand and savings deposits | Level 2 | ||||||||||||||||
Time deposits | Level 2 | ||||||||||||||||
FHLB and FRB borrowings | Level 2 | ||||||||||||||||
Convertible notes | Level 1 | ||||||||||||||||
Subordinated debentures | Level 3 | ||||||||||||||||
Accrued interest payable | Level 2 | ||||||||||||||||
Acceptances outstanding | Level 2 | ||||||||||||||||
December 31, 2023 | |||||||||||||||||
Carrying Amount | Estimated Fair Value | Fair Value Measurement Using | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Financial Assets: | |||||||||||||||||
Cash and cash equivalents | $ | $ | Level 1 | ||||||||||||||
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 | ||||||||||||||
Money market, interest bearing demand and savings deposits | Level 2 | ||||||||||||||||
Time deposits | Level 2 | ||||||||||||||||
FHLB and FRB borrowings | Level 2 | ||||||||||||||||
Convertible notes, net | Level 1 | ||||||||||||||||
Subordinated debentures | Level 3 | ||||||||||||||||
Accrued interest payable | Level 2 | ||||||||||||||||
Acceptances outstanding | Level 2 |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
(Dollars in thousands) | |||||||||||
Balance at beginning of period | $ | ( | $ | ( | |||||||
Unrealized net (losses) gains on securities available for sale | ( | ||||||||||
Unrealized net losses on interest rate contracts used for cash flow hedges | ( | ( | |||||||||
Reclassification adjustments for net gains realized in net income | ( | ( | |||||||||
Tax effect | ( | ||||||||||
Other comprehensive (loss) income, 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, 2024 | $ | ||||||||||||||||||||||
Granted | |||||||||||||||||||||||
Exercised | |||||||||||||||||||||||
Expired | ( | ||||||||||||||||||||||
Forfeited | |||||||||||||||||||||||
Outstanding - March 31, 2024 | $ | $ | |||||||||||||||||||||
Options exercisable - March 31, 2024 | $ | $ |
Number of Shares | Weighted-Average Grant Date Fair Value | ||||||||||
Outstanding (unvested) - January 1, 2024 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Outstanding (unvested) - March 31, 2024 | $ |
Actual | Ratio Required for Capital Adequacy Purposes | Ratio Required To Be Well-Capitalized | Ratio Required for Minimum Capital Adequacy With Capital Conservation Buffer | ||||||||||||||||||||||||||
March 31, 2024 | Amount | Ratio | |||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Common equity Tier 1 capital (to risk weighted assets): | |||||||||||||||||||||||||||||
Company | $ | % | % | N/A | % | ||||||||||||||||||||||||
Bank | $ | % | % | % | % | ||||||||||||||||||||||||
Tier 1 capital (to risk-weighted assets): | |||||||||||||||||||||||||||||
Company | $ | % | % | N/A | % | ||||||||||||||||||||||||
Bank | $ | % | % | % | % | ||||||||||||||||||||||||
Total capital (to risk-weighted assets): | |||||||||||||||||||||||||||||
Company | $ | % | % | N/A | % | ||||||||||||||||||||||||
Bank | $ | % | % | % | % | ||||||||||||||||||||||||
Leverage capital (to average assets): | |||||||||||||||||||||||||||||
Company | $ | % | % | N/A | N/A | ||||||||||||||||||||||||
Bank | $ | % | % | % | N/A |
Actual | Ratio Required for Capital Adequacy Purposes | Ratio Required To Be Well-Capitalized | Ratio Required for Minimum Capital Adequacy With Capital Conservation Buffer | ||||||||||||||||||||||||||
December 31, 2023 | Amount | Ratio | |||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Common equity Tier 1 capital (to risk weighted assets): | |||||||||||||||||||||||||||||
Company | $ | % | % | N/A | % | ||||||||||||||||||||||||
Bank | $ | % | % | % | % | ||||||||||||||||||||||||
Tier 1 capital (to risk-weighted assets): | |||||||||||||||||||||||||||||
Company | $ | % | % | N/A | % | ||||||||||||||||||||||||
Bank | $ | % | % | % | % | ||||||||||||||||||||||||
Total capital (to risk-weighted assets): | |||||||||||||||||||||||||||||
Company | $ | % | % | N/A | % | ||||||||||||||||||||||||
Bank | $ | % | % | % | % | ||||||||||||||||||||||||
Leverage capital (to average assets): | |||||||||||||||||||||||||||||
Company | $ | % | % | N/A | N/A | ||||||||||||||||||||||||
Bank | $ | % | % | % | N/A |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
(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 March 31, | |||||||||||
2024 | 2023 | ||||||||||
(Dollars in thousands, except share and per share data) | |||||||||||
Income Statement Data: | |||||||||||
Interest income | $ | 259,674 | $ | 236,677 | |||||||
Interest expense | 144,627 | 102,799 | |||||||||
Net interest income | 115,047 | 133,878 | |||||||||
Provision for credit losses | 2,600 | 3,320 | |||||||||
Net interest income after provision for credit losses | 112,447 | 130,558 | |||||||||
Noninterest income | 8,286 | 10,978 | |||||||||
Noninterest expense | 84,839 | 88,734 | |||||||||
Income before income tax provision | 35,894 | 52,802 | |||||||||
Income tax provision | 10,030 | 13,681 | |||||||||
Net income | $ | 25,864 | $ | 39,121 | |||||||
Per Share Data: | |||||||||||
Earnings per common share - basic | $ | 0.22 | $ | 0.33 | |||||||
Earnings per common share - diluted | $ | 0.21 | $ | 0.33 | |||||||
Cash dividends declared per common share | $ | 0.14 | $ | 0.14 | |||||||
Book value per common share (period end) | $ | 17.51 | $ | 17.17 | |||||||
Tangible common equity (“TCE”) per share (period end) (1) | $ | 13.63 | $ | 13.26 | |||||||
TCE ratio (period end) (1) | 9.33 | % | 7.91 | % | |||||||
Common Share Count: | |||||||||||
Number of common shares outstanding (period end) | 120,610,029 | 119,865,732 | |||||||||
Weighted average shares - basic | 120,187,300 | 119,551,247 | |||||||||
Weighted average shares - diluted | 121,020,292 | 120,242,295 | |||||||||
Selected Performance Ratios: | |||||||||||
Return on average assets (2) | 0.54 | % | 0.82 | % | |||||||
Return on average stockholders’ equity (2) | 4.87 | % | 7.65 | % | |||||||
Return on average tangible equity (1) (2) | 6.24 | % | 9.93 | % | |||||||
Dividend payout ratio (dividends per share/diluted EPS) | 64.58 | % | 42.42 | % | |||||||
Net interest margin (2) (3) | 2.55 | % | 3.02 | % | |||||||
Efficiency ratio (4) | 68.79 | % | 61.26 | % | |||||||
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
(Dollars in thousands) | |||||||||||
Average Balance Sheet Data: | |||||||||||
Assets | $ | 19,140,775 | $ | 19,087,170 | |||||||
Interest earning cash and deposits at other banks | 2,019,769 | 473,344 | |||||||||
Investment securities AFS and HTM | 2,317,154 | 2,248,479 | |||||||||
Loans | 13,746,219 | 15,235,386 | |||||||||
Deposits | 14,862,153 | 15,802,701 | |||||||||
FHLB & FRB borrowings | 1,683,334 | 676,444 | |||||||||
Stockholders’ equity | 2,126,333 | 2,046,159 | |||||||||
March 31, 2024 | March 31, 2023 | ||||||||||
(Dollars in thousands) | |||||||||||
Statement of Financial Condition Data - at Period End: | |||||||||||
Assets | $ | 18,088,214 | $ | 20,568,884 | |||||||
Interest earning cash and deposits at other banks | 1,025,269 | 2,000,152 | |||||||||
Investment securities AFS and HTM | 2,277,990 | 2,231,989 | |||||||||
Loans receivable | 13,719,178 | 15,064,849 | |||||||||
Deposits | 14,753,417 | 15,828,209 | |||||||||
FHLB and FRB borrowings | 795,634 | 2,130,000 | |||||||||
Convertible notes, net | 444 | 206,658 | |||||||||
Subordinated debentures, net | 108,148 | 106,875 | |||||||||
Stockholders’ equity | 2,112,270 | 2,058,580 | |||||||||
Consolidated Regulatory Capital Ratios (5) | |||||||||||
Common equity Tier 1 capital ratio | 12.47 | % | 10.75 | % | |||||||
Tier 1 capital ratio | 13.17 | % | 11.36 | % | |||||||
Total capital ratio | 14.19 | % | 12.25 | % | |||||||
Leverage ratio (6) | 10.42 | % | 10.13 | % | |||||||
Asset Quality Ratios: | |||||||||||
Allowance for credit losses to loans receivable | 1.16 | % | 1.09 | % | |||||||
Allowance for credit losses to nonaccrual loans | 266.70 | % | 207.38 | % | |||||||
Nonaccrual loans to loans receivable | 0.43 | % | 0.52 | % | |||||||
Nonperforming loans to loans receivable | 0.78 | % | 0.53 | % | |||||||
Nonperforming assets to total assets | 0.59 | % | 0.39 | % |
March 31, 2024 | March 31, 2023 | ||||||||||
(Dollars in thousands, except share data) | |||||||||||
Total stockholders’ equity | $ | 2,112,270 | $ | 2,058,580 | |||||||
Less: Goodwill and core deposit intangible assets, net | (467,984) | (469,728) | |||||||||
TCE | $ | 1,644,286 | $ | 1,588,852 | |||||||
Total assets | $ | 18,088,214 | $ | 20,568,884 | |||||||
Less: Goodwill and core deposit intangible assets, net | (467,984) | (469,728) | |||||||||
Tangible assets | $ | 17,620,230 | $ | 20,099,156 | |||||||
Common shares outstanding | 120,610,029 | 119,865,732 | |||||||||
TCE per share | $ | 13.63 | $ | 13.26 | |||||||
TCE ratio | 9.33 | % | 7.91 | % |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
(Dollars in thousands) | |||||||||||
Net income | $ | 25,864 | $ | 39,121 | |||||||
Average stockholders’ equity | $ | 2,126,333 | $ | 2,046,159 | |||||||
Less: Average goodwill and core deposit intangible assets, net | (468,229) | (469,992) | |||||||||
Average tangible equity | $ | 1,658,104 | $ | 1,576,167 | |||||||
Return on average tangible equity (annualized) | 6.24 | % | 9.93 | % |
Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||||||||||||||
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) | $ | 13,746,219 | $ | 213,626 | 6.25 | % | $ | 15,235,386 | $ | 215,935 | 5.75 | % | |||||||||||||||||||||||
Investment securities AFS and HTM(3) | 2,317,154 | 18,049 | 3.13 | % | 2,248,479 | 15,125 | 2.73 | % | |||||||||||||||||||||||||||
Interest earning cash and deposits at other banks | 2,019,769 | 27,183 | 5.41 | % | 473,344 | 4,922 | 4.22 | % | |||||||||||||||||||||||||||
FHLB stock and other investments | 48,136 | 816 | 6.82 | % | 47,043 | 695 | 5.99 | % | |||||||||||||||||||||||||||
Total interest earning assets | 18,131,278 | 259,674 | 5.76 | % | 18,004,252 | 236,677 | 5.33 | % | |||||||||||||||||||||||||||
Total noninterest earning assets | 1,009,497 | 1,082,918 | |||||||||||||||||||||||||||||||||
Total assets | $ | 19,140,775 | $ | 19,087,170 | |||||||||||||||||||||||||||||||
INTEREST BEARING LIABILITIES: | |||||||||||||||||||||||||||||||||||
Deposits: | |||||||||||||||||||||||||||||||||||
Money market, interest bearing demand and savings deposits | $ | 5,072,782 | $ | 50,145 | 3.98 | % | $ | 5,597,251 | $ | 42,226 | 3.06 | % | |||||||||||||||||||||||
Time deposits | 5,985,501 | 73,888 | 4.96 | % | 5,543,369 | 50,122 | 3.67 | % | |||||||||||||||||||||||||||
Total interest bearing deposits | 11,058,283 | 124,033 | 4.51 | % | 11,140,620 | 92,348 | 3.36 | % | |||||||||||||||||||||||||||
FHLB and FRB borrowings | 1,683,334 | 17,853 | 4.27 | % | 676,444 | 6,698 | 4.02 | % | |||||||||||||||||||||||||||
Convertible notes, net | 444 | 2 | 2.00 | % | 217,114 | 1,322 | 2.44 | % | |||||||||||||||||||||||||||
Subordinated debentures, net | 104,049 | 2,739 | 10.41 | % | 102,791 | 2,431 | 9.46 | % | |||||||||||||||||||||||||||
Total interest bearing liabilities | 12,846,110 | 144,627 | 4.53 | % | 12,136,969 | 102,799 | 3.44 | % | |||||||||||||||||||||||||||
Noninterest bearing liabilities and equity: | |||||||||||||||||||||||||||||||||||
Noninterest bearing demand deposits | 3,803,870 | 4,662,081 | |||||||||||||||||||||||||||||||||
Other liabilities | 364,462 | 241,961 | |||||||||||||||||||||||||||||||||
Stockholders’ equity | 2,126,333 | 2,046,159 | |||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 19,140,775 | $ | 19,087,170 | |||||||||||||||||||||||||||||||
Net interest income/net interest spread (not annualized) | $ | 115,047 | 1.23 | % | $ | 133,878 | 1.89 | % | |||||||||||||||||||||||||||
Net interest margin | 2.55 | % | 3.02 | % | |||||||||||||||||||||||||||||||
Cost of deposits | 3.36 | % | 2.37 | % |
Three Months Ended March 31, 2024 over March 31, 2023 | |||||||||||||||||
Net Increase (Decrease) | Change due to: | ||||||||||||||||
Rate | Volume | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
INTEREST INCOME: | |||||||||||||||||
Loans, including fees | $ | (2,309) | $ | 19,004 | $ | (21,313) | |||||||||||
Investment securities AFS and HTM | 2,924 | 2,425 | 499 | ||||||||||||||
Interest earning cash and deposits at other banks | 22,261 | 1,778 | 20,483 | ||||||||||||||
FHLB stock and other investments | 121 | 104 | 17 | ||||||||||||||
Total interest income | $ | 22,997 | $ | 23,311 | $ | (314) | |||||||||||
INTEREST EXPENSE: | |||||||||||||||||
Money market, interest bearing demand and savings deposits | $ | 7,919 | $ | 13,325 | $ | (5,406) | |||||||||||
Time deposits | 23,766 | 19,396 | 4,370 | ||||||||||||||
FHLB and FRB borrowings | 11,155 | 448 | 10,707 | ||||||||||||||
Convertible notes, net | (1,320) | (273) | (1,047) | ||||||||||||||
Subordinated debentures, net | 308 | 275 | 33 | ||||||||||||||
Total interest expense | $ | 41,828 | $ | 33,171 | $ | 8,657 | |||||||||||
NET INTEREST INCOME | $ | (18,831) | $ | (9,860) | $ | (8,971) |
Three Months Ended March 31, | Increase (Decrease) | ||||||||||||||||||||||
2024 | 2023 | Amount | Percent (%) | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Service fees on deposit accounts | $ | 2,587 | $ | 2,221 | $ | 366 | 16.5 | % | |||||||||||||||
International service fees | 1,035 | 1,088 | (53) | (4.9) | % | ||||||||||||||||||
Wire transfer fees | 812 | 773 | 39 | 5.0 | % | ||||||||||||||||||
Swap fees | 143 | 42 | 101 | 240.5 | % | ||||||||||||||||||
Net gains on sales of SBA loans | — | 2,225 | (2,225) | (100.0) | % | ||||||||||||||||||
Net gains on sales of residential mortgage loans | 73 | 64 | 9 | 14.1 | % | ||||||||||||||||||
Other income and fees | 3,636 | 4,565 | (929) | (20.4) | % | ||||||||||||||||||
Total noninterest income | $ | 8,286 | $ | 10,978 | $ | (2,692) | (24.5) | % | |||||||||||||||
Three Months Ended March 31, | Increase (Decrease) | ||||||||||||||||||||||
2024 | 2023 | Amount | Percent (%) | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Salaries and employee benefits | $ | 47,836 | $ | 57,169 | $ | (9,333) | (16.3) | % | |||||||||||||||
Occupancy | 6,786 | 7,521 | (735) | (9.8) | % | ||||||||||||||||||
Furniture and equipment | 5,340 | 5,058 | 282 | 5.6 | % | ||||||||||||||||||
Data processing and communications | 2,990 | 2,822 | 168 | 6.0 | % | ||||||||||||||||||
Professional fees | 2,518 | 1,543 | 975 | 63.2 | % | ||||||||||||||||||
Amortization of investments in affordable housing partnerships | 2,134 | 1,716 | 418 | 24.4 | % | ||||||||||||||||||
FDIC assessments | 2,926 | 1,781 | 1,145 | 64.3 | % | ||||||||||||||||||
FDIC special assessment | 1,000 | — | 1,000 | 100.0 | % | ||||||||||||||||||
Earned interest credit | 5,834 | 4,427 | 1,407 | 31.8 | % | ||||||||||||||||||
Restructuring costs | 143 | — | 143 | 100.0 | % | ||||||||||||||||||
Merger related costs | 1,044 | — | 1,044 | 100.0 | % | ||||||||||||||||||
Other | 6,288 | 6,697 | (409) | (6.1) | % | ||||||||||||||||||
Total noninterest expense | $ | 84,839 | $ | 88,734 | $ | (3,895) | (4.4) | % | |||||||||||||||
March 31, 2024 | December 31, 2023 | ||||||||||||||||||||||
Amount | Percent (%) | Amount | Percent (%) | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Loan portfolio composition | |||||||||||||||||||||||
CRE loans | $ | 8,707,673 | 64 | % | $ | 8,797,884 | 64 | % | |||||||||||||||
C&I loans | 4,041,063 | 29 | % | 4,135,044 | 30 | % | |||||||||||||||||
Residential mortgage loans | 936,035 | 7 | % | 883,687 | 6 | % | |||||||||||||||||
Consumer and other loans | 34,407 | — | % | 37,004 | — | % | |||||||||||||||||
Total loans receivable, net of deferred costs and fees | 13,719,178 | 100 | % | 13,853,619 | 100 | % | |||||||||||||||||
Allowance for credit losses | (158,758) | (158,694) | |||||||||||||||||||||
Loans receivable, net of allowance for credit losses | $ | 13,560,420 | $ | 13,694,925 |
March 31, 2024 | December 31, 2023 | ||||||||||
(Dollars in thousands) | |||||||||||
Commitments to extend credit | $ | 2,105,176 | $ | 2,274,239 | |||||||
Standby letters of credit | 132,811 | 132,132 | |||||||||
Other commercial letters of credit | 30,645 | 51,983 | |||||||||
Total loan commitments and letters of credit | $ | 2,268,632 | $ | 2,458,354 |
March 31, 2024 | December 31, 2023 | ||||||||||
(Dollars in thousands) | |||||||||||
Nonaccrual loans (1) | $ | 59,526 | $ | 45,204 | |||||||
Accruing delinquent loans past due 90 days or more | 47,290 | 261 | |||||||||
Total nonperforming loans | 106,816 | 45,465 | |||||||||
OREO | — | 63 | |||||||||
Total nonperforming assets | $ | 106,816 | $ | 45,528 | |||||||
Nonaccrual loans to loans receivable | 0.43 | % | 0.33 | % | |||||||
Nonperforming loans to loans receivable | 0.78 | % | 0.33 | % | |||||||
Nonperforming assets to total assets | 0.59 | % | 0.24 | % | |||||||
Allowance for credit losses to nonaccrual loans | 266.70 | % | 351.06 | % | |||||||
Allowance for credit losses to nonperforming loans | 148.63 | % | 349.05 | % | |||||||
Allowance for credit losses to nonperforming assets | 148.63 | % | 348.56 | % |
March 31, 2024 | December 31, 2023 | ||||||||||
(Dollars in thousands) | |||||||||||
CRE loans | $ | 90,823 | $ | 93,940 | |||||||
C&I loans | 55,465 | 51,291 | |||||||||
Residential mortgage loans | 11,942 | 12,838 | |||||||||
Consumer and other loans | 528 | 625 | |||||||||
Total | $ | 158,758 | $ | 158,694 | |||||||
Allowance for credit losses to loans receivable | 1.16 | % | 1.15 | % |
At or for the Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
(Dollars in thousands) | |||||||||||
LOANS: | |||||||||||
Average loans | $ | 13,746,219 | $ | 15,235,386 | |||||||
Loans receivable (end of period) | $ | 13,719,178 | $ | 15,064,849 | |||||||
ALLOWANCE: | |||||||||||
Balance, beginning of period | $ | 158,694 | $ | 162,359 | |||||||
Less loan charge offs: | |||||||||||
CRE loans | (38) | — | |||||||||
C&I loans | (4,619) | (440) | |||||||||
Consumer and other loans | (63) | (55) | |||||||||
Total loan charge offs | (4,720) | (495) | |||||||||
Plus loan recoveries: | |||||||||||
CRE loans | 535 | 69 | |||||||||
C&I loans | 547 | 284 | |||||||||
Consumer and other loans | 102 | 34 | |||||||||
Total loan recoveries | 1,184 | 387 | |||||||||
Net loan charge offs | (3,536) | (108) | |||||||||
ASU 2022-02 day 1 adjustment | — | (407) | |||||||||
Provision for credit loss on loans | 3,600 | 1,700 | |||||||||
Balance, end of period | $ | 158,758 | $ | 163,544 | |||||||
Net loan charge offs to average loans* | 0.10 | % | 0.00 | % | |||||||
Allowance for credit losses to loans receivable at end of period | 1.16 | % | 1.09 | % | |||||||
March 31, 2024 | |||||||||||
Balance | Percent (%) | ||||||||||
(Dollars in thousands) | |||||||||||
Three months or less | $ | 1,653,676 | 29 | % | |||||||
Over three months through six months | 1,441,804 | 25 | % | ||||||||
Over six months through nine months | 1,391,873 | 24 | % | ||||||||
Over nine months through twelve months | 1,189,952 | 20 | % | ||||||||
Over twelve months | 110,456 | 2 | % | ||||||||
Total time deposits | $ | 5,787,761 | 100 | % |
March 31, 2024 | |||||||||||||||||||||||
Actual | Ratio Required To Be Well-Capitalized | Excess Over Well-Capitalized | |||||||||||||||||||||
Amount | Ratio | ||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Hope Bancorp, Inc. | |||||||||||||||||||||||
Common equity tier 1 capital (to risk-weighted assets) | $ | 1,872,360 | 12.47 | % | N/A | N/A | |||||||||||||||||
Tier 1 capital (to risk-weighted assets) | $ | 1,976,607 | 13.17 | % | N/A | N/A | |||||||||||||||||
Total capital (to risk-weighted assets) | $ | 2,130,033 | 14.19 | % | N/A | N/A | |||||||||||||||||
Leverage capital (to average assets) | $ | 1,976,607 | 10.42 | % | N/A | N/A | |||||||||||||||||
Bank of Hope | |||||||||||||||||||||||
Common equity tier 1 capital (to risk-weighted assets) | $ | 1,948,503 | 12.99 | % | 6.50 | % | 6.49 | % | |||||||||||||||
Tier 1 capital (to risk-weighted assets) | $ | 1,948,503 | 12.99 | % | 8.00 | % | 4.99 | % | |||||||||||||||
Total capital (to risk-weighted assets) | $ | 2,101,929 | 14.01 | % | 10.00 | % | 4.01 | % | |||||||||||||||
Leverage capital (to average assets) | $ | 1,948,503 | 10.27 | % | 5.00 | % | 5.27 | % | |||||||||||||||
December 31, 2023 | |||||||||||||||||||||||
Actual | Ratio Required To Be Well-Capitalized | Excess Over Well-Capitalized | |||||||||||||||||||||
Amount | Ratio | ||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Hope Bancorp, Inc. | |||||||||||||||||||||||
Common equity tier 1 capital (to risk-weighted assets) | $ | 1,869,774 | 12.28 | % | N/A | N/A | |||||||||||||||||
Tier 1 capital (to risk-weighted assets) | $ | 1,973,698 | 12.96 | % | N/A | N/A | |||||||||||||||||
Total capital (to risk-weighted assets) | $ | 2,120,157 | 13.92 | % | N/A | N/A | |||||||||||||||||
Leverage capital (to average assets) | $ | 1,973,698 | 10.11 | % | N/A | N/A | |||||||||||||||||
Bank of Hope | |||||||||||||||||||||||
Common equity tier 1 capital (to risk-weighted assets) | $ | 1,940,303 | 12.75 | % | 6.50 | % | 6.25 | % | |||||||||||||||
Tier 1 capital (to risk-weighted assets) | $ | 1,940,303 | 12.75 | % | 8.00 | % | 4.75 | % | |||||||||||||||
Total capital (to risk-weighted assets) | $ | 2,086,762 | 13.71 | % | 10.00 | % | 3.71 | % | |||||||||||||||
Leverage capital (to average assets) | $ | 1,940,303 | 9.94 | % | 5.00 | % | 4.94 | % | |||||||||||||||
March 31, 2024 | March 31, 2023 | ||||||||||||||||||||||
Simulated Rate Changes | Estimated Net Interest Income Sensitivity | Economic Value Of Equity Volatility | Estimated Net Interest Income Sensitivity | Economic Value Of Equity Volatility | |||||||||||||||||||
+ 300 basis points | 0.80 | % | (19.70) | % | 16.00 | % | (7.30) | % | |||||||||||||||
+ 100 basis points | 0.60 | % | (5.90) | % | 5.20 | % | (1.50) | % | |||||||||||||||
- 100 basis points | (2.10) | % | 2.70 | % | (5.40) | % | 0.20 | % | |||||||||||||||
- 300 basis points | (6.80) | % | 2.30 | % | (16.60) | % | (5.00) | % |
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) | ||||||||||||||||||||||||||
January 1, 2024 to January 31, 2024 | — | $ | — | — | $ | 35,333 | ||||||||||||||||||||
February 1, 2024 to February 29, 2024 | — | — | — | 35,333 | ||||||||||||||||||||||
March 1, 2024 to March 31, 2024 | — | — | — | 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: | May 7, 2024 | /s/ Kevin S. Kim | |||||||||
Kevin S. Kim | |||||||||||
Chairman, President, and Chief Executive Officer | |||||||||||
Date: | May 7, 2024 | /s/ Julianna Balicka | |||||||||
Julianna Balicka | |||||||||||
Executive Vice President and Chief Financial Officer | |||||||||||
/s/ Kevin S. Kim | ||
Kevin S. Kim | ||
Chairman, President, and Chief Executive Officer |
/s/ Julianna Balicka | ||
Julianna Balicka | ||
Executive Vice President and Chief Financial Officer |
/s/ Kevin S. Kim | ||
Kevin S. Kim | ||
Chairman, President, and Chief Executive Officer |
/s/ Julianna Balicka | ||
Julianna Balicka | ||
Executive Vice President and Chief Financial Officer |
Consolidated Statements Of Financial Condition (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Fair Value | $ 242,717 | $ 250,518 |
Total | $ 158,758 | $ 158,694 |
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) | 137,992,864 | 137,509,621 |
Common stock, shares outstanding (in shares) | 120,610,029 | 120,126,786 |
Treasury stock, at cost, shares repurchased (in shares) | 17,382,835 | 17,382,835 |
Consolidated Statements Of Comprehensive Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 25,864 | $ 39,121 |
Other comprehensive (loss) income: | ||
Change in unrealized net holding (losses) gains on securities AFS | (13,734) | 31,215 |
Change in unrealized net holding losses on interest rate contracts used in cash flow hedges | (8,186) | (5,938) |
Reclassification adjustments for net gains realized in net income | (2,931) | (1,738) |
Tax effect | 7,311 | (6,939) |
Other comprehensive (loss) income, net of tax | (17,540) | 16,600 |
Total comprehensive income | $ 8,324 | $ 55,721 |
Consolidated Statements Of Changes In Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Statement of Stockholders' Equity [Abstract] | ||
Cash dividends declared on common stock (in dollars per share) | $ 0.14 | $ 0.14 |
ASU 2022-02 | ||
Adoption of ASU | Accounting Standards Update 2016-13 [Member] | |
ASU 2022-02, tax impact | ||
Adoption of ASU | ASU 2022-02, tax impact |
Hope Bancorp, Inc. |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
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”). At March 31, 2024, the Bank has 48 branches and nine loan production offices in California, New York, Texas, Washington, Illinois, New Jersey, Virginia, Georgia, Alabama, Colorado and Oregon as well 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. On March 28, 2024, the Bank entered into a Purchase and Assumption Agreement with PromiseOne Bank, a Georgia state bank, to sell the deposits, other liabilities and certain physical assets of the Bank’s two branches located in Virginia (Annandale and Centreville). The transaction is expected to be completed in the second half of 2024, subject to regulatory approvals and other customary closing conditions.
|
Basis of Presentation |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
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 at December 31, 2023, which was from the audited financial statements included in the Company’s 2023 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 the Bank. 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 March 31, 2024 and December 31, 2023, and the results of operations for the three months ended March 31, 2024 and 2023. 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 2023 Annual Report on Form 10-K. Significant Accounting Policies The Company’s accounting policies are described in Note 1—“Summary of Significant Accounting Policies”, of its audited consolidated financial statements included in its 2023 Annual Report Form 10-K. Significant changes to accounting policies from those disclosed in the Company’s audited consolidated financial statements included in its 2023 Annual Report Form 10-K are presented below. The allowance for unfunded commitments is recognized as a liability (other liabilities in the Consolidated Statements of Financial Condition), with adjustments to the allowance for unfunded commitments recognized through provision for credit losses in the Consolidated Statements of Income. Accounting Pronouncements Adopted In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” which expands segment disclosure requirements for public entities. ASU 2023-07 requires disclosure of significant segment expenses and other segment items on annual and interim periods about a reportable segment’s profit or loss and assets that are currently required annually. This guidance is effective for public entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company is currently evaluating the impact of adopting ASU 2023-07. Recently Issued Accounting Pronouncements Not Yet Adopted There were no recently issued accounting pronouncements not yet adopted that are expected to have a material impact on the Company’s consolidated financial statements. SEC Final Rules On March 6, 2024, the SEC adopted final rules that require companies to disclose certain climate-related information such as material climate-related risks; activities to mitigate or adapt to such risks; information about the registrant's board of directors' oversight of climate-related risks and management’s role in managing material climate-related risks; and information on any climate-related targets or goals that are material to the registrant's business, results of operations, or financial condition. In April 2024, the SEC voluntarily stayed the rule pending judicial review. Subject to the results of judicial review, the final rules would be effective for the fiscal year beginning on December 31, 2025. The Company is still assessing the impact of the final rules.
|
Significant Accounting Policies | Significant Accounting Policies The Company’s accounting policies are described in Note 1—“Summary of Significant Accounting Policies”, of its audited consolidated financial statements included in its 2023 Annual Report Form 10-K. Significant changes to accounting policies from those disclosed in the Company’s audited consolidated financial statements included in its 2023 Annual Report Form 10-K are presented below. The allowance for unfunded commitments is recognized as a liability (other liabilities in the Consolidated Statements of Financial Condition), with adjustments to the allowance for unfunded commitments recognized through provision for credit losses in the Consolidated Statements of Income.
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Earnings Per Share ("EPS") |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share ("EPS") | Earnings Per Share (“EPS”) Earnings per share are computed by dividing net income by the weighted average number of common shares outstanding for the period. 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. 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 March 31, 2024 and 2023, stock options and restricted share awards of 642,245 and 705,659 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, of which $444 thousand remained outstanding at March 31, 2024. 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 Note 10—“Convertible Notes and Subordinated Debentures” for additional information regarding convertible notes issued). Under the required if-converted method for calculating dilutive EPS for convertible instruments, 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 months ended March 31, 2024 and 2023, 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 months ended March 31, 2024 and 2023, as the conversion price exceeded the market price of the Company’s stock. The following table presents computations of basic and diluted EPS for the three months ended March 31, 2024 and 2023.
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Equity Investments |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Investments | Equity Investments Equity investments with readily determinable fair values at March 31, 2024 and December 31, 2023, consisted of mutual funds in the amounts of $4.3 million and $4.4 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 months ended March 31, 2024 and 2023, were recorded in other noninterest income and fees as summarized in the table below:
At March 31, 2024 and December 31, 2023, 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 March 31, 2024, the total balance of equity investments without readily determinable fair values included in “Equity investments” on the Consolidated Statements of Financial Condition was $39.6 million, consisting of $370 thousand in correspondent bank stock, $1.0 million in Community Development Financial Institutions (“CDFI”) investments, and $38.2 million in Community Reinvestment Act (“CRA”) investments. At December 31, 2023, the total balance of equity investments without readily determinable fair values was $39.4 million, consisting of $370 thousand in correspondent bank stock, $1.0 million in CDFI investments, and $38.0 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 months ended March 31, 2024 and 2023.
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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:
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 March 31, 2024 and December 31, 2023, totaled $9.1 million and $11.0 million, respectively. At March 31, 2024 and December 31, 2023, 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 March 31, 2024 and December 31, 2023, $209.9 million and $200.2 million in unrealized losses on investment securities AFS, net of taxes, respectively, were included in accumulated other comprehensive loss. For the three months ended March 31, 2024 and 2023, there were no reclassifications out of accumulated other comprehensive 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 March 31, 2024, 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 $815.3 million and $1.70 billion at March 31, 2024 and December 31, 2023, 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”).
The Company had U.S. Treasury securities, agency securities, 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 March 31, 2024. 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 asset-backed, corporate, and municipal securities that were in an unrealized loss position has 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 has been less than amortized cost is not considered when assessing for credit impairment. 79.4% of the Company’s investment portfolio at March 31, 2024, consisted of securities that were issued by U.S. Government agency and U.S. Government sponsored enterprises. Although a government guarantee exists on securities issued by U.S. Government sponsored agencies, 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 Housing and Economic Recovery Act of 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. Therefore, the Company concluded that a zero allowance approach for these investments was appropriate. The Company also had five asset-backed securities, six corporate securities, and 58 municipal bonds in unrealized loss positions at March 31, 2024. 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 March 31, 2024. 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 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 quantitative filter for impairment triggers. Once the quantitative filter has been triggered, a security is 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 are recognized in other comprehensive income, net of applicable taxes. The Company did not have an allowance for credit losses on investment securities AFS at March 31, 2024 and December 31, 2023. 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 a U.S. government agency or government-sponsored enterprises are highly rated by major rating agencies, and have a long history of no credit losses. Therefore, the Company applies a zero credit loss assumption on these investments. Any expected credit loss is recorded 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 March 31, 2024, all of the Company’s investment securities HTM were issued by a U.S. government agency or government-sponsored enterprises. The Company did not have an allowance for credit losses on investment securities HTM at March 31, 2024 and December 31, 2023.
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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 segment:
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 $4.9 million and $6.1 million at March 31, 2024 and December 31, 2023, respectively. The loan portfolio consists of four segments: CRE loans, C&I loans, residential mortgage loans, and consumer and other loans. CRE loans are extended for the purchase and refinance of commercial real estate and are generally secured by first deeds of trust and collateralized by residential or commercial properties. C&I loans are loans provided to businesses for various purposes such as working capital, purchasing inventory, debt refinancing, business acquisitions, international trade finance activities, and other business-related financing needs. This segment includes warehouse lines of credit for residential mortgages and Small Business Administration (“SBA”) 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. The Company had loans receivable of $13.72 billion at March 31, 2024, a decrease of $134.4 million, or 1.0%, from December 31, 2023. The decrease in loans receivable during the three months ended March 31, 2024, was due to the decline in C&I and CRE loans, offset partially by the growth in residential mortgage loans. During the three months ended March 31, 2024, loan payoffs and paydowns exceeded new origination volume, reflecting, in part, the Company’s prudent approach to loan growth and lower customer demand in a high interest rate environment. The Company had $2.8 million in loans held for sale at March 31, 2024, compared with $3.4 million at December 31, 2023. Loans held for sale at March 31, 2024, consisted of $2.3 million in CRE loans and $476 thousand in residential mortgage loans. Loans held for sale are not included in the loans receivable table presented above. The tables below detail the activity in the allowance for credit losses (“ACL”) by portfolio segment for the three months ended March 31, 2024 and 2023.
The following tables break out the allowance for credit losses and loan balance by measurement methodology at March 31, 2024 and December 31, 2023:
At March 31, 2024 and December 31, 2023, reserves for unfunded loan commitments recorded in other liabilities were $2.8 million and $3.8 million, respectively. For the three months ended March 31, 2024 and 2023, the Company recorded a reduction to reserves for unfunded commitments of $1.0 million and an addition to reserves for unfunded commitments of $1.6 million, 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, as well as loans past due 90 or more days and still on accrual status, by loan segment and broken out by loans with a recorded ACL and those without a recorded ACL, at March 31, 2024 and December 31, 2023.
__________________________________ (1) Total nonaccrual loans exclude the guaranteed portion of SBA loans that are in liquidation totaling $10.9 million and $11.4 million, at March 31, 2024 and December 31, 2023, respectively. The following table presents the amortized cost of collateral-dependent loans at March 31, 2024 and December 31, 2023:
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 three months ended March 31, 2024, the Company did not have any significant changes to the extent to which collateral secured its collateral-dependent loans, due to general deterioration or from other factors. Real estate collateral securing CRE and C&I loans consisted of commercial real estate properties including hotel/motel, building, office, gas station/carwash, warehouse, and residential mortgage properties. Accrued interest receivable on loans totaled $48.7 million at March 31, 2024, and $49.3 million at December 31, 2023. The Company has elected to exclude 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 receivable 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 months ended March 31, 2024 and 2023:
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 at March 31, 2024 and December 31, 2023, by loan segment:
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 segment, risk rating, and year of origination, renewal, or major modification at March 31, 2024 and December 31, 2023.
For the three months ended March 31, 2024 and the twelve months ended December 31, 2023, 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 segment that were reclassified from held for investment to held for sale for the three months ended March 31, 2024 and 2023, 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 the calculation of the allowance for credit losses for collectively assessed loans. The Company uses a reasonable and supportable period of two years, at which point loss assumptions revert back to historical loss information by means of one-year reversion period. Included in the quantitative portion of the ACL analysis are inputs such as borrowers’ net operating income, debt coverage ratios, real estate collateral values, as well as factors that are more subjective or require management’s judgment, including key macroeconomic variables from Moody’s forecast scenarios such as GDP, unemployment rates, interest rates, and CRE 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 that utilizes 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 the aggregate, non-modeled loans represented less than 2% of the Company’s total loan portfolio at March 31, 2024. 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. At March 31, 2024, the Company utilized the March 2024 consensus economic forecast scenario from Moody’s, as it best aligned with management’s expectations of future conditions. The forecast projected GDP growth of 1.4% in 2024, 2.0% for 2025, and 1.9% for 2026, with unemployment projected to be 4.1% for 2024, 4.1% for 2025, and 3.9% in 2026. CRE prices in the consensus scenario were expected to decrease initially, with the CRE price index declining -6.7% for 2024, before rebounding +6.0% for 2025 and +8.0% in 2026. The Company also utilized Moody’s December 2023 consensus economic forecast for the calculation of the December 31, 2023 ACL. In order to 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 Interagency Policy Statement on the Allowance for Credit 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, and other loan modifications; •Changes in the quality of the loan review system and the degree of oversight by the management and the Board of 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 that do not share similar risk characteristics such as nonaccrual loans above $1.0 million, the Company evaluates these loans on an individual basis in accordance with ASC 326. Such nonaccrual loans are considered to have different risk profiles than performing loans and are therefore evaluated individually. The Company elected to collectively assess 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 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 loss on loans. 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 look-back period of eight quarters. Credit loss is not estimated for off-balance-sheet credit exposures that are unconditionally cancellable by the Company. Loan Modifications to Borrowers Experiencing Financial Difficulty In January 2023, the Company adopted ASU 2022-02, Financial Instruments - Credit Losses (Topic 326): TDR and Vintage Disclosures (“ASU 2022-02”), which eliminated the accounting guidance for TDR while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors when a borrower is experiencing financial difficulty. The Company applied this guidance on a modified retrospective transition method, which resulted in a positive cumulative effect adjustment to retained earnings of $287 thousand, net of tax. Subsequent to the adoption of ASU 2022-02, the new guidance is applied uniformly to the Company’s entire loan portfolio when estimating expected credit losses. A summary of loans modified to borrowers experiencing financial difficulty for the period presented, disaggregated by loan class and type of modification, is shown in the tables below.
There were no loans modified to borrowers experiencing financial difficulty during the three months ended March 31, 2023. The following table describes the financial effect of the loan modifications made to borrowers experiencing financial difficulty for the periods presented:
The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. All loans that have been modified within the previous 12 months to borrowers experiencing financial difficulty were current at March 31, 2024 and 2023. There were no loan modifications to borrowers experiencing financial difficulty that had payment defaults during the three months ended March 31, 2024 and 2023, and were modified in the 12 months prior to default.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases The Company’s operating leases are real estate leases of bank branch locations, loan production offices, and office spaces with remaining lease terms ranging from 1 to 9 years at March 31, 2024. 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. The table below summarizes supplemental balance sheet information related to operating leases:
The Company uses its incremental borrowing rate to present value lease payments in order to recognize a ROU asset and the related lease liability. The Company calculates its incremental borrowing rate by adding a spread to the FHLB borrowing interest rate at a given period. During the three months ended March 31, 2024, the Company extended two leases and did not enter into any new lease contracts. Lease extension terms ranged from to five years and the Company reassessed the ROU assets and lease liabilities related to these leases. The Company wrote off $93 thousand in operating ROU assets resulting from the branch consolidation of one location during the three months ended March 31, 2023. There was no impairment on operating ROU assets during the same period of 2024. The table below summarizes the Company’s net operating lease cost:
Rent expense for the three months ended March 31, 2024 and 2023, was $4.2 million and $4.8 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:
At March 31, 2024, the Company had no operating lease commitments that had not yet commenced. The Company did not have any finance leases at March 31, 2024 and December 31, 2023.
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Deposits |
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Deposits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits | Deposits Total deposits of $14.75 billion at March 31, 2024, were largely unchanged from $14.75 billion at December 31, 2023. The aggregate amount of time deposits in denominations of more than $250 thousand at March 31, 2024 and December 31, 2023, was $2.29 billion and $2.24 billion, respectively. Included in time deposits of more than $250 thousand was $300.0 million in California State Treasurer’s deposits at March 31, 2024 and December 31, 2023. 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 March 31, 2024 and December 31, 2023, securities with fair values of approximately $211.6 million and $218.7 million, respectively, and a $150.0 million letter of credit issued by the FHLB, were pledged as collateral for the California State Treasurer’s deposits. Brokered deposits at March 31, 2024 and December 31, 2023, totaled $1.42 billion and $1.54 billion, respectively. Brokered deposits at March 31, 2024, consisted of $227.8 million in money market and NOW accounts and $1.19 billion in time deposit accounts. Brokered deposits at December 31, 2023, consisted of $164.1 million in money market and NOW accounts and $1.37 billion in time deposit accounts. The aggregate amount of unplanned overdrafts of demand deposits that were reclassified as loans was $1.4 million and $2.0 million at March 31, 2024 and December 31, 2023, respectively. The following is a breakdown of the Company’s deposits at March 31, 2024 and December 31, 2023:
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Borrowings |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowings | Borrowings At March 31, 2024, borrowings totaled $795.6 million, compared with $1.80 billion at December 31, 2023. All of the Company’s borrowings at March 31, 2024 and December 31, 2023, had maturities of less than 12 months. The tables below summarize the Company’s borrowing lines at March 31, 2024 and December 31, 2023:
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. The terms of this credit facility require the Company to pledge eligible collateral with the FHLB equal to at least 100% of outstanding advances. At March 31, 2024 and December 31, 2023, loans with a carrying amount of $7.57 billion and $7.60 billion were pledged at the FHLB for outstanding advances and remaining borrowing capacity, respectively. At March 31, 2024 and December 31, 2023, 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. As a member of the FRB system, the Bank may also borrow from the FRB discount window. 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 March 31, 2024, the outstanding principal balance of the qualifying loans pledged at the FRB discount window was $757.1 million. There were no investment securities pledged at the discount window at March 31, 2024. The Company availed itself of the BTFP, which was created in March 2023 to enhance banking system liquidity by allowing institutions to pledge certain securities at par value and borrow at a rate of ten basis points over the one-year overnight index swap rate. The BTFP is available to federally insured depository institutions in the U.S., with advances having a term of up to one year with no prepayment penalties. In 2023, the BTFP was available to federally insured depository institutions in the U.S. at a fixed rate of ten basis points over the one-year overnight index swap rate, but in 2024, the interest rate is no lower than the interest rate on reserve balances in effect on the day the loan is made. The Company’s outstanding borrowings at March 31, 2024 and December 31, 2023, were not subject to the new rate. The BTFP ceased extending new advances in March 2024. At March 31, 2024, the Company had a total par value of $718.7 million in investment securities that were pledged under the BTFP. The Company also maintains unsecured federal funds borrowing lines with other banks. There were no borrowings outstanding from other banks at March 31, 2024 and December 31, 2023.
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Subordinated Debentures and Convertible Notes |
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Subordinated Borrowings [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subordinated Debentures and Convertible Notes | Convertible Notes and Subordinated Debentures 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 are not capital instruments but 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 represented 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. 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 have the option to put the notes back to the Company on 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. On May 15, 2023, most holders of the Company’s convertible notes elected to exercise their optional put right and the Company paid off $197.1 million principal amount of notes in cash. During 2023, the Company also repurchased its notes in the aggregate principal amount of $19.9 million and recorded a gain on debt extinguishment of $405 thousand. The repurchased notes were immediately cancelled subsequent to the repurchase. These repurchases are separate from the optional put and were made through a third-party broker. No notes were repurchased or paid off in the three months ended March 31, 2024. The carrying value of the convertible notes at March 31, 2024 and December 31, 2023, was $444 thousand. The capitalized issuance costs were fully amortized at both March 31, 2024 and December 31, 2023. Interest expense on the convertible notes for the three months ended March 31, 2024 and 2023, totaled $2 thousand and $1.3 million, respectively.
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Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments As part of the Company’s overall interest rate risk management, the Company enters into derivative instruments, including interest rate swaps, collars, caps, floors, foreign exchange contracts, risk participation agreements and mortgage banking derivatives. The notional amount does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual agreements. Derivative instruments are recognized on the balance sheet at their fair value and are not reported on a net basis. The tables below present the fair value of the Company’s derivative financial instruments at March 31, 2024 and December 31, 2023. The Company’s derivative assets and derivative liabilities are located within “Other assets” and “Other liabilities,” respectively, on the Company’s Consolidated Statements of Financial Condition.
__________________________________ (1) The fair values of centrally-cleared derivative contracts are presented net of settled-to-market margin.
__________________________________ (1) The fair values of centrally-cleared derivative contracts are presented net of settled-to-market margin. Derivatives designated as cash flow hedges The Company’s interest rate contracts designated as cash flow hedges were determined to be fully effective during the periods presented and were hedged to financial instruments tied to term SOFR and Federal Funds Rate. The aggregate fair value of the cash flow hedges are recorded in assets or liabilities on the Consolidated Statements of Financial Condition, with changes in fair value recorded in other comprehensive income on the Consolidated Statements of Comprehensive Income. The gain or loss on derivatives is recorded in accumulated other comprehensive income (“AOCI”) and is subsequently reclassified into interest income and interest expense in the period, during which the hedged forecasted transaction affects earnings. Amounts reported in AOCI related to interest rate agreements 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. The Company expects to reclassify, during the next 12 months, approximately $5.2 million, net of taxes, from AOCI as an increase to net interest income. The table below presents the gains (losses) on derivative instruments designated as cash flow hedges, that were reclassified from AOCI into earnings for the periods indicated:
Total cash held as collateral for interest rate contracts designated as cash flow hedges was $0 at March 31, 2024, and $22.9 million at December 31, 2023. Derivatives not designated as hedges The Company’s derivatives not designated as hedges are not speculative and result from a service the Company provides to certain customers. 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. Simultaneously, 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 interest rate contracts 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 Consolidated Statements of Income as other income and fees. 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 the Company’s foreign exchange rate risk. The Company also enters into certain foreign exchange contracts with institutional counterparties, including non-deliverable forward contracts, to manage its foreign exchange rate risk. 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 months ended March 31, 2024 and 2023, the changes in fair value on foreign exchange contracts were gains of $263 thousand and $6 thousand, respectively, and were recognized in the Consolidated Statements of Income as other income and fees. At March 31, 2024, the Company had risk participation agreements with an outside counterparty for interest rate swaps related to loans in which it is a participant. The risk participation agreements provide credit protection to the financial institution should the borrowers fail to perform on their interest rate derivative contracts. 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 of credit derivatives are recognized directly in earnings. The fee received, less the estimate of the loss for credit exposure, is recognized in earnings at the time of the transaction. 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 March 31, 2024, the Company had approximately $2.5 million in interest rate lock commitments and total forward sales commitments for the future delivery of residential mortgage loans. At December 31, 2023, the Company had approximately $1.4 million in interest rate lock commitments and total forward sales commitments for the future delivery of residential mortgage loans.
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies The following table presents a summary of commitments described below at the dates indicated below:
The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its 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. The estimated exposure to loss from these commitments is included in the reserve for unfunded loan commitments, which amounted to $2.8 million at March 31, 2024, and $3.8 million at December 31, 2023. 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 $450 thousand at March 31, 2024, and $535 thousand at December 31, 2023. 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. Management believes that none of these legal claims, individually or in the aggregate, will have a material adverse effect on the results of operations or financial condition of the Company.
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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 The carrying amount of the Company’s goodwill at March 31, 2024, and December 31, 2023, was $464.5 million. There was no impairment of goodwill recorded during the three months ended March 31, 2024. Goodwill and other intangible assets generated from business combinations and deemed to have indefinite lives are not subject to amortization and instead are tested for impairment annually at the reporting unit level unless a triggering event occurs thereby requiring an updated assessment. 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. Impairment exists when the carrying value of the goodwill exceeds the fair value of the reporting unit. At December 31, 2023, the Company performed a qualitative assessment to test for impairment and 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. Intangible Assets Amortization expense related to core deposit intangible assets totaled $401 thousand and $448 thousand for the three months ended March 31, 2024 and 2023, respectively. The following table provides information regarding the core deposit intangibles at March 31, 2024 and December 31, 2023:
Servicing Assets Total servicing assets at March 31, 2024, totaled $8.9 million and were comprised of $7.0 million in SBA servicing assets and $1.9 million in mortgage related servicing assets. At December 31, 2023, servicing assets totaled $9.6 million and were comprised of $7.6 million in SBA servicing assets and $2.1 million in mortgage related servicing assets. 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. At March 31, 2024 and December 31, 2023, the Company did not have a valuation allowance on its servicing assets. The changes in servicing assets for the three months ended March 31, 2024 and 2023, were as follows:
Loans serviced for others are not reported as assets. The principal balances of loans serviced for other institutions were $953.5 million at March 31, 2024, and $987.4 million at December 31, 2023. 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 March 31, 2024 and December 31, 2023, are presented below.
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Income Taxes |
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Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the three months ended March 31, 2024, the Company recorded an income tax provision totaling $10.0 million on pretax income of $35.9 million, representing an effective tax rate of 27.94%, compared with an income tax provision of $13.7 million on pretax income of $52.8 million, representing an effective tax rate of 25.91% for the three months ended March 31, 2023. 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 $807 thousand at March 31, 2024, and $469 thousand at December 31, 2023, that relate to uncertainties associated with federal and state income tax matters. Management believes it is reasonably possible that the unrecognized tax benefits may decrease by $269 thousand in the next twelve months due to the expiration of statute of limitations. 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 at March 31, 2024
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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 Contracts The Company offers interest rate contracts 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 contract with the customer. The Company also enters into an offsetting interest rate contract 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. The fair value assets and liabilities of centrally cleared interest rate contracts are net of variation margin settled-to-market. Due to the observable nature of the inputs used in deriving the fair value of these derivative contracts, the valuation of interest rate contracts 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 contracts 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. Fair value assets and liabilities of centrally cleared derivatives are net of variation margin settled-to-market. Interest rate contracts designated as cash flow hedges and foreign exchange contracts, which includes non-deliverable forward 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 C&I 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. If Level 2 inputs are not available, carrying values 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 months ended March 31, 2024 and 2023. 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 months ended March 31, 2024 and 2023:
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 March 31, 2024 and December 31, 2023, 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 was the estimated fair value for cash and cash equivalents, savings and other interest bearing demand deposits, equity investments without readily determinable fair values, customers’ 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 was determined through a discounted cash flow analysis, which incorporates probability of default and loss given default rates on an individual loan basis. For fixed rate loans, the discount rate used in a discounted cash flow analysis was based on the SOFR Swap Rate. For variable loans, the discount rate started with the underlying 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. Fair values of residential real estate loans included Fannie Mae and Freddie Mac prepayment speed assumptions or a third-party index based on historical prepayment speeds. Fair value of time deposits was based on discounted cash flow analyses 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 incorporated brokered time deposit offering rates. The fair value of the Company’s debt was based on current rates for similar financing with a liquidity premium added to assumed market spreads to reflect exit pricing and the marketability/liquidity costs contained with consummating an orderly transaction. Fair value for the Company’s convertible notes was 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 was not presented herein, as the fair value of these financial instruments was 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 March 31, 2024, was $2.11 billion, compared with $2.12 billion at December 31, 2023. In January 2022, the Company’s Board of Directors approved a share repurchase program that authorized the Company to repurchase up to $50.0 million of its common stock, of which an estimated $35.3 million remained available at March 31, 2024. During the three months ended March 31, 2024, the Company did not repurchase any shares of common stock as part of this program (see Part II, Item 2—“Unregistered Sales of Equity Securities and Use of Proceeds” for additional information). For the three months ended March 31, 2024 and 2023, the Company paid total dividends of $0.14 per common share. The following table presents the changes to accumulated other comprehensive loss for the three months ended March 31, 2024 and 2023:
Reclassifications for net gains and losses realized in net income for the three months ended March 31, 2024 and 2023, related to net gains on interest rate contracts designated as cash flow hedges and amortization on unrealized losses from transferred investment securities to HTM. Gains and losses on interest rate contracts are recorded in interest expense in the Consolidated Statements of Income. The unrealized holding losses at the date of transfer on securities HTM will continue to be reported, net of taxes, in AOCI as a component of stockholders’ equity and be 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 months ended March 31, 2024 and 2023, the Company reclassified net gains of $3.8 million and $2.8 million on interest rate contracts designated as cash flow hedges, respectively, from other comprehensive loss to interest income and interest expense. For the three months ended March 31, 2024, the Company recorded a reclassification adjustment of $847 thousand from other comprehensive loss to a reduction of interest income, to amortize transferred unrealized losses to investment securities HTM, compared with $1.0 million for the three months ended March 31, 2023.
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Stock-Based Compensation |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 and employees 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, and other key employees with appropriate equity-based awards; (ii) motivate high levels of performance; (iii) recognize employees’ 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. In 2023, an additional 150,000 shares of common stock were made available to be issued in connection with grants of restricted stock to be granted as inducement awards for potential new employment with the Company under the 2019 Plan as Exempt Awards and pursuant to Nasdaq Listing Rule 5635(c)(4); this pool was not previously approved by stockholders. These additional shares are not available to persons who previously served as an employee or director of the Company, other than following a bona fide period of non-employment. The Company has not issued, and does not expect to issue, any shares under this 150,000 inducement award pool. At March 31, 2024, there were 96,233 remaining shares available for future grants under the 2019 plan, excluding the 150,000 shares for inducement awards. The pool of available shares can be partially replenished for future grants to the extent there are forfeitures, expirations or otherwise terminations of existing equity awards without issuance of the shares underlying such awards. 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. With the exception of the shares that are 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 three months ended March 31, 2024:
The following is a summary of the Company’s restricted stock and performance unit activity for the three months ended March 31, 2024:
The total fair value of restricted stock and performance units vested during the three months ended March 31, 2024 and 2023, was $8.5 million and $6.2 million, respectively. The total amounts charged against income related to stock-based payment arrangements were $2.7 million and $2.4 million for the three months ended March 31, 2024 and 2023, respectively. The income tax benefit recognized was approximately $751 thousand and $609 thousand for the three months ended March 31, 2024 and 2023, respectively. Since all stock option grants were vested at March 31, 2024, there was no unrecognized compensation expense related to non-vested stock option grants for the three months ended March 31, 2024. Unrecognized compensation expense related to non-vested restricted stock and performance units for the three months ended March 31, 2024 was $8.5 million, and is expected to be recognized over a weighted average vesting period of 1.45 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. At March 31, 2024, 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. At March 31, 2024 and December 31, 2023, 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 a minimum total capital ratio, Tier 1 capital ratio, common equity Tier 1 capital ratio, and leverage ratio 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 Recognition | Revenue Recognition The Company recognizes revenue when obligations under the terms of a contract with customers are satisfied. ASU 2014-09 (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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Subsequent Events |
3 Months Ended |
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Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On April 26, 2024, the Company entered into a merger agreement with Territorial Bancorp Inc. (“Territorial”), headquartered in Honolulu, Hawai‘i. Under the terms of the merger agreement, Territorial will merge with and into the Company, immediately followed by the merger of Territorial’s subsidiary bank, Territorial Savings Bank, with and into the Company’s subsidiary bank, Bank of Hope. Upon completion of the transaction, Territorial shareholders will receive a fixed exchange ratio of 0.8048 shares of the Company’s common stock in exchange for each share of Territorial common stock they own. Based on the closing price of the Company’s common stock on April 26, 2024, this represents a value of $8.82 per share of Territorial common stock, although the actual value will be determined upon the completion of the merger. The transaction is expected to close by year-end 2024, subject to regulatory approvals, the approval of Territorial shareholders, and the satisfaction of other customary closing conditions. Following the completion of the transaction, the legacy Territorial franchise in Hawai‘i will continue to do business under the Territorial Savings Bank brand, as a trade name of Bank of Hope.
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
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Mar. 31, 2024 |
Mar. 31, 2023 |
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Pay vs Performance Disclosure | ||
Basic EPS - common stock | $ 25,864 | $ 39,121 |
Insider Trading Arrangements |
3 Months Ended |
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Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Basis of Presentation (Policies) |
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||
Basis Of Presentation [Abstract] | |||||||||||||||||||||||||||||||||||||
Consolidation | The consolidated financial statements include the accounts of Hope Bancorp and its wholly owned subsidiaries, principally the Bank. 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 March 31, 2024 and December 31, 2023, and the results of operations for the three months ended March 31, 2024 and 2023. 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.
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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 | Recently Issued Accounting Pronouncements Not Yet Adopted There were no recently issued accounting pronouncements not yet adopted that are expected to have a material impact on the Company’s consolidated financial statements. SEC Final Rules On March 6, 2024, the SEC adopted final rules that require companies to disclose certain climate-related information such as material climate-related risks; activities to mitigate or adapt to such risks; information about the registrant's board of directors' oversight of climate-related risks and management’s role in managing material climate-related risks; and information on any climate-related targets or goals that are material to the registrant's business, results of operations, or financial condition. In April 2024, the SEC voluntarily stayed the rule pending judicial review. Subject to the results of judicial review, the final rules would be effective for the fiscal year beginning on December 31, 2025. The Company is still assessing the impact of the final rules.
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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 the calculation of the allowance for credit losses for collectively assessed loans. The Company uses a reasonable and supportable period of two years, at which point loss assumptions revert back to historical loss information by means of one-year reversion period. Included in the quantitative portion of the ACL analysis are inputs such as borrowers’ net operating income, debt coverage ratios, real estate collateral values, as well as factors that are more subjective or require management’s judgment, including key macroeconomic variables from Moody’s forecast scenarios such as GDP, unemployment rates, interest rates, and CRE 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 that utilizes 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 the aggregate, non-modeled loans represented less than 2% of the Company’s total loan portfolio at March 31, 2024. 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. At March 31, 2024, the Company utilized the March 2024 consensus economic forecast scenario from Moody’s, as it best aligned with management’s expectations of future conditions. The forecast projected GDP growth of 1.4% in 2024, 2.0% for 2025, and 1.9% for 2026, with unemployment projected to be 4.1% for 2024, 4.1% for 2025, and 3.9% in 2026. CRE prices in the consensus scenario were expected to decrease initially, with the CRE price index declining -6.7% for 2024, before rebounding +6.0% for 2025 and +8.0% in 2026. The Company also utilized Moody’s December 2023 consensus economic forecast for the calculation of the December 31, 2023 ACL. In order to 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 Interagency Policy Statement on the Allowance for Credit 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, and other loan modifications; •Changes in the quality of the loan review system and the degree of oversight by the management and the Board of 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 that do not share similar risk characteristics such as nonaccrual loans above $1.0 million, the Company evaluates these loans on an individual basis in accordance with ASC 326. Such nonaccrual loans are considered to have different risk profiles than performing loans and are therefore evaluated individually. The Company elected to collectively assess 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 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 loss on loans. 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 look-back period of eight quarters. Credit loss is not estimated for off-balance-sheet credit exposures that are unconditionally cancellable by the Company.
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Accounting Policies (Tables) |
3 Months Ended |
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Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Accounting Standards Update and Change in Accounting Principle | Accounting Pronouncements Adopted In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” which expands segment disclosure requirements for public entities. ASU 2023-07 requires disclosure of significant segment expenses and other segment items on annual and interim periods about a reportable segment’s profit or loss and assets that are currently required annually. This guidance is effective for public entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company is currently evaluating the impact of adopting ASU 2023-07.
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Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of basic and diluted EPS | The following table presents computations of basic and diluted EPS for the three months ended March 31, 2024 and 2023.
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Equity Investments (Tables) |
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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 months ended March 31, 2024 and 2023, were recorded in other noninterest income and fees as summarized in the table below:
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Securities Available for Sale (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 March 31, 2024, 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”).
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Loans Receivable and Allowance for Credit Losses (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Loans Receivable by Major Category | The following is a summary of loans receivable by segment:
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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 months ended March 31, 2024 and 2023.
The following tables break out the allowance for credit losses and loan balance by measurement methodology at March 31, 2024 and December 31, 2023:
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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, as well as loans past due 90 or more days and still on accrual status, by loan segment and broken out by loans with a recorded ACL and those without a recorded ACL, at March 31, 2024 and December 31, 2023.
__________________________________ (1) Total nonaccrual loans exclude the guaranteed portion of SBA loans that are in liquidation totaling $10.9 million and $11.4 million, at March 31, 2024 and December 31, 2023, respectively.
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Amortized Cost Basis of Collateral-Dependent Loans | The following table presents the amortized cost of collateral-dependent loans at March 31, 2024 and December 31, 2023:
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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 months ended March 31, 2024 and 2023:
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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 at March 31, 2024 and December 31, 2023, by loan segment:
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Financing Receivable Credit Quality Indicators | The following table presents the amortized cost basis of loans receivable by segment, risk rating, and year of origination, renewal, or major modification at March 31, 2024 and December 31, 2023.
For the three months ended March 31, 2024 and the twelve months ended December 31, 2023, there were no revolving loans converted to term loans.
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Loans Sold From Loans Held For Investment | The breakdown of loans by segment that were reclassified from held for investment to held for sale for the three months ended March 31, 2024 and 2023, is presented in the following table:
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Summary of Loans Modified | A summary of loans modified to borrowers experiencing financial difficulty for the period presented, disaggregated by loan class and type of modification, is shown in the tables below.
There were no loans modified to borrowers experiencing financial difficulty during the three months ended March 31, 2023. The following table describes the financial effect of the loan modifications made to borrowers experiencing financial difficulty for the periods presented:
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Leases (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Net Lease Cost and Other Information | The table below summarizes the Company’s net operating 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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Deposits (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Deposits | The following is a breakdown of the Company’s deposits at March 31, 2024 and December 31, 2023:
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Borrowings (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Borrowing Lines | The tables below summarize the Company’s borrowing lines at March 31, 2024 and December 31, 2023:
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Subordinated Debentures and Convertible Notes (Tables) |
3 Months Ended |
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Mar. 31, 2024 | |
Subordinated Borrowings [Abstract] | |
Convertible Debt | The carrying value of the convertible notes at March 31, 2024 and December 31, 2023, was $444 thousand. The capitalized issuance costs were fully amortized at both March 31, 2024 and December 31, 2023. Interest expense on the convertible notes for the three months ended March 31, 2024 and 2023, totaled $2 thousand and $1.3 million, respectively.
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Derivative Financial Instruments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments, Fair Value | The tables below present the fair value of the Company’s derivative financial instruments at March 31, 2024 and December 31, 2023. The Company’s derivative assets and derivative liabilities are located within “Other assets” and “Other liabilities,” respectively, on the Company’s Consolidated Statements of Financial Condition.
__________________________________ (1) The fair values of centrally-cleared derivative contracts are presented net of settled-to-market margin.
__________________________________ (1) The fair values of centrally-cleared derivative contracts are presented net of settled-to-market margin.
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Commitments and Contingencies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments | commitments described below at the dates indicated below:
The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its 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.
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Goodwill, Intangible Assets, and Servicing Assets (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets | The following table provides information regarding the core deposit intangibles at March 31, 2024 and December 31, 2023:
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Schedule of Servicing Assets | The changes in servicing assets for the three months ended March 31, 2024 and 2023, were as follows:
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Summary of Fair Value Inputs | The inputs used in evaluating servicing assets for impairment at March 31, 2024 and December 31, 2023, are presented below.
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Fair Value Measurements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 months ended March 31, 2024 and 2023:
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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 March 31, 2024 and December 31, 2023, were as follows:
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Stockholders’ Equity (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table presents the changes to accumulated other comprehensive loss for the three months ended March 31, 2024 and 2023:
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Stock-Based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 three months ended March 31, 2024:
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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 three months ended March 31, 2024:
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Regulatory Matters (Tables) |
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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:
|
Revenue Recognition (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | Service charges on deposit accounts and wire transfers are summarized below:
|
Hope Bancorp, Inc. (Details) |
Mar. 31, 2024
branch
office
|
Mar. 28, 2024
branch
|
---|---|---|
Business Acquisition [Line Items] | ||
Entity number of Branches | 48 | |
Number of loan production offices | office | 9 | |
PromiseOne Bank | ||
Business Acquisition [Line Items] | ||
Entity number of Branches | 2 |
Basis of Presentation (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
Jan. 01, 2023 |
---|---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Retained earnings | $ 1,159,593 | $ 1,150,547 | |
ASU 2022-02 | Cumulative Effect, Period of Adoption, Adjustment | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Retained earnings | $ 287 |
Equity Investments - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
|
Net Investment Income [Line Items] | |||
Equity investments with readily determinable fair value | $ 43,925 | $ 43,750 | |
Realized gain (loss) recorded on equity investments sold | 0 | $ 0 | |
Equity investments without readily determinable fair values | 39,600 | 39,387 | |
Equity investments without readily determinable fair values, impairment | 0 | $ 0 | |
Mutual funds | |||
Net Investment Income [Line Items] | |||
Equity investments with readily determinable fair value | 4,300 | 4,400 | |
Correspondent bank stock | |||
Net Investment Income [Line Items] | |||
Equity investments without readily determinable fair values | 370 | 370 | |
CDFI investments | |||
Net Investment Income [Line Items] | |||
Equity investments without readily determinable fair values | 1,000 | 1,000 | |
CRA investments | |||
Net Investment Income [Line Items] | |||
Equity investments without readily determinable fair values | $ 38,200 | $ 38,000 |
Equity Investments - Change in Fair Value of Equity Investments (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Investments, Debt and Equity Securities [Abstract] | ||
Net change in fair value recorded during the period on equity investments with readily determinable fair value | $ (46) | $ 69 |
Less: Net change in fair value recorded on equity investments sold during the period | 0 | 0 |
Net change in fair value on equity investments with readily determinable fair values held at the end of the period | $ (46) | $ 69 |
Securities Available for Sale - Interest Income (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Debt Securities, Available-for-Sale [Abstract] | ||
Taxable | $ 16,982 | $ 14,046 |
Nontaxable | 1,067 | 1,079 |
Total | $ 18,049 | $ 15,125 |
Held to Maturity (Details) - USD ($) |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
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 | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Interest income reversals | $ 785 | $ 983 |
Real estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Interest income reversals | 191 | 451 |
C&I loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Interest income reversals | 588 | 518 |
Residential mortgage loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Interest income reversals | $ 6 | $ 14 |
Loans Receivable and Allowance for Credit Losses - Loans Held For Investment - Reclassification to Held for Sale (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Transfer of loans held for investment to held for sale | $ 0 | $ 162,483 |
CRE loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Transfer of loans held for investment to held for sale | 0 | 53,608 |
C&I loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Transfer of loans held for investment to held for sale | $ 0 | $ 108,875 |
Loans Receivable and Allowance for Credit Losses - Principal Forgiveness (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Loan modifications with payment defaults, modified in 12 months prior to default | $ 0.0 | $ 0.0 |
C&I loans | Principal forgiveness | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Forgiveness of principal | $ 4.4 |
Leases - Additional Information (Details) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2024
USD ($)
lease
|
Mar. 31, 2023
USD ($)
branch
|
Dec. 31, 2023
USD ($)
|
|
Lessee, Lease, Description [Line Items] | |||
Extension options, term of extension | 5 years | ||
Rent expense | $ 4,200,000 | $ 4,800,000 | |
Operating Lease, Impairment Loss | $ 0 | $ (93,000) | |
Number of branches consolidated | branch | 1 | ||
Number of operating lease commitments not yet commenced | lease | 0 | ||
Short-term operating lease liability | $ 14,128,000 | $ 14,287,000 | |
Long-term operating lease liability | $ 35,621,000 | $ 38,383,000 | |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term for operating leases | 1 year | ||
Extension options, term of extension | 3 years | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term for operating leases | 9 years | ||
Extension options, term of extension | 5 years |
Leases - Net Lease Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Leases [Abstract] | ||
Operating lease cost | $ 3,606 | $ 3,841 |
Variable lease cost | 808 | 783 |
Sublease income | (39) | (42) |
Net lease cost | $ 4,375 | $ 4,582 |
Leases - Other Information (Details) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2024
USD ($)
lease
|
Mar. 31, 2023
USD ($)
|
Dec. 31, 2023
USD ($)
|
|
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash outflows for operating leases | $ 3,981 | $ 3,961 | |
ROU assets obtained in exchange for lease liabilities, net | $ 712 | $ 2,031 | |
Weighted-average remaining lease term - operating leases | 3 years 10 months 24 days | 4 years 6 months | |
Weighted-average discount rate - operating leases | 2.84% | 2.52% | |
Number of operating lease commitments not yet commenced | lease | 0 | ||
Number of leases extended | lease | 2 | ||
Number of new leases | lease | 0 | ||
Long-term operating lease liability | $ 35,621 | $ 38,383 | |
Operating Lease, Impairment Loss | $ 0 | $ (93) |
Leases - Maturities of Remaining Lease Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Leases [Abstract] | ||
2024 | $ 11,620 | |
2025 | 14,144 | |
2026 | 13,451 | |
2027 | 7,932 | |
2028 | 3,043 | |
2029 and thereafter | 2,575 | |
Total lease payments | 52,765 | |
Less: imputed interest | 3,016 | |
Total lease obligations | $ 49,749 | $ 52,670 |
Borrowings - Narrative (Details) $ in Thousands |
Mar. 31, 2024
USD ($)
securities
|
Dec. 31, 2023
USD ($)
|
---|---|---|
Debt Instrument [Line Items] | ||
FHLB and FRB borrowings | $ 795,634 | $ 1,795,726 |
Percent of assets | 25.00% | |
Percent outstanding advances | 100.00% | |
Unsecured Federal Funds lines | ||
Debt Instrument [Line Items] | ||
FHLB and FRB borrowings | $ 0 | 0 |
Qualifying Loans | ||
Debt Instrument [Line Items] | ||
Asset balance used to determine maximum borrowing capacity from federal reserve bank | $ 757,100 | |
FRB Discount Window | ||
Debt Instrument [Line Items] | ||
Percent of qualifying assets (up to) | 99.00% | |
Investment securities, pledged | $ 718,700 | |
Number of securities pledged as collateral | securities | 0 | |
Mortgage Loans on Real Estate | ||
Debt Instrument [Line Items] | ||
Pledged as collateral, FHLB | $ 7,570,000 | $ 7,600,000 |
Derivative Financial Instruments - Summary of Derivative Assets and Liabilities (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Derivative [Line Items] | ||
Interest rate cash flow hedge, gain (loss) reclassified to earnings, net | $ 3,778 | $ 2,772 |
Interest income and fees on loans | ||
Derivative [Line Items] | ||
Interest rate cash flow hedge, gain (loss) reclassified to earnings, net | (1,000) | 0 |
Interest expense on deposits | ||
Derivative [Line Items] | ||
Interest rate cash flow hedge, gain (loss) reclassified to earnings, net | 3,483 | 1,719 |
Interest expense on FHLB and FRB borrowings | ||
Derivative [Line Items] | ||
Interest rate cash flow hedge, gain (loss) reclassified to earnings, net | $ 1,295 | $ 1,053 |
Commitments and Contingencies (Details) - USD ($) |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Supply Commitment [Line Items] | ||
Loss contingencies for all legal claims | $ 450,000 | $ 535,000 |
Loss contingencies for all legal claims | 450,000 | 535,000 |
Commitments to extend credit | ||
Supply Commitment [Line Items] | ||
Commitments and letters of credit | 2,105,176,000 | 2,274,239,000 |
Standby letters of credit | ||
Supply Commitment [Line Items] | ||
Commitments and letters of credit | 132,811,000 | 132,132,000 |
Other letters of credit | ||
Supply Commitment [Line Items] | ||
Commitments and letters of credit | 30,645,000 | 51,983,000 |
Commitments to fund investments in affordable housing partnerships | ||
Supply Commitment [Line Items] | ||
Commitments and letters of credit | $ 20,675,000 | $ 21,017,000 |
Goodwill, Intangible Assets, and Servicing Assets - Intangible Assets (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
|
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill | $ 464,450,000 | $ 464,450,000 | |
Goodwill impairment | 0 | ||
Core Deposits | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense related to core deposit intangible assets | 401,000 | $ 448,000 | |
Gross Amount | 20,901,000 | 20,901,000 | |
Accumulated Amortization | (17,367,000) | (16,966,000) | |
Carrying Amount | $ 3,534,000 | 3,935,000 | |
Foster Bankshares acquisition | Core Deposits | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization Period | 10 years | ||
Gross Amount | $ 2,763,000 | 2,763,000 | |
Accumulated Amortization | (2,763,000) | (2,763,000) | |
Carrying Amount | $ 0 | 0 | |
Wilshire Bancorp acquisition | Core Deposits | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization Period | 10 years | ||
Gross Amount | $ 18,138,000 | 18,138,000 | |
Accumulated Amortization | (14,604,000) | (14,203,000) | |
Carrying Amount | $ 3,534,000 | $ 3,935,000 |
Goodwill, Intangible Assets, and Servicing Assets - Servicing Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
|
Servicing Asset at Amortized Cost, Balance [Roll Forward] | |||
Balance at beginning of period | $ 9,631 | $ 11,628 | $ 11,628 |
Additions through originations of servicing assets | 7 | 965 | |
Amortization | (769) | (965) | |
Balance at end of period | 8,869 | $ 11,628 | 9,631 |
SBA servicing assets | 7,000 | 7,600 | |
Mortgage related servicing assets | 1,900 | 2,100 | |
Principal balances of loans serviced for other institutions | $ 953,500 | $ 987,400 | |
SBA Servicing Assets: Weighted-average discount rate | 9.82% | 11.12% | |
SBA Servicing Assets: Constant prepayment rate | 12.22% | 12.17% | |
Mortgage Servicing Assets: Weighted-average discount rate | 11.13% | 11.00% | |
Mortgage Servicing Assets: Constant prepayment rate | 4.99% | 9.52% |
Income Taxes - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
|
Income Tax Disclosure [Abstract] | |||
Income tax provision | $ 10,030 | $ 13,681 | |
Pretax income | $ 35,894 | $ 52,802 | |
Effective income tax rate | 27.94% | 25.91% | |
Unrecognized tax benefits | $ 807 | $ 469 | |
Decrease in unrecognized tax benefits is reasonably possible | $ 269 |
Fair Value Measurements - Rollforward of Level 3 Assets (Details) - Level 3 - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | $ 858 | $ 943 |
Change in fair value included in other comprehensive income | (39) | 39 |
Ending Balance | 819 | 982 |
Other derivatives | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | 28 | 32 |
Change in fair value included in other comprehensive income | (15) | 3 |
Ending Balance | $ 13 | $ 35 |
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 | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Loans Receivable | CRE loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total gains (losses), fair value | $ (477) | $ (166) |
Loans Receivable | C&I loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total gains (losses), fair value | (4,341) | (2,794) |
OREO | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total gains (losses), fair value | $ 0 | $ (271) |
Stockholders' Equity - Discussion of Equity (Details) - USD ($) |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Equity [Abstract] | ||||
Total stockholders’ equity | $ 2,112,270,000 | $ 2,058,580,000 | $ 2,121,243,000 | $ 2,019,328,000 |
Share repurchase program, authorized amount | 50,000,000 | |||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | 35,300,000 | |||
Repurchase of treasury stock | $ 0 | |||
Dividends paid (in dollars per share) | $ 0.14 | $ 0.14 | ||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, before Tax | $ (3,800,000) | $ 2,800,000 | ||
Reclassification from AOCI, Debt Securities transferred from AFS to HTM amortization of unrealized losses, before tax | $ 847,000 | $ 1,000,000 |
Stockholders' Equity - Changes in Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | $ 2,121,243 | $ 2,019,328 |
Unrealized net (losses) gains on securities available for sale | (13,734) | 31,215 |
Unrealized net losses on interest rate contracts used for cash flow hedges | (8,186) | (5,938) |
Reclassification adjustments for net gains realized in net income | (2,931) | (1,738) |
Tax effect | 7,311 | (6,939) |
Other comprehensive (loss) income, net of tax | (17,540) | 16,600 |
Balance at end of period | 2,112,270 | 2,058,580 |
Accumulated other comprehensive loss, net | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (204,738) | (230,857) |
Other comprehensive (loss) income, net of tax | (17,540) | 16,600 |
Balance at end of period | $ (222,278) | $ (214,257) |
Subsequent Events (Details) - Subsequent Event - Territorial - $ / shares |
Apr. 29, 2024 |
Apr. 26, 2024 |
---|---|---|
Subsequent Event [Line Items] | ||
Merger agreement, fixed exchange ratio of shares | 0.8048 | |
Merger agreement, share value | $ 8.82 |
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