QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☒ | Accelerated filer | ☐ | ||||||||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
Emerging growth company |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Page | ||||||||
Item 1 – | ||||||||
Item 2 – | ||||||||
Item 3 – | ||||||||
Item 4 – | ||||||||
Item 1 – | ||||||||
Item 1A – | ||||||||
Item 2 – | ||||||||
Item 3 – | ||||||||
Item 4 – | ||||||||
Item 5 – | ||||||||
Item 6 – | ||||||||
September 30, 2023 | December 31, 2022 | ||||||||||
ASSETS | |||||||||||
Cash and due from banks | $ | $ | |||||||||
Interest-earning deposits in financial institutions | |||||||||||
Total cash and cash equivalents | |||||||||||
Securities held-to-maturity, at amortized cost (fair value of $ | |||||||||||
Securities available-for-sale, at fair value (amortized cost of $ | |||||||||||
Loans receivable | |||||||||||
Allowance for loan losses | ( | ( | |||||||||
Loans receivable, net | |||||||||||
Federal Home Loan Bank and other bank stock, at cost | |||||||||||
Premises and equipment, net | |||||||||||
Bank owned life insurance | |||||||||||
Deferred income taxes, net | |||||||||||
Goodwill | |||||||||||
Other intangibles | |||||||||||
Derivative assets | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Noninterest-bearing deposits | $ | $ | |||||||||
Interest-bearing deposits | |||||||||||
Total deposits | |||||||||||
Federal Home Loan Bank (FHLB) advances, net and Federal Reserve Bank (FRB) borrowings | |||||||||||
Other borrowings | |||||||||||
Long-term debt, net | |||||||||||
Accrued expenses and other liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingent liabilities | |||||||||||
Common stock, $ | |||||||||||
Class B non-voting non-convertible 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 | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
September 30, 2023 | June 30, 2023 | September 30, 2022 | 2023 | 2022 | |||||||||||||||||||||||||
Interest and dividend income | |||||||||||||||||||||||||||||
Loans, including fees | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Securities | |||||||||||||||||||||||||||||
Other interest-earning assets | |||||||||||||||||||||||||||||
Total interest and dividend income | |||||||||||||||||||||||||||||
Interest expense | |||||||||||||||||||||||||||||
Deposits | |||||||||||||||||||||||||||||
FHLB advances and FRB borrowings | |||||||||||||||||||||||||||||
Other interest-bearing liabilities | |||||||||||||||||||||||||||||
Total interest expense | |||||||||||||||||||||||||||||
Net interest income | |||||||||||||||||||||||||||||
Provision for (reversal of) credit losses | ( | ||||||||||||||||||||||||||||
Net interest income after provision for (reversal of) credit losses | |||||||||||||||||||||||||||||
Noninterest income | |||||||||||||||||||||||||||||
Customer service fees | |||||||||||||||||||||||||||||
Loan servicing income | |||||||||||||||||||||||||||||
Income from bank owned life insurance | |||||||||||||||||||||||||||||
Change in fair value of derivative instruments | |||||||||||||||||||||||||||||
Net gain on sale of securities available-for-sale | |||||||||||||||||||||||||||||
All other income | |||||||||||||||||||||||||||||
Total noninterest income | |||||||||||||||||||||||||||||
Noninterest expense | |||||||||||||||||||||||||||||
Salaries and employee benefits | |||||||||||||||||||||||||||||
Occupancy and equipment | |||||||||||||||||||||||||||||
Professional fees | |||||||||||||||||||||||||||||
Data processing | |||||||||||||||||||||||||||||
Regulatory assessments | |||||||||||||||||||||||||||||
Software and technology | |||||||||||||||||||||||||||||
(Gain) loss on investments in alternative energy partnerships | ( | ( | |||||||||||||||||||||||||||
Reversal of loan repurchase reserves | ( | ( | ( | ( | |||||||||||||||||||||||||
Amortization of other intangibles | |||||||||||||||||||||||||||||
Acquisition, integration and transaction costs | |||||||||||||||||||||||||||||
Other expense | |||||||||||||||||||||||||||||
Total noninterest expense | |||||||||||||||||||||||||||||
Income before income taxes | |||||||||||||||||||||||||||||
Income tax expense | |||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||
Preferred stock dividends | |||||||||||||||||||||||||||||
Impact of preferred stock redemption | |||||||||||||||||||||||||||||
Net income available to common stockholders | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Earnings per common share: | |||||||||||||||||||||||||||||
Basic | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Diluted | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Earnings per class B common share: | |||||||||||||||||||||||||||||
Basic | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Diluted | $ | $ | $ | $ | $ |
Three Months Ended | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
September 30, 2023 | June 30, 2023 | September 30, 2022 | 2023 | 2022 | |||||||||||||||||||||||||
Net income | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||||||||||||||||
Unrealized gain (loss) on available-for-sale securities: | |||||||||||||||||||||||||||||
Unrealized gain (loss) arising during the period | ( | ( | ( | ( | |||||||||||||||||||||||||
Reclassification adjustment for gain included in net income | ( | ||||||||||||||||||||||||||||
Total change in unrealized gain (loss) on available-for-sale securities | ( | ( | ( | ( | |||||||||||||||||||||||||
Unrealized gain on cash flow hedge: | |||||||||||||||||||||||||||||
Unrealized gain arising during the period | |||||||||||||||||||||||||||||
Amortization of unrealized loss on securities transferred from available-for-sale to held-to-maturity | |||||||||||||||||||||||||||||
Total other comprehensive income (loss) | ( | ( | ( | ||||||||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ | $ |
Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||||
Voting | Class B Non-Voting | ||||||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2023 | |||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2023 | $ | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||
Comprehensive income: | |||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Excise tax on treasury stock repurchases | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Restricted stock surrendered due to employee tax liability | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||
Shares purchased under the Dividend Reinvestment Plan | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Balance at September 30, 2023 | $ | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2022 | $ | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||
Comprehensive income: | |||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Issuance of common stock | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Repurchase of | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Restricted stock surrendered due to employee tax liability | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Shares purchased under the Dividend Reinvestment Plan | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Balance at September 30, 2022 | $ | $ | $ | $ | $ | ( | $ | ( | $ |
Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||
Voting | Class B Non-Voting | ||||||||||||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||
Comprehensive income: | |||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock | — | — | ( | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Repurchase of | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Restricted stock surrendered due to employee tax liability | — | ( | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Shares purchased under the Dividend Reinvestment Plan | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2023 | $ | $ | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||
Comprehensive loss: | |||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Redemption of preferred stock | ( | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Repurchase of | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Restricted stock surrendered due to employee tax liability | — | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Shares purchased under the Dividend Reinvestment Plan | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Preferred stock dividends | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2022 | $ | $ | $ | $ | $ | $ | ( | $ | ( | $ |
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||||||
Provision for (reversal of) credit losses | ( | ||||||||||
Reversal of loan repurchase reserves | ( | ( | |||||||||
Depreciation on premises and equipment | |||||||||||
Amortization of other intangibles | |||||||||||
Amortization of debt issuance costs | |||||||||||
Net amortization of premium on securities | |||||||||||
Net (accretion) amortization of deferred loan costs (fees) and purchased premiums (discounts) | |||||||||||
Deferred income tax expense | ( | ( | |||||||||
Bank owned life insurance income | ( | ( | |||||||||
Share-based compensation expense | |||||||||||
Change in fair value of derivative instruments | ( | ( | |||||||||
Loss on investments in alternative energy partnerships and affordable housing investments | |||||||||||
Net gain on sale of securities available-for-sale | ( | ||||||||||
Gain on sale-leaseback of branch | ( | ||||||||||
Repurchase of mortgage loans | ( | ( | |||||||||
Change in accrued interest receivable and other assets | |||||||||||
Change in accrued interest payable and other liabilities | ( | ||||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Proceeds from sales of securities available-for-sale | |||||||||||
Proceeds from maturities and calls of securities available-for-sale | |||||||||||
Purchases of securities available-for-sale | ( | ( | |||||||||
Proceeds from principal repayments of securities held-to-maturity and available-for-sale | |||||||||||
Net cash used in acquisitions | ( | ||||||||||
Loan originations and principal collections, net | |||||||||||
Purchases of loans | ( | ( | |||||||||
Redemption of FHLB stock | |||||||||||
Purchases of FHLB and other bank stock | ( | ( | |||||||||
Purchase of derivative instruments | ( | ||||||||||
Purchase of mortgage servicing rights | ( | ||||||||||
Purchases of premises and equipment | ( | ( | |||||||||
Proceeds from sale-leaseback of branch | |||||||||||
Funding of equity investments | ( | ( | |||||||||
Decrease in investments in alternative energy partnerships | |||||||||||
Net cash provided by investing activities | |||||||||||
Cash flows from financing activities: | |||||||||||
Net decrease in deposits | ( | ( | |||||||||
Net increase in short-term FHLB advances and FRB borrowings | |||||||||||
Proceeds from FHLB long-term advances and FRB borrowings | |||||||||||
Net increase (decrease) in other borrowings | ( | ||||||||||
Redemption of preferred stock | ( | ||||||||||
Redemption of long term debt | ( | ||||||||||
Purchase of treasury stock | ( | ( | |||||||||
Proceeds from exercise of stock options | |||||||||||
Purchase of restricted stock surrendered due to employee tax liability | ( | ( | |||||||||
Dividends paid on preferred stock | ( | ||||||||||
Dividends paid on common stock | ( | ( | |||||||||
Net cash used in financing activities | ( | ( | |||||||||
Net change in cash and cash equivalents | |||||||||||
Cash and cash equivalents at beginning of period | |||||||||||
Cash and cash equivalents at end of period | $ | $ | |||||||||
Supplemental cash flow information | |||||||||||
Interest paid on deposits and borrowed funds | |||||||||||
Income taxes paid | |||||||||||
Supplemental disclosure of non-cash activities | |||||||||||
Transfer from loans to other real estate owned, net | |||||||||||
Reclassification of securities available-for-sale to held-to-maturity | |||||||||||
Operating lease right-of-use assets received in exchange for lease liabilities | |||||||||||
Commitments to fund low income housing tax credit investments | |||||||||||
Goodwill adjustments for purchase accounting | |||||||||||
Fair Value Measurement Level | ||||||||||||||||||||||||||
($ in thousands) | Carrying Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||
September 30, 2023 | ||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Securities available-for-sale: | ||||||||||||||||||||||||||
SBA loan pools securities | $ | $ | $ | $ | ||||||||||||||||||||||
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities | ||||||||||||||||||||||||||
U.S. government agency and U.S. government sponsored enterprise collateralized mortgage obligations | ||||||||||||||||||||||||||
Non-agency residential mortgage-backed securities | ||||||||||||||||||||||||||
Collateralized loan obligations | ||||||||||||||||||||||||||
Corporate debt securities | ||||||||||||||||||||||||||
Derivative assets: | ||||||||||||||||||||||||||
Contingent forward loan sale agreement | ||||||||||||||||||||||||||
Interest rate swaptions | ||||||||||||||||||||||||||
Cash flow hedges | ||||||||||||||||||||||||||
Interest rate swaps and foreign exchange contracts | ||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||
Derivative liabilities: | ||||||||||||||||||||||||||
Interest rate swaps and foreign exchange contracts(1) | ||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Securities available-for-sale: | ||||||||||||||||||||||||||
SBA loan pools securities | $ | $ | $ | $ | ||||||||||||||||||||||
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities | ||||||||||||||||||||||||||
U.S. government agency and U.S. government sponsored enterprise collateralized mortgage obligations | ||||||||||||||||||||||||||
Municipal securities | ||||||||||||||||||||||||||
Non-agency residential mortgage-backed securities | ||||||||||||||||||||||||||
Collateralized loan obligations | ||||||||||||||||||||||||||
Corporate debt securities | ||||||||||||||||||||||||||
Derivative assets: | ||||||||||||||||||||||||||
Interest rate swaps and foreign exchange contracts | ||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||
Derivative liabilities: | ||||||||||||||||||||||||||
Interest rate swaps and foreign exchange contracts(1) | ||||||||||||||||||||||||||
Fair Value Measurement Level | ||||||||||||||||||||||||||
($ in thousands) | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||
September 30, 2023 | ||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Individually evaluated loans: | ||||||||||||||||||||||||||
Commercial and industrial | $ | $ | $ | $ | ||||||||||||||||||||||
SBA | ||||||||||||||||||||||||||
Other real estate owned: | ||||||||||||||||||||||||||
Single family residential | ||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Individually evaluated loans: | ||||||||||||||||||||||||||
Single family residential mortgage | $ | $ | $ | $ | ||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||||
SBA | ||||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
($ in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Individually evaluated loans: | ||||||||||||||||||||||||||
Single family residential mortgage | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||
Commercial and industrial | ( | ( | ( | ( | ||||||||||||||||||||||
SBA | ( | ( | ( | ( | ||||||||||||||||||||||
Other consumer | ( | ( | ( | |||||||||||||||||||||||
Commercial real estate | ( | |||||||||||||||||||||||||
Other real estate owned: | ||||||||||||||||||||||||||
Single family residential | ( | |||||||||||||||||||||||||
Carrying Amount | Fair Value Measurement Level | |||||||||||||||||||||||||||||||
($ in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||||
September 30, 2023 | ||||||||||||||||||||||||||||||||
Financial assets | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Securities held-to-maturity | ||||||||||||||||||||||||||||||||
Securities available-for-sale | ||||||||||||||||||||||||||||||||
Federal Home Loan Bank and other bank stock | ||||||||||||||||||||||||||||||||
Loans receivable, net of allowance for credit losses | ||||||||||||||||||||||||||||||||
Accrued interest receivable | ||||||||||||||||||||||||||||||||
Derivative assets | ||||||||||||||||||||||||||||||||
Financial liabilities | ||||||||||||||||||||||||||||||||
Deposits | ||||||||||||||||||||||||||||||||
Advances from Federal Home Loan Bank and Federal Reserve Bank borrowings | ||||||||||||||||||||||||||||||||
Other borrowings | ||||||||||||||||||||||||||||||||
Long-term debt | ||||||||||||||||||||||||||||||||
Derivative liabilities(1) | ||||||||||||||||||||||||||||||||
Accrued interest payable | ||||||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||
Financial assets | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Securities held-to-maturity | ||||||||||||||||||||||||||||||||
Securities available-for-sale | ||||||||||||||||||||||||||||||||
Federal Home Loan Bank and other bank stock | ||||||||||||||||||||||||||||||||
Loans receivable, net of allowance for credit losses | ||||||||||||||||||||||||||||||||
Accrued interest receivable | ||||||||||||||||||||||||||||||||
Derivative assets | ||||||||||||||||||||||||||||||||
Financial liabilities | ||||||||||||||||||||||||||||||||
Deposits | ||||||||||||||||||||||||||||||||
Advances from Federal Home Loan Bank | ||||||||||||||||||||||||||||||||
Long-term debt | ||||||||||||||||||||||||||||||||
Derivative liabilities(1) | ||||||||||||||||||||||||||||||||
Accrued interest payable |
($ in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Allowance for Credit Losses | Fair Value | |||||||||||||||||||||||||||
September 30, 2023 | ||||||||||||||||||||||||||||||||
Securities held-to-maturity: | ||||||||||||||||||||||||||||||||
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||
U.S. government agency and U.S. government sponsored enterprise collateralized mortgage obligations | ( | |||||||||||||||||||||||||||||||
Municipal securities | ( | |||||||||||||||||||||||||||||||
Total securities held-to-maturity | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||
Securities available-for-sale: | ||||||||||||||||||||||||||||||||
SBA loan pool securities | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities | ( | |||||||||||||||||||||||||||||||
U.S. government agency and U.S. government sponsored enterprise collateralized mortgage obligations | ( | |||||||||||||||||||||||||||||||
Non-agency residential mortgage-backed securities | ( | |||||||||||||||||||||||||||||||
Collateralized loan obligations | ( | |||||||||||||||||||||||||||||||
Corporate debt securities | ( | ( | ||||||||||||||||||||||||||||||
Total securities available-for-sale | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||
Securities held-to-maturity: | ||||||||||||||||||||||||||||||||
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||
U.S. government agency and U.S. government sponsored enterprise collateralized mortgage obligations | ( | |||||||||||||||||||||||||||||||
Municipal securities | ( | |||||||||||||||||||||||||||||||
Total securities held-to-maturity | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||
Securities available-for-sale: | ||||||||||||||||||||||||||||||||
SBA loan pool securities | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities | ( | |||||||||||||||||||||||||||||||
U.S. government agency and U.S. government sponsored enterprise collateralized mortgage obligations | ( | |||||||||||||||||||||||||||||||
Non-agency residential mortgage-backed securities | ( | |||||||||||||||||||||||||||||||
Collateralized loan obligations | ( | |||||||||||||||||||||||||||||||
Corporate debt securities | ( | |||||||||||||||||||||||||||||||
Total securities available-for-sale | $ | $ | $ | ( | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
($ in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Gross realized gains | $ | $ | $ | $ | ||||||||||||||||||||||
Gross realized losses | ( | |||||||||||||||||||||||||
Net realized gains on sales and calls | $ | $ | $ | $ | ||||||||||||||||||||||
Proceeds from sales and calls | $ | $ | $ | $ | ||||||||||||||||||||||
Less Than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||||||||||||||||
($ in thousands) | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||||||||||||||||||||
September 30, 2023 | ||||||||||||||||||||||||||||||||||||||
Securities available-for-sale: | ||||||||||||||||||||||||||||||||||||||
SBA loan pool securities | $ | $ | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities | ( | ( | ||||||||||||||||||||||||||||||||||||
U.S. government agency and U.S. government sponsored enterprise collateralized mortgage obligations | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Non-agency residential mortgage-backed securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Collateralized loan obligations | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Corporate debt securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Total securities available-for-sale | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||
Securities available-for-sale: | ||||||||||||||||||||||||||||||||||||||
SBA loan pool securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities | ( | ( | ||||||||||||||||||||||||||||||||||||
U.S. government agency and U.S. government sponsored enterprise collateralized mortgage obligations | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Non-agency residential mortgage-backed securities | ( | ( | ||||||||||||||||||||||||||||||||||||
Collateralized loan obligations | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Corporate debt securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Total securities available-for-sale | $ | $ | ( | $ | $ | ( | $ | $ | ( |
Held-to-Maturity | Available-for-Sale | |||||||||||||||||||||||||
($ in thousands) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||||||||||||
Earlier of maturity or next repricing date: | ||||||||||||||||||||||||||
Within one year | $ | $ | $ | $ | ||||||||||||||||||||||
One to five years | ||||||||||||||||||||||||||
Five to ten years | ||||||||||||||||||||||||||
Greater than ten years | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
One year or less | More than One Year through Five Years | More than Five Years through Ten Years | More than Ten Years | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | Fair Value | Weighted-Average Yield | Fair Value | Weighted-Average Yield | Fair Value | Weighted-Average Yield | Fair Value | Weighted-Average Yield | Fair Value | Weighted-Average Yield | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities available-for-sale: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SBA loan pool securities | $ | % | $ | % | $ | % | $ | % | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities | % | % | % | % | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. government agency and U.S. government sponsored enterprise collateralized mortgage obligations | % | % | % | % | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-agency residential mortgage-backed securities | % | % | % | % | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Collateralized loan obligations | % | % | % | % | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate debt securities | % | % | % | % | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total securities available-for-sale | $ | % | $ | % | $ | % | $ | % | $ | % |
One year or less | More than One Year through Five Years | More than Five Years through Ten Years | More than Ten Years | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | Amortized Cost | Weighted-Average Yield | Amortized Cost | Weighted-Average Yield | Amortized Cost | Weighted-Average Yield | Amortized Cost | Weighted-Average Yield | Amortized Cost | Weighted-Average Yield | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities held-to-maturity: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities | $ | % | $ | % | $ | % | $ | % | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. government agency and U.S. government sponsored enterprise collateralized mortgage obligations | % | % | % | % | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Municipal securities | % | % | % | % | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total securities held-to-maturity | $ | % | $ | % | $ | % | $ | % | $ | % |
($ in thousands) | September 30, 2023 | December 31, 2022 | ||||||||||||
Commercial: | ||||||||||||||
Commercial and industrial(1)(2) | $ | $ | ||||||||||||
Commercial real estate(2) | ||||||||||||||
Multifamily | ||||||||||||||
SBA | ||||||||||||||
Construction | ||||||||||||||
Consumer: | ||||||||||||||
Single family residential mortgage | ||||||||||||||
Other consumer | ||||||||||||||
Total loans | $ | $ | ||||||||||||
Allowance for loan losses | ( | ( | ||||||||||||
Loans receivable, net | $ | $ | ||||||||||||
($ in thousands) | September 30, 2023 | December 31, 2022 | ||||||||||||
Unpaid principal balance | $ | $ | ||||||||||||
Unamortized net premiums | ||||||||||||||
Unamortized net deferred (fees) costs | ( | ( | ||||||||||||
Fair value adjustment(1) | ( | ( | ||||||||||||
Total loans | $ | $ |
Term Loans Amortized Cost Basis by Origination Year | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | 2023 | 2022 | 2021 | 2020 | 2019 | Prior | Revolving Loans Amortized Cost Basis | Revolving Loans Amortized Cost Basis Converted to Term | Total | |||||||||||||||||||||||||||||||||||||||||||||||
September 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial and industrial (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Multifamily | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Multifamily | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SBA | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SBA |
Construction | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Single family residential mortgage | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Single family residential mortgage | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other consumer | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other consumer | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total loans | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Total loans | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful (2) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total loans | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Term Loans Amortized Cost Basis by Origination Year | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | 2022 | 2021 | 2020 | 2019 | 2018 | Prior | Revolving Loans Amortized Cost Basis | Revolving Loans Amortized Cost Basis Converted to Term | Total | |||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Multifamily | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Multifamily | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SBA | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SBA |
Construction | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Single family residential mortgage | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Single family residential mortgage | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other consumer | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other consumer | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total loans | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Total loans | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total loans | $ | $ | $ | $ | $ | $ | $ | $ | $ |
($ in thousands) | 30 - 59 Days Past Due | 60 - 89 Days Past Due | Greater than 89 Days Past due | Total Past Due | Current | Total | ||||||||||||||||||||||||||||||||
September 30, 2023 | ||||||||||||||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||||||||
Commercial and industrial | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Commercial real estate | ||||||||||||||||||||||||||||||||||||||
Multifamily | ||||||||||||||||||||||||||||||||||||||
SBA | ||||||||||||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||||||||
Consumer: | ||||||||||||||||||||||||||||||||||||||
Single family residential mortgage | ||||||||||||||||||||||||||||||||||||||
Other consumer | ||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||||||||
Commercial and industrial | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Commercial real estate | ||||||||||||||||||||||||||||||||||||||
Multifamily | ||||||||||||||||||||||||||||||||||||||
SBA | ||||||||||||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||||||||
Consumer: | ||||||||||||||||||||||||||||||||||||||
Single family residential mortgage | ||||||||||||||||||||||||||||||||||||||
Other consumer | ||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||
($ in thousands) | Total Nonaccrual Loans | Nonaccrual Loans with no ACL | Total Nonaccrual Loans | Nonaccrual Loans with no ACL | |||||||||||||||||||
Nonaccrual loans | |||||||||||||||||||||||
Commercial: | |||||||||||||||||||||||
Commercial and industrial | $ | $ | $ | $ | |||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||
Multi-family | |||||||||||||||||||||||
SBA | |||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||
Single family residential mortgage | |||||||||||||||||||||||
Other consumer | |||||||||||||||||||||||
Total nonaccrual loans | $ | $ | $ | $ | |||||||||||||||||||
Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
($ in thousands) | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||
Allowance for Loan Losses | Reserve for Unfunded Loan Commitments | Allowance for Credit Losses | Allowance for Loan Losses | Reserve for Unfunded Loan Commitments | Allowance for Credit Losses | |||||||||||||||||||||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Recoveries | ||||||||||||||||||||||||||||||||||||||
Net (charge-offs) recoveries | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Provision for (reversal of) credit losses | ( | |||||||||||||||||||||||||||||||||||||
Balance at end of period | $ | $ | $ | $ | $ | $ |
Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
($ in thousands) | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||
Allowance for Loan Losses | Reserve for Unfunded Loan Commitments | Allowance for Credit Losses | Allowance for Loan Losses | Reserve for Unfunded Loan Commitments | Allowance for Credit Losses | |||||||||||||||||||||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Recoveries | ||||||||||||||||||||||||||||||||||||||
Net (charge-offs) recoveries | ( | ( | ||||||||||||||||||||||||||||||||||||
Provision for (reversal of) credit losses | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Balance at end of period | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
($ in thousands) | Commercial and Industrial | Commercial Real Estate | Multifamily | SBA | Construction | Single Family Residential Mortgage | Other Consumer | Total | ||||||||||||||||||||||||||||||||||||||||||
ALL: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2023: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2023 | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Recoveries | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net (charge-offs) recoveries | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Provision for (reversal of) credit losses - loans | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2023 | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2023: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Recoveries | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net (charge-offs) recoveries | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Provision for (reversal of) credit losses - loans | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2023 | $ | $ | $ | $ | $ | $ | $ | $ |
($ in thousands) | Commercial and Industrial | Commercial Real Estate | Multifamily | SBA | Construction | Single Family Residential Mortgage | Other Consumer | Total | ||||||||||||||||||||||||||||||||||||||||||
ALL: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2022: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2022 | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Recoveries | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net recoveries (charge-offs) | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Provision for (reversal of) credit losses - loans | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2022 | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2022: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Recoveries | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net recoveries (charge-offs) | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
(Reversal of) provision for credit losses - loans | ( | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2022 | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Gross Charge-offs | ||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | 2023 | 2022 | 2021 | 2020 | 2019 | Prior | Total | |||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||||||||||||||
Commercial and industrial | $ | $ | ( | $ | ( | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||
SBA | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Consumer: | ||||||||||||||||||||||||||||||||||||||||||||
Other consumer | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Total loans | $ | $ | ( | $ | ( | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||||||||||||||
Commercial and industrial | $ | $ | ( | $ | ( | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||
Commercial real estate | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
SBA | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Consumer: | ||||||||||||||||||||||||||||||||||||||||||||
Single family residential mortgage | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Other consumer | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||
Total loans | $ | $ | ( | $ | ( | $ | ( | $ | $ | ( | $ | ( |
September 30, 2023 | ||||||||||||||||||||||||||||||||
Real Estate | ||||||||||||||||||||||||||||||||
($ in thousands) | Commercial | Residential | Business Assets | Automobile | Total | |||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||
Commercial and industrial | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Commercial real estate | ||||||||||||||||||||||||||||||||
Multifamily | ||||||||||||||||||||||||||||||||
SBA | ||||||||||||||||||||||||||||||||
Consumer: | ||||||||||||||||||||||||||||||||
Single family residential mortgage | ||||||||||||||||||||||||||||||||
Other consumer | ||||||||||||||||||||||||||||||||
Total loans | $ | $ | $ | $ | $ |
December 31, 2022 | ||||||||||||||||||||||||||||||||
Real Estate | ||||||||||||||||||||||||||||||||
($ in thousands) | Commercial | Residential | Business Assets | Automobile | Total | |||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||
Commercial and industrial | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Commercial real estate | ||||||||||||||||||||||||||||||||
SBA | ||||||||||||||||||||||||||||||||
Consumer: | ||||||||||||||||||||||||||||||||
Single family residential mortgage | ||||||||||||||||||||||||||||||||
Other consumer | ||||||||||||||||||||||||||||||||
Total loans | $ | $ | $ | $ | $ |
($ in thousands) | Commercial and industrial | Single family residential mortgage | Total | ||||||||||||||
September 30, 2023 | |||||||||||||||||
Interest rate reduction: | |||||||||||||||||
Amortized cost basis | $ | $ | $ | ||||||||||||||
% of total class of loans | % | % | % | ||||||||||||||
Term extension: | |||||||||||||||||
Amortized cost basis | $ | $ | $ | ||||||||||||||
% of total class of loans | % | % | % | ||||||||||||||
Combination - principal reduction and payment delays: | |||||||||||||||||
Amortized cost basis | $ | $ | $ | ||||||||||||||
% of total class of loans | % | % | % | ||||||||||||||
Combination - term extension and interest rate reduction | |||||||||||||||||
Amortized cost basis | $ | $ | $ | ||||||||||||||
% of total class of loans | % | % | % | ||||||||||||||
Total amortized cost basis | $ | $ | $ | ||||||||||||||
Percentage of total class of loans | % | % | % |
($ in thousands) | 30-59 Days Past Due | 60-89 Days Past Due | Over 90 Days Past Due | Total Past Due | Current | Total | ||||||||||||||||||||
September 30, 2023 | ||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||
Commercial and industrial | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
Consumer: | ||||||||||||||||||||||||||
Single family residential mortgage | ||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
($ in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Goodwill, beginning of period | $ | $ | $ | $ | ||||||||||||||||||||||
Goodwill from business combination | ||||||||||||||||||||||||||
Goodwill adjustments for purchase accounting | ||||||||||||||||||||||||||
Goodwill, end of period | $ | $ | $ | $ | ||||||||||||||||||||||
($ in thousands) | September 30, 2023 | December 31, 2022 | ||||||||||||
Core deposit intangibles | $ | $ | ||||||||||||
Developed technology | ||||||||||||||
Other intangibles | ||||||||||||||
Total other intangibles | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
($ in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Other intangibles: | ||||||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | ||||||||||||||||||||||
Other intangibles from business combination | ||||||||||||||||||||||||||
Purchase accounting adjustments | ( | |||||||||||||||||||||||||
Balance, end of period | ||||||||||||||||||||||||||
Accumulated amortization: | ||||||||||||||||||||||||||
Balance, beginning of period | ||||||||||||||||||||||||||
Amortization of other intangibles | ||||||||||||||||||||||||||
Balance, end of period | ||||||||||||||||||||||||||
Other intangibles | $ | $ | $ | $ |
($ in thousands) | Remainder of 2023 | 2024 | 2025 | 2026 | 2027 | 2028 and After | Total | |||||||||||||||||||||||||||||||||||||
Estimated future amortization expense | $ | $ | $ | $ | $ | $ | $ |
($ in thousands) | September 30, 2023 | December 31, 2022 | ||||||||||||
Fixed rate: | ||||||||||||||
Outstanding balance (1) | $ | $ | ||||||||||||
Interest rates ranging from | % | % | ||||||||||||
Interest rates ranging to | % | % | ||||||||||||
Weighted average interest rate | % | % | ||||||||||||
Variable rate: | ||||||||||||||
Outstanding balance | $ | $ | ||||||||||||
Weighted average interest rate | % | % |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||
($ in thousands) | Interest Rate | Maturity Date | Par Value | Unamortized Debt Issuance Cost and Discount | Par Value | Unamortized Debt Issuance Cost and Discount | ||||||||||||||||||||||||||||||||
Senior notes(1) | 4/15/2025 | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||||
Subordinated notes(2) | 10/30/2030 | ( | ( | |||||||||||||||||||||||||||||||||||
PMB Statutory Trust III, junior subordinated debentures | SOFR + | 9/26/2032 | ||||||||||||||||||||||||||||||||||||
PMB Capital Trust III, junior subordinated debentures | SOFR + | 10/8/2034 | ||||||||||||||||||||||||||||||||||||
Total long-term debt, net | $ | $ | ( | $ | $ | ( |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||
($ in thousands) | Notional Amount | Fair Value | Notional Amount | Fair Value | ||||||||||||||||||||||
Derivative assets: | ||||||||||||||||||||||||||
Contingent forward loan sale agreement | $ | $ | $ | $ | ||||||||||||||||||||||
Interest rate swaptions | ||||||||||||||||||||||||||
Cash flow hedges | ||||||||||||||||||||||||||
Interest rate swaps on loans | ||||||||||||||||||||||||||
Foreign exchange contracts | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | ||||||||||||||||||||||
Derivative liabilities: | ||||||||||||||||||||||||||
Interest rate swaps on loans | $ | $ | $ | $ | ||||||||||||||||||||||
Foreign exchange contracts | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
($ in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Restricted stock awards and units | $ | $ | $ | $ | ||||||||||||||||||||||
Related tax benefits | $ | $ | $ | $ |
Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2023 | |||||||||||||||||||||||||
Number of Shares | Weighted Average Grant Date Fair Value Per Share | Number of Shares | Weighted Average Grant Date Fair Value Per Share | |||||||||||||||||||||||
Outstanding at beginning of period | $ | $ | ||||||||||||||||||||||||
Granted (1) | $ | $ | ||||||||||||||||||||||||
Vested (2) | ( | $ | ( | $ | ||||||||||||||||||||||
Forfeited (3) | ( | $ | ( | $ | ||||||||||||||||||||||
Outstanding at end of period (4) | $ | $ |
Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2023 | |||||||||||||||||||||||||||||||||||||
($ in thousands, except per share data) | Number of Shares | Weighted-Average Exercise Price Per Share | Number of Shares | Weighted-Average Exercise Price Per Share | Weighted-Average Remaining Contract Term | Aggregate Intrinsic Value | ||||||||||||||||||||||||||||||||
Outstanding at beginning of period | $ | $ | ||||||||||||||||||||||||||||||||||||
Exercised | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||
Outstanding at end of period | $ | $ | $ | |||||||||||||||||||||||||||||||||||
Exercisable at end of period | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
($ in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Series E Preferred Stock: | ||||||||||||||||||||||||||
Depositary shares repurchased | ||||||||||||||||||||||||||
Preferred Stock retired (shares) | ||||||||||||||||||||||||||
Consideration paid | $ | $ | $ | $ | ||||||||||||||||||||||
Carrying value | ||||||||||||||||||||||||||
Impact of preferred stock redemption | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
($ in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Balance at beginning of period | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||
Unrealized gain (loss) on securities available-for-sale: | ||||||||||||||||||||||||||
Unrealized gain (loss) arising during the period | ( | ( | ( | |||||||||||||||||||||||
Reclassification adjustment from other comprehensive income | ( | |||||||||||||||||||||||||
Total unrealized gain (loss) on securities available-for-sale | ( | ( | ( | |||||||||||||||||||||||
Amortization of unrealized loss of available-for-sale securities transferred to held-to-maturity | ||||||||||||||||||||||||||
Unrealized gain on cash flow hedges: | ||||||||||||||||||||||||||
Unrealized gain arising during the period | ||||||||||||||||||||||||||
Tax effect of current period changes | ( | |||||||||||||||||||||||||
Total changes, net of taxes | ( | ( | ( | |||||||||||||||||||||||
Balance at end of period | $ | ( | $ | ( | $ | ( | $ | ( |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
($ in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Return of capital | $ | $ | $ | $ | ||||||||||||||||||||||
Gain (loss) on investments in alternative energy partnerships | ( | ( | ( | |||||||||||||||||||||||
Tax expense (benefit) recognized from HLBV application | ( | ( | ( |
($ in thousands) | September 30, 2023 | December 31, 2022 | ||||||||||||
Cash | $ | $ | ||||||||||||
Equipment, net of depreciation | ||||||||||||||
Other assets | ||||||||||||||
Total unconsolidated assets | $ | $ | ||||||||||||
Total unconsolidated liabilities | $ | $ | ||||||||||||
Maximum loss exposure | $ | $ |
($ in thousands) | September 30, 2023 | December 31, 2022 | ||||||||||||
Ending balance(1) | $ | $ | ||||||||||||
Aggregate funding commitment | ||||||||||||||
Total amount funded | ||||||||||||||
Unfunded commitment | ||||||||||||||
Maximum loss exposure |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
($ in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Fundings | $ | $ | $ | $ | ||||||||||||||||||||||
Proportional amortization recognized | ||||||||||||||||||||||||||
Income tax credits recognized |
Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2023 | |||||||||||||||||||||||||
($ in thousands except per share data) | Common Stock | Class B Common Stock | Common Stock | Class B Common Stock | ||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Weighted average common shares outstanding | ||||||||||||||||||||||||||
Dilutive effects of restricted shares/units | ||||||||||||||||||||||||||
Dilutive effects of stock options | ||||||||||||||||||||||||||
Average shares and dilutive common shares | ||||||||||||||||||||||||||
Basic earnings per common share | $ | $ | $ | $ | ||||||||||||||||||||||
Diluted earnings per common share | $ | $ | $ | $ |
Three Months Ended September 30, 2022 | Nine Months Ended September 30, 2022 | |||||||||||||||||||||||||
($ in thousands except per share data) | Common Stock | Class B Common Stock | Common Stock | Class B Common Stock | ||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Less: preferred stock dividends | ( | ( | ||||||||||||||||||||||||
Less: preferred stock redemption | ( | ( | ||||||||||||||||||||||||
Net income allocated to common stockholders | $ | $ | $ | $ | ||||||||||||||||||||||
Weighted average common shares outstanding | ||||||||||||||||||||||||||
Dilutive effects of restricted shares/units | ||||||||||||||||||||||||||
Dilutive effects of stock options | ||||||||||||||||||||||||||
Average shares and dilutive common shares | ||||||||||||||||||||||||||
Basic earnings per common share | $ | $ | $ | $ | ||||||||||||||||||||||
Diluted earnings per common share | $ | $ | $ | $ |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||
($ in thousands) | Fixed Rate | Variable Rate | Fixed Rate | Variable Rate | ||||||||||||||||||||||
Commitments to extend credit | $ | $ | $ | $ | ||||||||||||||||||||||
Unused lines of credit | ||||||||||||||||||||||||||
Letters of credit |
($ in thousands) | September 30, 2023 | December 31, 2022 | ||||||||||||
Accrued interest receivable | $ | $ | ||||||||||||
Prepaid expenses | ||||||||||||||
Servicing assets | ||||||||||||||
Other real estate owned | ||||||||||||||
Income taxes receivable | ||||||||||||||
Investments: | ||||||||||||||
CRA and other equity investments(1) | ||||||||||||||
LIHTC investments(1) | ||||||||||||||
Alternative energy partnerships(1) | ||||||||||||||
Other assets | ||||||||||||||
Total other assets | $ | $ |
($ in thousands) | September 30, 2023 | December 31, 2022 | ||||||||||||
Accrued interest payable | $ | $ | ||||||||||||
Accounts payable and accrued expenses | ||||||||||||||
Income taxes payable | ||||||||||||||
Derivative liabilities(1) | ||||||||||||||
Commitments to fund LIHTC investments(2) | ||||||||||||||
Reserve for unfunded noncancellable loan commitments | ||||||||||||||
Reserve for loss on repurchased loans | ||||||||||||||
Other liabilities | ||||||||||||||
Total accrued expenses and other liabilities | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
($ in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Noninterest income | ||||||||||||||||||||||||||
In scope of Topic 606 | ||||||||||||||||||||||||||
Deposit service fees | $ | $ | $ | $ | ||||||||||||||||||||||
Debit card fees | ||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||
Noninterest income (in-scope of Topic 606) | ||||||||||||||||||||||||||
Noninterest income (out-of-scope of Topic 606) | ||||||||||||||||||||||||||
Total noninterest income | $ | $ | $ | $ | ||||||||||||||||||||||
($ in thousands, except per share data) (Unaudited) | September 30, 2023 | December 31, 2022 | |||||||||
Tangible common equity, and tangible common equity to tangible assets ratio | |||||||||||
Total assets | $ | 9,247,072 | $ | 9,197,016 | |||||||
Less goodwill | (114,312) | (114,312) | |||||||||
Less other intangible assets | (6,142) | (7,526) | |||||||||
Tangible assets(1) | $ | 9,126,618 | $ | 9,075,178 | |||||||
Total stockholders' equity | $ | 1,001,720 | $ | 959,618 | |||||||
Less goodwill | (114,312) | (114,312) | |||||||||
Less other intangible assets | (6,142) | (7,526) | |||||||||
Tangible common equity(1) | $ | 881,266 | $ | 837,780 | |||||||
Total stockholders' equity to total assets | 10.83 | % | 10.43 | % | |||||||
Tangible common equity to tangible assets(1) | 9.66 | % | 9.23 | % | |||||||
Common shares outstanding | 56,959,141 | 58,544,534 | |||||||||
Class B non-voting non-convertible common shares outstanding | 477,321 | 477,321 | |||||||||
Total common shares outstanding | 57,436,462 | 59,021,855 | |||||||||
Book value per common share | $ | 17.44 | $ | 16.26 | |||||||
Tangible common equity per common share(1) | $ | 15.34 | $ | 14.19 |
Three Months Ended | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
($ in thousands) (Unaudited) | September 30, 2023 | June 30, 2023 | September 30, 2022 | 2023 | 2022 | ||||||||||||||||||||||||
Return on tangible common equity | |||||||||||||||||||||||||||||
Average total stockholders' equity | $ | 977,410 | $ | 997,049 | $ | 960,806 | $ | 992,984 | $ | 993,208 | |||||||||||||||||||
Less average preferred stock | — | — | — | — | (25,043) | ||||||||||||||||||||||||
Average total common stockholders' equity | 977,410 | 997,049 | 960,806 | 992,984 | 968,165 | ||||||||||||||||||||||||
Less average goodwill | (114,312) | (114,312) | (98,916) | (114,312) | (96,133) | ||||||||||||||||||||||||
Less average other intangibles | (6,430) | (6,885) | (4,570) | (6,887) | (5,216) | ||||||||||||||||||||||||
Average tangible common equity(1) | $ | 856,668 | $ | 875,852 | $ | 857,320 | $ | 871,785 | $ | 866,816 | |||||||||||||||||||
Net income available to common stockholders | $ | 42,574 | $ | 17,879 | $ | 24,196 | $ | 80,731 | $ | 94,253 | |||||||||||||||||||
Add amortization of other intangibles | 461 | 462 | 396 | 1,384 | 1,150 | ||||||||||||||||||||||||
Less tax effect on amortization of other intangibles(2) | (136) | (137) | (117) | (409) | (340) | ||||||||||||||||||||||||
Net income available to common stockholders(1) | $ | 42,899 | $ | 18,204 | $ | 24,475 | $ | 81,706 | $ | 95,063 | |||||||||||||||||||
Return on average equity | 17.28 | % | 7.19 | % | 9.99 | % | 10.87 | % | 13.38 | % | |||||||||||||||||||
Return on average tangible common equity(1) | 19.87 | % | 8.34 | % | 11.33 | % | 12.53 | % | 14.66 | % | |||||||||||||||||||
Three Months Ended | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
($ in thousands) (Unaudited) | September 30, 2023 | June 30, 2023 | September 30, 2022 | 2023 | 2022 | ||||||||||||||||||||||||
Adjusted noninterest income | |||||||||||||||||||||||||||||
Total noninterest income | $ | 50,778 | $ | 6,024 | $ | 5,681 | $ | 64,661 | $ | 18,777 | |||||||||||||||||||
Noninterest income adjustments: | |||||||||||||||||||||||||||||
Net loss (gain) on securities available-for-sale | — | — | — | — | (16) | ||||||||||||||||||||||||
Gain on merger-related derivatives(1) | (46,165) | — | — | (46,165) | — | ||||||||||||||||||||||||
Total noninterest income adjustments | (46,165) | — | — | (46,165) | (16) | ||||||||||||||||||||||||
Adjusted noninterest income(2) | $ | 4,613 | $ | 6,024 | $ | 5,681 | $ | 18,496 | $ | 18,761 | |||||||||||||||||||
Adjusted noninterest expense | |||||||||||||||||||||||||||||
Total noninterest expense | $ | 56,164 | $ | 49,132 | $ | 50,962 | $ | 156,535 | $ | 146,170 | |||||||||||||||||||
Noninterest expense adjustments: | |||||||||||||||||||||||||||||
Indemnified legal (fees) recoveries | (634) | (752) | (1,017) | (1,766) | (1,366) | ||||||||||||||||||||||||
Acquisition, integration and transaction costs | (9,329) | — | (2,080) | (9,329) | (2,080) | ||||||||||||||||||||||||
Noninterest expense adjustments before gain (loss) in alternative energy partnership investments | (9,963) | (752) | (3,097) | (11,095) | (3,446) | ||||||||||||||||||||||||
Gain (loss) in alternative energy partnership investments | 34 | 36 | (504) | (1,548) | (1,705) | ||||||||||||||||||||||||
Total noninterest expense adjustments | (9,929) | (716) | (3,601) | (12,643) | (5,151) | ||||||||||||||||||||||||
Adjusted noninterest expense(2) | $ | 46,235 | $ | 48,416 | $ | 47,361 | $ | 143,892 | $ | 141,019 | |||||||||||||||||||
Average assets | $ | 9,261,273 | $ | 9,611,239 | $ | 9,408,740 | $ | 9,396,368 | $ | 9,381,307 | |||||||||||||||||||
Noninterest income to total revenue | 42.32 | % | 7.96 | % | 6.68 | % | 23.38 | % | 7.42 | % | |||||||||||||||||||
Adjusted noninterest income to adjusted total revenue(2) | 6.25 | % | 7.96 | % | 6.68 | % | 8.03 | % | 7.42 | % | |||||||||||||||||||
Noninterest expense to average total assets(3) | 2.41 | % | 2.05 | % | 2.15 | % | 2.23 | % | 2.08 | % | |||||||||||||||||||
Adjusted noninterest expense to average total assets(2)(3) | 1.98 | % | 2.02 | % | 2.00 | % | 2.05 | % | 2.01 | % |
Three Months Ended | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
($ in thousands) (Unaudited) | September 30, 2023 | June 30, 2023 | September 30, 2022 | 2023 | 2022 | ||||||||||||||||||||||||
Adjusted pre-tax pre-provision income | |||||||||||||||||||||||||||||
Net interest income | $ | 69,218 | $ | 69,632 | $ | 79,408 | $ | 211,903 | $ | 234,148 | |||||||||||||||||||
Noninterest income | 50,778 | 6,024 | 5,681 | 64,661 | 18,777 | ||||||||||||||||||||||||
Total revenue | 119,996 | 75,656 | 85,089 | 276,564 | 252,925 | ||||||||||||||||||||||||
Noninterest expense | 56,164 | 49,132 | 50,962 | 156,535 | 146,170 | ||||||||||||||||||||||||
Pre-tax pre-provision income(1) | $ | 63,832 | $ | 26,524 | $ | 34,127 | $ | 120,029 | $ | 106,755 | |||||||||||||||||||
Total revenue | $ | 119,996 | $ | 75,656 | $ | 85,089 | $ | 276,564 | $ | 252,925 | |||||||||||||||||||
Total noninterest income adjustments | (46,165) | — | — | (46,165) | (16) | ||||||||||||||||||||||||
Adjusted total revenue(1) | 73,831 | 75,656 | 85,089 | 230,399 | 252,909 | ||||||||||||||||||||||||
Noninterest expense | 56,164 | 49,132 | 50,962 | 156,535 | 146,170 | ||||||||||||||||||||||||
Total noninterest expense adjustments | (9,929) | (716) | (3,601) | (12,643) | (5,151) | ||||||||||||||||||||||||
Adjusted noninterest expense(1) | 46,235 | 48,416 | 47,361 | 143,892 | 141,019 | ||||||||||||||||||||||||
Adjusted pre-tax pre-provision income(1) | $ | 27,596 | $ | 27,240 | $ | 37,728 | $ | 86,507 | $ | 111,890 | |||||||||||||||||||
Average assets | $ | 9,261,273 | $ | 9,611,239 | $ | 9,408,740 | $ | 9,396,368 | $ | 9,381,307 | |||||||||||||||||||
Pre-tax pre-provision income ROAA(1)(2) | 2.73 | % | 1.11 | % | 1.44 | % | 1.71 | % | 1.52 | % | |||||||||||||||||||
Adjusted pre-tax pre-provision income ROAA(1)(2) | 1.18 | % | 1.14 | % | 1.59 | % | 1.23 | % | 1.59 | % | |||||||||||||||||||
Efficiency ratio(1)(2) | 46.80 | % | 64.94 | % | 59.89 | % | 56.60 | % | 57.79 | % | |||||||||||||||||||
Adjusted efficiency ratio(1)(2) | 62.62 | % | 63.99 | % | 55.66 | % | 62.45 | % | 55.76 | % |
Three Months Ended | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
($ in thousands) (Unaudited) | September 30, 2023 | June 30, 2023 | September 30, 2022 | 2023 | 2022 | ||||||||||||||||||||||||
Adjusted net income | |||||||||||||||||||||||||||||
Net income(1)(2) | $ | 42,574 | $ | 17,879 | $ | 24,196 | $ | 80,731 | $ | 99,420 | |||||||||||||||||||
Adjustments: | |||||||||||||||||||||||||||||
Noninterest income | (46,165) | — | — | (46,165) | (16) | ||||||||||||||||||||||||
Noninterest expense adjustments | 9,929 | 716 | 3,601 | 12,643 | 5,151 | ||||||||||||||||||||||||
Tax impact of adjustments above(3) | 10,713 | (212) | (1,065) | 9,910 | (1,518) | ||||||||||||||||||||||||
Adjustments to net income | (25,523) | 504 | 2,536 | (23,612) | 3,617 | ||||||||||||||||||||||||
Adjusted net income(1)(2)(4) | $ | 17,051 | $ | 18,383 | $ | 26,732 | $ | 57,119 | $ | 103,037 | |||||||||||||||||||
Average assets | $ | 9,261,273 | $ | 9,611,239 | $ | 9,408,740 | $ | 9,396,368 | $ | 9,381,307 | |||||||||||||||||||
ROAA(5) | 1.82 | % | 0.75 | % | 1.02 | % | 1.15 | % | 1.42 | % | |||||||||||||||||||
Adjusted ROAA(4)(5) | 0.73 | % | 0.77 | % | 1.13 | % | 0.81 | % | 1.47 | % | |||||||||||||||||||
Adjusted net income available to common stockholders | |||||||||||||||||||||||||||||
Net income available to common stockholders | $ | 42,574 | $ | 17,879 | $ | 24,196 | $ | 80,731 | $ | 94,253 | |||||||||||||||||||
Adjustments to net income | (25,523) | 504 | 2,536 | (23,612) | 3,617 | ||||||||||||||||||||||||
Adjustments for impact of preferred stock redemption | — | — | — | — | 3,747 | ||||||||||||||||||||||||
Adjusted net income available to common stockholders(4) | $ | 17,051 | $ | 18,383 | $ | 26,732 | $ | 57,119 | $ | 101,617 | |||||||||||||||||||
Average diluted common shares | 57,521,836 | 58,026,007 | 60,492,460 | 58,230,137 | 61,659,900 | ||||||||||||||||||||||||
Diluted EPS | $ | 0.74 | $ | 0.31 | $ | 0.40 | $ | 1.39 | $ | 1.53 | |||||||||||||||||||
Adjusted diluted EPS(4)(6) | $ | 0.30 | $ | 0.32 | $ | 0.44 | $ | 0.98 | $ | 1.65 |
($ in thousands) (Unaudited) | September 30, 2023 | ||||
Adjusted Common Equity Tier 1 (CET 1) capital(1) | |||||
CET 1 capital | $ | 931,909 | |||
Less unrealized loss on AFS securities, net of tax | (36,551) | ||||
Less unrealized loss on HTM securities, net of tax | (54,913) | ||||
Adjusted CET 1 capital(2) | $ | 840,445 | |||
Unrealized loss on AFS securities, net of tax, to CET 1 capital | 3.92 | % | |||
Total unrealized loss on AFS and HTM securities, net of tax, to CET 1 capital | 9.81 | % | |||
Three Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
September 30, 2023 | June 30, 2023 | September 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | Average Balance | Interest and Dividends | Yield/Cost | Average Balance | Interest and Dividends | Yield/ Cost | Average Balance | Interest and Dividends | Yield/Cost | |||||||||||||||||||||||||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total loans(1)(2) | $ | 7,045,692 | $ | 95,613 | 5.38 | % | $ | 7,061,016 | $ | 92,889 | 5.28 | % | $ | 7,313,519 | $ | 83,699 | 4.54 | % | ||||||||||||||||||||||||||||||||||||||
Securities | 1,252,361 | 16,335 | 5.17 | % | 1,311,362 | 15,804 | 4.83 | % | 1,194,942 | 10,189 | 3.38 | % | ||||||||||||||||||||||||||||||||||||||||||||
Other interest-earning assets (3) | 309,159 | 4,274 | 5.48 | % | 595,234 | 7,458 | 5.03 | % | 292,819 | 2,085 | 2.82 | % | ||||||||||||||||||||||||||||||||||||||||||||
Total interest-earning assets | 8,607,212 | 116,222 | 5.36 | % | 8,967,612 | 116,151 | 5.20 | % | 8,801,280 | 95,973 | 4.33 | % | ||||||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses | (79,883) | (82,282) | (93,517) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
BOLI and noninterest-earning assets (4) | 733,944 | 725,909 | 700,977 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 9,261,273 | $ | 9,611,239 | $ | 9,408,740 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing checking | $ | 1,663,803 | 10,240 | 2.44 | % | $ | 1,761,341 | 9,751 | 2.22 | % | $ | 2,285,071 | 3,880 | 0.67 | % | |||||||||||||||||||||||||||||||||||||||||
Savings and money market | 1,024,127 | 3,075 | 1.19 | % | 1,015,181 | 2,609 | 1.03 | % | 1,536,438 | 2,236 | 0.58 | % | ||||||||||||||||||||||||||||||||||||||||||||
Certificates of deposit | 1,652,445 | 18,045 | 4.33 | % | 1,566,636 | 15,758 | 4.03 | % | 832,506 | 2,871 | 1.37 | % | ||||||||||||||||||||||||||||||||||||||||||||
Total interest-bearing deposits | 4,340,375 | 31,360 | 2.87 | % | 4,343,158 | 28,118 | 2.60 | % | 4,654,015 | 8,987 | 0.77 | % | ||||||||||||||||||||||||||||||||||||||||||||
FHLB advances and FRB borrowings | 897,020 | 7,773 | 3.44 | % | 1,441,244 | 14,703 | 4.09 | % | 482,842 | 3,558 | 2.92 | % | ||||||||||||||||||||||||||||||||||||||||||||
Other borrowings | 304,138 | 4,136 | 5.40 | % | 358 | 3 | 3.36 | % | 70,431 | 412 | 2.32 | % | ||||||||||||||||||||||||||||||||||||||||||||
Long-term debt | 274,199 | 3,735 | 5.40 | % | 275,012 | 3,695 | 5.39 | % | 274,665 | 3,608 | 5.21 | % | ||||||||||||||||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 5,815,732 | 47,004 | 3.21 | % | 6,059,772 | 46,519 | 3.08 | % | 5,481,953 | 16,565 | 1.20 | % | ||||||||||||||||||||||||||||||||||||||||||||
Noninterest-bearing deposits | 2,345,262 | 2,425,719 | 2,855,220 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Noninterest-bearing liabilities | 122,869 | 128,699 | 110,761 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities | 8,283,863 | 8,614,190 | 8,447,934 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total stockholders’ equity | 977,410 | 997,049 | 960,806 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 9,261,273 | $ | 9,611,239 | $ | 9,408,740 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest income/spread | $ | 69,218 | 2.15 | % | $ | 69,632 | 2.12 | % | $ | 79,408 | 3.13 | % | ||||||||||||||||||||||||||||||||||||||||||||
Net interest margin (5) | 3.19 | % | 3.11 | % | 3.58 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
Ratio of interest-earning assets to interest-bearing liabilities | 148 | % | 148 | % | 161 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total deposits(6) | 6,685,637 | 31,360 | 1.86 | % | 6,768,877 | 28,118 | 1.67 | % | 7,509,235 | 8,987 | 0.47 | % | ||||||||||||||||||||||||||||||||||||||||||||
Total funding (7) | 8,160,994 | 47,004 | 2.29 | % | 8,485,491 | 46,519 | 2.20 | % | 8,337,173 | 16,565 | 0.79 | % |
Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||||||||||||||
($ in thousands) | Average Balance | Interest and Dividends | Yield/Cost | Average Balance | Interest and Dividends | Yield/Cost | ||||||||||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||||||||||||||||
Total loans (1)(2) | $ | 7,034,074 | $ | 275,920 | 5.24 | % | $ | 7,282,169 | $ | 238,828 | 4.38 | % | ||||||||||||||||||||||||||
Securities | 1,286,955 | 47,048 | 4.89 | % | 1,234,188 | 25,622 | 2.78 | % | ||||||||||||||||||||||||||||||
Other interest-earning assets (3) | 430,855 | 16,324 | 5.07 | % | 284,725 | 4,210 | 1.98 | % | ||||||||||||||||||||||||||||||
Total interest-earning assets | 8,751,884 | 339,292 | 5.18 | % | 8,801,082 | 268,660 | 4.08 | % | ||||||||||||||||||||||||||||||
Allowance for loan losses | (82,124) | (93,454) | ||||||||||||||||||||||||||||||||||||
BOLI and noninterest-earning assets (4) | 726,608 | 673,679 | ||||||||||||||||||||||||||||||||||||
Total assets | $ | 9,396,368 | $ | 9,381,307 | ||||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||||
Interest-bearing checking | $ | 1,791,200 | 28,505 | 2.13 | % | $ | 2,352,067 | 5,978 | 0.34 | % | ||||||||||||||||||||||||||||
Savings and money market | 1,036,568 | 7,685 | 0.99 | % | 1,602,280 | 3,606 | 0.30 | % | ||||||||||||||||||||||||||||||
Certificates of deposit | 1,471,275 | 43,815 | 3.98 | % | 658,576 | 3,971 | 0.81 | % | ||||||||||||||||||||||||||||||
Total interest-bearing deposits | 4,299,043 | 80,005 | 2.49 | % | 4,612,923 | 13,555 | 0.39 | % | ||||||||||||||||||||||||||||||
FHLB advances | 1,134,507 | 32,124 | 3.79 | % | 476,158 | 9,625 | 2.70 | % | ||||||||||||||||||||||||||||||
Other borrowings | 104,186 | 4,195 | 5.38 | % | 101,369 | 792 | 1.04 | % | ||||||||||||||||||||||||||||||
Long-term debt | 274,714 | 11,065 | 5.39 | % | 274,533 | 10,540 | 5.13 | % | ||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 5,812,450 | 127,389 | 2.93 | % | 5,464,983 | 34,512 | 0.84 | % | ||||||||||||||||||||||||||||||
Noninterest-bearing deposits | 2,461,985 | 2,818,795 | ||||||||||||||||||||||||||||||||||||
Noninterest-bearing liabilities | 128,949 | 104,321 | ||||||||||||||||||||||||||||||||||||
Total liabilities | 8,403,384 | 8,388,099 | ||||||||||||||||||||||||||||||||||||
Total stockholders’ equity | 992,984 | 993,208 | ||||||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 9,396,368 | $ | 9,381,307 | ||||||||||||||||||||||||||||||||||
Net interest income/spread | $ | 211,903 | 2.25 | % | $ | 234,148 | 3.24 | % | ||||||||||||||||||||||||||||||
Net interest margin (5) | 3.24 | % | 3.56 | % | ||||||||||||||||||||||||||||||||||
Ratio of interest-earning assets to interest-bearing liabilities | 151 | % | 161 | % | ||||||||||||||||||||||||||||||||||
Total deposits(6) | 6,761,028 | 80,005 | 1.58 | % | 7,431,718 | 13,555 | 0.24 | % | ||||||||||||||||||||||||||||||
Total funding (7) | 8,274,435 | 127,389 | 2.06 | % | 8,283,778 | 34,512 | 0.56 | % |
Three Months Ended September 30, 2023 vs. September 30, 2022 | Nine Months Ended September 30, 2023 vs. 2022 | |||||||||||||||||||||||||||||||||||||
Increase (Decrease) Due to | Net Increase (Decrease) | Increase (Decrease) Due to | Net Increase (Decrease) | |||||||||||||||||||||||||||||||||||
($ In thousands) | Volume | Rate | Volume | Rate | ||||||||||||||||||||||||||||||||||
Interest and dividend income: | ||||||||||||||||||||||||||||||||||||||
Total loans | $ | (3,160) | $ | 15,074 | $ | 11,914 | $ | (8,373) | $ | 45,465 | $ | 37,092 | ||||||||||||||||||||||||||
Securities | 510 | 5,636 | 6,146 | 1,139 | 20,287 | 21,426 | ||||||||||||||||||||||||||||||||
Other interest-earning assets | 123 | 2,066 | 2,189 | 2,996 | 9,118 | 12,114 | ||||||||||||||||||||||||||||||||
Total interest and dividend income | $ | (2,527) | $ | 22,776 | $ | 20,249 | $ | (4,238) | $ | 74,870 | $ | 70,632 | ||||||||||||||||||||||||||
Interest expense: | ||||||||||||||||||||||||||||||||||||||
Interest-bearing checking | $ | (1,310) | $ | 7,670 | $ | 6,360 | $ | (1,750) | $ | 24,277 | $ | 22,527 | ||||||||||||||||||||||||||
Savings and money market | (825) | 1,664 | 839 | (1,493) | 5,572 | 4,079 | ||||||||||||||||||||||||||||||||
Certificates of deposit | 4,748 | 10,426 | 15,174 | 9,504 | 30,340 | 39,844 | ||||||||||||||||||||||||||||||||
FHLB advances and FRB borrowings | 3,493 | 722 | 4,215 | 17,442 | 5,057 | 22,499 | ||||||||||||||||||||||||||||||||
Other borrowings | 2,661 | 1,063 | 3,724 | 23 | 3,380 | 3,403 | ||||||||||||||||||||||||||||||||
Long-term debt | (6) | 133 | 127 | 7 | 518 | 525 | ||||||||||||||||||||||||||||||||
Total interest expense | 8,761 | 21,678 | 30,439 | 23,733 | 69,144 | 92,877 | ||||||||||||||||||||||||||||||||
Net interest income | $ | (11,288) | $ | 1,098 | $ | (10,190) | $ | (27,971) | $ | 5,726 | $ | (22,245) |
Three Months Ended | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
($ in thousands) | September 30, 2023 | June 30, 2023 | September 30, 2022 | 2023 | 2022 | |||||||||||||||||||||||||||
Provision for (reversal of) credit losses - loans | $ | 5,000 | $ | 1,664 | $ | (500) | $ | 9,164 | $ | (32,342) | ||||||||||||||||||||||
(Reversal of) provision for credit losses - unfunded noncancellable loan commitments | — | (800) | 500 | (1,300) | 800 | |||||||||||||||||||||||||||
Provision for credit losses - securities | — | 1,036 | — | 1,036 | — | |||||||||||||||||||||||||||
Total provision for (reversal of) credit losses | $ | 5,000 | $ | 1,900 | $ | — | $ | 8,900 | $ | (31,542) |
Three Months Ended | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
($ in thousands) | September 30, 2023 | June 30, 2023 | September 30, 2022 | 2023 | 2022 | |||||||||||||||||||||||||||
Customer service fees | $ | 2,114 | $ | 2,022 | $ | 2,462 | $ | 6,115 | $ | 7,474 | ||||||||||||||||||||||
Loan servicing income | 563 | 574 | 636 | 1,684 | 957 | |||||||||||||||||||||||||||
Income from bank owned life insurance | 966 | 951 | 873 | 2,817 | 2,479 | |||||||||||||||||||||||||||
Net gain on sale of securities available-for-sale | — | — | — | — | 16 | |||||||||||||||||||||||||||
Change in fair value of derivative instruments | 46,186 | 10 | 39 | 46,172 | 224 | |||||||||||||||||||||||||||
Other income | 949 | 2,467 | 1,671 | 7,873 | 7,627 | |||||||||||||||||||||||||||
Total noninterest income | $ | 50,778 | $ | 6,024 | $ | 5,681 | $ | 64,661 | $ | 18,777 |
Three Months Ended | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
($ in thousands) | September 30, 2023 | June 30, 2023 | September 30, 2022 | 2023 | 2022 | |||||||||||||||||||||||||||
Salaries and employee benefits | $ | 25,819 | $ | 28,282 | $ | 27,997 | $ | 83,757 | $ | 85,248 | ||||||||||||||||||||||
Occupancy and equipment | 5,804 | 5,603 | 5,796 | 16,933 | 17,174 | |||||||||||||||||||||||||||
Professional fees | 3,616 | 4,001 | 3,957 | 11,689 | 10,797 | |||||||||||||||||||||||||||
Data processing | 1,657 | 1,686 | 1,699 | 4,906 | 5,309 | |||||||||||||||||||||||||||
Regulatory assessments | 1,410 | 1,301 | 925 | 3,913 | 2,721 | |||||||||||||||||||||||||||
Software and technology | 3,811 | 3,579 | 3,659 | 10,664 | 9,106 | |||||||||||||||||||||||||||
Reversal of loan repurchase reserves | — | (808) | (26) | (819) | (987) | |||||||||||||||||||||||||||
Amortization of other intangibles | 461 | 462 | 396 | 1,384 | 1,150 | |||||||||||||||||||||||||||
Acquisition, integration and transaction costs | 9,329 | — | 2,080 | 9,329 | 2,080 | |||||||||||||||||||||||||||
Other expense | 4,291 | 5,062 | 3,975 | 13,231 | 11,867 | |||||||||||||||||||||||||||
Noninterest expense before (gain) loss on investments in alternative energy partnerships | 56,198 | 49,168 | 50,458 | 154,987 | 144,465 | |||||||||||||||||||||||||||
(Gain) loss on investments in alternative energy partnerships | (34) | (36) | 504 | 1,548 | 1,705 | |||||||||||||||||||||||||||
Total noninterest expense | $ | 56,164 | $ | 49,132 | $ | 50,962 | $ | 156,535 | $ | 146,170 |
September 30, 2023 | December 31, 2022 (1) | |||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | Amortized Cost | Unrealized Gain (Loss) | Allowance for Credit Losses | Fair Value | Amortized Cost | Unrealized Gain (Loss) | Fair Value | |||||||||||||||||||||||||||||||||||||
Securities available-for-sale: | ||||||||||||||||||||||||||||||||||||||||||||
SBA loan pool securities | $ | 8,721 | $ | (22) | $ | — | $ | 8,699 | $ | 11,241 | $ | (54) | $ | 11,187 | ||||||||||||||||||||||||||||||
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities | 79,786 | (2,942) | — | 76,844 | 40,431 | (225) | 40,206 | |||||||||||||||||||||||||||||||||||||
U.S. government agency and U.S. government sponsored enterprise collateralized mortgage obligations | 93,696 | (7,864) | — | 85,832 | 99,075 | (5,884) | 93,191 | |||||||||||||||||||||||||||||||||||||
Non-agency residential mortgage-backed securities | 120,062 | (15,102) | — | 104,960 | 90,832 | (10,340) | 80,492 | |||||||||||||||||||||||||||||||||||||
Collateralized loan obligations | 489,940 | (6,136) | — | 483,804 | 492,203 | (15,600) | 476,603 | |||||||||||||||||||||||||||||||||||||
Corporate debt securities | 175,804 | (19,853) | (1,036) | 154,915 | 175,781 | (9,163) | 166,618 | |||||||||||||||||||||||||||||||||||||
Total securities available-for-sale | $ | 968,009 | $ | (51,919) | $ | (1,036) | $ | 915,054 | $ | 909,563 | $ | (41,266) | $ | 868,297 |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||
($ in thousands) | Amortized Cost | Unrealized Gain (Loss) | Fair Value | Amortized Cost | Unrealized Gain (Loss) | Fair Value | ||||||||||||||||||||||||||||||||
Securities held-to-maturity: | ||||||||||||||||||||||||||||||||||||||
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities | $ | 152,748 | $ | (35,680) | $ | 117,068 | $ | 153,033 | $ | (29,807) | $ | 123,226 | ||||||||||||||||||||||||||
U.S. government agency and U.S. government sponsored enterprise collateralized mortgage obligations | 61,337 | (15,688) | 45,649 | 61,404 | (11,946) | 49,458 | ||||||||||||||||||||||||||||||||
Municipal securities | 114,202 | (26,634) | 87,568 | 114,204 | (24,428) | 89,776 | ||||||||||||||||||||||||||||||||
Total securities held-to-maturity | $ | 328,287 | $ | (78,002) | $ | 250,285 | $ | 328,641 | $ | (66,181) | $ | 262,460 |
One Year or Less | More than One Year through Five Years | More than Five Years through Ten Years | More than Ten Years | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | Fair Value | Weighted Average Yield | Fair Value | Weighted Average Yield | Fair Value | Weighted Average Yield | Fair Value | Weighted Average Yield | Fair Value | Weighted Average Yield | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities available-for-sale: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SBA loan pools securities | $ | 8,699 | 5.79 | % | $ | — | — | % | $ | — | — | % | $ | — | — | % | $ | 8,699 | 5.79 | % | ||||||||||||||||||||||||||||||||||||||||||
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities | — | — | % | — | — | % | — | — | % | 76,844 | 5.52 | % | 76,844 | 5.52 | % | |||||||||||||||||||||||||||||||||||||||||||||||
U.S. government agency and U.S. government sponsored enterprise collateralized mortgage obligations | 5,066 | 5.98 | % | 7,528 | 3.72 | % | 23,087 | 3.25 | % | 50,151 | 5.21 | % | 85,832 | 4.52 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Non-agency residential mortgage-backed securities | — | — | % | — | — | % | — | — | % | 104,960 | 4.02 | % | 104,960 | 4.02 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Collateralized loan obligations | 483,804 | 7.20 | % | — | — | % | — | — | % | — | — | % | 483,804 | 7.20 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Corporate debt securities | — | — | % | 143,052 | 4.82 | % | 11,863 | 5.73 | % | — | — | % | 154,915 | 4.89 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Total securities available-for-sale | $ | 497,569 | 7.16 | % | $ | 150,580 | 4.76 | % | $ | 34,950 | 4.04 | % | $ | 231,955 | 4.74 | % | $ | 915,054 | 5.97 | % |
One Year or Less | More than One Year through Five Years | More than Five Years through Ten Years | More than Ten Years | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | Amortized Cost | Weighted Average Yield | Amortized Cost | Weighted Average Yield | Amortized Cost | Weighted Average Yield | Amortized Cost | Weighted Average Yield | Amortized Cost | Weighted Average Yield | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities held-to-maturity: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities | $ | — | — | % | $ | — | — | % | $ | 9,334 | 2.52 | % | $ | 143,414 | 2.70 | % | $ | 152,748 | 2.69 | % | ||||||||||||||||||||||||||||||||||||||||||
U.S. government agency and U.S. government sponsored enterprise collateralized mortgage obligations | — | — | % | — | — | % | — | — | % | 61,337 | 2.64 | % | 61,337 | 2.64 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Municipal securities | — | — | % | — | — | % | 27,971 | 2.32 | % | 86,231 | 2.72 | % | 114,202 | 2.62 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Total securities held-to-maturity | $ | — | — | % | $ | — | — | % | $ | 37,305 | 2.37 | % | $ | 290,982 | 2.69 | % | $ | 328,287 | 2.65 | % |
($ in thousands) | September 30, 2023 | December 31, 2022 | Amount Change | Percentage Change | ||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||
Commercial and industrial(1)(2) | $ | 1,942,964 | $ | 1,845,960 | $ | 97,004 | 5.3 | % | ||||||||||||||||||
Commercial real estate(2) | 1,173,332 | 1,259,651 | (86,319) | (6.9) | % | |||||||||||||||||||||
Multifamily | 1,654,272 | 1,689,943 | (35,671) | (2.1) | % | |||||||||||||||||||||
SBA | 56,600 | 68,137 | (11,537) | (16.9) | % | |||||||||||||||||||||
Construction | 262,715 | 243,553 | 19,162 | 7.9 | % | |||||||||||||||||||||
Total commercial loans | 5,089,883 | 5,107,244 | (17,361) | (0.3) | % | |||||||||||||||||||||
Consumer: | ||||||||||||||||||||||||||
Single family residential mortgage | 1,782,655 | 1,920,806 | (138,151) | (7.2) | % | |||||||||||||||||||||
Other consumer | 88,494 | 86,988 | 1,506 | 1.7 | % | |||||||||||||||||||||
Total consumer loans | 1,871,149 | 2,007,794 | (136,645) | (6.8) | % | |||||||||||||||||||||
Total loans(3) | 6,961,032 | 7,115,038 | (154,006) | (2.2) | % | |||||||||||||||||||||
Allowance for loan losses | (74,390) | (85,960) | 11,570 | (13.5) | % | |||||||||||||||||||||
Total loans receivable, net | $ | 6,886,642 | $ | 7,029,078 | $ | (142,436) | (2.0) | % |
($ in thousands) | Pass | Special Mention | Substandard | Doubtful | Total | |||||||||||||||||||||||||||
September 30, 2023 | ||||||||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||
Commercial and industrial | $ | 1,880,538 | $ | 34,074 | $ | 23,636 | $ | 4,716 | $ | 1,942,964 | ||||||||||||||||||||||
Commercial real estate | 1,153,630 | 10,502 | 9,200 | — | 1,173,332 | |||||||||||||||||||||||||||
Multifamily | 1,635,340 | 3,000 | 15,932 | — | 1,654,272 | |||||||||||||||||||||||||||
SBA | 46,653 | 1,228 | 8,417 | 302 | 56,600 | |||||||||||||||||||||||||||
Construction | 262,715 | — | — | — | 262,715 | |||||||||||||||||||||||||||
Consumer: | ||||||||||||||||||||||||||||||||
Single family residential mortgage | 1,730,371 | 11,779 | 40,505 | — | 1,782,655 | |||||||||||||||||||||||||||
Other consumer | 87,688 | 350 | 456 | — | 88,494 | |||||||||||||||||||||||||||
Total | $ | 6,796,935 | $ | 60,933 | $ | 98,146 | $ | 5,018 | $ | 6,961,032 |
($ in thousands) | Pass | Special Mention | Substandard | Doubtful | Total | |||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||
Commercial and industrial | $ | 1,749,284 | $ | 49,399 | $ | 43,273 | $ | 4,004 | $ | 1,845,960 | ||||||||||||||||||||||
Commercial real estate | 1,248,196 | 1,745 | 9,710 | — | 1,259,651 | |||||||||||||||||||||||||||
Multifamily | 1,658,521 | 2,997 | 28,425 | — | 1,689,943 | |||||||||||||||||||||||||||
SBA | 55,789 | 800 | 11,548 | — | 68,137 | |||||||||||||||||||||||||||
Construction | 243,553 | — | — | — | 243,553 | |||||||||||||||||||||||||||
Consumer: | ||||||||||||||||||||||||||||||||
Single family residential mortgage | 1,889,911 | 9,101 | 21,794 | — | 1,920,806 | |||||||||||||||||||||||||||
Other consumer | 86,599 | 138 | 251 | — | 86,988 | |||||||||||||||||||||||||||
Total | $ | 6,931,853 | $ | 64,180 | $ | 115,001 | $ | 4,004 | $ | 7,115,038 |
($ in thousands) | September 30, 2023 | December 31, 2022 | Amount Change | Percentage Change | ||||||||||||||||||||||
Loans past due 90 days or more still on accrual | $ | — | $ | — | $ | — | — | % | ||||||||||||||||||
Nonaccrual loans | 60,556 | 55,251 | 5,305 | 9.6 | % | |||||||||||||||||||||
Total nonperforming loans | 60,556 | 55,251 | 5,305 | 9.6 | % | |||||||||||||||||||||
Other real estate owned | 882 | — | 882 | — | % | |||||||||||||||||||||
Total nonperforming assets | $ | 61,438 | $ | 55,251 | $ | 6,187 | 11.2 | % | ||||||||||||||||||
Nonaccrual loans to total loans | 0.87 | % | 0.78 | % | ||||||||||||||||||||||
Nonperforming loans to total loans | 0.87 | % | 0.78 | % | ||||||||||||||||||||||
Total nonperforming assets to total assets | 0.66 | % | 0.60 | % | ||||||||||||||||||||||
ALL to nonperforming loans | 122.84 | % | 155.58 | % | ||||||||||||||||||||||
ACL to nonperforming loans | 129.46 | % | 165.18 | % |
($ in thousands) | September 30, 2023 | December 31, 2022 | ||||||||||||
Allowance for credit losses: | ||||||||||||||
Allowance for loan losses (ALL) | $ | 74,390 | $ | 85,960 | ||||||||||
Reserve for unfunded loan commitments | 4,005 | 5,305 | ||||||||||||
Total allowance for credit losses (ACL) | $ | 78,395 | $ | 91,265 | ||||||||||
ALL to total loans | 1.07 | % | 1.21 | % | ||||||||||
ACL to total loans | 1.13 | % | 1.28 | % | ||||||||||
Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
($ in thousands) | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||
Allowance for Loan Losses | Reserve for Unfunded Loan Commitments | Allowance for Credit Losses | Allowance for Loan Losses | Reserve for Unfunded Loan Commitments | Allowance for Credit Losses | |||||||||||||||||||||||||||||||||
Balance at beginning of period | $ | 80,883 | $ | 4,005 | $ | 84,888 | $ | 93,793 | $ | 5,905 | $ | 99,698 | ||||||||||||||||||||||||||
Loans charged off | (11,644) | — | (11,644) | (912) | — | (912) | ||||||||||||||||||||||||||||||||
Recoveries of loans previously charged off | 151 | — | 151 | 63 | — | 63 | ||||||||||||||||||||||||||||||||
Net (charge-offs) recoveries | (11,493) | — | (11,493) | (849) | — | (849) | ||||||||||||||||||||||||||||||||
Provision (reversal of) for credit losses | 5,000 | — | 5,000 | (500) | 500 | — | ||||||||||||||||||||||||||||||||
Balance at end of period | $ | 74,390 | $ | 4,005 | $ | 78,395 | $ | 92,444 | $ | 6,405 | $ | 98,849 |
Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
($ in thousands) | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||
Allowance for Loan Losses | Reserve for Unfunded Loan Commitments | Allowance for Credit Losses | Allowance for Loan Losses | Reserve for Unfunded Loan Commitments | Allowance for Credit Losses | |||||||||||||||||||||||||||||||||
Balance at beginning of period | $ | 85,960 | $ | 5,305 | $ | 91,265 | $ | 92,584 | $ | 5,605 | $ | 98,189 | ||||||||||||||||||||||||||
Loans charged off | (21,260) | — | (21,260) | (1,637) | — | (1,637) | ||||||||||||||||||||||||||||||||
Recoveries of loans previously charged off | 526 | — | 526 | 33,839 | — | 33,839 | ||||||||||||||||||||||||||||||||
Net (charge-offs) recoveries | (20,734) | — | (20,734) | 32,202 | — | 32,202 | ||||||||||||||||||||||||||||||||
Provision for (reversal of) credit losses | 9,164 | (1,300) | 7,864 | (32,342) | 800 | (31,542) | ||||||||||||||||||||||||||||||||
Balance at end of period | $ | 74,390 | $ | 4,005 | $ | 78,395 | $ | 92,444 | $ | 6,405 | $ | 98,849 |
Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
($ in thousands) | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||
Net (Charge-offs) Recoveries | Average Loans | Annualized (Charge-off) Recovery Ratio | Net (Charge-offs) Recoveries | Average Loans | Annualized (Charge-off) Recovery Ratio | |||||||||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||||||||
Commercial and industrial | $ | (11,341) | $ | 1,949,411 | (2.33) | % | $ | (819) | $ | 2,101,671 | (0.16) | % | ||||||||||||||||||||||||||
Commercial real estate | — | 1,255,833 | — | % | 3 | 1,263,520 | — | % | ||||||||||||||||||||||||||||||
Multifamily | — | 1,655,307 | — | % | — | 1,644,458 | — | % | ||||||||||||||||||||||||||||||
SBA | (163) | 27,509 | (2.37) | % | (44) | 49,840 | (0.35) | % | ||||||||||||||||||||||||||||||
Construction | — | 264,451 | — | % | — | 234,794 | — | % | ||||||||||||||||||||||||||||||
Consumer: | ||||||||||||||||||||||||||||||||||||||
Single family residential mortgage | 1 | 1,802,091 | — | % | 1 | 1,927,694 | — | % | ||||||||||||||||||||||||||||||
Other consumer | 10 | 86,978 | 0.05 | % | 10 | 87,335 | 0.05 | % | ||||||||||||||||||||||||||||||
Total loans | $ | (11,493) | $ | 7,041,580 | (0.65) | % | $ | (849) | $ | 7,309,312 | (0.05) | % |
Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
($ in thousands) | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||
Net (Charge-offs) Recoveries | Average Loans | Annualized (Charge-off) Recovery Ratio | Net (Charge-offs) Recoveries | Average Loans | Annualized (Charge-off) Recovery Ratio | |||||||||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||||||||
Commercial and industrial | $ | (19,013) | $ | 1,846,026 | (1.37) | % | $ | 31,678 | $ | 2,395,169 | 1.76 | % | ||||||||||||||||||||||||||
Commercial real estate | (300) | 1,288,152 | (0.03) | % | 3 | 1,266,418 | — | % | ||||||||||||||||||||||||||||||
Multifamily | — | 1,668,551 | — | % | — | 1,481,355 | — | % | ||||||||||||||||||||||||||||||
SBA | (934) | 29,713 | (4.19) | % | 565 | 78,497 | 0.96 | % | ||||||||||||||||||||||||||||||
Construction | — | 262,601 | — | % | — | 214,375 | — | % | ||||||||||||||||||||||||||||||
Consumer: | ||||||||||||||||||||||||||||||||||||||
Single family residential mortgage | (369) | 1,849,183 | (0.03) | % | 183 | 1,749,968 | 0.01 | % | ||||||||||||||||||||||||||||||
Other consumer | (118) | 85,568 | (0.18) | % | (227) | 92,633 | (0.33) | % | ||||||||||||||||||||||||||||||
Total loans | $ | (20,734) | $ | 7,029,794 | (0.39) | % | $ | 32,202 | $ | 7,278,415 | 0.59 | % |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||
($ in thousands) | Allowance for Loan Losses | Loans Receivable | % of Loans in Category to Total Loans | Allowance for Loan Losses | Loans Receivable | % of Loans in Category to Total Loans | ||||||||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||||||||
Commercial and industrial | $ | 29,642 | $ | 1,942,964 | 27.9 | % | $ | 34,156 | $ | 1,845,960 | 25.9 | % | ||||||||||||||||||||||||||
Commercial real estate | 13,173 | 1,173,332 | 16.9 | % | 15,977 | 1,259,651 | 17.7 | % | ||||||||||||||||||||||||||||||
Multifamily | 13,963 | 1,654,272 | 23.8 | % | 14,696 | 1,689,943 | 23.8 | % | ||||||||||||||||||||||||||||||
SBA | 1,082 | 56,600 | 0.8 | % | 2,648 | 68,137 | 1.0 | % | ||||||||||||||||||||||||||||||
Construction | 6,169 | 262,715 | 3.7 | % | 5,850 | 243,553 | 3.4 | % | ||||||||||||||||||||||||||||||
Consumer: | ||||||||||||||||||||||||||||||||||||||
Single family residential mortgage | 9,786 | 1,782,655 | 25.6 | % | 12,050 | 1,920,806 | 27.0 | % | ||||||||||||||||||||||||||||||
Other consumer | 575 | 88,494 | 1.3 | % | 583 | 86,988 | 1.2 | % | ||||||||||||||||||||||||||||||
Total | $ | 74,390 | $ | 6,961,032 | 100.0 | % | $ | 85,960 | $ | 7,115,038 | 100.0 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
($ in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Balance at beginning of period | $ | 19,111 | $ | 23,531 | $ | 21,410 | $ | 25,888 | ||||||||||||||||||
Return of capital | (342) | (626) | (1,059) | (1,782) | ||||||||||||||||||||||
Gain (loss) on investments using HLBV method | 34 | (504) | (1,548) | (1,705) | ||||||||||||||||||||||
Balance at end of period | $ | 18,803 | $ | 22,401 | $ | 18,803 | $ | 22,401 | ||||||||||||||||||
Unfunded equity commitments at end of period | $ | — | $ | — | $ | — | $ | — |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||
($ in thousands) | Amount | % of Total Deposits | Amount | % of Total Deposits | Amount Change | |||||||||||||||||||||||||||
Noninterest-bearing deposits | $ | 2,366,544 | 35.6 | % | $ | 2,809,328 | 39.5 | % | $ | (442,784) | ||||||||||||||||||||||
Interest-bearing demand deposits | 1,531,306 | 23.1 | % | 1,947,247 | 27.3 | % | (415,941) | |||||||||||||||||||||||||
Savings and money market accounts | 1,157,126 | 17.5 | % | 1,174,925 | 16.5 | % | (17,799) | |||||||||||||||||||||||||
Certificates of deposit of $250,000 or less | 1,177,795 | 17.7 | % | 793,040 | 11.1 | % | 384,755 | |||||||||||||||||||||||||
Certificates of deposit of more than $250,000 | 407,859 | 6.1 | % | 396,381 | 5.6 | % | 11,478 | |||||||||||||||||||||||||
Total deposits | $ | 6,640,630 | 100.0 | % | $ | 7,120,921 | 100.0 | % | $ | (480,291) |
($ in thousands) | Three Months or Less | Over Three Months Through Six Months | Over Six Months Through Twelve Months | Over One Year | Total | |||||||||||||||||||||||||||
Certificates of deposit of $250,000 or less | $ | 679,173 | $ | 163,730 | $ | 274,599 | $ | 60,293 | $ | 1,177,795 | ||||||||||||||||||||||
Certificates of deposit of more than $250,000 | 142,709 | 207,180 | 48,878 | 9,092 | 407,859 | |||||||||||||||||||||||||||
Total certificates of deposit | $ | 821,882 | $ | 370,910 | $ | 323,477 | $ | 69,385 | $ | 1,585,654 |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||
($ in thousands) | Weighted Average Interest Rate | Weighted Average Maturity (years) | Outstanding Balance | Outstanding Balance | ||||||||||||||||||||||
FHLB advances: | ||||||||||||||||||||||||||
Overnight advances | —% | — | $ | — | $ | 20,000 | ||||||||||||||||||||
Term advances | 2.91% | 2.75 | 611,000 | 611,000 | ||||||||||||||||||||||
Term advances (putable) | 3.44% | 4.25 | 200,000 | 100,000 | ||||||||||||||||||||||
Unamortized costs | (2,671) | (3,652) | ||||||||||||||||||||||||
Total FHLB advances | 3.04% | 3.12 | $ | 808,329 | $ | 727,348 | ||||||||||||||||||||
FRB borrowings: | ||||||||||||||||||||||||||
Short-term advances | 5.50% | 0.01 | $ | 199,964 | $ | — | ||||||||||||||||||||
Total FRB borrowings | 5.50% | 0.01 | $ | 199,964 | $ | — | ||||||||||||||||||||
Other borrowings: | ||||||||||||||||||||||||||
Unsecured overnight borrowings | 5.49% | 0.00 | 185,802 | — | ||||||||||||||||||||||
Lines of credit | SOFR + 1.85% | 0.22 | $ | — | $ | — | ||||||||||||||||||||
Total other borrowings | 0.00 | $ | 185,802 | $ | — | |||||||||||||||||||||
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||
($ in thousands) | Interest Rate | Maturity Date | Par Value | Unamortized Debt Issuance Cost and Discount | Par Value | Unamortized Debt Issuance Cost and Discount | ||||||||||||||||||||||||||||||||
Senior notes (1) | 5.25% | 4/15/2025 | $ | 174,000 | $ | (520) | $ | 175,000 | $ | (722) | ||||||||||||||||||||||||||||
Subordinated notes (2) | 4.375% | 10/30/2030 | 85,000 | (1,728) | 85,000 | (1,899) | ||||||||||||||||||||||||||||||||
PMB Statutory Trust III, junior subordinated debentures | SOFR + 3.40% | 9/26/2032 | 7,217 | — | 7,217 | — | ||||||||||||||||||||||||||||||||
PMB Capital Trust III, junior subordinated debentures | SOFR + 2.00% | 10/8/2034 | 10,310 | — | 10,310 | — | ||||||||||||||||||||||||||||||||
Total | $ | 276,527 | $ | (2,248) | $ | 277,527 | $ | (2,621) |
Commitments and Contractual Obligations | ||||||||||||||||||||||||||||||||
($ in thousands) | Total Amount Committed | Within One Year | More Than One Year Through Three Years | More Than Three Years Through Five Years | Over Five Years | |||||||||||||||||||||||||||
Commitments to extend credit | $ | 230,094 | $ | 31,939 | $ | 104,325 | $ | 75,051 | $ | 18,779 | ||||||||||||||||||||||
Unused lines of credit | 1,412,335 | 1,069,154 | 220,088 | 100,975 | 22,118 | |||||||||||||||||||||||||||
Standby letters of credit | 10,559 | 9,663 | 896 | — | — | |||||||||||||||||||||||||||
Total commitments | $ | 1,652,988 | $ | 1,110,756 | $ | 325,309 | $ | 176,026 | $ | 40,897 | ||||||||||||||||||||||
FHLB advances and FRB borrowings | $ | 1,011,002 | $ | 200,002 | $ | 311,000 | $ | 500,000 | $ | — | ||||||||||||||||||||||
Other borrowings | 185,802 | 185,802 | — | — | — | |||||||||||||||||||||||||||
Long-term debt | 276,527 | — | 174,000 | — | 102,527 | |||||||||||||||||||||||||||
Operating and capital lease obligations | 26,558 | 8,076 | 11,364 | 4,707 | 2,411 | |||||||||||||||||||||||||||
Certificates of deposit | 1,585,654 | 1,516,269 | 68,312 | 1,073 | — | |||||||||||||||||||||||||||
Total contractual obligations | $ | 3,085,543 | $ | 1,910,149 | $ | 564,676 | $ | 505,780 | $ | 104,938 |
Banc of California, Inc. | Banc of California, NA | Minimum Capital Requirements | Well-Capitalized Requirements (Bank) | Capital Conservation Buffer Requirements | ||||||||||||||||||||||||||||
September 30, 2023 | ||||||||||||||||||||||||||||||||
Total risk-based capital | 14.83 | % | 16.37 | % | 8.00 | % | 10.00 | % | 10.50 | % | ||||||||||||||||||||||
Tier 1 risk-based capital | 12.53 | % | 15.41 | % | 6.00 | % | 8.00 | % | 8.50 | % | ||||||||||||||||||||||
Common equity tier 1 capital | 12.53 | % | 15.41 | % | 4.50 | % | 6.50 | % | 7.00 | % | ||||||||||||||||||||||
Tier 1 leverage | 10.13 | % | 12.46 | % | 4.00 | % | 5.00 | % | N/A | |||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||
Total risk-based capital | 14.18 | % | 16.00 | % | 8.00 | % | 10.00 | % | 10.50 | % | ||||||||||||||||||||||
Tier 1 risk-based capital | 11.78 | % | 14.92 | % | 6.00 | % | 8.00 | % | 8.50 | % | ||||||||||||||||||||||
Common equity tier 1 capital | 11.78 | % | 14.92 | % | 4.50 | % | 6.50 | % | 7.00 | % | ||||||||||||||||||||||
Tier 1 leverage | 9.70 | % | 12.25 | % | 4.00 | % | 5.00 | % | N/A | |||||||||||||||||||||||
Change in Interest Rates in Basis Points (bps) (1) | ||||||||||||||||||||||||||||||||||||||
($ in thousands) | Economic Value of Equity | Net Interest Income | ||||||||||||||||||||||||||||||||||||
Amount | Amount Change | Percentage Change | Amount | Amount Change | Percentage Change | |||||||||||||||||||||||||||||||||
September 30, 2023 | ||||||||||||||||||||||||||||||||||||||
+200 bps | $ | 1,601,095 | $ | 133,411 | 9.1 | % | $ | 354,573 | $ | 64,200 | 22.1 | % | ||||||||||||||||||||||||||
+100 bps | 1,536,345 | 68,661 | 4.7 | % | 324,957 | 34,584 | 11.9 | % | ||||||||||||||||||||||||||||||
0 bps | 1,467,684 | 290,373 | ||||||||||||||||||||||||||||||||||||
-100 bps | 1,452,453 | (15,231) | (1.0) | % | 285,561 | (4,812) | (1.7) | % | ||||||||||||||||||||||||||||||
-200 bps | 1,418,189 | (49,495) | (3.4) | % | 279,109 | (11,264) | (3.9) | % | ||||||||||||||||||||||||||||||
Purchase of Equity Securities by the Issuer | ||||||||||||||||||||||||||
Total Number of Shares | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans | Approximate Dollar Value of Shares That May Yet be Purchased Under the Plan | |||||||||||||||||||||||
Common Stock: | ||||||||||||||||||||||||||
From July 1, 2023 to July 31, 2023 | 2,391 | $ | 11.82 | — | $ | 13,852,812 | ||||||||||||||||||||
From August 1, 2023 to August 31, 2023 | 4,233 | $ | 13.63 | — | $ | 13,852,812 | ||||||||||||||||||||
From September 1, 2023 to September 30, 2023 | — | $ | — | — | $ | 13,852,812 | ||||||||||||||||||||
Total | 6,624 | $ | 12.98 | — | ||||||||||||||||||||||
2.1 | |||||
3.1 | |||||
3.2 | |||||
10.1 | |||||
10.2 | |||||
31.1 | |||||
31.2 | |||||
32.0 | |||||
101.0 | The following financial statements and footnotes from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 formatted in Extensible Business Reporting Language (XBRL): (i) Consolidated Statements of Financial Condition; (ii) Consolidated Statements of Operations; (iii) Consolidated Statements of Comprehensive Income; (iv) Consolidated Statements of Stockholders’ Equity; (v) Consolidated Statements of Cash Flows; and (vi) the Notes to Consolidated Financial Statements. The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document. | ||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
BANC OF CALIFORNIA, INC. | |||||||||||
Date: | November 9, 2023 | /s/ Jared Wolff | |||||||||
Jared Wolff | |||||||||||
Chairman, President and Chief Executive Officer (Principal Executive Officer) | |||||||||||
Date: | November 9, 2023 | /s/ Joseph Kauder | |||||||||
Joseph Kauder | |||||||||||
Executive Vice President, Chief Financial Officer (Principal Financial Officer) | |||||||||||
Date: | November 9, 2023 | /s/ Raymond Rindone | |||||||||
Raymond Rindone | |||||||||||
Executive Vice President, Chief Accounting Officer and Deputy Chief Financial Officer (Principal Accounting Officer) | |||||||||||
Date: | November 9, 2023 | /s/ Jared Wolff | |||||||||
Jared Wolff | |||||||||||
Chairman, President and Chief Executive Officer (Principal Executive Officer) |
Date: | November 9, 2023 | /s/ Joseph Kauder | |||||||||
Joseph Kauder | |||||||||||
Executive Vice President, Chief Financial Officer (Principal Financial Officer) |
Date: | November 9, 2023 | /s/ Jared Wolff | |||||||||
Jared Wolff | |||||||||||
Chairman, President and Chief Executive Officer (Principal Executive Officer) | |||||||||||
Date: | November 9, 2023 | /s/ Joseph Kauder | |||||||||
Joseph Kauder | |||||||||||
Executive Vice President, Chief Financial Officer (Principal Financial Officer) | |||||||||||
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Securities held-to-maturity | $ 250,285 | $ 262,460 |
Amortized cost | 968,009 | 909,563 |
Allowance for credit loss | $ (1,036) | $ 0 |
Treasury stock (in shares) | 8,383,337 | 6,623,846 |
Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 446,863,844 | 446,863,844 |
Common stock, shares issued (in shares) | 65,342,478 | 65,168,380 |
Common stock, shares outstanding (in shares) | 56,959,141 | 58,544,534 |
Class B Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 3,136,156 | 3,136,156 |
Common stock, shares issued (in shares) | 477,321 | 477,321 |
Common stock, shares outstanding (in shares) | 477,321 | 477,321 |
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2023 |
Jun. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Interest and dividend income | |||||
Loans, including fees | $ 95,613 | $ 92,889 | $ 83,699 | $ 275,920 | $ 238,828 |
Securities | 16,335 | 15,804 | 10,189 | 47,048 | 25,622 |
Other interest-earning assets | 4,274 | 7,458 | 2,085 | 16,324 | 4,210 |
Total interest and dividend income | 116,222 | 116,151 | 95,973 | 339,292 | 268,660 |
Interest expense | |||||
Deposits | 31,360 | 28,118 | 8,987 | 80,005 | 13,555 |
FHLB advances and FRB borrowings | 7,773 | 14,703 | 3,558 | 32,124 | 9,625 |
Other interest-bearing liabilities | 7,871 | 3,698 | 4,020 | 15,260 | 11,332 |
Total interest expense | 47,004 | 46,519 | 16,565 | 127,389 | 34,512 |
Net interest income | 69,218 | 69,632 | 79,408 | 211,903 | 234,148 |
Provision for (reversal of) credit losses | 5,000 | 1,900 | 0 | 8,900 | (31,542) |
Net interest income after provision for (reversal of) credit losses | 64,218 | 67,732 | 79,408 | 203,003 | 265,690 |
Noninterest income | |||||
Customer service fees | 2,114 | 2,022 | 2,462 | 6,115 | 7,474 |
Loan servicing income | 563 | 574 | 636 | 1,684 | 957 |
Income from bank owned life insurance | 966 | 951 | 873 | 2,817 | 2,479 |
Change in fair value of derivative instruments | 46,186 | 10 | 39 | 46,172 | 224 |
Net gain on sale of securities available-for-sale | 0 | 0 | 0 | 0 | 16 |
All other income | 949 | 2,467 | 1,671 | 7,873 | 7,627 |
Total noninterest income | 50,778 | 6,024 | 5,681 | 64,661 | 18,777 |
Noninterest expense | |||||
Salaries and employee benefits | 25,819 | 28,282 | 27,997 | 83,757 | 85,248 |
Occupancy and equipment | 5,804 | 5,603 | 5,796 | 16,933 | 17,174 |
Professional fees | 3,616 | 4,001 | 3,957 | 11,689 | 10,797 |
Data processing | 1,657 | 1,686 | 1,699 | 4,906 | 5,309 |
Regulatory assessments | 1,410 | 1,301 | 925 | 3,913 | 2,721 |
Software and technology | 3,811 | 3,579 | 3,659 | 10,664 | 9,106 |
(Gain) loss on investments in alternative energy partnerships | (34) | (36) | 504 | 1,548 | 1,705 |
Reversal of loan repurchase reserves | 0 | (808) | (26) | (819) | (987) |
Amortization of other intangibles | 461 | 462 | 396 | 1,384 | 1,150 |
Acquisition, integration and transaction costs | 9,329 | 0 | 2,080 | 9,329 | 2,080 |
Other expense | 4,291 | 5,062 | 3,975 | 13,231 | 11,867 |
Total noninterest expense | 56,164 | 49,132 | 50,962 | 156,535 | 146,170 |
Income before income taxes | 58,832 | 24,624 | 34,127 | 111,129 | 138,297 |
Income tax expense | 16,258 | 6,745 | 9,931 | 30,398 | 38,877 |
Net income | 42,574 | 17,879 | 24,196 | 80,731 | 99,420 |
Preferred stock dividends | 0 | 0 | 0 | 0 | 1,420 |
Impact of preferred stock redemption | 0 | 0 | 0 | 0 | 3,747 |
Net income available to common stockholders | $ 42,574 | $ 17,879 | 24,196 | $ 80,731 | 94,253 |
Common Stock | |||||
Noninterest expense | |||||
Preferred stock dividends | 0 | 1,409 | |||
Impact of preferred stock redemption | $ 0 | $ 3,718 | |||
Earnings per share: | |||||
Basic (in dollars per share) | $ 0.74 | $ 0.31 | $ 0.40 | $ 1.39 | $ 1.54 |
Diluted (in dollars per share) | 0.74 | 0.31 | $ 0.40 | 1.39 | $ 1.53 |
Class B Common Stock | |||||
Noninterest expense | |||||
Preferred stock dividends | $ 0 | $ 11 | |||
Impact of preferred stock redemption | $ 0 | $ 29 | |||
Earnings per share: | |||||
Basic (in dollars per share) | 0.74 | 0.31 | $ 0.40 | 1.39 | $ 1.54 |
Diluted (in dollars per share) | $ 0.74 | $ 0.31 | $ 0.40 | $ 1.39 | $ 1.54 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2023 |
Jun. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Statement of Comprehensive Income [Abstract] | |||||
Net income | $ 42,574 | $ 17,879 | $ 24,196 | $ 80,731 | $ 99,420 |
Unrealized gain (loss) on available-for-sale securities: | |||||
Unrealized gain (loss) arising during the period | 1,568 | (5,215) | (13,715) | (7,573) | (55,741) |
Reclassification adjustment for gain included in net income | 0 | 0 | 0 | 0 | (11) |
Total change in unrealized gain (loss) on available-for-sale securities | 1,568 | (5,215) | (13,715) | (7,573) | (55,752) |
Unrealized gain arising during the period | 4,558 | 5,764 | 0 | 4,176 | 0 |
Amortization of unrealized loss on securities transferred from available-for-sale to held-to-maturity | 179 | 182 | 195 | 541 | 430 |
Total other comprehensive income (loss) | 6,305 | 731 | (13,520) | (2,856) | (55,322) |
Comprehensive income | $ 48,879 | $ 18,610 | $ 10,676 | $ 77,875 | $ 44,098 |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Parenthetical) - $ / shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Statement of Stockholders' Equity [Abstract] | ||||
Shares repurchased (in shares) | 0 | 740,332 | 1,759,491 | 3,069,058 |
Dividends declared, per common share (in dollars per share) | $ 0.10 | $ 0.06 | $ 0.30 | $ 0.18 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
9 Months Ended |
---|---|
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations: Banc of California, Inc., a Maryland corporation, was incorporated in March 2002 and serves as the holding company for its wholly owned subsidiary, Banc of California, National Association (the “Bank”), a California-based bank. When we refer to the “parent” or the “holding company", we are referring to Banc of California, Inc., the parent company, on a stand-alone basis. When we refer to “we,” “us,” “our,” or the “Company”, we are referring to Banc of California, Inc. and its consolidated subsidiaries including the Bank, collectively. We are regulated as a bank holding company by the FRB and the Bank operates under a national bank charter issued by the Office of the Comptroller of the Currency (“OCC”), the Bank’s primary regulator. The Bank is a member of the Federal Home Loan Bank (“FHLB”) system, and maintains insurance on deposit accounts with the Federal Deposit Insurance Corporation (“FDIC”). The Bank offers a variety of financial services to meet the banking and financial needs of the communities it serves, with operations conducted through 32 offices including 26 full-service branches located throughout Southern California as of September 30, 2023. Update on Proposed Merger with PacWest: On July 25, 2023, the Company and PacWest announced the execution of an Agreement and Plan of Merger, pursuant to which (a) a newly formed merger subsidiary of the Company will merge with and into PacWest, with PacWest as the surviving entity (the “first-step merger”), (b) immediately following the first-step merger, PacWest will merge with and into the Company, with the Company surviving (the “second-step merger”), (c) promptly following the second-step merger, Pacific Western Bank, a California-chartered non-member bank and, as of immediately prior to the second-step merger, a wholly-owned subsidiary of PacWest (“PacWest Bank”), will become a member of the Federal Reserve System (the “FRS Membership”) and (d) promptly following the effectiveness of the FRS Membership, the Bank will merge with and into PacWest Bank, with PacWest Bank surviving as a wholly-owned subsidiary of the Company (the “bank merger” and together with the first-step merger and the second-step merger, the “merger”). Upon closing of the merger, the combined holding company and bank will operate under the Banc of California name and brand. At the closing of the merger, PacWest stockholders will be entitled to receive 0.6569 of a share of the Company’s common stock for each share held of PacWest common stock. In the second-step merger, each outstanding share of PacWest’s 7.75% series A fixed-rate reset noncumulative perpetual preferred stock will be converted into the right to receive one share of a newly created series of substantially identical preferred stock of the Company with the same terms and conditions. In connection with the proposed transaction, the Company also entered into separate investment agreements (the “Investment Agreements”) with affiliates of funds managed by Warburg Pincus LLC (the “Warburg Investors”) and certain investment vehicles sponsored, managed or advised by Centerbridge Partners, L.P. and its affiliates (the “Centerbridge Investors” and, together with the Warburg Investors, the “Investors”), which together will invest a total of $400 million for newly issued equity securities of the Company substantially concurrently with and subject to the closing of the transaction. Subject to the terms and conditions of the Investment Agreements, at the closing of the transactions contemplated thereby, the Company expects to issue to the Warburg Investors and the Centerbridge Investors, in the aggregate, approximately 21.8 million shares of common stock at a purchase price of $12.30 per share and 10.8 million shares of a new class of nonvoting, common-equivalent stock at a purchase price of $12.30 per share. Additionally, the Warburg Investors will receive warrants to purchase approximately 15.9 million of the Company’s nonvoting, common-equivalent shares, and the Centerbridge Investors will receive warrants to purchase approximately 3.0 million shares of the Company’s common stock, each with an exercise price of $15.375 per share. The warrants carry a term of seven years but are subject to mandatory exercise when the market price of the Company’s common stock reaches or exceeds $24.60 for twenty or more trading days during any thirty-consecutive trading day period. On October 19, 2023, the Board of Governors of the Federal Reserve System granted its approval of the merger. In addition, on October 5, 2023, the California Department of Financial Protection and Innovation granted its approval of the bank merger. No further regulatory approvals are required to complete the proposed transaction. Banc of California and PacWest will each hold a special meeting of its respective stockholders in connection with the transaction on November 22, 2023. The consummation of the proposed transaction is expected to close on or about November 30, 2023, subject to the satisfaction of the remaining closing conditions set forth in the merger agreement, including receipt of the requisite stockholder approval and the concurrent closing of the $400 million equity capital raise described above. (Refer to Note 19 - Subsequent Events for further discussion). Concurrently with entering into the definitive merger agreement, the Bank entered into an aggregate of $3.1 billion in interest rate swaptions to hedge interest rate risk for a total cost of $15.7 million, and a contingent forward loan sale agreement on $1.8 billion of the single family residential (“SFR”) loan portfolio. The contingent forward loan sale agreement is contingent upon receipt of approval to close the bank merger. Should the merger not close for any reason, we intend to continue to hold the SFR loan portfolio for investment. During the third quarter of 2023, we recorded a $46.2 million pre-tax mark-to-market gain on derivative instruments used to hedge the interest rate risk associated with various assets on our balance sheet in anticipation of the sale of such assets in connection with the proposed merger with PacWest. (Refer to Note 9 - Derivative Instruments for further discussion). Basis of Presentation: The accompanying unaudited interim consolidated financial statements have been prepared pursuant to Article 10 of SEC Regulation S-X and other SEC rules and regulations for reporting on the Quarterly Report on Form 10-Q. Accordingly, certain disclosures required by U.S. generally accepted accounting principles (“GAAP”) are not included herein. These interim statements should be read in conjunction with the consolidated financial statements and notes included in the Annual Report on Form 10-K for the year ended December 31, 2022 filed by us with the SEC. Certain prior period amounts have been reclassified to conform to current period presentation. These reclassifications are immaterial and have no effect on net income, comprehensive income (loss), total assets or total shareholders’ equity previously reported. In the opinion of management of the Company, the accompanying unaudited interim consolidated financial statements reflect all of the adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the consolidated financial condition and consolidated results of operations as of the dates and for the periods presented. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. Principles of Consolidation: The accompanying unaudited consolidated financial statements include the accounts of the Company and its consolidated subsidiaries as of September 30, 2023 and December 31, 2022 and for the three and nine months ended September 30, 2023 and September 30, 2022. Significant intercompany accounts and transactions have been eliminated in consolidation. Unless the context requires otherwise, all references to the Company include its then wholly-owned subsidiaries. Significant Accounting Policies: The accounting and reporting policies of the Company are based upon GAAP and conform to predominant practices within the banking industry. We have not made any changes in our significant accounting policies from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC, except for those described below, which reflect an update to our accounting policy on derivative instruments and the impact of the adoption of ASU 2022-02: Derivative Instruments: We record our derivative instruments at fair value as either assets or liabilities on the consolidated statements of financial condition in derivative assets and accrued expenses and other liabilities, respectively, and have elected to present all derivatives with counterparties on a gross basis. For fair value derivatives that qualify for hedge accounting, we record changes in the fair value in noninterest income. For derivatives that do not qualify for hedge accounting, the fair value impact is recorded in noninterest income in the income statement. For derivatives designated as cash flow hedges, the gain or loss on the derivatives is recorded in other comprehensive income and subsequently reclassified into earnings in the same period during which the hedged transaction affects earnings. Derivative instruments utilized by the Company included the following: Interest Rate Swaps and Caps. We offer interest rate swap and cap products to certain loan clients to allow them to hedge the risk of rising interest rates on their variable rate loans. When such products are issued, we also enter into an offsetting swap with institutional counterparties to eliminate the interest rate risk. These back-to-back derivative agreements, which generate fee income for us, are intended to offset each other. We retain the credit risk of the original loan. The net cash flow for us is equal to the interest income received from a variable rate loan originated with the client plus a fee. These swaps and caps are not designated as accounting hedges and are recorded at fair value in derivative assets and accrued expenses and other liabilities in the consolidated statements of financial condition. The changes in fair value are recorded in noninterest income in the consolidated statements of operations. Foreign Exchange Contracts. We offer short-term foreign exchange contracts to our clients to purchase and/or sell foreign currencies at set rates in the future. These products allow clients to hedge the foreign exchange rate risk of their deposits and loans denominated in foreign currencies. In conjunction with these products, we also enter into offsetting contracts with institutional counterparties to hedge our foreign exchange rate risk. These back-to-back contracts allow us to offer our clients foreign exchange products while minimizing our exposure to foreign exchange rate fluctuations. These foreign exchange contracts are not designated as accounting hedges and are recorded at fair value in derivative assets and accrued expenses and other liabilities on the consolidated statements of financial condition. Interest Rate Swaptions and Contingent Forward Loan Sale Agreement. Concurrently with the announcement of the proposed merger with PacWest, we entered into an aggregate of $3.1 billion in interest rate swaptions to hedge the interest rate risk associated with various assets on our balance sheet in anticipation of the sale of such assets in connection with the proposed merger with PacWest and a contingent forward loan sale agreement on $1.8 billion of the SFR loan portfolio. The contingent forward loan sale agreement is contingent upon receipt of approval to close the bank merger. Should the merger not close for any reason, we intend to continue to hold the SFR loan portfolio for investment. These derivative instruments are not designated as accounting hedges and are recorded at fair value in derivative assets on the consolidated statements of financial condition. The fair values of these derivative instruments will rise and fall in response to changes in market interest rates and the change in fair value is recorded in noninterest income in the consolidated statements of operations. Cash Flow Hedge. The Company applies hedge accounting for qualifying derivative instruments used to manage interest rate risk. A cash flow hedge is a derivative instrument used to manage the variability in future expected cash flows that would otherwise be impacted by movements in interest rates. To quality for hedge accounting, the cash flow hedge must be highly effective at reducing the risk associated with the hedged exposure. The effectiveness of the hedging relationship is documented at inception and is monitored at least quarterly through the life of the transaction. A cash flow hedge that is designated as highly effective is carried at fair value with the change in fair value recorded in other comprehensive income (loss) (“AOCI”) and subsequently recognized in earnings in the same period that the hedged forecasted transaction affects earnings. At that time, the amount reclassified from AOCI is presented in the same income statement line item in which the hedged transaction is reported (interest income or expense). If the cash flow hedge becomes ineffective, the change in fair value is reclassified from AOCI to earnings. Cash flows from cash flow hedges are classified as operating activities in the statement of cash flows. We classify both the earnings and cash flow impact from these derivatives consistent with the underlying hedged item. Loan Modifications to Borrowers Experiencing Financial Difficulty: Prior to the adoption of ASU 2022-02, we accounted for the modification to the contractual terms of a loan that resulted in granting a concession to a borrower experiencing financial difficulties as a troubled debt restructuring (“TDR”). Effective January 1, 2023, we adopted ASU 2022-02, which eliminated TDR accounting prospectively for all restructurings occurring on or after January 1, 2023. Loans that were considered a TDR prior to the adoption of ASU 2022-02 will continue to be accounted for under the superseded TDR accounting guidance until the loan is paid off, liquidated, or subsequently modified. Since adoption of ASU 2022-02 on January 1, 2023, we have evaluated all loan modifications under ASC 310-20 to determine whether a modification made to a borrower results in a new loan or is a continuation of the existing loan. Use of Estimates in the Preparation of Financial Statements: The preparation of financial statements, in conformity with GAAP, requires management to make estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the consolidated financial statements and disclosures provided, and actual results could differ. The allowance for credit losses (“ACL”) (which includes the allowance for loan losses (“ALL”) and the reserve for unfunded noncancellable loan commitments (“RUC”)), loan repurchase reserve, realization of deferred tax assets, the fair value of assets and liabilities acquired in business combinations and related purchase price allocation, the valuation of goodwill and other intangible assets, other derivatives, hypothetical liquidation at book value (“HLBV”) of investments in alternative energy partnerships, and the fair value measurement of financial instruments are particularly subject to change and such change could have a material effect on the consolidated financial statements. Recently Adopted Accounting Guidance: In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-02, Financial Instruments—Credit Losses (Topic 326) Troubled Debt Restructurings and Vintage Disclosures, which addresses areas identified by the FASB as part of its post-implementation review of the credit losses standard (“ASU 2016-13”) that introduced the current expected credit losses (“CECL”) model. The amendments eliminate the accounting guidance for TDRs by creditors that have adopted the CECL model and enhances the disclosure requirements for loan refinancings and restructurings made with borrowers experiencing financial difficulty. In addition, the amendments require a public business entity to disclose current-period gross write-offs for financing receivables by year of origination in the vintage disclosures. ASU 2022-02 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We adopted ASU 2022-02 on January 1, 2023 and the impact of adoption did not have a material effect on our consolidated financial statements. Recently Issued Accounting Guidance Not Yet Adopted: In March 2023, the FASB issued ASU 2023-02, Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method (a consensus of the Emerging Issues Task Force)(“ASU 2023-02”), which permits reporting entities to elect to account for their tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method, which was previously allowed only for low-income housing tax credit (“LIHTC”) investments, if certain conditions are met. ASU 2023-02 is effective for fiscal years beginning after December 15, 2023, and including interim periods within those fiscal years. The amendment must be applied on either a modified retrospective or a retrospective basis, and early adoption is permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements and related disclosures, including assessing eligibility to apply the updated guidance to our investments in alternative energy partnerships currently accounted for using the HLBV method of the equity method of accounting.
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FAIR VALUES OF FINANCIAL INSTRUMENTS |
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FAIR VALUES OF FINANCIAL INSTRUMENTS | FAIR VALUES OF FINANCIAL INSTRUMENTS Fair Value Hierarchy ASC 820-10 establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The topic describes three levels of inputs that may be used to measure fair value: •Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. •Level 2: Significant observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. •Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Assets and Liabilities Measured on a Recurring Basis Securities Available-for-Sale (“AFS”): The fair values of AFS securities are generally determined by quoted market prices in active markets, if available (Level 1). If quoted market prices are not available, we primarily employ independent pricing services that utilize pricing models to calculate fair value. Such fair value measurements consider observable data such as dealer quotes, market spreads, cash flows, yield curves, live trading levels, trade execution data, market consensus prepayment speeds, credit information, and respective terms and conditions for debt instruments (Level 2). We adhere to established processes to monitor the pricing services’ assumptions and challenge the valuations that appear unusual or unexpected. Multiple quotes or prices may be obtained in this process and we determine which fair value is most appropriate based on market information and analysis. Quotes obtained through this process are generally non-binding. We follow established procedures to ensure that assets and liabilities are properly classified in the fair value hierarchy. Level 2 securities include SBA loan pool securities, U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities, non-agency residential mortgage-backed securities, non-agency commercial mortgage-backed securities, collateralized loan obligations, and corporate debt securities. When a market is illiquid or there is a lack of transparency around the inputs to valuation, including at least one unobservable input, the securities are classified as Level 3 and reliance is placed upon internally developed models and management’s judgment and evaluation for valuation. Derivative Assets and Liabilities: Cash Flow Hedge. We have entered into pay-fixed, receive-variable interest rate swap contracts with institutional counterparties to hedge against variability in cash flows attributable to interest rate risk caused by changes in interest rates on our deposits and borrowings. We estimate the fair value of these contracts based on inputs from a third-party pricing model, which incorporates such factors as the Treasury curve, SOFR rates, and the pay rate on the interest rate swaps. The fair value of these derivatives is based on a discounted cash flow approach. Due to the observable nature of the inputs used in deriving the fair value of these derivative contracts, the valuation of interest rate swaps is classified as Level 2. Interest Rate Swaps. We offer interest rate swap products to certain loan clients to allow them to hedge the risk of rising interest rates on their variable rate loans. We originate a variable rate loan and enter into a variable-to-fixed interest rate swap with the client. We also enter into an offsetting swap with a correspondent bank. These back-to-back agreements are intended to offset each other and allow us to originate a variable rate loan while providing a contract for fixed interest payments for the client. The net cash flow for us is equal to the interest income received from a variable rate loan originated with the client plus a fee. The fair value of these derivatives is based on a discounted cash flow approach. Due to the observable nature of the inputs used in deriving the fair value of these derivative contracts, the valuation of interest rate swaps is classified as Level 2. Foreign Exchange Contracts. We offer short-term foreign exchange contracts to customers to purchase and/or sell foreign currencies at set rates in the future. These products allow customers to hedge the foreign exchange rate risk of their deposits and loans denominated in foreign currencies. In conjunction with these products, we also enter into offsetting back-to-back contracts with institutional counterparties to hedge our foreign exchange rate risk. These back-to-back contracts are intended to offset each other and allow us to offer our customers foreign exchange products. The fair value of both of these offsetting asset and liability instruments is based on the change in the underlying foreign exchange rate. We are subject to counterparty risk in the event our customers or institutional counterparties default under these contracts. Given the short-term nature of the contracts, the counterparties’ credit risks are considered nominal and typically result in no adjustments to the valuation of the short-term foreign exchange contracts. Due to the observable nature of the inputs used in deriving the fair value of these derivative contracts, the valuation of these contracts is classified as Level 2. Interest Rate Swaptions. In connection with our proposed merger with PacWest, we entered into pay-fixed, receive-variable interest rate swaption contracts with institutional counterparties to mitigate rising interest rate risk from the time the merger was announced through the closing date. We receive estimated fair value for these contracts from a third-party pricing which reflected mid-market values obtained from market pricing data sources available for comparable transactions in the over the counter (“OTC”) interest rate derivative market. These sources are believed to be reliable. Due to the observable nature of the inputs used in deriving the fair value of these derivative contracts, the valuation of interest rate swaptions is classified as Level 2. Contingent Forward Loan Sale Agreement. In connection with our proposed merger with PacWest, we entered into a contingent forward loan sale agreement for the sale of $1.8 billion of our SFR loan portfolio. These commitments are valued using the terms of the agreement that includes available market pricing sources that reflect the commitments particular product, coupon, and settlement. These derivatives are classified as Level 2. The following table presents our financial assets and liabilities measured at fair value on a recurring basis as of the dates indicated:
(1)Included in accrued expenses and other liabilities in the consolidated statements of financial condition. There were no assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2023 and 2022. Assets and Liabilities Measured on a Non-Recurring Basis Individually Evaluated Loans: The fair value of individually evaluated loans with specific allocations of the ACL based on collateral values is generally derived from recent real estate appraisals and automated valuation models (“AVMs”). These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers for differences between the comparable sales and income data available. Such adjustments are typically deemed significant unobservable inputs used for determining fair value and result in a Level 3 classification. Other Real Estate Owned (“OREO”): The fair value of OREO is generally based on recent real estate appraisals, less estimated costs to sell. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers for differences between the comparable sales and income data available. Such adjustments are typically deemed significant unobservable inputs used for determining fair value and result in a Level 3 classification. The following table presents our financial assets and liabilities measured at fair value on a non-recurring basis as of the dates indicated:
The following table presents the gains (losses) recognized on assets measured at fair value on a non-recurring basis for the periods indicated:
Estimated Fair Values of Financial Instruments The following table presents the carrying amounts and estimated fair values of financial assets and liabilities as of the dates indicated:
(1)Included in accrued expenses and other liabilities in the consolidated statements of financial condition.
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INVESTMENT SECURITIES |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENT SECURITIES | INVESTMENT SECURITIES The following table presents the amortized cost and fair value of the investment securities portfolio as of the dates indicated:
During the first quarter of 2022, certain longer-duration fixed-rate mortgage-backed securities and municipal securities with an amortized cost basis of $346.0 million were transferred from the available-for-sale (“AFS”) portfolio to the held-to-maturity (“HTM”) portfolio. At the time of the transfer, the securities had an unrealized gross loss of $16.6 million, which became part of the securities’ amortized cost basis. This amount, along with the unrealized loss included in accumulated other comprehensive income, is subsequently amortized over the remaining life of the security as an adjustment to its yield using the interest method. As a result, there is no impact on the consolidated statements of operations. At September 30, 2023, the gross unrealized loss included in accumulated other comprehensive income was $15.0 million. At September 30, 2023, our investment securities portfolio consisted of agency securities, municipal securities, mortgage-backed securities (“MBS”), collateralized loan obligations (“CLOs”), and corporate debt securities. The expected maturities of these types of securities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Accrued interest receivable on AFS and HTM securities totaled $11.8 million and $9.2 million at September 30, 2023 and December 31, 2022, and is included within other assets in the accompanying consolidated statements of financial condition. At September 30, 2023 and December 31, 2022, there were no holdings of any one issuer, other than U.S. government agency and sponsored enterprises, in an amount greater than 10 percent of our stockholders’ equity. Pledged Securities Investment securities with carrying values of $525.7 million and $356.5 million as of September 30, 2023 and December 31, 2022 were pledged to secure FHLB advances, FRB borrowings, public deposits and for other deposits as required or permitted by law. Securities Available-for-Sale The following table presents proceeds from sales and calls of AFS securities and the associated gross gains and losses realized through earnings upon the sales and calls of AFS securities for the periods indicated:
The following table summarizes the AFS investment securities with unrealized losses by security type and length of time in a continuous, unrealized loss position as of the dates indicated:
At September 30, 2023, our AFS securities portfolio consisted of 86 securities, of which 84 securities were in an unrealized loss position. At December 31, 2022, our AFS securities portfolio consisted of 77 securities, of which 76 securities were in an unrealized loss position. We monitor our securities portfolio for identification of potential credit impairment. During the three and nine months ended September 30, 2023, we recognized zero and $1.0 million in provision for credit losses on three corporate debt securities of other financial institutions that were downgraded to below investment grade by external credit agencies. During the three and nine months ended September 30, 2022, there was no provision for credit losses related to AFS or HTM securities. Except for the corporate debt securities noted above, we believe there was no credit impairment and the decline in fair value of our securities since acquisition was attributable to a combination of changes in interest rates and general volatility in market conditions. As of September 30, 2023, we did not have the intent to sell securities in an unrealized loss position and further believe, it is more likely than not, that we will not be required to sell these securities before their anticipated recovery. As of September 30, 2023, 81 of our 84 AFS securities in an unrealized loss position received an investment grade credit rating, and all of our HTM securities in an unrealized loss position received an investment grade credit rating. The following table presents the amortized cost and fair value of the investment securities portfolio as of September 30, 2023, based on the earlier of contractual maturity dates or next repricing date:
Contractual maturities may not reflect the actual maturities of the investments. The average lives for MBS and collateralized mortgage obligations (“CMOs”) will likely be shorter than their contractual maturities due to prepayments and amortization. The following table presents the fair value and weighted average yields using amortized cost of the AFS securities portfolio as of September 30, 2023, based on the earlier of contractual maturity dates or next repricing dates:
The following table presents the amortized cost and weighted average yields using amortized cost of the HTM securities portfolio as of September 30, 2023, based on the earlier of contractual maturity dates or next repricing dates:
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LOANS AND ALLOWANCE FOR CREDIT LOSSES |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LOANS AND ALLOWANCE FOR CREDIT LOSSES | LOANS AND ALLOWANCE FOR CREDIT LOSSES The following table presents the balances in our loan portfolio as of the dates indicated:
(1)Includes warehouse lending balances of $647.7 million and $602.5 million at September 30, 2023 and December 31, 2022. (2)$102.3 million of owner-occupied CRE loans were moved to the C&I category from the CRE category during the third quarter of 2023. The following table presents the balances of total loans as of the dates indicated:
(1)At September 30, 2023, balance includes $7.1 million related to the acquisition of Pacific Mercantile Bancorp (“PMB”), of which $3.6 million related to purchased credit deteriorated (“PCD”) loans. At December 31, 2022, includes $8.0 million related to the PMB acquisition, of which $4.1 million related to PCD loans. Credit Quality Indicators We categorize loans into risk categories based on relevant information about the ability of borrowers to repay their debt such as current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. We analyze the associated risks in the current loan portfolio and individually grade each loan for credit risk. This analysis includes all loans delinquent over 60 days and non-homogeneous loans such as commercial and commercial real estate (“CRE”) loans. We use the following definitions for risk ratings: Pass: Loans risk rated “Pass” are in compliance in all respects with the Bank’s credit policy and regulatory requirements, and do not exhibit any potential or defined weakness as defined under “Special Mention”, “Substandard” or “Doubtful.” Special Mention: Loans risk rated “Special Mention” have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loans or of our credit position at some future date. Substandard: Loans risk rated “Substandard” are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or a weakness that jeopardizes the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. Doubtful: Loans risk rated “Doubtful” have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The following table presents the risk categories for total loans by class of loans and origination year as of September 30, 2023:
(1) $102.3 million of owner-occupied CRE loans were moved to the C&I category from the CRE category during the third quarter of 2023. (2) Doubtful loans in origination year 2023 included one commercial and industrial (“C&I”) loan that was modified and accounted for as a new loan. The following table presents the risk categories for total loans by class of loans and origination year as of December 31, 2022:
Past Due Loans The following table presents the aging of the recorded investment in past due loans, excluding accrued interest receivable (which is not considered to be material), by class of loans as of the dates indicated:
Nonaccrual Loans The following table presents nonaccrual loans as of the dates indicated:
At September 30, 2023 and December 31, 2022, there were no loans that were past due 90 days or more and still accruing. Allowance for Credit Losses - Loans The ACL methodology uses a nationally recognized, third-party model that includes many assumptions based on historical and peer loss data, current loan portfolio risk profile including risk ratings, and economic forecasts including macroeconomic variables released by the model provider during September 2023. The published forecasts consider the Federal Reserve’s monetary policy, labor market constraints, inflation levels, global oil prices and changes in real estate values, among other factors. The ACL also incorporates qualitative factors to account for certain loan portfolio characteristics that are not taken into consideration by the third-party model including underlying strengths and weaknesses in various segments of the loan portfolio. As is the case with all estimates, the ACL is expected to be impacted in future periods by economic volatility, changing economic forecasts, underlying model assumptions, and asset quality metrics, all of which may be better or worse than current estimates. The ACL process involves subjective and complex judgments as well as adjustments for numerous factors including those described in the federal banking agencies’ joint interagency policy statement on ALL, which include underwriting experience and collateral value changes, among others. The RUC is established to cover the current expected credit losses for the estimated level of funding of these loan commitments, except for unconditionally cancellable commitments for which no reserve is required under ASC 326. At September 30, 2023 and December 31, 2022, the reserve for unfunded loan commitments was $4.0 million and $5.3 million and was included in accrued expenses and other liabilities on the consolidated statements of financial condition. The following table presents a summary of activity in the ACL for the periods indicated:
Accrued interest receivable on loans receivable, net totaled $26.6 million and $28.6 million at September 30, 2023 and December 31, 2022, and is included within other assets in the accompanying consolidated statements of financial condition. Accrued interest receivable is excluded from the allowance of credit losses. The following table presents the activity and balance in the ALL as of or for the three and nine months ended September 30, 2023:
The following table presents the activity and balance in the ALL as of or for the three and nine months ended September 30, 2022:
The following table presents the gross charge-offs by class of loans and origination year as of September 30, 2023:
Collateral Dependent Loans A loan is considered collateral dependent when the borrower is experiencing financial difficulty and repayment of the loan is expected to be provided substantially through the operation or sale of the collateral. Collateral dependent loans are evaluated individually and the ALL is determined based on the amount by which amortized costs exceed the estimated fair value of the collateral, adjusted for estimated selling costs. Collateral dependent loans consisted of the following as of the dates indicated:
Loan Modifications to Borrowers Experiencing Financial Difficulty Loans modified for borrowers experiencing financial difficulty consisted of the following as of the dates indicated:
The following table presents the aging of loans modified to borrowers experiencing financial difficulty at September 30, 2023:
There were no loan modifications made to borrowers experiencing financial difficulty during the quarter ended September 30, 2023 that subsequently defaulted. Troubled Debt Restructurings (for modifications to borrowers experiencing financial difficulty prior to January 1, 2023) At September 30, 2023 and December 31, 2022, we had 7 and 15 loans classified as TDRs, with an aggregate balance of $3.5 million and $16.1 million. During the nine months ended September 30, 2023, a $3.9 million C&I loan that was restructured during 2022 was modified and accounted for as a new loan. Additionally, $7.8 million relating to three commercial relationships were paid down and $1.2 million was charged off during this same period. Accruing TDRs were $0.1 million and nonaccrual TDRs were $3.4 million at September 30, 2023, compared to accruing TDRs of $2.7 million and nonaccrual TDRs of $13.4 million at December 31, 2022. Purchases, Sales, and Transfers From time to time, we purchase and sell loans in the secondary market. There were no loans purchased during the three months ended September 30, 2023. During the nine months ended September 30, 2023, we purchased loans aggregating $61.4 million. During the three and nine months ended September 30, 2022, we purchased loans aggregating $172.7 million and $814.3 million. There were no loans transferred from held for investment to loans held-for-sale, and there were no sales of loans for the three and nine months ended September 30, 2023 and 2022.Non-Traditional Mortgage (“NTM”) Loans We no longer originate SFR loans, however we have purchased and may continue to purchase pools of loans that include NTM loans such as interest only loans with maturities of up to 40 years and flexible initial repricing dates, ranging from 1 to 10 years, and periodic repricing dates through the life of the loan. NTM loans are included in our SFR loan portfolio and are comprised primarily of interest only loans. As of September 30, 2023 and December 31, 2022, the NTM loans totaled $792.0 million, or 11.4% of total loans, and $862.3 million, or 12.1% of total loans. The total NTM portfolio decreased by $70.4 million, or 8.2% during the nine months ended September 30, 2023. The decrease was due to principal paydowns and payoffs. At September 30, 2023 and December 31, 2022, nonperforming NTM loans totaled $15.3 million and $3.0 million. NTM loans are considered to have an increased risk of delinquency and default than conforming loans. In the case of interest only loans, the borrower’s monthly payment may increase by a substantial amount as market interest rates increase and as loans are converted to fully-amortizing status. Non-Traditional Mortgage Performance Indicators Our risk management policy and credit monitoring include reviewing delinquency, FICO scores, and LTV ratios on the NTM loan portfolio. We also continually monitor market conditions for our geographic lending areas. We have determined that the most significant performance indicators for NTM loans are LTV ratios. At September 30, 2023, our NTM portfolio had a weighted average LTV of approximately 60%.
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GOODWILL AND OTHER INTANGIBLES |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLES | GOODWILL AND OTHER INTANGIBLES Goodwill Goodwill represents the excess consideration paid for net assets acquired in a business combination over their fair values. At September 30, 2023 and December 31, 2022, we had goodwill of $114.3 million. The following table presents changes in the carrying amount of goodwill for the periods indicated:
The acquisition of Deepstack in the third quarter of 2022 resulted in the recognition of $18.2 million in goodwill. We also adjusted goodwill during the three and nine months ended September 30, 2022 as a result of updates to the initial fair value of core deposit intangibles and finalization of income tax returns related to the acquisition of PMB. We evaluate goodwill for impairment as of October 1 each year, and more frequently if events or circumstances indicate that there may be impairment. We completed our most recent annual goodwill impairment test as of October 1, 2022 and determined that no goodwill impairment existed. For the three and nine months ended September 30, 2023, we analyzed indicators related to potential goodwill impairment due to volatility in the financial markets and recent events in the banking sector. Based on this analysis, we did not identify any impairment to goodwill. Other Intangibles Other intangibles are comprised of the following at September 30, 2023 and December 31, 2022:
Other intangibles are amortized over their estimated useful lives and reviewed for impairment at least quarterly. As of September 30, 2023, the weighted average remaining amortization period for core deposit intangibles was approximately 6.2 years. Amortization periods for developed technology and other intangibles acquired in the acquisition of Deepstack have useful lives ranging from 3 to 10 years. The following table presents changes in the carrying amount of other intangibles for the periods indicated:
The following table presents estimated future amortization expense of other intangibles as of September 30, 2023:
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FEDERAL HOME LOAN BANK ADVANCES, FEDERAL RESERVE BANK BORROWINGS AND OTHER BORROWINGS |
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Federal Home Loan Banks [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FEDERAL HOME LOAN BANK ADVANCES, FEDERAL RESERVE BANK BORROWINGS AND OTHER BORROWINGS | FEDERAL HOME LOAN BANK ADVANCES, FEDERAL RESERVE BANK BORROWINGS AND OTHER BORROWINGS Federal Home Loan Bank (FHLB) Advances The following table presents advances from the FHLB as of the dates indicated:
(1)Excludes $2.7 million and $3.7 million of unamortized debt issuance costs at September 30, 2023 and December 31, 2022. As of September 30, 2023, FHLB advances consisted of $611 million in term advances with a weighted average life of 2.75 years and a weighted average interest rate of 2.91% and $200 million in putable advances with a weighted average life of 4.25 years and a weighted average interest rate of 3.44%. Term advances are payable at maturity date, and advances paid early are subject to a prepayment penalty. The putable advances can be called quarterly until maturity at the option of the FHLB beginning in December 2023. FHLB advances are collateralized by a blanket lien on all real estate loans. As of September 30, 2023, our secured borrowing capacity with the FHLB totaled $2.42 billion, of which the Bank was eligible to borrow an additional $1.19 billion based on qualifying loans with an aggregate unpaid principal balance of $3.63 billion as of that date. The Bank’s investment in the capital stock of the FHLB of San Francisco totaled $25.7 million and $22.6 million at September 30, 2023 and December 31, 2022. Federal Reserve Bank (FRB) Borrowings At September 30, 2023, the Bank had borrowing capacity with the Federal Reserve Bank of San Francisco (the “Federal Reserve”) of $1.38 billion, including the secured borrowing capacity through the FRB Discount Window, Borrower-in-Custody (“BIC”), and Bank Term Funding (“BTFP”) programs. Borrowings under the BIC program are overnight advances with interest chargeable at the primary credit borrowing rate. Borrowings under the BTFP, which was established in March 2023, are for periods up to one year in length, with interest rates based on the one-year overnight index swap (“OIS”) rate plus a spread of 10 basis points. BTFP borrowings are collateralized by eligible investment securities valued at par and provide an additional source of liquidity leveraging high-quality securities. At September 30, 2023, the Bank pledged certain qualifying loans with an unpaid principal balance of $1.28 billion and securities with a carrying value of $505.8 million as collateral for the FRB credit programs. Borrowings from the Federal Reserve through the FRB Discount Window and BIC programs were $200.0 million and zero at September 30, 2023 and December 31, 2022. There were no borrowings under the BTFP at September 30, 2023. The Bank’s investment in capital stock of the Federal Reserve totaled $34.6 million and $34.5 million at September 30, 2023 and December 31, 2022. Other Borrowings The Bank maintains available unsecured federal funds lines with six correspondent banks totaling $290.0 million and $210.0 million, with no outstanding borrowings at September 30, 2023 and December 31, 2022. We mainly utilize FHLB and FRB borrowings and the unsecured federal funds lines as our secondary source of funds. From time to time, the Bank may also utilize alternate sources of funds, including unsecured overnight borrowings through the American Financial Exchange platform ("AFX") and other financial institutions. The availability of such unsecured borrowings fluctuates regularly and are subject to the counterparties discretion. Other borrowings from these alternate sources totaled $185.8 million and zero at September 30, 2023 and December 31, 2022. In December 2022, the holding company renewed its $50.0 million revolving line of credit with another financial institution. The line of credit matures on December 18, 2023 and is subject to certain operational and financial covenants. There were no borrowings under this line of credit at September 30, 2023 and December 31, 2022, and we were in compliance with all covenants. The Bank also maintained repurchase agreements and had no outstanding securities sold under these agreements at September 30, 2023 and December 31, 2022. Availabilities and terms on repurchase agreements are subject to the counterparties’ discretion and the pledging of additional investment securities.
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LONG-TERM DEBT |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM DEBT | LONG-TERM DEBT The following table presents our long-term debt as of the dates indicated:
(1) The Senior notes bear interest at a fixed rate of 5.25% per annum, payable semi-annually in arrears. (2) The Subordinated notes bear interest at an initial fixed rate of 4.375% per annum, payable semi-annually in arrears. From and including October 30, 2025 to, but excluding, the maturity date or the date of earlier redemption, the Subordinated Notes bear interest at a floating rate per annum equal to a benchmark rate, which is expected to be 3-Month Term SOFR, plus a spread of 419.5 basis points, payable quarterly in arrears. During the three months ended September 30, 2023, there were no repurchases of senior notes. During the nine months ended September 30, 2023, we repurchased senior notes with an outstanding balance of $1.0 million at a discount and recognized an $80 thousand gain. There were no repurchases of senior notes during the three and nine months ended September 30, 2022. At September 30, 2023, we were in compliance with all covenants under our long-term debt agreements.
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INCOME TAXES |
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Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES For the three and nine months ended September 30, 2023, income tax expense was $16.3 million and $30.4 million, resulting in an effective tax rate of 27.6% and 27.4%. For the three and nine months ended September 30, 2022, income tax expense was $9.9 million and $38.9 million, resulting in an effective tax rate of 29.1% and 28.1%. The effective tax rate for the three and nine months ended September 30, 2023 and 2022, differs from the combined federal and state statutory rate for the consolidated company of 28.9% due primarily to various permanent tax differences, tax credits and other discrete tax items that impact our effective tax rate. We account for income taxes by recognizing deferred tax assets and liabilities based upon temporary differences between the amounts for financial reporting purposes and the tax basis of our assets and liabilities. 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 will continue to evaluate both positive and negative evidence on a quarterly basis, including considering the four possible sources of future taxable income, such as future reversal of existing taxable temporary differences, future taxable income exclusive of reversing temporary differences and carryforwards, taxable income in prior carryback year(s), and future tax planning strategies. Based on this analysis, management determined, it was more likely than not, that all of the deferred tax assets would be realized; therefore, no valuation allowance was provided against the net deferred tax assets of $51.5 million and $50.5 million at September 30, 2023 and December 31, 2022. ASC 740-10-25 relates to the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. ASC 740-10-25 prescribes a threshold and a measurement process for recognizing in the financial statements a tax position taken or expected to be taken in a tax return and also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. We had unrecognized tax benefits of $0.8 million at both September 30, 2023 and December 31, 2022. We do not believe that the unrecognized tax benefits will change materially in the next twelve months. As of September 30, 2023, the total unrecognized tax benefit that, if recognized, would impact the effective tax rate was $0.6 million. At September 30, 2023 and December 31, 2022, we had no accrued interest or penalties. In the event we are assessed interest and/or penalties by federal or state tax authorities, such amounts will be classified in the consolidated financial statements as income tax expense. We are subject to U.S. federal income tax as well as income tax in multiple state jurisdictions. We are no longer subject to examination by U.S. federal taxing authorities for years before 2019. The statute of limitations for the assessment of California franchise taxes has expired for tax years before 2018 (other state income and franchise tax statutes of limitations vary by state).
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DERIVATIVE INSTRUMENTS |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS We use derivative instruments and other risk management techniques to reduce our exposure to adverse fluctuations in interest rates and foreign currency exchange rates in accordance with our risk management policies and for certain loan clients to allow them to hedge the risk of rising interest rates on their variable rate loans. The Company recognizes all derivatives on the consolidated balance sheet at fair value in derivative assets and accrued expenses and other liabilities. On the date we enter into a derivative contract, the derivative is designated as either a fair value hedge, cash flow hedge, or a hedge designation is not made as it is a customer-related transaction. When a derivative is designated as a fair value hedge or cash flow hedge, the Company performs an assessment at inception, and, at least quarterly thereafter, to determine the effectiveness of the derivative in offsetting changes in the fair value or cash flows of the hedged items. Cash flow hedge In March 2023, the Company entered into pay-fixed, receive-variable interest-rate swap contracts classified as cash flow hedges with notional amounts aggregating $300.0 million, five year terms and varying maturity dates through 2028. These swap contracts were entered into with institutional counterparties to hedge against variability in cash flows attributable to interest rate risk related to changes in the SOFR benchmark interest rate on a portion of the Company’s variable rate deposits and borrowings. The cash flow hedges were deemed highly effective at inception and quarterly thereafter. The portion of changes in the fair value of the cash flow hedges considered highly effective are recognized in other comprehensive income (loss) until the related cash flows from the hedged item are recognized in earnings. At September 30, 2023, the fair value of the cash flow hedges represent an asset of $5.9 million, of which $4.2 million (net of tax) was included in AOCI on the consolidated statements of financial condition. As of September 30, 2023, we estimated that $4.1 million of unrealized net pre-tax gains in AOCI is expected to be reclassified into earnings within the next twelve months. Interest Rate Swaptions and Contingent Forward Loan Sale Agreement not designated for hedge accounting Concurrently with the announcement of the proposed merger with PacWest, we entered into an aggregate of $3.1 billion in interest rate swaptions to hedge the interest rate risk associated with various assets on our balance sheet in anticipation of the sale of such assets in connection with the proposed merger with PacWest and a contingent forward loan sale agreement on $1.8 billion of the SFR loan portfolio. Interest Rate Swaptions. We executed interest rate swaptions, with an aggregate notional amount of $3.1 billion, where, if executed, we would pay a fixed rate and receive a floating rate based on 2-year, 7-year and 10-year SOFR. In connection with executing these agreements, we paid $15.7 million. During the three and nine months ended September 30, 2023, changes in the fair value of the interest rate swaptions resulted in gains of $11.3 million and were included in noninterest income on the consolidated statements of operations. Contingent Forward Loan Sale Agreement. Under the terms of the contingent forward loan sale agreement, we have committed to selling $1.8 billion of first lien SFR loans at a price of 87.25% plus or minus certain adjustments for accrued interest and payoffs, contingent upon receipt of approval for the closing of the bank merger. Should the merger not close for any reason, we intend to continue to hold the SFR loan portfolio for investment. The contingent forward loan sale agreement contains customary terms and conditions associated with a whole loan sale and we expect to close the forward loan sale shortly after closing of the merger. Pursuant to the terms of the agreement, the purchase price is subject to adjustment reflecting at-market fees based on the additional time for settlement from November 8, 2023. During the three and nine months ended September 30, 2023, changes in the estimated fair value of the contingent forward loan sale agreement were gains of $34.9 million and were included in noninterest income on the consolidated statements of operations. Other interest rate swaps and foreign exchange contracts not designated for hedge accounting During the three and nine months ended September 30, 2023, changes in fair value of other interest rate swaps on loans and foreign exchange contracts were gains of $19 thousand and $7 thousand and were included in noninterest income on the consolidated statements of operations. During the three and nine months ended September 30, 2022, changes in fair value of other interest rate swaps on loans and foreign exchange contracts were gains of $38 thousand and $0.2 million. The following table presents the notional amount and fair value of our derivative instruments as of the dates indicated.
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EMPLOYEE STOCK COMPENSATION |
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Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EMPLOYEE STOCK COMPENSATION | EMPLOYEE STOCK COMPENSATION On May 31, 2018, our stockholders approved the Company’s 2018 Omnibus Stock Incentive Plan (“2018 Omnibus Plan”). The 2018 Omnibus Plan provides that the maximum number of shares available for awards is 4,417,882. As of September 30, 2023, there were 1,904,116 shares available for future awards. Stock-based Compensation Expense The following table presents total stock-based compensation expense and the related tax benefits for the periods indicated:
Total stock-based compensation expense represents the cost of service-based restricted stock units, performance-based restricted stock units and performance-based restricted stock units with market conditions. At September 30, 2023, unrecognized compensation expense totaled $11.6 million and will be recognized over a weighted average remaining period of 2.4 years. Restricted Stock Awards and Restricted Stock Units We have granted restricted stock awards and restricted stock units to certain employees, officers, and directors. The restricted stock awards and units are measured based on grant-date fair value, which generally reflect the closing price of our stock on the date of grant. For awards containing market conditions, we engage a third party to perform a valuation analysis using a Monte Carlo simulation model to determine grant-date fair value. The restricted stock awards and units fully vest after a specified period (generally ranging from to five years) of continued service from the date of grant plus, in some cases, the satisfaction of performance and/or market conditions. Such targets include conditions relating to our profitability, our total shareholder return (TSR), stock price and regulatory standing. The actual amounts of stock released upon vesting will be determined by the Compensation, Nominating and Corporate Governance Committee of our Board of Directors (the “CNG Committee”) upon its certification of the satisfaction of the target level of performance. We recognize an income tax deduction in an amount equal to the taxable income reported by the holders of the restricted stock, generally upon vesting or, in the case of restricted stock units, when settled. The following table presents unvested restricted stock awards and restricted stock units activity for the three and nine months ended September 30, 2023:
(1)There were zero and 79,784 performance-based shares/units included in shares granted for the three and nine months ended September 30, 2023. (2)There were zero and 66,699 performance-based shares/units included in vested shares for the three and nine months ended September 30, 2023. (3)The number of forfeited shares included aggregate performance-based shares/units of 26,076 and 150,958 for the three and nine months ended September 30, 2023. (4)Includes 780,514 performance-based shares/units at September 30, 2023. As a result of the pending merger with PacWest, the CNG Committee approved the cancellation of performance-based restricted stock unit (“PSU”) awards granted with stock price targets, subject to the closing of the merger with PacWest. As of September 30, 2023, we have 590,162 shares of stock-price based PSU awards subject to cancellation upon closing of the merger. The merger agreement also provides that, at the merger closing date, outstanding PSU awards, other than stock-price based PSUs, will vest and be settled within five business days from the merger close date, with performance deemed achieved at the target level of performance. As of September 30, 2023, we have 190,352 shares of PSU awards granted with performance conditions other than stock-price subject to immediate vesting upon closing of the merger. The expense associated with the immediate vesting of these awards will be recognized at the legal close of the merger. Additionally, any restricted stock unit awards granted to a non-employee member of the Company’s Board of Directors will vest and will be settled within five business days after the merger closing date. All other time-based restricted stock unit awards outstanding immediately prior to the merger close date will remain outstanding and subject to the same terms and conditions prior to the merger. Stock Options We have issued stock options to certain employees, officers, and directors. Stock options are issued at the closing market price immediately before the grant date and generally have a to five year vesting period and contractual terms of to ten years. We recognize an income tax deduction upon exercise of a stock option to the extent taxable income is recognized by the option holder. In the case of a non-qualified stock option, the option holder recognizes taxable income based on the fair market value of the shares acquired at the time of exercise less the exercise price. There were no stock options granted and no unvested stock options as of September 30, 2023 and December 31, 2022. The following tables represents stock option activity for the three and nine months ended September 30, 2023:
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STOCKHOLDERS' EQUITY |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Preferred Stock We are authorized to issue 50,000,000 shares of preferred stock with par value of $0.01 per share. Preferred shares outstanding rank senior to common shares both as to dividends and liquidation preference but generally have no voting rights. All of our shares of preferred stock had a $1,000 per share liquidation preference and there were no preferred shares outstanding since March 2022. The following table summarizes redemptions and repurchases of these depositary shares for the periods indicated:
During the first quarter of 2022, we redeemed all of our outstanding Series E Depositary Shares, resulting in an after-tax charge of $3.7 million in the accompanying consolidated statements of operations. Common Share Repurchase Program On February 13, 2023, we announced our Board of Directors authorized the repurchase of up to $35 million of our common stock. The repurchase authorization expires in February 2024. Purchases may be made in open-market transactions, in block transactions on or off an exchange, in privately negotiated transactions or by other means as determined by our management and in accordance with the regulations of the SEC. The timing of purchases and the number of shares repurchased under the program will depend on a variety of factors including price, trading volume, corporate and regulatory requirements and market conditions. There were no shares repurchased under the program during the three months ended September 30, 2023. During the nine months ended September 30, 2023, there were 1,759,491 shares of common stock repurchased under the program at a weighted average price of $12.02. As of September 30, 2023, the Company had $13.9 million remaining under the current stock repurchase authorization. Change in Accumulated Other Comprehensive (Loss) Income ("AOCI") Our AOCI includes unrealized gain (loss) on AFS securities and cash flow hedges. Changes to AOCI are presented net of the tax effect as a component of stockholders’ equity. For AFS securities, reclassifications from AOCI occur when a security is sold, called or matures and are recorded on the consolidated statements of operations either as a gain or loss. During the first quarter of 2022, we transferred certain AFS securities to HTM. The unrealized loss on such securities at the time of transfer continues to be reported in AOCI and is amortized over the remaining life of the security as a yield adjustment. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in AOCI and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. If a cash flow hedge is terminated or is no longer deemed highly effective, the hedge accounting is ceased and any gain or loss included in AOCI is reclassified into earnings. The following table presents changes to AOCI for the periods indicated:
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VARIABLE INTEREST ENTITIES |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
VARIABLE INTEREST ENTITIES | VARIABLE INTEREST ENTITIES We hold ownership interests in alternative energy partnerships, qualified affordable housing partnerships and other CRA investments and have a variable interest in a multifamily securitization trust. We evaluate our interests in these entities to determine whether they meet the definition of a variable interest entity ("VIE") and whether we are required to consolidate these entities. A VIE is consolidated by its primary beneficiary, which is the party that has both (i) the power to direct the activities that most significantly impact the economic performance of the VIE and (ii) a variable interest that could potentially be significant to the VIE. To determine whether or not a variable interest we hold could potentially be significant to the VIE, we consider both qualitative and quantitative factors regarding the nature, size, and form of our involvement with the VIE. We have determined that our interests in these entities meet the definition of variable interests; however none of the VIE’s meet the criteria for consolidation. Unconsolidated VIEs Alternative Energy Partnerships We invested in certain alternative energy partnerships (limited liability companies) formed to provide sustainable energy projects that are designed to generate a return primarily through the realization of federal tax credits (energy tax credits). These entities were formed to invest in newly established residential and commercial solar leases and power purchase agreements. As a result of our investments, we have the right to certain investment tax credits and tax depreciation benefits (recognized on the flow through income statement method in accordance with ASC 740), and to a lesser extent, cash flows generated from the installed solar systems leased to individual consumers for a fixed period of time. While our interest in the alternative energy partnerships meets the definition of a VIE in accordance with ASC 810, we have determined that we are not the primary beneficiary because we do not have the power to direct the activities that most significantly impact the economic performance of the entities including operational and credit risk management activities. As we are not the primary beneficiary, we did not consolidate the entities. We use the HLBV method to account for our investments in alternative energy partnerships as an equity investment. Under the HLBV method, an equity method investor determines its share of an investee’s net earnings by comparing its claim on the investee’s book value at the beginning and end of the period, assuming the investee were to liquidate all assets at their U.S. GAAP amounts and distribute the resulting cash to creditors and investors under their respective priorities. The difference between the calculated liquidation distribution amounts at the beginning and the end of the reporting period, after adjusting for capital contributions and distributions, is our share of the earnings or losses from the equity investment for the period. To account for the tax credits earned on investments in alternative energy partnerships, we use the flow-through income statement method. Under this method, the tax credits are recognized as a reduction to income tax expense and the initial book-tax differences in the basis of the investments are recognized as additional tax expense in the year they are earned. Investments in alternative energy partnerships totaled $18.8 million and $21.4 million at September 30, 2023 and December 31, 2022. The following table presents information regarding activity in our alternative energy partnerships for the periods indicated:
There were no fundings of alternative energy partnerships or related income tax credits recognized for the three and nine months ended September 30, 2023 and 2022. The following table represents the carrying value of the associated unconsolidated assets and liabilities and the associated maximum loss exposure for alternative energy partnerships as of the dates indicated:
The maximum loss exposure that would be absorbed by us in the event that all of the assets in alternative energy partnerships are deemed worthless is $18.8 million, which is our recorded investment amount at September 30, 2023. We believe that the loss exposure on our investments is reduced considering our return on our investment is provided not only by the cash flows of the underlying client leases and power purchase agreements, but also through the tax benefits, including the federal tax credit carryover that resulted from the investments. In addition, our exposure is further limited as the arrangements include a transition manager to support any transition of the solar company sponsor, whose role includes that of the servicer and operation and maintenance provider, in the event the sponsor would be required to be removed from its responsibilities (e.g., bankruptcy, breach of contract, etc.). Qualified Affordable Housing Partnerships - Low Income Housing Tax Credits We invest in limited partnerships that operate qualified affordable housing projects that qualify for LIHTC. The returns on these investments are generated primarily through allocated federal tax credits and other tax benefits. In addition, LIHTC investments contribute to our compliance with the Community Reinvestment Act. These limited partnerships are considered to be VIEs, because either (i) they do not have sufficient equity investment at risk or (ii) the limited partners with equity at risk do not have substantive kick-out rights through voting rights or substantive participating rights over the general partner. As a limited partner, we are not the primary beneficiary because the general partner has the ability to direct the activities of the VIEs that most significantly impact their economic performance. As a result, we do not consolidate these partnerships. The following table presents information regarding balances in LIHTC investments for the periods indicated:
(1)Included in other assets in the accompanying Consolidated Statements of Financial Condition. The following table presents information regarding activity in our LIHTC investments for the periods indicated:
Other CRA Investments We invest in other CRA investments that are accounted for using the equity method of accounting or the measurement alternative to fair value for equity investments without a readily determinable fair value. Other CRA investments totaled $88.6 million and $85.0 million at September 30, 2023 and December 31, 2022. CRA investments that are accounted for under the equity method consist primarily of investments in small business investment companies (“SBICs”) and limited partnerships which provide affordable housing where our ownership percentage exceeds 3%. Under the equity method of accounting, we record our proportionate share of the profits or losses of the investment entity as an adjustment to the carrying value of the investment and as a component of noninterest income. Equity investments that do not meet the criteria to be accounted for under the equity method and do not have a readily determinable fair value are accounted for at cost under the measurement alternative to fair value with adjustments for impairment and observable price changes as applicable. These investments consist primarily of investments in limited partnerships which provide affordable housing where our partnership percentage is less than 3% and other qualifying investments such as Community Development Financial Institutions (“CDFI”) stock. Multifamily Securitization During the third quarter of 2019, we transferred $573.5 million of multifamily loans, through a two-step process, to a third-party depositor which placed the multifamily loans into a third-party trust (a VIE) that issued structured pass-through certificates to investors. The transfer of these loans was accounted for as a sale for financial reporting purposes, in accordance with ASC 860. We determined that we are not the primary beneficiary of this VIE as we do not have the power to direct the activities that will have the most significant economic impact on the entity, therefore we do not consolidate the securitization trust. Our continuing involvement in this securitization is limited to customary obligations associated with the securitization of loans, including the obligation to cure, repurchase, or substitute loans in the event of a material breach in representations. Additionally, we have the obligation to guarantee credit losses up to 12% of the aggregate unpaid principal balances at cut-off date of the securitization. This obligation is supported by a $68.8 million letter of credit between Freddie Mac and the FHLB. The maximum loss exposure that would be absorbed by us in the event that all of the assets in the securitization trust are deemed worthless is $68.8 million, which represents the aforementioned obligation to guarantee credit losses up to 12%. We believe that the loss exposure on the multifamily securitization is reduced by both loan-to-value ratios of the underlying collateral balances and the overcollateralization that exists within the securitization trust. At September 30, 2023, the remaining unpaid principal balance on the securitization totaled $82.1 million, and we have a $1.2 million repurchase reserve related to this VIE. Capital Trusts - Trust Preferred Securities In connection with our acquisition of PMB, we acquired investments in two grantor trusts. These grantor trusts were originally formed to sell and issue trust preferred securities to institutional investors (Refer to Note 7 - Long-term Debt). We are not the primary beneficiary, and consequently, these grantor trusts are not consolidated in the consolidated financial statements. At September 30, 2023 and December 31, 2022, our investment in these grantor trusts, which is included in other assets in the consolidated statements of financial condition, totaled $0.5 million.
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EARNINGS PER COMMON SHARE |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER COMMON SHARE | EARNINGS PER COMMON SHARE The following table presents computations of basic and diluted earnings per common share (“EPS”) for the three and nine months ended September 30, 2023:
For the three and nine months ended September 30, 2023, there were 500,943 and 484,850 anti-dilutive restricted shares/units and 11,232 and 11,232 anti-dilutive stock options that were excluded from computing diluted earnings per common share. The following table presents computations of basic and diluted EPS for the three and nine months ended September 30, 2022:
For the three and nine months ended September 30, 2022, there were 157,049 and 3,391 anti-dilutive restricted shares/units and no anti-dilutive stock options that were excluded from computing diluted earnings per common share.
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LOAN COMMITMENTS AND OTHER RELATED ACTIVITIES |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LOAN COMMITMENTS AND OTHER RELATED ACTIVITIES | LOAN COMMITMENTS AND OTHER RELATED ACTIVITIES Some financial instruments, such as unfunded loan commitments, credit lines, letters of credit, and overdraft protection, are issued to meet customer financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions established in the contract are met prior to their expiration dates. Commitments may expire without being used. Risk of credit loss exists up to the face amount of these instruments. The same credit policies are used to make such commitments as are used for originating loans, including obtaining collateral at exercise of the commitment. The following table presents the contractual amount of financial instruments with off-balance-sheet risk as of the periods indicated:
Other Commitments At September 30, 2023, we had unfunded commitments of $15.4 million, $7.4 million, and $20.5 million for LIHTC investments, SBIC investments, and other investments. At December 31, 2022, we had unfunded commitments of $17.5 million, $8.6 million, and $9.8 million for LIHTC investments, SBIC investments, and other investments. Unfunded commitments for LIHTC investments were included in accrued expenses and other liabilities on the consolidated balance sheet. Contingent Forward Loan Sale Agreement
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OTHER ASSETS AND OTHER LIABILITIES |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER ASSETS AND OTHER LIABILITIES | OTHER ASSETS AND OTHER LIABILITIES The following table presents the components of other assets as of the dates indicated:
(1)See Note 12 - Variable Interest Entities regarding alternative energy partnerships, LIHTC and other CRA investments The following table presents the components of accrued expenses and other liabilities as of the dates indicated:
(1)See Note 9 - Derivative Instruments for information regarding derivative instruments (2)See Note 14 - Loan Commitments and Other Related Activities regarding commitments to fund LIHTC
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REVENUE RECOGNITION |
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REVENUE RECOGNITION | REVENUE RECOGNITION The following table presents noninterest income, segregated by revenue streams, in-scope and out-of-scope of Topic 606 - Revenue From Contracts With Customers, for the periods indicated:
We do not typically enter into long-term revenue contracts with clients and as of September 30, 2023 and December 31, 2022, we did not have any significant contract balances within the scope of Topic 606 and we did not capitalize any revenue contract acquisition costs. Sale-leaseback Transactions In January 2022, we completed a sale-leaseback transaction for $2.4 million and recognized a gain of $0.8 million. Gains related to sale-leaseback are included in other income in the accompanying consolidated statements of operations.
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RELATED-PARTY TRANSACTIONS |
9 Months Ended |
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Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
RELATED-PARTY TRANSACTIONS | RELATED-PARTY TRANSACTIONSCertain of our executive officers and directors, and their related interests, are customers of, or have had transactions with the Bank in the ordinary course of business, including deposits, loans and other financial services related transactions. From time to time, the Bank may make loans to executive officers and directors, and their related interests, in the ordinary course of business and on substantially the same terms and conditions, including interest rates and collateral, as those of comparable transactions with non-insiders prevailing at the time, in accordance with the Bank’s underwriting guidelines, and do not involve more than the normal risk of collectability or present other unfavorable features. As of September 30, 2023, no related party loans were categorized as nonaccrual, past due, restructured or potential problem loans. Transactions with Related Parties The Company and the Bank have engaged in transactions described below with the Company’s current or former directors, executive officers, and beneficial owners of more than five percent of the outstanding shares of the Company’s voting common stock and certain persons related to them. As previously disclosed, the Company’s Board of Directors has authorized and directed the Company to provide indemnification, advancement and/or reimbursement for the costs of separate independent counsel retained by any then-current officer or director, in their individual capacity, with respect to matters related to (i) an investigation by the Special Committee of the Company’s Board of Directors in late 2016, (ii) a formal order of investigation issued by the SEC on January 4, 2017 (since resolved), and (iii) any civil or administrative proceedings against the Company as well as officers and directors currently or previously associated with the Company (collectively, the “Indemnified Matters”). Indemnification costs were paid or reimbursed by the Company or its insurance carriers on behalf of certain current directors in connection with the Indemnified Matters, in an aggregate amount less than $120 thousand and $159 thousand for each of the three and nine months ended September 30, 2023. Indemnification costs were paid or reimbursed by the Company or its insurance carriers on behalf of certain current directors in connection with the Indemnified Matters, in an aggregate amount less than $120 thousand and $244 thousand for each of the three and nine months ended September 30, 2022.
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LITIGATION |
9 Months Ended |
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Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
LITIGATION | LITIGATION From time to time, we are involved as plaintiff or defendant in various legal actions arising in the normal course of business. In accordance with applicable accounting guidance, we establish an accrued liability when those matters present loss contingencies that are both probable and estimable. While the ultimate liability with respect to legal actions cannot be determined at this time, we believe that damages, if any, and other amounts relating to pending matters are not likely to be material to the consolidated financial statements.
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SUBSEQUENT EVENTS |
9 Months Ended |
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Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS We have evaluated events from the date of the consolidated financial statements on September 30, 2023 through the issuance of these consolidated financial statements included in this Quarterly Report on Form 10-Q. On October 19, 2023, the Board of Governors of the Federal Reserve System granted its approval of the merger. In addition, on October 5, 2023, the California Department of Financial Protection and Innovation granted its approval of the bank merger. No further regulatory approvals are required to complete the proposed transaction. Banc of California and PacWest will each hold a special meeting of its respective stockholders in connection with the transaction on November 22, 2023. The consummation of the proposed transaction is expected to close on or about November 30, 2023, subject to the satisfaction of the remaining closing conditions set forth in the merger agreement, including receipt of the requisite stockholder approvals, and the concurrent closing of a $400 million equity capital raise. Except as noted, there have been no other subsequent events that occurred during such period that would require disclosure in this report or would be required to be recognized in the consolidated financial statements as of September 30, 2023.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
9 Months Ended |
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Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation: The accompanying unaudited interim consolidated financial statements have been prepared pursuant to Article 10 of SEC Regulation S-X and other SEC rules and regulations for reporting on the Quarterly Report on Form 10-Q. Accordingly, certain disclosures required by U.S. generally accepted accounting principles (“GAAP”) are not included herein. These interim statements should be read in conjunction with the consolidated financial statements and notes included in the Annual Report on Form 10-K for the year ended December 31, 2022 filed by us with the SEC. |
Reclassification | Certain prior period amounts have been reclassified to conform to current period presentation. These reclassifications are immaterial and have no effect on net income, comprehensive income (loss), total assets or total shareholders’ equity previously reported.In the opinion of management of the Company, the accompanying unaudited interim consolidated financial statements reflect all of the adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the consolidated financial condition and consolidated results of operations as of the dates and for the periods presented. |
Principles of Consolidation | Principles of Consolidation: The accompanying unaudited consolidated financial statements include the accounts of the Company and its consolidated subsidiaries as of September 30, 2023 and December 31, 2022 and for the three and nine months ended September 30, 2023 and September 30, 2022. Significant intercompany accounts and transactions have been eliminated in consolidation. Unless the context requires otherwise, all references to the Company include its then wholly-owned subsidiaries. |
Significant Accounting Policies, and Recent Accounting Guidance | Significant Accounting Policies: The accounting and reporting policies of the Company are based upon GAAP and conform to predominant practices within the banking industry. We have not made any changes in our significant accounting policies from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC, except for those described below, which reflect an update to our accounting policy on derivative instruments and the impact of the adoption of ASU 2022-02: Recently Adopted Accounting Guidance: In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-02, Financial Instruments—Credit Losses (Topic 326) Troubled Debt Restructurings and Vintage Disclosures, which addresses areas identified by the FASB as part of its post-implementation review of the credit losses standard (“ASU 2016-13”) that introduced the current expected credit losses (“CECL”) model. The amendments eliminate the accounting guidance for TDRs by creditors that have adopted the CECL model and enhances the disclosure requirements for loan refinancings and restructurings made with borrowers experiencing financial difficulty. In addition, the amendments require a public business entity to disclose current-period gross write-offs for financing receivables by year of origination in the vintage disclosures. ASU 2022-02 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We adopted ASU 2022-02 on January 1, 2023 and the impact of adoption did not have a material effect on our consolidated financial statements. Recently Issued Accounting Guidance Not Yet Adopted: In March 2023, the FASB issued ASU 2023-02, Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method (a consensus of the Emerging Issues Task Force)(“ASU 2023-02”), which permits reporting entities to elect to account for their tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method, which was previously allowed only for low-income housing tax credit (“LIHTC”) investments, if certain conditions are met. ASU 2023-02 is effective for fiscal years beginning after December 15, 2023, and including interim periods within those fiscal years. The amendment must be applied on either a modified retrospective or a retrospective basis, and early adoption is permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements and related disclosures, including assessing eligibility to apply the updated guidance to our investments in alternative energy partnerships currently accounted for using the HLBV method of the equity method of accounting.
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Derivative Instruments | Derivative Instruments: We record our derivative instruments at fair value as either assets or liabilities on the consolidated statements of financial condition in derivative assets and accrued expenses and other liabilities, respectively, and have elected to present all derivatives with counterparties on a gross basis. For fair value derivatives that qualify for hedge accounting, we record changes in the fair value in noninterest income. For derivatives that do not qualify for hedge accounting, the fair value impact is recorded in noninterest income in the income statement. For derivatives designated as cash flow hedges, the gain or loss on the derivatives is recorded in other comprehensive income and subsequently reclassified into earnings in the same period during which the hedged transaction affects earnings. Derivative instruments utilized by the Company included the following: Interest Rate Swaps and Caps. We offer interest rate swap and cap products to certain loan clients to allow them to hedge the risk of rising interest rates on their variable rate loans. When such products are issued, we also enter into an offsetting swap with institutional counterparties to eliminate the interest rate risk. These back-to-back derivative agreements, which generate fee income for us, are intended to offset each other. We retain the credit risk of the original loan. The net cash flow for us is equal to the interest income received from a variable rate loan originated with the client plus a fee. These swaps and caps are not designated as accounting hedges and are recorded at fair value in derivative assets and accrued expenses and other liabilities in the consolidated statements of financial condition. The changes in fair value are recorded in noninterest income in the consolidated statements of operations. Foreign Exchange Contracts. We offer short-term foreign exchange contracts to our clients to purchase and/or sell foreign currencies at set rates in the future. These products allow clients to hedge the foreign exchange rate risk of their deposits and loans denominated in foreign currencies. In conjunction with these products, we also enter into offsetting contracts with institutional counterparties to hedge our foreign exchange rate risk. These back-to-back contracts allow us to offer our clients foreign exchange products while minimizing our exposure to foreign exchange rate fluctuations. These foreign exchange contracts are not designated as accounting hedges and are recorded at fair value in derivative assets and accrued expenses and other liabilities on the consolidated statements of financial condition. Interest Rate Swaptions and Contingent Forward Loan Sale Agreement. Concurrently with the announcement of the proposed merger with PacWest, we entered into an aggregate of $3.1 billion in interest rate swaptions to hedge the interest rate risk associated with various assets on our balance sheet in anticipation of the sale of such assets in connection with the proposed merger with PacWest and a contingent forward loan sale agreement on $1.8 billion of the SFR loan portfolio. The contingent forward loan sale agreement is contingent upon receipt of approval to close the bank merger. Should the merger not close for any reason, we intend to continue to hold the SFR loan portfolio for investment. These derivative instruments are not designated as accounting hedges and are recorded at fair value in derivative assets on the consolidated statements of financial condition. The fair values of these derivative instruments will rise and fall in response to changes in market interest rates and the change in fair value is recorded in noninterest income in the consolidated statements of operations. Cash Flow Hedge. The Company applies hedge accounting for qualifying derivative instruments used to manage interest rate risk. A cash flow hedge is a derivative instrument used to manage the variability in future expected cash flows that would otherwise be impacted by movements in interest rates. To quality for hedge accounting, the cash flow hedge must be highly effective at reducing the risk associated with the hedged exposure. The effectiveness of the hedging relationship is documented at inception and is monitored at least quarterly through the life of the transaction. A cash flow hedge that is designated as highly effective is carried at fair value with the change in fair value recorded in other comprehensive income (loss) (“AOCI”) and subsequently recognized in earnings in the same period that the hedged forecasted transaction affects earnings. At that time, the amount reclassified from AOCI is presented in the same income statement line item in which the hedged transaction is reported (interest income or expense). If the cash flow hedge becomes ineffective, the change in fair value is reclassified from AOCI to earnings. Cash flows from cash flow hedges are classified as operating activities in the statement of cash flows. We classify both the earnings and cash flow impact from these derivatives consistent with the underlying hedged item. Loan Modifications to Borrowers Experiencing Financial Difficulty: Prior to the adoption of ASU 2022-02, we accounted for the modification to the contractual terms of a loan that resulted in granting a concession to a borrower experiencing financial difficulties as a troubled debt restructuring (“TDR”). Effective January 1, 2023, we adopted ASU 2022-02, which eliminated TDR accounting prospectively for all restructurings occurring on or after January 1, 2023. Loans that were considered a TDR prior to the adoption of ASU 2022-02 will continue to be accounted for under the superseded TDR accounting guidance until the loan is paid off, liquidated, or subsequently modified. Since adoption of ASU 2022-02 on January 1, 2023, we have evaluated all loan modifications under ASC 310-20 to determine whether a modification made to a borrower results in a new loan or is a continuation of the existing loan.
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Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements: The preparation of financial statements, in conformity with GAAP, requires management to make estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the consolidated financial statements and disclosures provided, and actual results could differ. The allowance for credit losses (“ACL”) (which includes the allowance for loan losses (“ALL”) and the reserve for unfunded noncancellable loan commitments (“RUC”)), loan repurchase reserve, realization of deferred tax assets, the fair value of assets and liabilities acquired in business combinations and related purchase price allocation, the valuation of goodwill and other intangible assets, other derivatives, hypothetical liquidation at book value (“HLBV”) of investments in alternative energy partnerships, and the fair value measurement of financial instruments are particularly subject to change and such change could have a material effect on the consolidated financial statements. |
Sale-leaseback Transaction | Sale-leaseback Transactions In January 2022, we completed a sale-leaseback transaction for $2.4 million and recognized a gain of $0.8 million. Gains related to sale-leaseback are included in other income in the accompanying consolidated statements of operations.
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FAIR VALUES OF FINANCIAL INSTRUMENTS (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value Assets Measured on a Recurring Basis | The following table presents our financial assets and liabilities measured at fair value on a recurring basis as of the dates indicated:
(1)Included in accrued expenses and other liabilities in the consolidated statements of financial condition.
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Schedule of Fair Value Liabilities Measured on a Recurring Basis | The following table presents our financial assets and liabilities measured at fair value on a recurring basis as of the dates indicated:
(1)Included in accrued expenses and other liabilities in the consolidated statements of financial condition.
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Schedule of Assets and Liabilities Measured on Non-recurring Basis | The following table presents our financial assets and liabilities measured at fair value on a non-recurring basis as of the dates indicated:
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Schedule of Gains and (Losses) Recognized on Assets Measured at Fair Value on Non-recurring Basis | The following table presents the gains (losses) recognized on assets measured at fair value on a non-recurring basis for the periods indicated:
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Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments | Estimated Fair Values of Financial Instruments The following table presents the carrying amounts and estimated fair values of financial assets and liabilities as of the dates indicated:
(1)Included in accrued expenses and other liabilities in the consolidated statements of financial condition.
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INVESTMENT SECURITIES (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Amortized Cost and Fair Value of Available-for-Sale Investment Securities | The following table presents the amortized cost and fair value of the investment securities portfolio as of the dates indicated:
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Schedule of Proceeds from Sales and Calls of Securities and Associated Gross Gains and Losses | The following table presents proceeds from sales and calls of AFS securities and the associated gross gains and losses realized through earnings upon the sales and calls of AFS securities for the periods indicated:
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Schedule of Securities Available-for-Sale | The following table summarizes the AFS investment securities with unrealized losses by security type and length of time in a continuous, unrealized loss position as of the dates indicated:
The following table presents the fair value and weighted average yields using amortized cost of the AFS securities portfolio as of September 30, 2023, based on the earlier of contractual maturity dates or next repricing dates:
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Schedule of Investments Classified by Contractual Maturity Date | The following table presents the amortized cost and fair value of the investment securities portfolio as of September 30, 2023, based on the earlier of contractual maturity dates or next repricing date:
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Schedule of Fair Value and Weighted Average Yields of Securities Held-to-Maturity | The following table presents the amortized cost and weighted average yields using amortized cost of the HTM securities portfolio as of September 30, 2023, based on the earlier of contractual maturity dates or next repricing dates:
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LOANS AND ALLOWANCE FOR CREDIT LOSSES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Loans and Leases Receivable | The following table presents the balances in our loan portfolio as of the dates indicated:
(1)Includes warehouse lending balances of $647.7 million and $602.5 million at September 30, 2023 and December 31, 2022. (2)$102.3 million of owner-occupied CRE loans were moved to the C&I category from the CRE category during the third quarter of 2023. The following table presents the balances of total loans as of the dates indicated:
(1)At September 30, 2023, balance includes $7.1 million related to the acquisition of Pacific Mercantile Bancorp (“PMB”), of which $3.6 million related to purchased credit deteriorated (“PCD”) loans. At December 31, 2022, includes $8.0 million related to the PMB acquisition, of which $4.1 million related to PCD loans. Collateral dependent loans consisted of the following as of the dates indicated:
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Schedule of Risk Categories for Loans and Leases | The following table presents the risk categories for total loans by class of loans and origination year as of September 30, 2023:
(1) $102.3 million of owner-occupied CRE loans were moved to the C&I category from the CRE category during the third quarter of 2023. (2) Doubtful loans in origination year 2023 included one commercial and industrial (“C&I”) loan that was modified and accounted for as a new loan. The following table presents the risk categories for total loans by class of loans and origination year as of December 31, 2022:
The following table presents the gross charge-offs by class of loans and origination year as of September 30, 2023:
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Schedule of Aging of Recorded Investment in Past Due Loans and Leases | The following table presents the aging of the recorded investment in past due loans, excluding accrued interest receivable (which is not considered to be material), by class of loans as of the dates indicated:
The following table presents the aging of loans modified to borrowers experiencing financial difficulty at September 30, 2023:
There were no loan modifications made to borrowers experiencing financial difficulty during the quarter ended September 30, 2023 that subsequently defaulted.
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Schedule of Composition of Nonaccrual Loans and Leases | The following table presents nonaccrual loans as of the dates indicated:
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Schedule of Allowance for Loan and Lease Losses and Recorded Investment, Excluding Accrued Interest, in Loans | The following table presents a summary of activity in the ACL for the periods indicated:
The following table presents the activity and balance in the ALL as of or for the three and nine months ended September 30, 2023:
The following table presents the activity and balance in the ALL as of or for the three and nine months ended September 30, 2022:
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Schedule of Troubled Debt Restructurings | Loans modified for borrowers experiencing financial difficulty consisted of the following as of the dates indicated:
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GOODWILL AND OTHER INTANGIBLES (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The following table presents changes in the carrying amount of goodwill for the periods indicated:
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Schedule of Finite-lived Intangible Assets | Other intangibles are comprised of the following at September 30, 2023 and December 31, 2022:
The following table presents changes in the carrying amount of other intangibles for the periods indicated:
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Schedule of Estimated Future Amortization Expense | The following table presents estimated future amortization expense of other intangibles as of September 30, 2023:
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FEDERAL HOME LOAN BANK ADVANCES, FEDERAL RESERVE BANK BORROWINGS AND OTHER BORROWINGS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Federal Home Loan Banks [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Advances from the FHLB | The following table presents advances from the FHLB as of the dates indicated:
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LONG-TERM DEBT (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-Term Debt Instruments | The following table presents our long-term debt as of the dates indicated:
(1) The Senior notes bear interest at a fixed rate of 5.25% per annum, payable semi-annually in arrears. (2) The Subordinated notes bear interest at an initial fixed rate of 4.375% per annum, payable semi-annually in arrears. From and including October 30, 2025 to, but excluding, the maturity date or the date of earlier redemption, the Subordinated Notes bear interest at a floating rate per annum equal to a benchmark rate, which is expected to be 3-Month Term SOFR, plus a spread of 419.5 basis points, payable quarterly in arrears.
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DERIVATIVE INSTRUMENTS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Amount and Market Value of Mortgage Banking Derivatives | The following table presents the notional amount and fair value of our derivative instruments as of the dates indicated.
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EMPLOYEE STOCK COMPENSATION (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation Expense | The following table presents total stock-based compensation expense and the related tax benefits for the periods indicated:
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Schedule of Restricted Stock and Restricted Stock Units Activity | The following table presents unvested restricted stock awards and restricted stock units activity for the three and nine months ended September 30, 2023:
(1)There were zero and 79,784 performance-based shares/units included in shares granted for the three and nine months ended September 30, 2023. (2)There were zero and 66,699 performance-based shares/units included in vested shares for the three and nine months ended September 30, 2023. (3)The number of forfeited shares included aggregate performance-based shares/units of 26,076 and 150,958 for the three and nine months ended September 30, 2023. (4)Includes 780,514 performance-based shares/units at September 30, 2023.
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Schedule of Option Activity | The following tables represents stock option activity for the three and nine months ended September 30, 2023:
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STOCKHOLDERS' EQUITY (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Preferred Stock | The following table summarizes redemptions and repurchases of these depositary shares for the periods indicated:
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Schedule of Changes to Accumulate Other Comprehensive Income by Components | The following table presents changes to AOCI for the periods indicated:
|
VARIABLE INTEREST ENTITIES (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Unconsolidated VIEs | The following table represents the carrying value of the associated unconsolidated assets and liabilities and the associated maximum loss exposure for alternative energy partnerships as of the dates indicated:
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Variable Interest Entity, Not Primary Beneficiary | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Unconsolidated VIEs | The following table presents information regarding activity in our alternative energy partnerships for the periods indicated:
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Variable Interest Entity, Not Primary Beneficiary | Affordable Housing Fund Investment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Unconsolidated VIEs | The following table presents information regarding balances in LIHTC investments for the periods indicated:
(1)Included in other assets in the accompanying Consolidated Statements of Financial Condition. The following table presents information regarding activity in our LIHTC investments for the periods indicated:
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EARNINGS PER COMMON SHARE (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Basic and Diluted Earnings Per Common Share | The following table presents computations of basic and diluted earnings per common share (“EPS”) for the three and nine months ended September 30, 2023:
The following table presents computations of basic and diluted EPS for the three and nine months ended September 30, 2022:
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LOAN COMMITMENTS AND OTHER RELATED ACTIVITIES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Contractual Amount of Financial Instruments With Off-balance-sheet Risk | The following table presents the contractual amount of financial instruments with off-balance-sheet risk as of the periods indicated:
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OTHER ASSETS AND OTHER LIABILITIES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Assets and Other Liabilities | The following table presents the components of other assets as of the dates indicated:
(1)See Note 12 - Variable Interest Entities regarding alternative energy partnerships, LIHTC and other CRA investments The following table presents the components of accrued expenses and other liabilities as of the dates indicated:
(1)See Note 9 - Derivative Instruments for information regarding derivative instruments (2)See Note 14 - Loan Commitments and Other Related Activities regarding commitments to fund LIHTC
|
REVENUE RECOGNITION (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Noninterest (Loss) Income | The following table presents noninterest income, segregated by revenue streams, in-scope and out-of-scope of Topic 606 - Revenue From Contracts With Customers, for the periods indicated:
|
FAIR VALUES OF FINANCIAL INSTRUMENTS - Additional Information (Details) - USD ($) $ in Thousands |
Nov. 09, 2023 |
Sep. 30, 2023 |
Jul. 25, 2023 |
Dec. 31, 2022 |
---|---|---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Derivatives asset, notional amount | $ 5,233,632 | $ 39,579 | ||
Banc of California, NA | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Contingent forward asset sale | $ 1,800,000 | |||
Subsequent Event | Banc of California, NA | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Contingent forward asset sale | $ 1,800,000 | |||
Contingent forward loan sale agreement | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Derivatives asset, notional amount | $ 1,803,869 | $ 1,800,000 | $ 0 |
INVESTMENT SECURITIES - Proceeds from Sales and Calls of Securities and Associated Gross Gains and Losses (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2023 |
Jun. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Investments, Debt and Equity Securities [Abstract] | |||||
Gross realized gains | $ 0 | $ 0 | $ 0 | $ 209 | |
Gross realized losses | 0 | 0 | 0 | (193) | |
Net realized gains on sales and calls | 0 | $ 0 | 0 | 0 | 16 |
Proceeds from sales and calls | $ 0 | $ 0 | $ 20,000 | $ 56,145 |
INVESTMENT SECURITIES - Contractual Maturity Schedule (Detail) $ in Thousands |
Sep. 30, 2023
USD ($)
|
---|---|
Amortized Cost | |
Within one year | $ 0 |
One to five years | 0 |
Five to ten years | 37,305 |
Greater than ten years | 290,982 |
Total | 328,287 |
Fair Value | |
Within one year | 0 |
One to five years | 0 |
Five to ten years | 30,544 |
Greater than ten years | 219,741 |
Total | 250,285 |
Amortized Cost | |
Within one year | 503,799 |
One to five years | 171,294 |
Five to ten years | 41,786 |
Greater than ten years | 251,130 |
Total | 968,009 |
Fair Value | |
Within one year | 497,569 |
One to five years | 150,580 |
Five to ten years | 34,950 |
Greater than ten years | 231,955 |
Total | $ 915,054 |
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Schedule of Participating Mortgage Loans (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Jul. 25, 2023 |
Dec. 31, 2022 |
---|---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Unpaid principal balance | $ 6,953,895 | $ 7,107,897 | |
Unamortized net premiums | 16,571 | 18,319 | |
Unamortized net deferred (fees) costs | (1,331) | (1,880) | |
Fair value adjustment | (8,103) | (9,298) | |
Loans receivable, net | 6,961,032 | 7,115,038 | |
Banc of California, NA | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Contingent forward asset sale | $ 1,800,000 | ||
PMB Acquisition | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Fair value adjustment | (7,100) | (8,000) | |
PMB Acquisition | PCD loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Fair value adjustment | $ (3,600) | $ (4,100) |
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Credit Quality Indicators Additional Information (Details) |
9 Months Ended |
---|---|
Sep. 30, 2023 | |
Receivables [Abstract] | |
Loans delinquent | 60 days |
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Nonaccrual Loans and Leases Additional Information (Details) $ in Thousands |
Sep. 30, 2023
USD ($)
loan
|
Dec. 31, 2022
USD ($)
loan
|
---|---|---|
Financing Receivable, Past Due [Line Items] | ||
Loans 90 days past due and still accruing | $ 0 | $ 0 |
Other real estate owned, net | 882 | 0 |
Single family residential mortgage | ||
Financing Receivable, Past Due [Line Items] | ||
Other real estate owned, net | $ 900 | $ 0 |
Consumer | Single family residential mortgage | ||
Financing Receivable, Past Due [Line Items] | ||
Number of loans in process of foreclosure | loan | 8 | 9 |
Loans in process of foreclosure | $ 7,700 | $ 11,700 |
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Allowance for Credit Losses-Loans Additional Information (Details) - USD ($) $ in Thousands |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Unfunded loan commitments | $ 74,390 | $ 85,960 | |
Allowance for loan losses recovery from settlement of charged off | $ 31,300 | ||
Accrued interest receivable on loans receivable | 11,800 | 9,200 | |
Loans Receivable | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accrued interest receivable on loans receivable | 26,600 | 28,600 | |
Unfunded Loan Commitment | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Unfunded loan commitments | $ 4,000 | $ 5,300 |
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Troubled Debt Restructurings Additional Information (Details) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2023
USD ($)
loan
loans
|
Dec. 31, 2022
USD ($)
loan
|
|
Financing Receivable, Past Due [Line Items] | ||
Number of loans classified as TDRs | loan | 7 | 15 |
Aggregate balance | $ 3,500 | $ 16,100 |
Loans receivable | 7,651 | |
Accruing TDRs | 100 | 2,700 |
Non-accruing TDRs | 3,400 | $ 13,400 |
Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Loans receivable | 3,900 | |
Commercial | ||
Financing Receivable, Past Due [Line Items] | ||
Loans receivable | 4,564 | |
Modified loans paid down | $ 7,800 | |
Modified loans paid down, number of loans | loans | 3 | |
Charge offs on modified loans | $ 1,200 | |
Commercial | Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Loans receivable | $ 4,564 |
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Purchases, Sales, and Transfers (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Receivables [Abstract] | ||||
Transfers of loans to held-for-sale | $ 0 | |||
Purchases of loans (excluding loans held-for-sale) | $ 172,700,000 | $ 61,400,000 | $ 814,300,000 | |
Sales of loans | $ 0 | $ 0 | $ 0 | $ 0 |
GOODWILL AND OTHER INTANGIBLES - Additional Information (Details) - USD ($) |
9 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Oct. 01, 2022 |
Sep. 30, 2023 |
Jun. 30, 2023 |
Dec. 31, 2022 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Dec. 31, 2021 |
|
Finite-Lived Intangible Assets [Line Items] | |||||||
Goodwill | $ 114,312,000 | $ 114,312,000 | $ 114,312,000 | $ 114,312,000 | $ 95,127,000 | $ 94,301,000 | |
Goodwill impairment | $ 0 | ||||||
Core deposit intangibles | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Intangible assets, weighted average useful life | 6 years 2 months 12 days | ||||||
Core deposit intangibles | Minimum | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Amortization period of other intangible assets | 3 years | ||||||
Core deposit intangibles | Maximum | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Amortization period of other intangible assets | 10 years | ||||||
Deepstack Technologies, LLC | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Goodwill | $ 18,200,000 |
GOODWILL AND OTHER INTANGIBLES- Schedule of Goodwill (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Goodwill [Roll Forward] | ||||
Goodwill, beginning of period | $ 114,312 | $ 95,127 | $ 114,312 | $ 94,301 |
Goodwill from business combination | 0 | 18,190 | 0 | 18,190 |
Goodwill adjustments for purchase accounting | 0 | 995 | 0 | 1,821 |
Goodwill, end of period | $ 114,312 | $ 114,312 | $ 114,312 | $ 114,312 |
GOODWILL AND OTHER INTANGIBLES - Schedule of Finite-lived Intangible Assets (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Other intangibles | $ 6,142 | $ 7,526 |
Core deposit intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangibles | 3,078 | 3,932 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangibles | 2,216 | 2,637 |
Other intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangibles | $ 848 | $ 957 |
GOODWILL AND OTHER INTANGIBLES - Other Intangible Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2023 |
Jun. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Other intangibles: | |||||
Balance, beginning of period | $ 38,778 | $ 34,978 | $ 38,778 | $ 35,958 | |
Other intangibles from business combination | 0 | 3,800 | 0 | 3,800 | |
Purchase accounting adjustments | 0 | 0 | 0 | (980) | |
Balance, end of period | 38,778 | $ 38,778 | 38,778 | 38,778 | 38,778 |
Accumulated amortization: | |||||
Balance, beginning of period | 32,175 | 30,301 | 31,252 | 29,547 | |
Amortization of other intangibles | 461 | 462 | 396 | 1,384 | 1,150 |
Balance, end of period | 32,636 | $ 32,175 | 30,697 | 32,636 | 30,697 |
Total | $ 6,142 | $ 8,081 | $ 6,142 | $ 8,081 |
GOODWILL AND OTHER INTANGIBLES - Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Sep. 30, 2022 |
---|---|---|
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Remainder of 2023 | $ 415 | |
2024 | 1,425 | |
2025 | 1,107 | |
2026 | 1,013 | |
2027 | 811 | |
2028 and After | 1,371 | |
Total | $ 6,142 | $ 8,081 |
FEDERAL HOME LOAN BANK ADVANCES, FEDERAL RESERVE BANK BORROWINGS AND OTHER BORROWINGS - Summary of Advances From the FHLB (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Fixed rate: | ||
Outstanding balance | $ 811,000 | $ 711,000 |
Variable rate: | ||
Outstanding balance | $ 0 | $ 20,000 |
Weighted average interest rate (percent) | 0.00% | 4.59% |
Unamortized debt issuance costs | $ 2,700 | $ 3,700 |
Minimum | ||
Fixed rate: | ||
Interest rate (percent) | 0.64% | 0.64% |
Maximum | ||
Fixed rate: | ||
Interest rate (percent) | 3.70% | 3.70% |
Weighted average (percent) | ||
Fixed rate: | ||
Interest rate (percent) | 3.04% | 2.97% |
LONG-TERM DEBT - Additional Information (Detail) - Senior Notes - Senior Notes - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2023 |
|
Debt Instrument [Line Items] | ||
Repurchase of debt | $ 0 | $ 1,000 |
Discount recognized gain. | $ 80 |
INCOME TAXES (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
|
Income Tax Disclosure [Abstract] | |||||
Income tax expense (benefit) | $ 16,300,000 | $ 9,900,000 | $ 30,400,000 | $ 38,900,000 | |
Effective tax rate (percent) | 27.60% | 29.10% | 27.40% | 28.10% | |
Effective income tax rate reconciliation, at federal and state statutory income tax rate, percent (percent) | 28.90% | 28.90% | 28.90% | 28.90% | |
Valuation allowance | $ 0 | $ 0 | $ 0 | ||
Net deferred tax asset | 51,500,000 | 51,500,000 | 50,500,000 | ||
Unrecognized tax benefits | 800,000 | 800,000 | 800,000 | ||
Unrecognized tax benefits that would impact the effective tax rate | 600,000 | 600,000 | |||
Accrued interest or penalties | $ 0 | $ 0 | $ 0 |
EMPLOYEE STOCK COMPENSATION - Share Based Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Related tax benefits | $ 457 | $ 495 | $ 1,377 | $ 1,295 |
Restricted stock awards and units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | $ 1,581 | $ 1,715 | $ 4,762 | $ 4,482 |
STOCKHOLDERS' EQUITY - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 30, 2023 |
Jun. 30, 2023 |
Sep. 30, 2022 |
Mar. 31, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Feb. 13, 2023 |
|
Class of Stock [Line Items] | |||||||
Impact of preferred stock redemption | $ 0 | $ 0 | $ 0 | $ 0 | $ 3,747 | ||
Authorized repurchase amount | $ 35,000 | ||||||
Shares repurchased (in shares) | 0 | 740,332 | 1,759,491 | 3,069,058 | |||
Shares repurchased, weighted average price (in usd per share) | $ 12.02 | ||||||
Remaining authorized repurchase amount | $ 13,900 | $ 13,900 | |||||
Preferred Stock | |||||||
Class of Stock [Line Items] | |||||||
Preferred stock, authorized (in shares) | 50,000,000 | 50,000,000 | |||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||||
Preferred stock, liquidation preference per share (in dollars per share) | $ 1,000 | $ 1,000 | |||||
Preferred stock, outstanding (in shares) | 0 | 0 | |||||
Preferred Stock | Series E Preferred Stock | |||||||
Class of Stock [Line Items] | |||||||
Impact of preferred stock redemption | $ 0 | $ 0 | $ 3,700 | $ 0 | $ 3,747 |
STOCKHOLDERS' EQUITY - Depository Share Repurchases (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2023 |
Jun. 30, 2023 |
Sep. 30, 2022 |
Mar. 31, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Class of Stock [Line Items] | ||||||
Impact of preferred stock redemption | $ 0 | $ 0 | $ 0 | $ 0 | $ 3,747 | |
Preferred Stock | Series E Depository Shares | ||||||
Class of Stock [Line Items] | ||||||
Shares redeemed (in shares) | 0 | 0 | 0 | 3,948,080 | ||
Preferred Stock | Series E Preferred Stock | ||||||
Class of Stock [Line Items] | ||||||
Shares redeemed (in shares) | 0 | 0 | 0 | 98,702 | ||
Consideration paid | $ 0 | $ 0 | $ 0 | $ 98,703 | ||
Carrying value | 0 | 0 | 0 | 94,956 | ||
Impact of preferred stock redemption | $ 0 | $ 0 | $ 3,700 | $ 0 | $ 3,747 |
VARIABLE INTEREST ENTITIES - Information Regarding Activity in Alternative Energy Partnerships (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2023 |
Jun. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Variable Interest Entity [Line Items] | |||||
Gain (loss) on investments in alternative energy partnerships | $ 34 | $ 36 | $ (504) | $ (1,548) | $ (1,705) |
Tax expense (benefit) recognized from HLBV application | 16,258 | $ 6,745 | 9,931 | 30,398 | 38,877 |
Variable Interest Entity, Not Primary Beneficiary | |||||
Variable Interest Entity [Line Items] | |||||
Return of capital | 342 | 626 | 1,059 | 1,782 | |
Gain (loss) on investments in alternative energy partnerships | 34 | (504) | (1,548) | (1,705) | |
Tax expense (benefit) recognized from HLBV application | $ 10 | $ (146) | $ (448) | $ (493) |
VARIABLE INTEREST ENTITIES - Summary of Unconsolidated VIEs (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Variable Interest Entity [Line Items] | ||
Equipment, net of depreciation | $ 109,141 | $ 107,345 |
Other assets | 264,148 | 275,897 |
Total unconsolidated assets | 9,247,072 | 9,197,016 |
Total unconsolidated liabilities | 8,245,352 | 8,237,398 |
Variable Interest Entity, Not Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Cash | 2,902 | 4,110 |
Equipment, net of depreciation | 230,987 | 237,641 |
Other assets | 10,590 | 9,838 |
Total unconsolidated assets | 244,479 | 251,589 |
Total unconsolidated liabilities | 11,451 | 11,679 |
Maximum loss exposure | $ 18,803 | $ 21,410 |
VARIABLE INTEREST ENTITIES - Balances and Activity in Affordable Housing Partnerships (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
|
Variable Interest Entity [Line Items] | |||||
Fundings | $ 4,712 | $ 4,878 | |||
Variable Interest Entity, Not Primary Beneficiary | |||||
Variable Interest Entity [Line Items] | |||||
Ending balance | $ 18,803 | 18,803 | $ 21,410 | ||
Maximum loss exposure | 18,803 | 18,803 | 21,410 | ||
Affordable Housing Fund Investment | Variable Interest Entity, Not Primary Beneficiary | |||||
Variable Interest Entity [Line Items] | |||||
Ending balance | 41,138 | 41,138 | 45,726 | ||
Aggregate funding commitment | 72,767 | 72,767 | 72,967 | ||
Total amount funded | 57,417 | 57,417 | 55,487 | ||
Unfunded commitment | 15,350 | 15,350 | 17,480 | ||
Maximum loss exposure | 41,138 | 41,138 | $ 45,726 | ||
Fundings | 127 | $ 1,128 | 1,930 | 3,152 | |
Proportional amortization recognized | 1,512 | 1,350 | 4,450 | 3,727 | |
Income tax credits recognized | $ 1,673 | $ 1,298 | $ 5,048 | $ 3,834 |
EARNINGS PER COMMON SHARE - Additional Information (Details) - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Dilutive effects of restricted shares/units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Stock excluded from computation of earnings per share (in shares) | 500,943 | 157,049 | 484,850 | 3,391 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Stock excluded from computation of earnings per share (in shares) | 11,232 | 0 | 11,232 | 0 |
REVENUE RECOGNITION - Summary of Noninterest Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2023 |
Jun. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Disaggregation of Revenue [Line Items] | |||||
Noninterest income (in-scope of Topic 606) | $ 2,139 | $ 2,198 | $ 6,278 | $ 6,770 | |
Noninterest income (out-of-scope of Topic 606) | 48,639 | 3,483 | 58,383 | 12,007 | |
Total noninterest income | 50,778 | $ 6,024 | 5,681 | 64,661 | 18,777 |
Deposit service fees | |||||
Disaggregation of Revenue [Line Items] | |||||
Noninterest income (in-scope of Topic 606) | 1,508 | 1,486 | 4,148 | 4,767 | |
Debit card fees | |||||
Disaggregation of Revenue [Line Items] | |||||
Noninterest income (in-scope of Topic 606) | 417 | 472 | 1,217 | 1,467 | |
Other | |||||
Disaggregation of Revenue [Line Items] | |||||
Noninterest income (in-scope of Topic 606) | $ 214 | $ 240 | $ 913 | $ 536 |
REVENUE RECOGNITION - Additional Information (Details) - USD ($) $ in Thousands |
1 Months Ended | 9 Months Ended | |
---|---|---|---|
Jan. 31, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Revenue from Contract with Customer [Abstract] | |||
Sale leaseback transaction, net book value | $ 2,400 | ||
Gain on sale-leaseback of branch | $ 800 | $ 0 | $ 771 |
RELATED-PARTY TRANSACTIONS - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Director | Current Directors | Special Committee Investigation Indemnification | ||||
Related Party Transaction [Line Items] | ||||
Expenses from transactions with related parties | $ 120 | $ 120 | $ 159 | $ 244 |
SUBSEQUENT EVENTS - Narrative (Details) $ in Millions |
Jul. 25, 2023
USD ($)
|
---|---|
Warburg Pincus LLC (“Warburg”), and Centerbridge Partners, L.P. And Affiliates (“Centerbridge”) | |
Subsequent Event [Line Items] | |
Total investment expected | $ 400 |
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