(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
Title of each class | Trading symbol | Name of each exchange on which registered | ||||||
Large accelerated filer | o | x | |||||||||
Non-accelerated filer | o | Smaller reporting company | |||||||||
Emerging growth company |
(in thousands, except share amounts) | March 31, 2024 | December 31, 2023 | ||||||||||||
ASSETS | ||||||||||||||
Cash and due from financial institutions | $ | $ | ||||||||||||
Interest-bearing deposits in banks | ||||||||||||||
Cash and cash equivalents | ||||||||||||||
Time deposits in banks | ||||||||||||||
Securities available-for-sale, at fair value, net of allowance for credit losses of $ | ||||||||||||||
Securities held-to-maturity, at amortized cost, net of allowance for credit losses of $ | ||||||||||||||
Loans held for sale | ||||||||||||||
Loans held for investment | ||||||||||||||
Allowance for credit losses - loans | ( | ( | ||||||||||||
Loans held for investment, net of allowance for credit losses | ||||||||||||||
FHLB stock | ||||||||||||||
Operating leases, right-of-use asset, net | ||||||||||||||
Premises and equipment, net | ||||||||||||||
Bank-owned life insurance | ||||||||||||||
Interest receivable and other assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||
Deposits: | ||||||||||||||
Non-interest-bearing | $ | $ | ||||||||||||
Interest-bearing | ||||||||||||||
Total deposits | ||||||||||||||
Borrowings: | ||||||||||||||
Subordinated notes, net | ||||||||||||||
Other borrowings | ||||||||||||||
Operating lease liability | ||||||||||||||
Interest payable and other liabilities | ||||||||||||||
Total liabilities | ||||||||||||||
Commitments and contingencies (Note 8) | ||||||||||||||
Shareholders’ equity: | ||||||||||||||
Preferred stock, | ||||||||||||||
Common stock, | ||||||||||||||
Retained earnings | ||||||||||||||
Accumulated other comprehensive loss, net of taxes | ( | ( | ||||||||||||
Total shareholders’ equity | ||||||||||||||
Total liabilities and shareholders’ equity | $ | $ |
Three Months Ended March 31, | ||||||||||||||
(in thousands, except per share amounts) | 2024 | 2023 | ||||||||||||
Interest and fee income: | ||||||||||||||
Loans, including fees | $ | $ | ||||||||||||
Taxable securities | ||||||||||||||
Nontaxable securities | ||||||||||||||
Interest-bearing deposits in banks | ||||||||||||||
Total interest and fee income | ||||||||||||||
Interest expense: | ||||||||||||||
Deposits | ||||||||||||||
Subordinated notes | ||||||||||||||
Other borrowings | ||||||||||||||
Total interest expense | ||||||||||||||
Net interest income | ||||||||||||||
Provision for credit losses | ||||||||||||||
Net interest income after provision for credit losses | ||||||||||||||
Non-interest income: | ||||||||||||||
Service charges on deposit accounts | ||||||||||||||
Gain on sale of loans | ||||||||||||||
Loan-related fees | ||||||||||||||
FHLB stock dividends | ||||||||||||||
Earnings on BOLI | ||||||||||||||
Other | ||||||||||||||
Total non-interest income | ||||||||||||||
Non-interest expense: | ||||||||||||||
Salaries and employee benefits | ||||||||||||||
Occupancy and equipment | ||||||||||||||
Data processing and software | ||||||||||||||
FDIC insurance | ||||||||||||||
Professional services | ||||||||||||||
Advertising and promotional | ||||||||||||||
Loan-related expenses | ||||||||||||||
Other operating expenses | ||||||||||||||
Total non-interest expense | ||||||||||||||
Income before provision for income taxes | ||||||||||||||
Provision for income taxes | ||||||||||||||
Net income | $ | $ | ||||||||||||
Basic earnings per common share | $ | $ | ||||||||||||
Diluted earnings per common share | $ | $ |
Three Months Ended March 31, | ||||||||||||||
(in thousands) | 2024 | 2023 | ||||||||||||
Net income | $ | $ | ||||||||||||
Unrealized (loss) gain on securities: | ||||||||||||||
Net unrealized holding (loss) gain on securities available-for-sale during the period | ( | |||||||||||||
Less: Income tax (benefit) expense related to items of other comprehensive (loss) income | ( | |||||||||||||
Other comprehensive (loss) income | ( | |||||||||||||
Total comprehensive income | $ | $ |
Common Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Total Shareholders’ Equity | |||||||||||||||||||||||||||||
(in thousands, except per share amounts) | Shares | Amount | ||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
— | — | ( | — | ( | ||||||||||||||||||||||||||||
Net income | — | — | — | |||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | |||||||||||||||||||||||||||||
Stock issued under stock award plans, net | — | — | — | |||||||||||||||||||||||||||||
Stock compensation expense | — | — | — | |||||||||||||||||||||||||||||
Cash dividends paid ($ | — | — | ( | — | ( | |||||||||||||||||||||||||||
Balance at March 31, 2023 | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Balance at December 31, 2023 | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Net income | — | — | — | |||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | ( | ( | |||||||||||||||||||||||||||
Stock issued under stock award plans, net | — | — | — | |||||||||||||||||||||||||||||
Stock compensation expense | — | — | — | |||||||||||||||||||||||||||||
Stock forfeitures | ( | — | — | — | ||||||||||||||||||||||||||||
Cash dividends paid ($ | — | — | ( | — | ( | |||||||||||||||||||||||||||
Balance at March 31, 2024 | $ | $ | $ | ( | $ |
Three Months Ended March 31, | ||||||||||||||
(in thousands) | 2024 | 2023 | ||||||||||||
Cash flows from operating activities: | ||||||||||||||
Net income | $ | $ | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
Provision for credit losses | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Amortization of deferred loan fees and costs | ( | ( | ||||||||||||
Amortization of premiums and discounts on securities | ||||||||||||||
Amortization of subordinated note issuance costs | ||||||||||||||
Stock compensation expense | ||||||||||||||
Earnings on BOLI | ( | ( | ||||||||||||
Deferred tax provision | ||||||||||||||
Loans originated for sale | ( | ( | ||||||||||||
Gain on sale of loans | ( | ( | ||||||||||||
Gross proceeds from sale of loans | ||||||||||||||
Gain on partial sale of equity investment | ||||||||||||||
Net changes in: | ||||||||||||||
Interest receivable and other assets | ( | |||||||||||||
Interest payable and other liabilities | ( | |||||||||||||
Operating lease liability | ( | ( | ||||||||||||
Net cash provided by operating activities | ||||||||||||||
Cash flows from investing activities: | ||||||||||||||
Maturities, prepayments, and calls of securities available-for-sale | ||||||||||||||
Capital call for equity investment | ( | |||||||||||||
Proceeds received from equity investment | ||||||||||||||
Net change in time deposits in banks | ( | |||||||||||||
Loan originations, net of repayments | ( | ( | ||||||||||||
Purchase of premises and equipment | ( | ( | ||||||||||||
Purchase of BOLI | ( | ( | ||||||||||||
Net cash used in investing activities | ( | ( | ||||||||||||
Cash flows from financing activities: | ||||||||||||||
Net change in deposits | ( | |||||||||||||
(Payments) advances on other borrowings | ( | |||||||||||||
Cash dividends paid | ( | ( | ||||||||||||
Net cash (used in) provided by 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 disclosure of cash flow information: | ||||||||||||||
Interest paid | $ | $ | ||||||||||||
Income taxes paid | ||||||||||||||
Supplemental disclosure of noncash items: | ||||||||||||||
Transfer from loans held for sale to loans held for investment | ||||||||||||||
Unrealized (loss) gain on securities | ( | |||||||||||||
Operating lease liabilities exchanged for ROUA | ||||||||||||||
ROUA acquired | ( | ( |
(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) | Measurement Categories: Changes in Fair Value Recorded In | |||||||||||||||||||||||||||
March 31, 2024 | ||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||
Securities available-for-sale: | ||||||||||||||||||||||||||||||||
U.S. government agency securities, mortgage-backed securities, obligations of states and political subdivisions, collateralized mortgage obligations, and corporate bonds | $ | $ | $ | $ | OCI | |||||||||||||||||||||||||||
Derivatives – interest rate swap | NI | |||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||
Derivatives – interest rate swap | NI | |||||||||||||||||||||||||||||||
December 31, 2023 | ||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||
Securities available-for-sale: | ||||||||||||||||||||||||||||||||
U.S. government agency securities, mortgage-backed securities, obligations of states and political subdivisions, collateralized mortgage obligations, and corporate bonds | $ | $ | $ | $ | OCI | |||||||||||||||||||||||||||
Derivatives – interest rate swap | NI | |||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||
Derivatives – interest rate swap | NI |
March 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||||||||||||||
(in thousands) | Carrying Amounts | Fair Value | Fair Value Hierarchy | Carrying Amounts | Fair Value | Fair Value Hierarchy | ||||||||||||||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | Level 1 | $ | $ | Level 1 | ||||||||||||||||||||||||||||||||
Time deposits in banks | Level 1 | Level 1 | ||||||||||||||||||||||||||||||||||||
Securities available-for-sale | Level 2 | Level 2 | ||||||||||||||||||||||||||||||||||||
Securities held-to-maturity | Level 3 | Level 3 | ||||||||||||||||||||||||||||||||||||
Loans held for sale | Level 2 | Level 2 | ||||||||||||||||||||||||||||||||||||
Loans held for investment, net of allowance for credit losses | Level 3 | Level 3 | ||||||||||||||||||||||||||||||||||||
FHLB stock and other investments | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||||
Interest rate swap | Level 2 | Level 2 | ||||||||||||||||||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||||||||||||||||
Interest rate swap | $ | $ | Level 2 | $ | $ | Level 2 | ||||||||||||||||||||||||||||||||
Time deposits | Level 2 | Level 2 | ||||||||||||||||||||||||||||||||||||
Subordinated notes | Level 3 | Level 3 | ||||||||||||||||||||||||||||||||||||
Other borrowings | Level 2 | Level 2 |
(in thousands) | Amortized Cost | Gross Unrealized | Fair Value | |||||||||||||||||||||||
Gains | (Losses) | |||||||||||||||||||||||||
March 31, 2024 | ||||||||||||||||||||||||||
Obligations of states and political subdivisions | $ | $ | $ | ( | $ | |||||||||||||||||||||
Total held-to-maturity | $ | $ | $ | ( | $ | |||||||||||||||||||||
December 31, 2023 | ||||||||||||||||||||||||||
Obligations of states and political subdivisions | $ | $ | $ | ( | $ | |||||||||||||||||||||
Total held-to-maturity | $ | $ | $ | ( | $ |
(in thousands) | Amortized Cost | Gross Unrealized | Fair Value | |||||||||||||||||||||||
Gains | (Losses) | |||||||||||||||||||||||||
March 31, 2024 | ||||||||||||||||||||||||||
U.S. government agency securities | $ | $ | $ | ( | $ | |||||||||||||||||||||
Mortgage-backed securities | ( | |||||||||||||||||||||||||
Obligations of states and political subdivisions | ( | |||||||||||||||||||||||||
Collateralized mortgage obligations | ( | |||||||||||||||||||||||||
Corporate bonds | ( | |||||||||||||||||||||||||
Total available-for-sale | $ | $ | $ | ( | $ | |||||||||||||||||||||
December 31, 2023 | ||||||||||||||||||||||||||
U.S. government agency securities | $ | $ | $ | ( | $ | |||||||||||||||||||||
Mortgage-backed securities | ( | |||||||||||||||||||||||||
Obligations of states and political subdivisions | ( | |||||||||||||||||||||||||
Collateralized mortgage obligations | ( | |||||||||||||||||||||||||
Corporate bonds | ( | |||||||||||||||||||||||||
Total available-for-sale | $ | $ | $ | ( | $ |
(in thousands) | March 31, 2024 | December 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||
Held-to-Maturity | Available-for-Sale | Held-to-Maturity | Available-for-Sale | |||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost | Fair Value | Amortized Cost | Fair Value | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||||||||||||||||||||||||||||||||||
Within one year | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
After one but within five years | ||||||||||||||||||||||||||||||||||||||||||||||||||
After five years through ten years | ||||||||||||||||||||||||||||||||||||||||||||||||||
After ten years | ||||||||||||||||||||||||||||||||||||||||||||||||||
Investment securities not due at a single maturity date: | ||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. government agency securities | ||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities | ||||||||||||||||||||||||||||||||||||||||||||||||||
Collateralized mortgage obligations | ||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate bonds | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ |
(in thousands) | March 31, 2024 | December 31, 2023 | ||||||||||||
Pledged to: | ||||||||||||||
The State of California, securing deposits of public funds and borrowings | $ | $ | ||||||||||||
The Federal Reserve Discount Window, increasing borrowing capacity | ||||||||||||||
Total pledged investment securities | $ | $ |
Less than 12 months | 12 months or more | Total securities in a loss position | ||||||||||||||||||||||||||||||||||||
(in thousands) | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||||||||||||||||
March 31, 2024 | ||||||||||||||||||||||||||||||||||||||
U.S. government agency securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
Mortgage-backed securities | ( | ( | ||||||||||||||||||||||||||||||||||||
Obligations of states and political subdivisions | ( | ( | ||||||||||||||||||||||||||||||||||||
Collateralized mortgage obligations | ( | ( | ||||||||||||||||||||||||||||||||||||
Corporate bonds | ( | ( | ||||||||||||||||||||||||||||||||||||
Total temporarily impaired securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
December 31, 2023 | ||||||||||||||||||||||||||||||||||||||
U.S. government agency securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
Mortgage-backed securities | ( | ( | ||||||||||||||||||||||||||||||||||||
Obligations of states and political subdivisions | ( | ( | ||||||||||||||||||||||||||||||||||||
Collateralized mortgage obligations | ( | ( | ||||||||||||||||||||||||||||||||||||
Corporate bonds | ( | ( | ||||||||||||||||||||||||||||||||||||
Total temporarily impaired securities | $ | $ | ( | $ | $ | ( | $ | $ | ( |
(in thousands) | March 31, 2024 | December 31, 2023 | ||||||||||||
Real estate: | ||||||||||||||
Commercial | $ | $ | ||||||||||||
Commercial land and development | ||||||||||||||
Commercial construction | ||||||||||||||
Residential construction | ||||||||||||||
Residential | ||||||||||||||
Farmland | ||||||||||||||
Commercial: | ||||||||||||||
Secured | ||||||||||||||
Unsecured | ||||||||||||||
Consumer and other | ||||||||||||||
Subtotal | ||||||||||||||
Net deferred loan fees | ( | ( | ||||||||||||
Loans held for investment | ||||||||||||||
Allowance for credit losses - loans | ( | ( | ||||||||||||
Loans held for investment, net of allowance for credit losses | $ | $ |
Amortized Cost Basis by Origination Year as of March 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | 2024 | 2023 | 2022 | 2021 | 2020 | Prior | Revolving Loans | Revolving Converted to Term | Total | |||||||||||||||||||||||||||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial land and development | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial construction | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential construction | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Farmland | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Secured | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total |
Amortized Cost Basis by Origination Year as of March 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | 2024 | 2023 | 2022 | 2021 | 2020 | Prior | Revolving Loans | Revolving Converted to Term | Total | |||||||||||||||||||||||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unsecured | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer and other | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Amortized Cost Basis by Origination Year as of December 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | 2023 | 2022 | 2021 | 2020 | 2019 | Prior | Revolving Loans | Revolving Converted to Term | Total | |||||||||||||||||||||||||||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial land and development | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial construction | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential construction | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost Basis by Origination Year as of December 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | 2023 | 2022 | 2021 | 2020 | 2019 | Prior | Revolving Loans | Revolving Converted to Term | Total | |||||||||||||||||||||||||||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Farmland | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Secured | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unsecured | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer and other | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | $ |
(in thousands) | Past Due | |||||||||||||||||||||||||||||||||||||
30-59 Days | 60-89 Days | Greater Than 90 Days | Total Past Due | Current | Total Loans Receivable | |||||||||||||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||||||||||||
Commercial | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Commercial land and development | ||||||||||||||||||||||||||||||||||||||
Commercial construction | ||||||||||||||||||||||||||||||||||||||
Residential construction | ||||||||||||||||||||||||||||||||||||||
Residential | ||||||||||||||||||||||||||||||||||||||
Farmland | ||||||||||||||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||||||||
Secured | ||||||||||||||||||||||||||||||||||||||
Unsecured | ||||||||||||||||||||||||||||||||||||||
Consumer and other | ||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
(in thousands) | Past Due | Total Past Due | Current | Total Loans Receivable | ||||||||||||||||||||||||||||||||||
30-59 Days | 60-89 Days | Greater Than 90 Days | ||||||||||||||||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||||||||||||
Commercial | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Commercial land and development | ||||||||||||||||||||||||||||||||||||||
Commercial construction | ||||||||||||||||||||||||||||||||||||||
Residential construction | ||||||||||||||||||||||||||||||||||||||
Residential | ||||||||||||||||||||||||||||||||||||||
Farmland | ||||||||||||||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||||||||
Secured | ||||||||||||||||||||||||||||||||||||||
Unsecured | ||||||||||||||||||||||||||||||||||||||
Consumer and other | ||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
(in thousands) | March 31, 2024 | December 31, 2023 | ||||||||||||
Real estate: | ||||||||||||||
Commercial | $ | $ | ||||||||||||
Commercial: | ||||||||||||||
Secured | ||||||||||||||
Total non-accrual loans | $ | $ |
(in thousands) | Beginning Balance | Charge-offs | Recoveries | Provision (Benefit) | Ending Balance | |||||||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||||||
Commercial | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
Commercial land and development | ( | |||||||||||||||||||||||||||||||
Commercial construction | ( | |||||||||||||||||||||||||||||||
Residential construction | ||||||||||||||||||||||||||||||||
Residential | ||||||||||||||||||||||||||||||||
Farmland | ||||||||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||
Secured | ( | |||||||||||||||||||||||||||||||
Unsecured | ( | |||||||||||||||||||||||||||||||
Consumer and other | ( | |||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | $ |
(in thousands) | Beginning Balance | Effect of Adoption of ASC 326 | Charge-offs | Recoveries | Provision (Benefit) | Ending Balance | ||||||||||||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||||||||||||
Commercial | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Commercial land and development | ||||||||||||||||||||||||||||||||||||||
Commercial construction | ( | |||||||||||||||||||||||||||||||||||||
Residential construction | ||||||||||||||||||||||||||||||||||||||
Residential | ||||||||||||||||||||||||||||||||||||||
Farmland | ( | ( | ||||||||||||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||||||||
Secured | ( | ( | ||||||||||||||||||||||||||||||||||||
Unsecured | ( | |||||||||||||||||||||||||||||||||||||
Consumer and other | ( | ( | ||||||||||||||||||||||||||||||||||||
Unallocated | ( | |||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | $ | $ |
Three months ended | ||||||||||||||
(in thousands) | March 31, 2024 | March 31, 2023 | ||||||||||||
Balance at beginning of period | $ | $ | ||||||||||||
Effect of adoption of ASC 326 | ||||||||||||||
Provision | ( | |||||||||||||
Balance at end of period | $ | $ |
(in thousands) | March 31, 2024 | December 31, 2023 | ||||||||||||
Interest-bearing transaction accounts | $ | $ | ||||||||||||
Savings accounts | ||||||||||||||
Money market accounts | ||||||||||||||
Time accounts, $ | ||||||||||||||
Other time accounts | ||||||||||||||
Total interest-bearing deposits | $ | $ |
(in thousands) | ||||||||
2024 | $ | |||||||
2025 | ||||||||
2026 | ||||||||
2027 | ||||||||
2028 | ||||||||
Total time deposits | $ |
(in thousands) | March 31, 2024 | December 31, 2023 | ||||||||||||
CDARS | $ | $ | ||||||||||||
ICS | ||||||||||||||
Total network deposits | $ | $ |
Three months ended | ||||||||||||||
(in thousands) | March 31, 2024 | March 31, 2023 | ||||||||||||
Interest-bearing transaction accounts | $ | $ | ||||||||||||
Savings accounts | ||||||||||||||
Money market accounts | ||||||||||||||
Time accounts, $ | ||||||||||||||
Other time accounts | ||||||||||||||
Total interest expense on interest-bearing deposits | $ | $ |
(in thousands) | March 31, 2024 | December 31, 2023 | ||||||||||||
Total financing ability from the FHLB | $ | $ | ||||||||||||
Less: outstanding borrowings | ||||||||||||||
Less: LCs pledged to secure State of California deposits | ||||||||||||||
Less: LCs pledged to secure local agency deposits | ||||||||||||||
Total LCs issued | ||||||||||||||
Available borrowing capacity with the FHLB | $ | $ |
(in thousands) | March 31, 2024 | December 31, 2023 | ||||||||||||
Total financing ability from the Federal Reserve Discount Window | $ | $ | ||||||||||||
Less: outstanding borrowings | ||||||||||||||
Available borrowing capacity with the Federal Reserve Discount Window | $ | $ |
Three months ended | ||||||||||||||
(in thousands, except share count and earnings per common share) | March 31, 2024 | March 31, 2023 | ||||||||||||
Net income | $ | $ | ||||||||||||
Basic weighted average common shares outstanding | ||||||||||||||
Add: Dilutive effects of assumed vesting of restricted stock | ||||||||||||||
Total dilutive weighted average common shares outstanding | ||||||||||||||
Earnings per common share: | ||||||||||||||
Basic EPS | $ | $ | ||||||||||||
Diluted EPS | $ | $ |
For the three months ended March 31, | ||||||||||||||||||||||||||
2024 | 2023 | |||||||||||||||||||||||||
Shares | Weighted Average Grant Date Fair Value | Shares | Weighted Average Grant Date Fair Value | |||||||||||||||||||||||
Beginning of the period balance | $ | $ | ||||||||||||||||||||||||
Shares granted | ||||||||||||||||||||||||||
Shares vested | ( | ( | ||||||||||||||||||||||||
Shares forfeited | ( | |||||||||||||||||||||||||
End of the period balance | $ | $ |
(in thousands) | March 31, 2024 | December 31, 2023 | ||||||||||||
Commercial lines of credit | $ | $ | ||||||||||||
Undisbursed construction loans | ||||||||||||||
Undisbursed commercial real estate loans | ||||||||||||||
Agricultural lines of credit | ||||||||||||||
Undisbursed residential real estate loans | ||||||||||||||
Undisbursed agricultural real estate loans | ||||||||||||||
Other | ||||||||||||||
Total commitments and standby letters of credit | $ | $ |
(dollars in thousands) | March 31, 2024 | December 31, 2023 | ||||||||||||
Selected financial condition data: | ||||||||||||||
Total assets | $ | 3,476,360 | $ | 3,593,125 | ||||||||||
Total loans held for investment | $ | 3,104,130 | $ | 3,081,719 | ||||||||||
Total deposits | $ | 2,955,772 | $ | 3,026,896 | ||||||||||
Total subordinated notes, net | $ | 73,786 | $ | 73,749 | ||||||||||
Total shareholders’ equity | $ | 292,580 | $ | 285,774 | ||||||||||
Asset quality ratios: | ||||||||||||||
Allowance for credit losses to total loans held for investment | 1.12 | % | 1.12 | % | ||||||||||
Allowance for credit losses to nonperforming loans | 1,806.73 | % | 1,752.70 | % | ||||||||||
Nonperforming loans to total loans held for investment | 0.06 | % | 0.06 | % | ||||||||||
Capital ratios: | ||||||||||||||
Total capital (to risk-weighted assets) | 12.34 | % | 12.30 | % | ||||||||||
Tier 1 capital (to risk-weighted assets) | 9.13 | % | 9.07 | % | ||||||||||
Common equity Tier 1 capital (to risk-weighted assets) | 9.13 | % | 9.07 | % | ||||||||||
Tier 1 leverage | 8.63 | % | 8.73 | % | ||||||||||
Total shareholders’ equity to total assets | 8.42 | % | 7.95 | % | ||||||||||
Tangible shareholders’ equity to tangible assets1 | 8.42 | % | 7.95 | % |
For the three months ended | ||||||||||||||
(dollars in thousands, except per share data) | March 31, 2024 | March 31, 2023 | ||||||||||||
Selected operating data: | ||||||||||||||
Net interest income | $ | 26,744 | $ | 29,148 | ||||||||||
Provision for credit losses | $ | 900 | $ | 900 | ||||||||||
Non-interest income | $ | 1,833 | $ | 1,371 | ||||||||||
Non-interest expense | $ | 12,716 | $ | 11,118 | ||||||||||
Net income | $ | 10,631 | $ | 13,161 | ||||||||||
Per common share data: | ||||||||||||||
Earnings per common share: | ||||||||||||||
Basic | $ | 0.62 | $ | 0.77 | ||||||||||
Diluted | $ | 0.62 | $ | 0.77 | ||||||||||
Book value per share | $ | 16.86 | $ | 15.10 | ||||||||||
Tangible book value per share2 | $ | 16.86 | $ | 15.10 | ||||||||||
Performance and other financial ratios: | ||||||||||||||
ROAA | 1.22 | % | 1.65 | % | ||||||||||
ROAE | 14.84 | % | 20.94 | % | ||||||||||
Net interest margin | 3.14 | % | 3.75 | % | ||||||||||
Cost of funds | 2.62 | % | 1.53 | % | ||||||||||
Efficiency ratio | 44.50 | % | 36.43 | % | ||||||||||
Cash dividend payout ratio on common stock3 | 32.26 | % | 19.48 | % |
For the three months ended March 31, 2024 | For the three months ended March 31, 2023 | |||||||||||||||||||||||||||||||||||||
(dollars in thousands) | Average Balance | Interest Income/Expense | Average Yield/Rate | Average Balance | Interest Income/Expense | Average Yield/Rate | ||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||||
Interest-earning deposits in banks1 | $ | 233,002 | $ | 3,102 | 5.35 | % | $ | 200,541 | $ | 2,167 | 4.38 | % | ||||||||||||||||||||||||||
Investment securities1,2 | 109,177 | 653 | 2.41 | % | 119,489 | 650 | 2.21 | % | ||||||||||||||||||||||||||||||
Loans held for investment and sale1,3 | 3,082,290 | 43,786 | 5.71 | % | 2,836,070 | 37,494 | 5.36 | % | ||||||||||||||||||||||||||||||
Total interest-earning assets1 | 3,424,469 | 47,541 | 5.58 | % | 3,156,100 | 40,311 | 5.18 | % | ||||||||||||||||||||||||||||||
Interest receivable and other assets, net4 | 93,983 | 69,253 | ||||||||||||||||||||||||||||||||||||
Total assets | $ | 3,518,452 | $ | 3,225,353 | ||||||||||||||||||||||||||||||||||
Liabilities and shareholders’ equity | ||||||||||||||||||||||||||||||||||||||
Interest-bearing transaction accounts1 | $ | 300,325 | $ | 1,126 | 1.51 | % | $ | 379,593 | $ | 433 | 0.46 | % | ||||||||||||||||||||||||||
Savings accounts1 | 124,561 | 861 | 2.78 | % | 155,233 | 545 | 1.42 | % | ||||||||||||||||||||||||||||||
Money market accounts1 | 1,410,264 | 12,155 | 3.47 | % | 1,087,122 | 5,436 | 2.03 | % | ||||||||||||||||||||||||||||||
Time accounts1 | 429,586 | 5,369 | 5.03 | % | 300,952 | 2,964 | 3.99 | % | ||||||||||||||||||||||||||||||
Subordinated notes and other borrowings1 | 82,775 | 1,286 | 6.25 | % | 125,691 | 1,785 | 5.76 | % | ||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 2,347,511 | 20,797 | 3.56 | % | 2,048,591 | 11,163 | 2.21 | % | ||||||||||||||||||||||||||||||
Demand accounts | 842,105 | 901,491 | ||||||||||||||||||||||||||||||||||||
Interest payable and other liabilities | 40,730 | 20,344 | ||||||||||||||||||||||||||||||||||||
Shareholders’ equity | 288,106 | 254,927 | ||||||||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 3,518,452 | $ | 3,225,353 | ||||||||||||||||||||||||||||||||||
Net interest spread5 | 2.02 | % | 2.97 | % | ||||||||||||||||||||||||||||||||||
Net interest income/margin6 | $ | 26,744 | 3.14 | % | $ | 29,148 | 3.75 | % |
For the three months ended March 31, 2024 compared to the three months ended March 31, 2023 | ||||||||||||||||||||
(dollars in thousands) | Volume | Yield/Rate | Total Increase (Decrease) | |||||||||||||||||
Interest-earning deposits in banks | $ | 446 | $ | 489 | $ | 935 | ||||||||||||||
Investment securities | (59) | 62 | 3 | |||||||||||||||||
Loans held for investment and sale | 3,694 | 2,598 | 6,292 | |||||||||||||||||
Total interest-earning assets | 4,081 | 3,149 | 7,230 | |||||||||||||||||
Interest-bearing transaction accounts | (282) | 975 | 693 | |||||||||||||||||
Savings accounts | (218) | 534 | 316 | |||||||||||||||||
Money market accounts | 2,776 | 3,943 | 6,719 | |||||||||||||||||
Time accounts | 1,630 | 775 | 2,405 | |||||||||||||||||
Subordinated notes and other borrowings | (651) | 152 | (499) | |||||||||||||||||
Total interest-bearing liabilities | 3,255 | 6,379 | 9,634 | |||||||||||||||||
Changes in net interest income/margin | $ | 826 | $ | (3,230) | $ | (2,404) |
For the three months ended | ||||||||||||||||||||||||||
(dollars in thousands) | March 31, 2024 | March 31, 2023 | $ Change | % Change | ||||||||||||||||||||||
Service charges on deposit accounts | $ | 188 | $ | 117 | $ | 71 | 60.68 | % | ||||||||||||||||||
Gain on sale of loans | 369 | 598 | (229) | (38.29) | % | |||||||||||||||||||||
Loan-related fees | 429 | 308 | 121 | 39.29 | % | |||||||||||||||||||||
FHLB stock dividends | 332 | 193 | 139 | 72.02 | % | |||||||||||||||||||||
Earnings on BOLI | 142 | 102 | 40 | 39.22 | % | |||||||||||||||||||||
Other income | 373 | 53 | 320 | 603.77 | % | |||||||||||||||||||||
Total non-interest income | $ | 1,833 | $ | 1,371 | $ | 462 | 33.70 | % |
For the three months ended | ||||||||||||||||||||||||||
(dollars in thousands) | March 31, 2024 | March 31, 2023 | $ Change | % Change | ||||||||||||||||||||||
Salaries and employee benefits | $ | 7,577 | $ | 6,618 | $ | 959 | 14.49 | % | ||||||||||||||||||
Occupancy and equipment | 626 | 523 | 103 | 19.69 | % | |||||||||||||||||||||
Data processing and software | 1,157 | 872 | 285 | 32.68 | % | |||||||||||||||||||||
FDIC insurance | 400 | 402 | (2) | (0.50) | % | |||||||||||||||||||||
Professional services | 707 | 631 | 76 | 12.04 | % | |||||||||||||||||||||
Advertising and promotional | 460 | 418 | 42 | 10.05 | % | |||||||||||||||||||||
Loan-related expenses | 297 | 255 | 42 | 16.47 | % | |||||||||||||||||||||
Other operating expenses | 1,492 | 1,399 | 93 | 6.65 | % | |||||||||||||||||||||
Total non-interest expense | $ | 12,716 | $ | 11,118 | $ | 1,598 | 14.37 | % |
(dollars in thousands) | March 31, 2024 | December 31, 2023 | ||||||||||||
Total assets | $ | 3,476,360 | $ | 3,593,125 | ||||||||||
Cash and cash equivalents | $ | 185,325 | $ | 321,576 | ||||||||||
Total investments | $ | 108,006 | $ | 111,160 | ||||||||||
Loans held for investment | $ | 3,104,130 | $ | 3,081,719 | ||||||||||
Total deposits | $ | 2,955,772 | $ | 3,026,896 | ||||||||||
Subordinated notes, net | $ | 73,786 | $ | 73,749 | ||||||||||
Total shareholders’ equity | $ | 292,580 | $ | 285,774 |
As of | ||||||||||||||||||||||||||
March 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||
(dollars in thousands) | Carrying Value | % of Total | Carrying Value | % of Total | ||||||||||||||||||||||
Available-for-sale (at fair value): | ||||||||||||||||||||||||||
U.S. government agency securities | $ | 9,929 | 9.19 | % | $ | 10,541 | 9.48 | % | ||||||||||||||||||
Mortgage-backed securities | 54,945 | 50.87 | % | 56,973 | 51.25 | % | ||||||||||||||||||||
Obligations of states and political subdivisions | 38,023 | 35.20 | % | 38,459 | 34.60 | % | ||||||||||||||||||||
Collateralized mortgage obligations | 317 | 0.29 | % | 332 | 0.30 | % | ||||||||||||||||||||
Corporate bonds | 1,792 | 1.67 | % | 1,778 | 1.60 | % | ||||||||||||||||||||
Total available-for-sale | 105,006 | 97.22 | % | 108,083 | 97.23 | % | ||||||||||||||||||||
Held-to-maturity (at amortized cost): | ||||||||||||||||||||||||||
Obligations of states and political subdivisions | 3,000 | 2.78 | % | 3,077 | 2.77 | % | ||||||||||||||||||||
Total | $ | 108,006 | 100.00 | % | $ | 111,160 | 100.00 | % |
Due in one year or less | Due after one year through five years | Due after five years through ten years | Due after ten years | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | Carrying Value | Weighted Average Yield | Carrying Value | Weighted Average Yield | Carrying Value | Weighted Average Yield | Carrying Value | Weighted Average Yield | Carrying Value | Weighted Average Yield | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Available-for-sale: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. government agency securities | $ | — | — | % | $ | 836 | 3.72 | % | $ | 1,660 | 5.37 | % | $ | 7,433 | 6.64 | % | $ | 9,929 | 6.18 | % | ||||||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities | — | — | % | — | — | % | 580 | 2.74 | % | 54,365 | 1.77 | % | 54,945 | 1.78 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Obligations of states and political subdivisions | — | — | % | 362 | 0.84 | % | 6,908 | 1.66 | % | 30,753 | 1.77 | % | 38,023 | 1.74 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Collateralized mortgage obligations | — | — | % | — | — | % | 317 | 1.76 | % | — | — | % | 317 | 1.76 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Corporate bonds | — | — | % | 1,792 | 1.25 | % | — | — | % | — | — | % | 1,792 | 1.25 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Total available-for-sale | — | — | % | 2,990 | 1.89 | % | 9,465 | 2.38 | % | 92,551 | 2.16 | % | 105,006 | 2.17 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Held-to-maturity: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Obligations of states and political subdivisions | 245 | 6.00 | % | 920 | 6.00 | % | 1,340 | 6.00 | % | 495 | 6.00 | % | 3,000 | 6.00 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 245 | 6.00 | % | $ | 3,910 | 2.86 | % | $ | 10,805 | 2.83 | % | $ | 93,046 | 2.18 | % | $ | 108,006 | 2.28 | % |
Due in one year or less | Due after one year through five years | Due after five years through ten years | Due after ten years | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | Carrying Value | Weighted Average Yield | Carrying Value | Weighted Average Yield | Carrying Value | Weighted Average Yield | Carrying Value | Weighted Average Yield | Carrying Value | Weighted Average Yield | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Available-for-sale: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. government agency securities | $ | — | — | % | $ | 800 | 3.44 | % | $ | 2,010 | 5.36 | % | $ | 7,731 | 5.77 | % | $ | 10,541 | 5.51 | % | ||||||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities | — | — | % | — | — | % | 609 | 2.74 | % | 56,364 | 1.76 | % | 56,973 | 1.77 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Obligations of states and political subdivisions | — | — | % | 367 | 0.84 | % | 5,838 | 1.71 | % | 32,254 | 1.76 | % | 38,459 | 1.74 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Collateralized mortgage obligations | — | — | % | — | — | % | 332 | 1.76 | % | — | — | % | 332 | 1.76 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Corporate bonds | — | — | % | 1,778 | 1.25 | % | — | — | % | — | — | % | 1,778 | 1.25 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Total available-for-sale | — | — | % | 2,945 | 1.79 | % | 8,789 | 2.62 | % | 96,349 | 2.08 | % | 108,083 | 2.12 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Held-to-maturity: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Obligations of states and political subdivisions | 277 | 6.00 | % | 935 | 6.00 | % | 1,365 | 6.00 | % | 500 | 6.00 | % | 3,077 | 6.00 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 277 | 6.00 | % | $ | 3,880 | 2.81 | % | $ | 10,154 | 3.07 | % | $ | 96,849 | 2.10 | % | $ | 111,160 | 2.22 | % |
As of | ||||||||||||||||||||||||||
March 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||
(dollars in thousands) | Amount | % of Loans | Amount | % of Loans | ||||||||||||||||||||||
Loans held for investment: | ||||||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||
Commercial | $ | 2,687,456 | 86.23 | % | $ | 2,685,419 | 86.76 | % | ||||||||||||||||||
Commercial land and development | 14,678 | 0.47 | % | 15,551 | 0.50 | % | ||||||||||||||||||||
Commercial construction | 62,513 | 2.01 | % | 62,863 | 2.03 | % | ||||||||||||||||||||
Residential construction | 18,141 | 0.58 | % | 15,456 | 0.50 | % | ||||||||||||||||||||
Residential | 28,685 | 0.92 | % | 25,893 | 0.84 | % | ||||||||||||||||||||
Farmland | 51,422 | 1.65 | % | 51,669 | 1.67 | % | ||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||
Secured | 143,273 | 4.60 | % | 165,109 | 5.33 | % | ||||||||||||||||||||
Unsecured | 26,175 | 0.84 | % | 23,850 | 0.77 | % | ||||||||||||||||||||
Consumer and other | 73,917 | 2.37 | % | 38,166 | 1.23 | % | ||||||||||||||||||||
Loans held for investment, gross | 3,106,260 | 99.67 | % | 3,083,976 | 99.63 | % | ||||||||||||||||||||
Loans held for sale: | ||||||||||||||||||||||||||
Commercial | 10,243 | 0.33 | % | 11,464 | 0.37 | % | ||||||||||||||||||||
Total loans, gross | 3,116,503 | 100.00 | % | 3,095,440 | 100.00 | % | ||||||||||||||||||||
Net deferred loan fees | (2,130) | (2,257) | ||||||||||||||||||||||||
Total loans | $ | 3,114,373 | $ | 3,093,183 |
(dollars in thousands) | Loan Balance | % of Commercial Real Estate | Collateral Value | Minimum LTV | Maximum LTV | |||||||||||||||||||||||||||
March 31, 2024 | ||||||||||||||||||||||||||||||||
Manufactured home community | $ | 847,510 | 31.54 | % | $ | 1,502,434 | 14.47 | % | 74.52 | % | ||||||||||||||||||||||
RV Park | 345,398 | 12.85 | % | 603,311 | 18.24 | % | 75.00 | % | ||||||||||||||||||||||||
Retail | 273,063 | 10.16 | % | 542,916 | 6.79 | % | 73.76 | % | ||||||||||||||||||||||||
Faith-based | 185,545 | 6.90 | % | 491,049 | 8.30 | % | 74.50 | % | ||||||||||||||||||||||||
Industrial | 185,377 | 6.90 | % | 452,425 | 7.14 | % | 82.90 | % | ||||||||||||||||||||||||
Multifamily | 177,860 | 6.62 | % | 371,684 | 12.84 | % | 75.00 | % | ||||||||||||||||||||||||
Mini storage | 177,256 | 6.60 | % | 360,832 | 16.48 | % | 75.38 | % | ||||||||||||||||||||||||
Office | 134,469 | 5.00 | % | 300,469 | 5.80 | % | 73.13 | % | ||||||||||||||||||||||||
All other types1 | 360,978 | 13.43 | % | 738,991 | 3.36 | % | 152.17 | % | ||||||||||||||||||||||||
Total2 | $ | 2,687,456 | 100.00 | % | $ | 5,364,111 | ||||||||||||||||||||||||||
December 31, 2023 | ||||||||||||||||||||||||||||||||
Manufactured home community | $ | 813,687 | 30.30 | % | $ | 1,430,224 | 16.80 | % | 74.52 | % | ||||||||||||||||||||||
RV Park | 343,817 | 12.80 | % | 599,691 | 18.29 | % | 75.00 | % | ||||||||||||||||||||||||
Retail | 273,100 | 10.17 | % | 540,660 | 6.89 | % | 74.07 | % | ||||||||||||||||||||||||
Multifamily | 211,598 | 7.88 | % | 427,948 | 13.12 | % | 75.00 | % | ||||||||||||||||||||||||
Faith-based | 184,799 | 6.88 | % | 488,160 | 8.33 | % | 74.54 | % | ||||||||||||||||||||||||
Mini storage | 176,380 | 6.57 | % | 358,395 | 16.56 | % | 70.00 | % | ||||||||||||||||||||||||
Industrial | 173,192 | 6.45 | % | 417,439 | 7.48 | % | 83.26 | % | ||||||||||||||||||||||||
Office | 135,928 | 5.06 | % | 298,989 | 9.07 | % | 73.52 | % | ||||||||||||||||||||||||
All other types1 | 372,918 | 13.89 | % | 756,541 | 4.00 | % | 152.33 | % | ||||||||||||||||||||||||
Total2 | $ | 2,685,419 | 100.00 | % | $ | 5,318,047 |
(dollars in thousands) | Due in 1 year or less | Due after 1 year through 5 years | Due after 5 years through 15 years | Due after 15 years | Total | |||||||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||||||
Commercial | $ | 30,322 | $ | 289,132 | $ | 2,292,288 | $ | 75,714 | $ | 2,687,456 | ||||||||||||||||||||||
Commercial land and development | 11,372 | 2,310 | 996 | — | 14,678 | |||||||||||||||||||||||||||
Commercial construction | 30,330 | 10,263 | 21,920 | — | 62,513 | |||||||||||||||||||||||||||
Residential construction | 14,228 | 3,913 | — | — | 18,141 | |||||||||||||||||||||||||||
Residential | 269 | 6,494 | 20,974 | 948 | 28,685 | |||||||||||||||||||||||||||
Farmland | 2,140 | 4,701 | 44,581 | — | 51,422 | |||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||
Secured | 32,098 | 33,547 | 87,460 | 411 | 153,516 | |||||||||||||||||||||||||||
Unsecured | 4,502 | 8,514 | 13,159 | — | 26,175 | |||||||||||||||||||||||||||
Consumer and other | 562 | 6,555 | 66,800 | — | 73,917 | |||||||||||||||||||||||||||
Total | $ | 125,823 | $ | 365,429 | $ | 2,548,178 | $ | 77,073 | $ | 3,116,503 |
(dollars in thousands) | Due in 1 year or less | Due after 1 year through 5 years | Due after 5 years through 15 years | Due after 15 years | Total | |||||||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||||||
Commercial | $ | 57,443 | $ | 271,306 | $ | 2,284,482 | $ | 72,188 | $ | 2,685,419 | ||||||||||||||||||||||
Commercial land and development | 11,406 | 3,353 | 792 | — | 15,551 | |||||||||||||||||||||||||||
Commercial construction | 27,078 | 10,377 | 25,408 | — | 62,863 | |||||||||||||||||||||||||||
Residential construction | 11,543 | 3,913 | — | — | 15,456 | |||||||||||||||||||||||||||
Residential | 286 | 5,916 | 18,735 | 956 | 25,893 | |||||||||||||||||||||||||||
Farmland | 2,835 | 3,932 | 44,902 | — | 51,669 | |||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||
Secured | 36,844 | 48,491 | 90,826 | 412 | 176,573 | |||||||||||||||||||||||||||
Unsecured | 574 | 10,789 | 12,487 | — | 23,850 | |||||||||||||||||||||||||||
Consumer and other | 857 | 5,638 | 31,671 | — | 38,166 | |||||||||||||||||||||||||||
Total | $ | 148,866 | $ | 363,715 | $ | 2,509,303 | $ | 73,556 | $ | 3,095,440 |
(dollars in thousands) | Fixed Interest Rates | Floating or Adjustable Rates | Total | |||||||||||||||||
Real estate: | ||||||||||||||||||||
Commercial | $ | 578,389 | $ | 2,109,067 | $ | 2,687,456 | ||||||||||||||
Commercial land and development | 10,068 | 4,610 | 14,678 | |||||||||||||||||
Commercial construction | — | 62,513 | 62,513 | |||||||||||||||||
Residential construction | 3,913 | 14,228 | 18,141 | |||||||||||||||||
Residential | 1,179 | 27,506 | 28,685 | |||||||||||||||||
Farmland | 5,298 | 46,124 | 51,422 | |||||||||||||||||
Commercial: | ||||||||||||||||||||
Secured | 37,823 | 115,693 | 153,516 | |||||||||||||||||
Unsecured | 17,155 | 9,020 | 26,175 | |||||||||||||||||
Consumer and other | 73,874 | 43 | 73,917 | |||||||||||||||||
Total | $ | 727,699 | $ | 2,388,804 | $ | 3,116,503 |
(dollars in thousands) | Fixed Interest Rates | Floating or Adjustable Rates | Total | |||||||||||||||||
Real estate: | ||||||||||||||||||||
Commercial | $ | 570,385 | $ | 2,115,034 | $ | 2,685,419 | ||||||||||||||
Commercial land and development | 10,081 | 5,470 | 15,551 | |||||||||||||||||
Commercial construction | — | 62,863 | 62,863 | |||||||||||||||||
Residential construction | 3,913 | 11,543 | 15,456 | |||||||||||||||||
Residential | 1,272 | 24,621 | 25,893 | |||||||||||||||||
Farmland | 5,848 | 45,821 | 51,669 | |||||||||||||||||
Commercial: | ||||||||||||||||||||
Secured | 38,029 | 138,544 | 176,573 | |||||||||||||||||
Unsecured | 16,343 | 7,507 | 23,850 | |||||||||||||||||
Consumer and other | 38,081 | 85 | 38,166 | |||||||||||||||||
Total | $ | 683,952 | $ | 2,411,488 | $ | 3,095,440 |
As of | ||||||||||||||
(dollars in thousands) | March 31, 2024 | December 31, 2023 | ||||||||||||
Non-accrual loans: | ||||||||||||||
Real estate: | ||||||||||||||
Commercial | $ | 1,852 | $ | 1,893 | ||||||||||
Commercial: | ||||||||||||||
Secured | 66 | 72 | ||||||||||||
Total non-accrual loans | 1,918 | 1,965 | ||||||||||||
Loans past due 90 days or more and still accruing: | ||||||||||||||
Total loans past due and still accruing | — | — | ||||||||||||
Total nonperforming loans | 1,918 | 1,965 | ||||||||||||
Real estate owned | — | — | ||||||||||||
Total nonperforming assets | $ | 1,918 | $ | 1,965 | ||||||||||
Performing LMs (not included above) | $ | — | $ | — | ||||||||||
Allowance for credit losses to period end nonperforming loans | 1,806.73 | % | 1,752.70 | % | ||||||||||
Nonperforming loans to loans held for investment | 0.06 | % | 0.06 | % | ||||||||||
Nonperforming assets to total assets | 0.06 | % | 0.05 | % | ||||||||||
Nonperforming loans plus performing LMs to loans held for investment | 0.06 | % | 0.06 | % |
(dollars in thousands) | Pass | Watch | Substandard | Doubtful | Total | |||||||||||||||||||||||||||
March 31, 2024 | ||||||||||||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||||||
Commercial | $ | 2,648,303 | $ | 37,301 | $ | 1,852 | $ | — | $ | 2,687,456 | ||||||||||||||||||||||
Commercial land and development | 14,678 | — | — | — | 14,678 | |||||||||||||||||||||||||||
Commercial construction | 62,513 | — | — | — | 62,513 | |||||||||||||||||||||||||||
Residential construction | 18,141 | — | — | — | 18,141 | |||||||||||||||||||||||||||
Residential | 28,685 | — | — | — | 28,685 | |||||||||||||||||||||||||||
Farmland | 51,422 | — | — | — | 51,422 | |||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||
Secured | 128,595 | 14,612 | 66 | — | 143,273 | |||||||||||||||||||||||||||
Unsecured | 26,175 | — | — | — | 26,175 | |||||||||||||||||||||||||||
Consumer and other | 73,891 | 15 | 11 | — | 73,917 | |||||||||||||||||||||||||||
Total | $ | 3,052,403 | $ | 51,928 | $ | 1,929 | $ | — | $ | 3,106,260 | ||||||||||||||||||||||
December 31, 2023 | ||||||||||||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||||||
Commercial | $ | 2,658,504 | $ | 25,023 | $ | 1,892 | $ | — | $ | 2,685,419 | ||||||||||||||||||||||
Commercial land and development | 15,551 | — | — | — | 15,551 | |||||||||||||||||||||||||||
Commercial construction | 62,863 | — | — | — | 62,863 | |||||||||||||||||||||||||||
Residential construction | 15,456 | — | — | — | 15,456 | |||||||||||||||||||||||||||
Residential | 25,893 | — | — | — | 25,893 | |||||||||||||||||||||||||||
Farmland | 51,669 | — | — | — | 51,669 | |||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||
Secured | 150,451 | 14,586 | 72 | — | 165,109 | |||||||||||||||||||||||||||
Unsecured | 23,850 | — | — | — | 23,850 | |||||||||||||||||||||||||||
Consumer and other | 38,139 | 15 | 12 | — | 38,166 | |||||||||||||||||||||||||||
Total | $ | 3,042,376 | $ | 39,624 | $ | 1,976 | $ | — | $ | 3,083,976 |
March 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||
(dollars in thousands) | Allowance for Credit Losses | % of Loans to Total Loans | Allowance for Credit Losses | % of Loans to Total Loans | ||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||
Commercial | $ | 28,895 | 86.23 | % | $ | 29,015 | 86.76 | % | ||||||||||||||||||
Commercial land and development | 164 | 0.47 | % | 178 | 0.50 | % | ||||||||||||||||||||
Commercial construction | 697 | 2.01 | % | 718 | 2.03 | % | ||||||||||||||||||||
Residential construction | 114 | 0.58 | % | 89 | 0.50 | % | ||||||||||||||||||||
Residential | 164 | 0.92 | % | 151 | 0.84 | % | ||||||||||||||||||||
Farmland | 438 | 1.65 | % | 399 | 1.67 | % | ||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||
Secured | 3,262 | 4.93 | % | 3,314 | 5.70 | % | ||||||||||||||||||||
Unsecured | 259 | 0.84 | % | 189 | 0.77 | % | ||||||||||||||||||||
Consumer and other | 660 | 2.37 | % | 378 | 1.23 | % | ||||||||||||||||||||
Total allowance for credit losses | $ | 34,653 | 100.00 | % | $ | 34,431 | 100.00 | % |
As of and for the three months ended | ||||||||||||||||||||||||||
March 31, 2024 | March 31, 2023 | |||||||||||||||||||||||||
(dollars in thousands) | Activity | % of Average Loans Held for Investment | Activity | % of Average Loans Held for Investment | ||||||||||||||||||||||
Average loans held for investment | $ | 3,069,466 | $ | 2,826,035 | ||||||||||||||||||||||
Allowance for credit losses - loans | $ | 34,431 | $ | 28,389 | ||||||||||||||||||||||
Effect of adoption of ASC 326 | — | 5,262 | ||||||||||||||||||||||||
Net (charge-offs) recoveries: | ||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||
Secured | (816) | (0.03) | % | (396) | (0.01) | % | ||||||||||||||||||||
Unsecured | (34) | — | % | — | — | % | ||||||||||||||||||||
Consumer and other | 22 | — | % | 17 | — | % | ||||||||||||||||||||
Net charge-offs | (828) | (0.03) | % | (379) | (0.01) | % | ||||||||||||||||||||
Provision for credit losses | 1,050 | 900 | ||||||||||||||||||||||||
Allowance for credit losses - loans | $ | 34,653 | $ | 34,172 | ||||||||||||||||||||||
Loans held for investment | $ | 3,104,130 | $ | 2,869,848 | ||||||||||||||||||||||
Allowance for credit losses - loans to loans held for investment | 1.12 | % | 1.19 | % |
For the three months ended | ||||||||||||||||||||||||||||||||||||||
March 31, 2024 | March 31, 2023 | |||||||||||||||||||||||||||||||||||||
(dollars in thousands) | Average Amount | Average Rate Paid | % of Total Deposits | Average Amount | Average Rate Paid | % of Total Deposits | ||||||||||||||||||||||||||||||||
Interest-bearing transaction accounts | $ | 300,325 | 1.51 | % | 9.67 | % | $ | 379,593 | 0.46 | % | 13.44 | % | ||||||||||||||||||||||||||
Money market and savings accounts | 1,534,825 | 3.41 | % | 49.40 | % | 1,242,355 | 1.95 | % | 43.98 | % | ||||||||||||||||||||||||||||
Time accounts | 429,586 | 5.03 | % | 13.83 | % | 300,952 | 3.99 | % | 10.66 | % | ||||||||||||||||||||||||||||
Demand accounts | 842,105 | — | % | 27.10 | % | 901,491 | — | % | 31.92 | % | ||||||||||||||||||||||||||||
Total deposits | $ | 3,106,841 | 2.53 | % | 100.00 | % | $ | 2,824,391 | 1.35 | % | 100.00 | % |
(dollars in thousands) | March 31, 2024 | December 31, 2023 | ||||||||||||
Municipalities | $ | 581,859 | $ | 693,685 | ||||||||||
Non-profits | 220,827 | 188,252 | ||||||||||||
Businesses | 497,543 | 525,193 | ||||||||||||
Brokered deposits | 41,990 | 100,128 | ||||||||||||
Total | $ | 1,342,219 | $ | 1,507,258 |
(dollars in thousands) | $250,000 or Greater | Less than $250,000 | Total | Uninsured Portion | ||||||||||||||||||||||
Remaining maturity: | ||||||||||||||||||||||||||
Three months or less | $ | 108,021 | $ | 17,036 | $ | 125,057 | $ | 104,271 | ||||||||||||||||||
Over three through six months | 81,391 | 43,715 | 125,106 | 77,641 | ||||||||||||||||||||||
Over six through twelve months | 30,407 | 4,372 | 34,779 | 25,157 | ||||||||||||||||||||||
Over twelve months | 2,157 | 1,069 | 3,226 | 1,157 | ||||||||||||||||||||||
Total | $ | 221,976 | $ | 66,192 | $ | 288,168 | $ | 208,226 |
(dollars in thousands) | Issuance Date | Amount of Notes | Prepayment Right | Maturity Date | ||||||||||||||||||||||
Subordinated notes | August 2022 | $ | 75,000 | August 17, 2027 | September 1, 2032 | |||||||||||||||||||||
Fixed at 6.00% through September 1, 2027, then three-month Term SOFR plus 329.0 basis points (8.58% as of March 31, 2024) through maturity |
March 31, 2024 | Available | |||||||||||||||||||||||||
(dollars in thousands) | Line of Credit | Letters of Credit Issued | Borrowings | |||||||||||||||||||||||
FHLB advances | $ | 1,002,910 | $ | 571,500 | $ | 20,000 | $ | 411,410 | ||||||||||||||||||
Federal Reserve Discount Window | 807,143 | — | 100,000 | 707,143 | ||||||||||||||||||||||
Correspondent bank lines of credit | 175,000 | — | — | 175,000 | ||||||||||||||||||||||
Cash and cash equivalents | — | — | — | 185,325 | ||||||||||||||||||||||
Total | $ | 1,985,053 | $ | 571,500 | $ | 120,000 | $ | 1,478,878 |
Three months ended March 31, | ||||||||||||||||||||
(dollars in thousands) | 2024 | 2023 | $ Change | |||||||||||||||||
Net cash provided by operating activities | $ | 247 | $ | 694 | $ | (447) | ||||||||||||||
Net cash used in investing activities | $ | (11,923) | $ | (68,559) | $ | 56,636 | ||||||||||||||
Net cash (used in) provided by financing activities | $ | (124,575) | $ | 155,813 | $ | (280,388) |
Capital Ratios for Bancorp | Actual Ratio | Required for Capital Adequacy Purposes1 | Ratio to be Well-Capitalized under Prompt Corrective Action Provisions | |||||||||||||||||||||||||||||||||||
(dollars in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||||||||||||||
March 31, 2024 | ||||||||||||||||||||||||||||||||||||||
Total capital (to risk-weighted assets) | $ | 412,503 | 12.34 | % | $ | 264,002 | 8.00 | % | N/A | N/A | ||||||||||||||||||||||||||||
Tier 1 capital (to risk-weighted assets) | $ | 305,192 | 9.13 | % | $ | 200,544 | 6.00 | % | N/A | N/A | ||||||||||||||||||||||||||||
Common equity tier 1 capital (to risk-weighted assets) | $ | 305,192 | 9.13 | % | $ | 150,408 | 4.50 | % | N/A | N/A | ||||||||||||||||||||||||||||
Tier 1 leverage | $ | 305,192 | 8.63 | % | $ | 141,459 | 4.00 | % | N/A | N/A | ||||||||||||||||||||||||||||
December 31, 2023 | ||||||||||||||||||||||||||||||||||||||
Total capital (to risk-weighted assets) | $ | 404,829 | 12.30 | % | $ | 259,090 | 8.00 | % | N/A | N/A | ||||||||||||||||||||||||||||
Tier 1 capital (to risk-weighted assets) | $ | 298,749 | 9.07 | % | $ | 197,534 | 6.00 | % | N/A | N/A | ||||||||||||||||||||||||||||
Common equity tier 1 capital (to risk-weighted assets) | $ | 298,749 | 9.07 | % | $ | 148,150 | 4.50 | % | N/A | N/A | ||||||||||||||||||||||||||||
Tier 1 leverage | $ | 298,749 | 8.73 | % | $ | 136,953 | 4.00 | % | N/A | N/A |
Capital Ratios for the Bank | Actual Ratio | Required for Capital Adequacy Purposes | Ratio to be Well-Capitalized under Prompt Corrective Action Provisions | |||||||||||||||||||||||||||||||||||
(dollars in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||||||||||||||
March 31, 2024 | ||||||||||||||||||||||||||||||||||||||
Total capital (to risk-weighted assets) | $ | 398,228 | 11.94 | % | $ | 266,911 | 8.00 | % | $ | 333,639 | 10.00 | % | ||||||||||||||||||||||||||
Tier 1 capital (to risk-weighted assets) | $ | 364,702 | 10.93 | % | $ | 200,183 | 6.00 | % | $ | 266,911 | 8.00 | % | ||||||||||||||||||||||||||
Common equity tier 1 capital (to risk-weighted assets) | $ | 364,702 | 10.93 | % | $ | 150,137 | 4.50 | % | $ | 216,865 | 6.50 | % | ||||||||||||||||||||||||||
Tier 1 leverage | $ | 364,702 | 10.33 | % | $ | 141,236 | 4.00 | % | $ | 176,545 | 5.00 | % | ||||||||||||||||||||||||||
December 31, 2023 | ||||||||||||||||||||||||||||||||||||||
Total capital (to risk-weighted assets) | $ | 392,114 | 11.93 | % | $ | 262,947 | 8.00 | % | $ | 328,684 | 10.00 | % | ||||||||||||||||||||||||||
Tier 1 capital (to risk-weighted assets) | $ | 359,783 | 10.95 | % | $ | 197,211 | 6.00 | % | $ | 262,947 | 8.00 | % | ||||||||||||||||||||||||||
Common equity tier 1 capital (to risk-weighted assets) | $ | 359,783 | 10.95 | % | $ | 147,908 | 4.50 | % | $ | 213,645 | 6.50 | % | ||||||||||||||||||||||||||
Tier 1 leverage | $ | 359,783 | 10.52 | % | $ | 136,757 | 4.00 | % | $ | 170,946 | 5.00 | % |
2023 Annual Report on Form 10-K | Company’s Annual Report on Form 10-K for the year ended December 31, 2023 | GNMA | Government National Mortgage Association | |||||||||||
ASC | Accounting Standards Codification | GSE | Government Sponsored Entity | |||||||||||
ASU | Accounting Standards Update | ICS | Insured Cash Sweep® | |||||||||||
Bancorp | Five Star Bancorp and its subsidiary | IPO | Initial Public Offering | |||||||||||
Bank | Five Star Bank | LM | Loan modification made to borrower experiencing financial difficulty | |||||||||||
Basel III | A capital framework and rules for U.S. banking organizations | EVE | Economic Value of Equity | |||||||||||
BOLI | Bank-Owned Life Insurance | NI | Net Income | |||||||||||
CDARS | Certificate of Deposit Account Registry Service® | NII | Net Interest Income | |||||||||||
CME | Chicago Mercantile Exchange | OCI | Other Comprehensive Income | |||||||||||
EPS | Earnings per Share | RSA | Restricted Stock Award | |||||||||||
FASB | Financial Accounting Standards Board | ROAA | Return on Average Assets, annualized | |||||||||||
FDIC | Federal Deposit Insurance Corporation | ROAE | Return on Average Equity, annualized | |||||||||||
Federal Reserve | Board of Governors of the Federal Reserve System | ROUA | Right-of-Use Asset | |||||||||||
FHLB | Federal Home Loan Bank of San Francisco | SBA | U.S. Small Business Administration | |||||||||||
FHLMC | Federal Home Loan Mortgage Corporation | SEC | Securities and Exchange Commission | |||||||||||
FNMA | Federal National Mortgage Association | SOFR | Secured Overnight Financing Rate | |||||||||||
GAAP | Generally Accepted Accounting Principles in the U.S. |
March 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||
Change in Interest Rates | Estimated Change in NII (as % of NII) | Estimated Change in EVE (as % of EVE) | Estimated Change in NII (as % of NII) | Estimated Change in EVE (as % of EVE) | ||||||||||||||||||||||
(in basis points) | ||||||||||||||||||||||||||
+300 (shock) | (14.62) | % | (19.52) | % | (13.73) | % | (22.17) | % | ||||||||||||||||||
+200 (shock) | (9.64) | % | (13.37) | % | (9.02) | % | (15.23) | % | ||||||||||||||||||
+100 (shock) | (4.79) | % | (6.72) | % | (4.63) | % | (7.90) | % | ||||||||||||||||||
+ 0 (flat) | — | % | — | % | — | % | — | % | ||||||||||||||||||
-100 (shock) | 4.69 | % | 7.05 | % | 4.43 | % | 8.09 | % | ||||||||||||||||||
-200 (shock) | 9.44 | % | 13.57 | % | 8.93 | % | 14.76 | % | ||||||||||||||||||
-300 (shock) | 14.36 | % | 20.19 | % | 13.72 | % | 22.38 | % |
Incorporated by Reference | ||||||||||||||||||||
Exhibit Number | Exhibit Description | Form | File No. | Exhibit | Filing Date | Herewith | ||||||||||||||
31.1 | Filed | |||||||||||||||||||
31.2 | Filed | |||||||||||||||||||
32.1 | Filed | |||||||||||||||||||
32.2 | Filed | |||||||||||||||||||
101 | Inline XBRL Interactive Data | Filed | ||||||||||||||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document in Exhibit 101) | Filed |
Five Star Bancorp | |||||||||||
(registrant) | |||||||||||
May 8, 2024 | /s/ James E. Beckwith | ||||||||||
Date | James E. Beckwith | ||||||||||
President & | |||||||||||
Chief Executive Officer | |||||||||||
(Principal Executive Officer) | |||||||||||
May 8, 2024 | /s/ Heather C. Luck | ||||||||||
Date | Heather C. Luck | ||||||||||
Senior Vice President & | |||||||||||
Chief Financial Officer | |||||||||||
(Principal Financial Officer) |
May 8, 2024 | /s/ James E. Beckwith | |||||||
Date | James E. Beckwith | |||||||
President & Chief Executive Officer |
May 8, 2024 | /s/ Heather C. Luck | |||||||
Date | Heather C. Luck | |||||||
Senior Vice President & Chief Financial Officer |
May 8, 2024 | /s/ James E. Beckwith | |||||||
Date | James E. Beckwith | |||||||
President & Chief Executive Officer | ||||||||
May 8, 2024 | /s/ Heather C. Luck | |||||||
Date | Heather C. Luck | |||||||
Senior Vice President & Chief Financial Officer | ||||||||
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CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for credit losses, available for sale | $ 0 | $ 0 |
Amortized Cost | 122,667,000 | 124,788,000 |
Allowance for credit losses, held to maturity | 20,000 | 20,000 |
Securities held-to-maturity | $ 2,828,000 | $ 2,913,000 |
Preferred stock (in USD per share) | $ 0 | $ 0 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common Stock (in USD per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 17,353,251 | 17,256,989 |
Common stock, shares outstanding (in shares) | 17,353,251 | 17,256,989 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2024 |
Mar. 31, 2023 |
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Income Statement [Abstract] | ||
Net income | $ 10,631 | $ 13,161 |
Unrealized (loss) gain on securities: | ||
Net unrealized holding (loss) gain on securities available-for-sale during the period | (955) | 2,140 |
Less: Income tax (benefit) expense related to items of other comprehensive (loss) income | (282) | 632 |
Other comprehensive (loss) income | (673) | 1,508 |
Total comprehensive income | $ 9,958 | $ 14,669 |
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) (Parenthetical) - $ / shares |
3 Months Ended | |
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Mar. 31, 2024 |
Mar. 31, 2023 |
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Statement of Stockholders' Equity [Abstract] | ||
Cash dividends paid (in USD per share) | $ 0.20 | $ 0.15 |
Basis of Presentation and Summary of Significant Accounting Policies |
3 Months Ended |
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Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies (a) Organization Five Star Bank (the “Bank”) was chartered on October 26, 1999 and began operations on December 20, 1999. Five Star Bancorp (“Bancorp” or the “Company”) was incorporated on September 16, 2002 and subsequently obtained approval from the Federal Reserve to be a bank holding company in connection with its acquisition of the Bank. The Company became the sole shareholder of the Bank on June 2, 2003 in a statutory merger, pursuant to which each outstanding share of the Bank’s common stock was exchanged for one share of common stock of the Company. The Company, through the Bank, provides financial services to customers who are predominately small and middle-market businesses, professionals, and individuals residing in the Northern California region. The Company’s primary loan products are commercial real estate loans, land development loans, construction loans, and operating lines of credit, and its primary deposit products are checking accounts, savings accounts, money market accounts, and term certificate accounts. The Bank currently has seven branch offices in Roseville, Natomas, Rancho Cordova, Redding, Elk Grove, Chico, and Yuba City. (b) Basis of Financial Statement Presentation and Consolidation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) as contained within the Financial Accounting Standards Board’s (“FASB”) ASC and the rules and regulations of the SEC, including the instructions to Regulation S-X. These interim unaudited consolidated financial statements reflect all adjustments (consisting solely of normal recurring adjustments and accruals) which, in the opinion of management, are necessary for a fair presentation of financial position, results of operations and comprehensive income, changes in shareholders’ equity, and cash flows for the interim periods presented. These unaudited consolidated financial statements have been prepared on a basis consistent with, and should be read in conjunction with, the audited consolidated financial statements as of and for the year ended December 31, 2023, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Annual Report on Form 10-K”), which was filed with the SEC on February 23, 2024. The unaudited consolidated financial statements include Bancorp and its wholly owned subsidiary, the Bank. All significant intercompany transactions and balances are eliminated in consolidation. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results of operations that may be expected for any other interim period or for the year ending December 31, 2024. The Company’s accounting and reporting policies conform to GAAP and to general practices within the banking industry. (c) Segments While the Company’s chief decision-makers monitor the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Discrete financial information is not available other than on a Company-wide basis. Accordingly, all of the financial service operations are considered by management to be aggregated in one reportable operating segment. (d) Emerging Growth Company The Company qualifies as an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012, and, as such, may take advantage of specified reduced reporting requirements and deferred accounting standards adoption dates, and is relieved of other significant requirements that are otherwise generally applicable to other public companies. The Company will remain an emerging growth company for five years after its IPO date of May 5, 2021, unless one of the following occurs: (i) total annual gross revenues are $1.235 billion or more; (ii) the Company issues more than $1 billion in non-convertible debt; or (iii) the Company becomes a large accelerated filer with a public float of more than $0.7 billion. (e) Significant Accounting Policies The Company’s significant accounting policies are included in Note 1, Basis of Presentation in the notes to our audited consolidated financial statements included in the 2023 Annual Report on Form 10-K. (f) Recently Issued Accounting Standards The following information reflects recent accounting standards that have been adopted or are pending adoption by the Company. The Company qualifies as an emerging growth company and, as such, has elected to use the extended transition period for complying with new or revised accounting standards and is not subject to the new or revised accounting standards applicable to public companies during the extended transition period. The accounting standards discussed below indicate effective dates for the Company as an emerging growth company using the extended transition period. Accounting Standards Adopted in 2024 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 (“ASU 2023-02”). Under current GAAP, an entity can only elect to apply the proportional amortization method to investments in low income housing tax credit (“LIHTC”) structures. The amendments in ASU 2023-02 allow entities to elect to account for equity investments made primarily for the purpose of receiving income tax credits using the proportional amortization method, regardless of the tax credit program through which the investment earns income tax credits, if certain conditions are met. ASU 2023-02 provides amendments to paragraph ASC 323-740-25-1, which sets forth the conditions needed to apply the proportional amortization method. The amendments make certain limited changes to those conditions to clarify their application to a broader group of tax credit investment programs. However, the conditions in substance remain consistent with current GAAP. The amendments in ASU 2023-02 also eliminate certain LIHTC-specific guidance to align the accounting more closely with the accounting for other equity investments in tax credit structures and require that the delayed equity contribution guidance in paragraph ASC 323-740-25-3 apply only to tax equity investments accounted for using the proportional amortization method. The Company adopted ASU 2023-02 on January 1, 2024, which did not have a significant impact on the Company’s consolidated financial statements. Accounting Standards Issued But Not Yet Adopted In October 2023, the FASB issued ASU No. 2023-06, Disclosure Improvements - Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative (“ASU 2023-06”), amending disclosure or presentation requirements related to various subtopics in the FASB’s ASC. ASU 2023-06 was issued in response to the SEC’s initiative to update and simplify disclosure requirements. The SEC identified 27 disclosure requirements that were incremental to those in the ASC and referred them to the FASB for potential incorporation into GAAP. To avoid duplication, the SEC intended to eliminate those disclosure requirements from existing SEC regulations as the FASB incorporated them into the relevant ASC subtopics. ASU 2023-06 adds 14 of the 27 identified disclosure or presentation requirements to the ASC. ASU 2023-06 is to be applied prospectively, and early adoption is prohibited. For reporting entities subject to the SEC’s existing disclosure requirements, the effective dates of ASU 2023-06 will be the date on which the SEC’s removal of that related disclosure requirement from Regulation S-X or Regulation S-K becomes effective. If by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the ASC and will not become effective for any entities. ASU 2023-06 is not expected to have a significant impact on the Company’s consolidated financial statements. In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures (“ASU 2023-07”), amending disclosure requirements related to segment reporting primarily through enhanced disclosure about significant segment expenses and by requiring disclosure of segment information on an annual and interim basis. ASU 2023-07 is effective January 1, 2024 and for interim periods beginning after December 15, 2024. The key amendments: (i) require that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (the “CODM”) and included within each reported measure of segment profit or loss; (ii) require that a public entity disclose, on an annual and interim basis, an amount for other segment items by reportable segment and a description of its composition; (iii) require that a public entity provide all annual disclosures about a reportable segment’s profit or loss currently required by GAAP in interim periods as well; (iv) clarify that if the CODM uses more than one measure of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources, an entity may report one or more of those additional measures of segment profit; (v) require that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure of segment profit or loss in assessing segment performance and deciding how to allocate resources; and (vi) require that a public entity that has a single reportable segment provide all the disclosures required by the amendments in the ASU and all existing segment disclosures. The requirements of this standard for such entities will apply beginning with the Company’s annual report for the year ending December 31, 2024. The Company has one reportable segment and ASU 2023-07 is not expected to have a significant impact on the Company’s consolidated financial statements. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures (“ASU 2023-09”), which enhances the transparency and decision usefulness of income tax disclosures. ASU 2023-09 will require disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. Entities will also be required to disclose income/(loss) from continuing operations before income tax expense/(benefit) disaggregated between domestic and foreign, as well as income tax expense/(benefit) from continuing operations disaggregated by federal, state, and foreign. ASU 2023-09 is effective January 1, 2025 and is not expected to have a significant impact on the Company’s consolidated financial statements. In March 2024, the FASB issued ASU 2024-02, Codification Improvements - Amendments to Remove References to the Concepts Statements (“ASU 2024-02”). ASU 2024-02 contains amendments to the ASC that remove references to various Concepts Statements. In most instances, the references are extraneous and not required to understand or apply the guidance. In other instances, the references were used in prior Statements to provide guidance in certain topical areas. FASB Concepts Statements are nonauthoritative. Removing all references to Concepts Statements in the guidance is intended to simplify the ASC and draw a distinction between authoritative and nonauthoritative literature. ASU 2024-02 is effective January 1, 2025 and is not expected to have a significant impact on the Company’s consolidated financial statements.
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Fair Value of Assets and Liabilities |
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Fair Value of Assets and Liabilities | Fair Value of Assets and Liabilities Fair Value Hierarchy and Fair Value Measurement Accounting standards require the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard 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 Company has the ability to access as of the measurement date. Level 2: Significant other 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 the Company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. The fair values of securities are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). The following table summarizes the Company’s assets and liabilities that were required to be recorded at fair value on a recurring basis.
Available-for-sale securities are recorded at fair value on a recurring basis. When available, quoted market prices (Level 1 inputs) are used to determine the fair value of available-for-sale securities. If quoted market prices are not available, management obtains pricing information from a reputable third-party service provider, who may utilize valuation techniques that use current market-based or independently sourced parameters, such as bid/ask prices, dealer-quoted prices, interest rates, benchmark yield curves, prepayment speeds, probability of default, loss severity, and credit spreads (Level 2 inputs). Level 2 securities include U.S. agencies’ or government-sponsored agencies’ debt securities, mortgage-backed securities, government agency-issued bonds, privately issued collateralized mortgage obligations, and corporate bonds. Level 3 securities are based on unobservable inputs that are supported by little or no market activity. In addition, values use discounted cash flow models and may include significant management judgment and estimation. As of March 31, 2024 and December 31, 2023, there were no Level 1 available-for-sale securities and no transfers between Level 1 and Level 2 classifications for assets or liabilities measured at fair value on a recurring basis. On a recurring basis, derivative financial instruments are recorded at fair value, which is based on the income approach using observable Level 2 market inputs, reflecting market expectations of future interest rates as of the measurement date. Standard valuation techniques are used to calculate the present value of the future expected cash flows assuming an orderly transaction. Valuation adjustments may be made to reflect both the Company’s credit risk and the counterparties’ credit risk in determining the fair value of the derivatives. A similar credit risk adjustment, correlated to the credit standing of the counterparty, is made when collateral posted by the counterparty does not fully cover their liability to the Company. Certain financial assets may be measured at fair value on a non-recurring basis. These assets are subject to fair value adjustments that result from the application of the lower of cost or fair value accounting or write-downs of individual assets, such as collateral dependent loans and other real estate owned. As of March 31, 2024 and December 31, 2023, the carrying amount of assets measured at fair value on a non-recurring basis was immaterial to the Company. Disclosures about Fair Value of Financial Instruments The table below is a summary of fair value estimates for financial instruments as of March 31, 2024 and December 31, 2023. The carrying amounts in the following table are recorded in the consolidated balance sheets under the indicated captions. Further, management has not disclosed the fair value of financial instruments specifically excluded from disclosure requirements, such as BOLI.
The following methods and assumptions were used by the Company to estimate the fair value of its financial instruments at March 31, 2024 and December 31, 2023: Cash and cash equivalents and time deposits in banks: The carrying amount is estimated to be fair value due to the liquid nature of the assets and their short-term maturities. Investment securities: See discussion above for the methods and assumptions used by the Company to estimate the fair value of investment securities. Fair value of held-to-maturity securities is estimated by calculating the net present value of future cash flows based on observable market data, such as interest rates and yield curves (observable at commonly quoted intervals) as provided by an independent third party. Loans held for sale: The fair value is based on what secondary markets are currently offering for portfolios with similar characteristics. Loans held for investment, net of allowance for credit losses: For variable rate loans that reprice frequently with no significant change in credit risk, fair values are based on carrying values. Fair values for other loans are estimated using discounted cash flow analyses, which use interest rates being offered at each reporting date for loans with similar terms to borrowers of comparable creditworthiness without considering widening credit spreads due to market illiquidity, which approximates the exit price notion. The allowance for credit losses is considered to be a reasonable estimate of loan discount for credit quality concerns. FHLB stock and other investments: Carrying amounts of these investments are reasonable estimates of fair value because the securities are restricted to member banks and do not have a readily determinable market value. Derivatives - interest rate swap: See above for a discussion of the methods and assumptions used by the Company to estimate the fair value of derivatives. Commitments to extend credit: These are primarily for adjustable rate loans and there are no differences between the committed amounts and their fair values. Commitments to fund fixed rate loans are at rates which approximate fair value at each reporting date. Time deposits: The fair value is estimated using a discounted cash flow analysis that uses interest rates offered at each reporting date by the Company for certificates with similar remaining maturities, resulting in a Level 2 classification. Subordinated notes: The fair value is estimated by discounting the future cash flow using the current three-month CME Term SOFR. The Company’s subordinated notes are not registered securities and were issued through private placements, resulting in a Level 3 classification. The notes are recorded at carrying value. Other borrowings: The carrying amount is estimated to be fair value.
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Investment Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities | Investment Securities The Company’s investment securities portfolio includes obligations of states and political subdivisions, securities issued by U.S. federal government agencies, such as the SBA, and securities issued by U.S. GSEs, such as the FNMA, the FHLMC, and the FHLB. The Company also invests in residential and commercial mortgage-backed securities, collateralized mortgage obligations issued or guaranteed by GSEs, and corporate bonds, as reflected in the following tables. A summary of the amortized cost and fair value related to securities held-to-maturity as of March 31, 2024 and December 31, 2023 is presented below.
For securities issued by states and political subdivisions, for purposes of evaluating whether to recognize credit loss expense, management considers: (i) issuer and/or guarantor credit ratings; (ii) historical probability of default and loss given default rates for given bond ratings and remaining maturity; (iii) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities; (iv) internal credit review of the financial information; and (v) whether or not such securities have credit enhancements such as guarantees, contain a defeasance clause, or are pre-refunded by the issuers. A summary of the amortized cost and fair value related to securities available-for-sale as of March 31, 2024 and December 31, 2023 is presented below.
The amortized cost and fair value of investment securities by contractual maturity at March 31, 2024 and December 31, 2023 are shown below. Expected maturities may differ from contractual maturities if the issuers of the securities have the right to call or prepay obligations with or without call or prepayment penalties.
There were no purchases or sales of investment securities during the three months ended March 31, 2024 and March 31, 2023. Pledged investment securities are shown in the following table:
The following table details the gross unrealized losses and fair values aggregated by investment category and length of time that individual available-for-sale securities have been in a continuous unrealized loss position at March 31, 2024 and December 31, 2023:
There were 150 and 149 available-for-sale securities in unrealized loss positions at March 31, 2024 and December 31, 2023, respectively. As of March 31, 2024, the investment portfolio included 144 investment securities that had been in a continuous loss position for twelve months or more and six investment securities that had been in a loss position for less than twelve months. There was one held-to-maturity security in a continuous unrealized loss position at March 31, 2024 and December 31, 2023, which had been in a continuous loss position for more than twelve months. Obligations issued or guaranteed by government agencies such as the GNMA and the SBA or GSEs under conservatorship such as the FNMA and the FHLMC, are guaranteed or sponsored by agencies of the U.S. government and have strong credit profiles. The Company therefore expects to receive all contractual interest payments on time and believes the risk of credit losses on these securities is remote. The Company’s investment in obligations of states and political subdivisions are deemed credit worthy after management’s comprehensive analysis of the issuers’ latest financial information, credit ratings by major credit agencies, and/or credit enhancements. Non-Marketable Securities Included in Other Assets FHLB capital stock: As a member of the FHLB, the Company is required to maintain a minimum investment in FHLB capital stock determined by the board of directors of the FHLB. The minimum investment requirements can increase in the event the Company increases its total asset size or borrowings with the FHLB. Shares cannot be purchased or sold except between the FHLB and its members at the $100 per share par value. The Company held $15.0 million of FHLB stock at March 31, 2024 and December 31, 2023. The carrying amounts of these investments are reasonable estimates of fair value because the securities are restricted to member banks and do not have a readily determinable market value. Based on management’s analysis of the FHLB’s financial condition and certain qualitative factors, management determined that the FHLB stock was not impaired at March 31, 2024 and December 31, 2023.
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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 Company’s loan portfolio is its largest class of earning assets and typically provides higher yields than other types of earning assets. Associated with the higher yields is an inherent amount of credit risk which the Company attempts to mitigate through strong underwriting practices. The following table presents the balance of each major product type within the Company’s portfolio as of the dates indicated.
Underwriting Commercial loans: Commercial loans are underwritten after evaluating and understanding the borrower’s ability to operate profitably and prudently expand its business. Underwriting standards are designed to promote relationship banking rather than transactional banking. Once it is determined that the borrower’s management possesses sound ethics and solid business acumen, the Company’s management examines current and projected cash flows to determine the ability of the borrower to repay its obligations as agreed. Commercial loans are primarily made based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected, and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the assets being financed or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee; however, some short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers. Real estate loans: Real estate loans are subject to underwriting standards and processes similar to commercial loans. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts, and the repayment of these loans is generally largely dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected than other loans by conditions in the real estate market or in the general economy. The properties securing the Company’s commercial real estate portfolio are diverse in terms of type. This diversity helps reduce the Company’s exposure to adverse economic events that affect any single market or industry. Management monitors and evaluates commercial real estate loans based on collateral, geography, and risk grade criteria. Construction loans: With respect to construction loans that the Company may originate from time to time, the Company generally requires the borrower to have had an existing relationship with the Company and have a proven record of success. Construction loans may be underwritten utilizing feasibility studies, independent appraisal reviews, sensitivity analysis of absorption and lease rates, and financial analysis of the developers and property owners. Construction loans are generally based upon estimates of costs and value associated with the completed project. These estimates may be inaccurate. Construction loans often involve the disbursement of substantial funds with repayment substantially dependent on the ultimate success of the project. Sources of repayment for these types of loans may be pre-committed permanent loans from approved long-term lenders, sales of developed property, or an interim loan commitment from the Company until permanent financing is obtained. These loans are closely monitored using on-site inspections and are generally considered to have higher risks than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, governmental regulation of real property, general economic conditions, and the availability of long-term financing. Residential real estate loans: Residential real estate loans are underwritten based upon the borrower’s income, credit history, and collateral. To monitor and manage residential loan risk, policies and procedures are developed and modified, as needed. This activity, coupled with relatively small loan amounts that are spread across many individual borrowers, minimizes risk. Underwriting standards for home loans are heavily influenced by statutory requirements, which include, but are not limited to, a maximum loan-to-value percentage, collection remedies, the number of such loans a borrower can have at one time, and documentation requirements. Farmland loans: Farmland loans are generally made to producers and processors of crops and livestock. Repayment is primarily from the sale of an agricultural product or service. Farmland loans are secured by real property and are susceptible to changes in market demand for specific commodities. This may be exacerbated by, among other things, industry changes, changes in the individual financial capacity of the business owner, general economic conditions, and changes in business cycles, as well as adverse weather conditions. Consumer loans: The Company purchased consumer loans underwritten utilizing credit scoring analysis to supplement the underwriting process. To monitor and manage consumer loan risk, policies and procedures are developed and modified, as needed. This activity, coupled with relatively small loan amounts that are spread across many individual borrowers, minimizes risk. Underwriting standards for home equity loans are heavily influenced by statutory requirements, which include, but are not limited to, a maximum loan-to-value percentage, collection remedies, the number of such loans a borrower can have at one time, and documentation requirements. Credit Quality Indicators The Company has established a loan risk rating system to measure and monitor the quality of the loan portfolio. All loans are assigned a risk rating from the inception of the loan until the loan is paid off. The primary loan grades are as follows: Loans rated pass: These are loans to borrowers with satisfactory financial support, repayment capacity, and credit strength. Borrowers in this category demonstrate fundamentally sound financial positions, repayment capacity, credit history, and management expertise. Loans in this category must have an identifiable and stable source of repayment and meet the Company’s policy regarding debt service coverage ratios. These borrowers are capable of sustaining normal economic, market, or operational setbacks without significant financial impacts and their financial ratios and trends are acceptable. Negative external industry factors are generally not present. The loan may be secured, unsecured, or supported by non-real estate collateral for which the value is more difficult to determine and/or marketability is more uncertain. Loans rated watch: These are loans which have deficient loan quality and potentially significant issues, but losses do not appear to be imminent, and the issues may be temporary in nature. The significant issues are typically: (i) a history of losses or events that threaten the borrower’s viability; (ii) a property with significant depreciation and/or marketability concerns; or (iii) poor or deteriorating credit, occasional late payments, and/or limited reserves but the loan is generally kept current. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Company’s credit position at some future date. Loans rated substandard: These are loans which are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged (if any). Loans so classified exhibit a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. Loans are characterized by the distinct possibility that the Company may sustain some loss if the deficiencies are not corrected. Loans rated doubtful: These are loans for which the collection or liquidation of the entire debt is highly questionable or improbable. Typically, the possibility of loss is extremely high. The losses on these loans are deferred until all pending factors have been addressed. The amortized cost basis of the Company’s loans by origination year, where origination is defined as the later of origination or renewal date, and credit quality indicator as of the period indicated was as follows:
Management regularly reviews the Company’s loans for accuracy of risk grades whenever new information is received. Borrowers are generally required to submit financial information at regular intervals. Typically, commercial borrowers with lines of credit are required to submit financial information with reporting intervals generally ranging from monthly to annually depending on credit size, risk, and complexity. In addition, investor commercial real estate borrowers with loans exceeding a certain dollar threshold are usually required to submit rent rolls or property income statements annually. Management monitors construction loans monthly and reviews consumer loans based on delinquency. Management also reviews loans graded “watch” or worse, regardless of loan type, no less than quarterly. The age analysis of past due loans by class as of March 31, 2024 consisted of the following:
There were no loans greater than 90 days past due and still accruing interest income as of March 31, 2024. The age analysis of past due loans by class as of December 31, 2023 consisted of the following:
There were no loans greater than 90 days past due and still accruing interest income as of December 31, 2023. No collateral dependent loans were in process of foreclosure at March 31, 2024 or December 31, 2023. Non-accrual loans, segregated by class, were as follows as of March 31, 2024 and December 31, 2023:
No interest income was recognized on non-accrual loans in the three months ended March 31, 2024 or March 31, 2023. Non-accrual real estate loans did not have an allowance for credit losses as of March 31, 2024. Interest income can be recognized on non-accrual loans in cases where resolution occurs through a sale or full payment is received on the non-accrual loan. The amount of foregone interest income related to non-accrual loans was $39.2 thousand for the three months ended March 31, 2024, as compared to $9.1 thousand for the three months ended March 31, 2023. Allowance for Credit Losses - Loans The following table discloses activity in the allowance for credit losses - loans for the three months ended March 31, 2024.
The following table discloses activity in the allowance for credit losses - loans for the three months ended March 31, 2023.
Unfunded Loan Commitment Reserves Unfunded loan commitment reserves are included in “Interest payable and other liabilities” in the unaudited consolidated balance sheets. Provisions for unfunded loan commitments are included in “Provision for credit losses” in the unaudited consolidated statements of income.
Pledged Loans The Company’s FHLB line of credit is secured under terms of a collateral agreement by a pledge of certain qualifying loans with unpaid principal balances of $1.7 billion at March 31, 2024 and December 31, 2023. In addition, the Company pledges eligible tenants in common loans, which totaled $1.2 billion at March 31, 2024 and December 31, 2023, to secure its borrowing capacity with the Federal Reserve Discount Window. See Note 6, Long Term Debt and Other Borrowings, for further discussion of these borrowings.
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Interest-Bearing Deposits |
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Interest-Bearing Deposits | Interest-Bearing Deposits Interest-bearing deposits consisted of the following as of March 31, 2024 and December 31, 2023:
Time deposits totaled $288.2 million and $466.6 million as of March 31, 2024 and December 31, 2023, respectively. As of March 31, 2024, scheduled maturities of time deposits for the next five years were as follows:
Total deposits include deposits offered through the IntraFi Network that are comprised of Certificate of Deposit Account Registry Service® (“CDARS”) balances included in time deposits and Insured Cash Sweep® (“ICS”) balances included in money market and interest checking deposits. Through this network, the Company offers customers access to FDIC-insured deposit products in aggregate amounts exceeding current insurance limits. When funds are deposited through CDARS and ICS on behalf of a customer, the Company has the option of receiving matching deposits through the network’s reciprocal deposit program or placing deposits “one-way,” for which the Company receives no matching deposits. The Company considers the reciprocal deposits to be in-market deposits, as distinguished from traditional out-of-market brokered deposits. There were no one-way deposits at March 31, 2024 and December 31, 2023. The composition of network deposits as of March 31, 2024 and December 31, 2023 was as follows:
Interest expense recognized on interest-bearing deposits for periods ended March 31, 2024 and 2023 consisted of the following:
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Long Term Debt and Other Borrowings |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long Term Debt and Other Borrowings | Long Term Debt and Other Borrowings Subordinated notes: On August 17, 2022, the Company completed a private placement of $75.0 million of fixed-to-floating rate subordinated notes to certain qualified investors, of which $19.3 million was purchased by existing or former members of the board of directors and their affiliates. The notes will be used for capital management and general corporate purposes, including, without limitation, the redemption of existing subordinated notes. The subordinated notes have a maturity date of September 1, 2032 and bear interest, payable semi-annually, at the rate of 6.00% per annum until September 1, 2027. On that date, the interest rate will be adjusted to float at a rate equal to the three-month Term SOFR plus 329.0 basis points (8.58% as of March 31, 2024) until maturity. The notes include a right of prepayment, on or after August 17, 2027 or, in certain limited circumstances, before that date. The indebtedness evidenced by the subordinated notes, including principal and interest, is unsecured and subordinate and junior in right to payment to general and secured creditors and depositors of the Company. The subordinated notes have been structured to qualify as Tier 2 capital for the Company for regulatory capital purposes. Eligible amounts will be phased out by 20% per year beginning five years before the maturity date of the notes. Debt issuance costs incurred in conjunction with the notes were $1.5 million, of which $0.2 million has been amortized as of March 31, 2024. The Company reflects debt issuance costs as a direct deduction from the face of the note. The debt issuance costs are amortized into interest expense through the maturity period. At March 31, 2024 and December 31, 2023, the carrying value of the Company’s subordinated notes outstanding was $73.8 million and $73.7 million, respectively. Other borrowings: The Company entered into an agreement with the FHLB which granted the FHLB a blanket lien on certain loans receivable as collateral for a borrowing line. The Company’s total financing availability is based on the dollar volume of qualifying loan collateral. The Company’s total financing availability with the FHLB is decreased by outstanding borrowings and letters of credit (“LCs”) issued on behalf of the Company, as follows:
At March 31, 2024 and December 31, 2023, the Company had a borrowing line available from the Federal Reserve Discount Window. The borrowing line is secured by certain liens on the Company’s loans and certain available-for-sale securities. The Company’s financing availability with the Federal Reserve Discount Window is as follows:
At March 31, 2024 and December 31, 2023, the Company had five unsecured federal funds lines of credit with its correspondent banks totaling $175.0 million. There were no amounts outstanding at March 31, 2024 and December 31, 2023.
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Shareholders’ Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity | Shareholders’ Equity (a) EPS Basic EPS is net income divided by the weighted average number of common shares outstanding during the period less average unvested restricted stock awards (“RSAs”). Diluted EPS includes the dilutive effect of additional potential common shares related to unvested RSAs using the treasury stock method. The Company has two forms of outstanding common stock: common stock and unvested RSAs. Holders of unvested RSAs receive non-forfeitable dividends at the same rate as common shareholders and they both share equally in undistributed earnings, and therefore the RSAs are considered participating securities. However, under the two-class method, the difference in EPS is not significant for these participating securities.
The Company did not have any anti-dilutive shares at March 31, 2024 or March 31, 2023. (b) Dividends On January 18, 2024, the board of directors declared a $0.20 per common share dividend, totaling $3.5 million. (c) Stock-Based Incentive Arrangement The Company’s stock-based compensation consists of RSAs granted under its historical stock-based incentive arrangement (the “Historical Incentive Plan”) and RSAs issued under the Five Star Bancorp 2021 Equity Incentive Plan (the “Equity Incentive Plan”). The Historical Incentive Plan consisted of RSAs for certain executive officers of the Company. The arrangement provided that these executive officers would receive shares of restricted common stock of the Company that vested over three years, with the number of shares granted based upon achieving certain performance objectives. These objectives included, but were not limited to, net income adjusted for the provision for credit losses, deposit growth, efficiency ratio, net interest margin, and asset quality. Compensation expense for RSAs granted under the Historical Incentive Plan is recognized over the service period, which is equal to the vesting period of the shares based on the fair value of the shares at issue date. In connection with its IPO in May 2021, the Company granted RSAs under the Equity Incentive Plan to certain employees, officers, executives, and non-employee directors. Shares granted to non-employee directors vested immediately upon grant, while shares granted to certain employees, officers, and executives vest ratably over , , or seven years (as defined in the respective agreements). Since the completion of the IPO, the Company has granted RSAs under the Equity Incentive Plan to certain executives and directors, which vest annually over three years and over one year, respectively. All RSAs were granted at the fair value of common stock at the time of the award. The RSAs are considered fixed awards, as the number of shares and fair value are known at the date of grant and the fair value at the grant date is amortized over the service period. Non-cash stock compensation expense recognized for the three months ended March 31, 2024 and 2023 was $0.3 million and $0.2 million, respectively. At March 31, 2024 and 2023, there were 162,348 and 108,363 unvested restricted shares, respectively. As of March 31, 2024, there was approximately $2.9 million of unrecognized compensation expense related to the 162,348 unvested restricted shares. The holders of unvested RSAs are entitled to dividends at the same per-share ratio as holders of common stock. Tax benefits for dividends paid on unvested RSAs are recorded as tax benefits in the consolidated statements of income with a corresponding decrease to current taxes payable. Such tax benefits are expected to be recognized over the weighted average term remaining on the unvested restricted shares of 3.37 years as of March 31, 2024. The impact of tax benefits for dividends paid on unvested restricted stock on the Company’s unaudited consolidated statements of income for the three months ended March 31, 2024 and 2023 was immaterial. The following table summarizes activity related to restricted shares for the periods indicated:
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Financial Instruments with Off-Balance Sheet Risk Some financial instruments, such as 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, and usually have expiration dates. Commitments may expire without being used. Substantially all of these commitments are at variable interest rates, based on an index, and have fixed expiration dates. Off-balance sheet risk to loan loss exists up to the face amount of these instruments, although material losses are not anticipated. The Company uses the same credit policies in making commitments to originate loans and lines of credit as it does for on-balance sheet instruments, including obtaining collateral at exercise of the commitment. The contractual amounts of unfunded loan commitments and standby letters of credit not reflected in the unaudited consolidated balance sheets were as follows:
The Company records an allowance for credit losses on unfunded loan commitments at the consolidated balance sheet date based on estimates of the probability that these commitments will be drawn upon according to historical utilization experience of the different types of commitments and historical loss rates determined for pooled funded loans. The allowance for credit losses on unfunded commitments totaled $1.1 million as of March 31, 2024 and $1.2 million as of December 31, 2023, which is recorded in “Interest payable and other liabilities” in the unaudited consolidated balance sheets. Concentrations of credit risk: The Company grants real estate mortgage, real estate construction, commercial, and consumer loans to customers primarily in Northern California. Although the Company has a diversified loan portfolio, a substantial portion is secured by commercial and residential real estate. In management’s judgment, a concentration of loans exists in real estate related loans, which represented approximately 91.86% of the Company’s loan portfolio at March 31, 2024 and 92.30% of the Company’s loan portfolio at December 31, 2023. Although management believes such concentrations have no more than the normal risk of collectability, a substantial decline in the economy in general, or a decline in real estate values in the Company’s primary market areas in particular, could have an adverse impact on the collectability of these loans. Personal and business incomes represent the primary source of repayment for the majority of these loans. Deposit concentrations: At March 31, 2024, the Company had 92 deposit relationships that exceeded $5.0 million each, totaling $1.7 billion, or approximately 57.63% of total deposits. The Company’s largest single deposit relationship at March 31, 2024 totaled $200.9 million, or approximately 6.80% of total deposits. Management maintains the Company’s liquidity position and lines of credit with correspondent banks to mitigate the risk of large withdrawals by this group of large depositors. Contingencies: The Company is subject to legal proceedings and claims which arise in the ordinary course of business. In the opinion of management, the amount of ultimate liability with respect to such actions will not materially affect the consolidated financial position or results of operations of the Company. Correspondent banking agreements: The Company maintains funds on deposit with other FDIC-insured financial institutions under correspondent banking agreements. Uninsured deposits through these agreements totaled approximately $24.7 million and $22.3 million at March 31, 2024 and December 31, 2023, respectively. Litigation Matters The Company is subject to legal proceedings and claims which arise in the ordinary course of business. In the opinion of management, the amount of ultimate liability with respect to such actions will not materially affect the consolidated financial position or results of operations of the Company.
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Subsequent Events |
3 Months Ended |
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Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On April 18, 2024, the Board of Directors of the Company authorized a cash dividend of $0.20 per common share, payable on May 13, 2024 to shareholders of record as of May 6, 2024. On March 28, 2024, the Company entered into an underwriting agreement with Keefe, Bruyette & Woods, Inc., as representative of the several underwriters named in Schedule I thereto (the “Underwriters”), to issue and sell up to 3,967,500 shares of common stock, including up to 517,500 shares that could be purchased by the Underwriters pursuant to a 30-day option granted to the Underwriters by the Company, at a public offering price of $21.75 per share (the “2024 Public Offering”). On April 2, 2024, the Company closed the 2024 Public Offering and issued 3,450,000 shares of its common stock, and on April 10, 2024, the Company issued an additional 517,500 shares of its common stock to the Underwriters, pursuant to the Underwriters’ full exercise of their option to purchase additional shares. When combined with the shares sold in the closing that occurred on April 2, 2024, the Company sold an aggregate of 3,967,500 shares of its common stock at a public offering price of $21.75 per share. The net proceeds to the Company, after deducting underwriting discounts, commissions, and estimated offering expenses of approximately $0.7 million, were approximately $80.8 million. The Company has a shelf registration statement on file with the SEC registering $250.0 million for any combination of equity or debt securities, depository shares, warrants, purchase contracts, purchase units, subscription rights, and units in one or more offerings. The 2024 Public Offering used $86.3 million of the Company’s shelf registration statement on file with the SEC.
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2024 |
Mar. 31, 2023 |
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Pay vs Performance Disclosure | ||
Net income | $ 10,631 | $ 13,161 |
Insider Trading Arrangements |
3 Months Ended |
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Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Basis of Presentation and Summary of Significant Accounting Policies (Policies) |
3 Months Ended |
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Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Five Star Bank (the “Bank”) was chartered on October 26, 1999 and began operations on December 20, 1999. Five Star Bancorp (“Bancorp” or the “Company”) was incorporated on September 16, 2002 and subsequently obtained approval from the Federal Reserve to be a bank holding company in connection with its acquisition of the Bank. The Company became the sole shareholder of the Bank on June 2, 2003 in a statutory merger, pursuant to which each outstanding share of the Bank’s common stock was exchanged for one share of common stock of the Company. The Company, through the Bank, provides financial services to customers who are predominately small and middle-market businesses, professionals, and individuals residing in the Northern California region. The Company’s primary loan products are commercial real estate loans, land development loans, construction loans, and operating lines of credit, and its primary deposit products are checking accounts, savings accounts, money market accounts, and term certificate accounts. The Bank currently has seven branch offices in Roseville, Natomas, Rancho Cordova, Redding, Elk Grove, Chico, and Yuba City.
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Basis of Financial Statement Presentation and Consolidation and Emerging Growth Company | Basis of Financial Statement Presentation and Consolidation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) as contained within the Financial Accounting Standards Board’s (“FASB”) ASC and the rules and regulations of the SEC, including the instructions to Regulation S-X. These interim unaudited consolidated financial statements reflect all adjustments (consisting solely of normal recurring adjustments and accruals) which, in the opinion of management, are necessary for a fair presentation of financial position, results of operations and comprehensive income, changes in shareholders’ equity, and cash flows for the interim periods presented. These unaudited consolidated financial statements have been prepared on a basis consistent with, and should be read in conjunction with, the audited consolidated financial statements as of and for the year ended December 31, 2023, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Annual Report on Form 10-K”), which was filed with the SEC on February 23, 2024. The unaudited consolidated financial statements include Bancorp and its wholly owned subsidiary, the Bank. All significant intercompany transactions and balances are eliminated in consolidation. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results of operations that may be expected for any other interim period or for the year ending December 31, 2024. The Company’s accounting and reporting policies conform to GAAP and to general practices within the banking industry. Emerging Growth CompanyThe Company qualifies as an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012, and, as such, may take advantage of specified reduced reporting requirements and deferred accounting standards adoption dates, and is relieved of other significant requirements that are otherwise generally applicable to other public companies. The Company will remain an emerging growth company for five years after its IPO date of May 5, 2021, unless one of the following occurs: (i) total annual gross revenues are $1.235 billion or more; (ii) the Company issues more than $1 billion in non-convertible debt; or (iii) the Company becomes a large accelerated filer with a public float of more than $0.7 billion.
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Segments | Segments While the Company’s chief decision-makers monitor the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Discrete financial information is not available other than on a Company-wide basis. Accordingly, all of the financial service operations are considered by management to be aggregated in one reportable operating segment.
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Recently Issued Accounting Standards, Accounting Standards Implemented, and Accounting Standards Issued But Not Yet Adopted | Recently Issued Accounting Standards The following information reflects recent accounting standards that have been adopted or are pending adoption by the Company. The Company qualifies as an emerging growth company and, as such, has elected to use the extended transition period for complying with new or revised accounting standards and is not subject to the new or revised accounting standards applicable to public companies during the extended transition period. The accounting standards discussed below indicate effective dates for the Company as an emerging growth company using the extended transition period. Accounting Standards Adopted in 2024 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 (“ASU 2023-02”). Under current GAAP, an entity can only elect to apply the proportional amortization method to investments in low income housing tax credit (“LIHTC”) structures. The amendments in ASU 2023-02 allow entities to elect to account for equity investments made primarily for the purpose of receiving income tax credits using the proportional amortization method, regardless of the tax credit program through which the investment earns income tax credits, if certain conditions are met. ASU 2023-02 provides amendments to paragraph ASC 323-740-25-1, which sets forth the conditions needed to apply the proportional amortization method. The amendments make certain limited changes to those conditions to clarify their application to a broader group of tax credit investment programs. However, the conditions in substance remain consistent with current GAAP. The amendments in ASU 2023-02 also eliminate certain LIHTC-specific guidance to align the accounting more closely with the accounting for other equity investments in tax credit structures and require that the delayed equity contribution guidance in paragraph ASC 323-740-25-3 apply only to tax equity investments accounted for using the proportional amortization method. The Company adopted ASU 2023-02 on January 1, 2024, which did not have a significant impact on the Company’s consolidated financial statements. Accounting Standards Issued But Not Yet Adopted In October 2023, the FASB issued ASU No. 2023-06, Disclosure Improvements - Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative (“ASU 2023-06”), amending disclosure or presentation requirements related to various subtopics in the FASB’s ASC. ASU 2023-06 was issued in response to the SEC’s initiative to update and simplify disclosure requirements. The SEC identified 27 disclosure requirements that were incremental to those in the ASC and referred them to the FASB for potential incorporation into GAAP. To avoid duplication, the SEC intended to eliminate those disclosure requirements from existing SEC regulations as the FASB incorporated them into the relevant ASC subtopics. ASU 2023-06 adds 14 of the 27 identified disclosure or presentation requirements to the ASC. ASU 2023-06 is to be applied prospectively, and early adoption is prohibited. For reporting entities subject to the SEC’s existing disclosure requirements, the effective dates of ASU 2023-06 will be the date on which the SEC’s removal of that related disclosure requirement from Regulation S-X or Regulation S-K becomes effective. If by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the ASC and will not become effective for any entities. ASU 2023-06 is not expected to have a significant impact on the Company’s consolidated financial statements. In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures (“ASU 2023-07”), amending disclosure requirements related to segment reporting primarily through enhanced disclosure about significant segment expenses and by requiring disclosure of segment information on an annual and interim basis. ASU 2023-07 is effective January 1, 2024 and for interim periods beginning after December 15, 2024. The key amendments: (i) require that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (the “CODM”) and included within each reported measure of segment profit or loss; (ii) require that a public entity disclose, on an annual and interim basis, an amount for other segment items by reportable segment and a description of its composition; (iii) require that a public entity provide all annual disclosures about a reportable segment’s profit or loss currently required by GAAP in interim periods as well; (iv) clarify that if the CODM uses more than one measure of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources, an entity may report one or more of those additional measures of segment profit; (v) require that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure of segment profit or loss in assessing segment performance and deciding how to allocate resources; and (vi) require that a public entity that has a single reportable segment provide all the disclosures required by the amendments in the ASU and all existing segment disclosures. The requirements of this standard for such entities will apply beginning with the Company’s annual report for the year ending December 31, 2024. The Company has one reportable segment and ASU 2023-07 is not expected to have a significant impact on the Company’s consolidated financial statements. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures (“ASU 2023-09”), which enhances the transparency and decision usefulness of income tax disclosures. ASU 2023-09 will require disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. Entities will also be required to disclose income/(loss) from continuing operations before income tax expense/(benefit) disaggregated between domestic and foreign, as well as income tax expense/(benefit) from continuing operations disaggregated by federal, state, and foreign. ASU 2023-09 is effective January 1, 2025 and is not expected to have a significant impact on the Company’s consolidated financial statements. In March 2024, the FASB issued ASU 2024-02, Codification Improvements - Amendments to Remove References to the Concepts Statements (“ASU 2024-02”). ASU 2024-02 contains amendments to the ASC that remove references to various Concepts Statements. In most instances, the references are extraneous and not required to understand or apply the guidance. In other instances, the references were used in prior Statements to provide guidance in certain topical areas. FASB Concepts Statements are nonauthoritative. Removing all references to Concepts Statements in the guidance is intended to simplify the ASC and draw a distinction between authoritative and nonauthoritative literature. ASU 2024-02 is effective January 1, 2025 and is not expected to have a significant impact on the Company’s consolidated financial statements.
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EPS | EPS Basic EPS is net income divided by the weighted average number of common shares outstanding during the period less average unvested restricted stock awards (“RSAs”). Diluted EPS includes the dilutive effect of additional potential common shares related to unvested RSAs using the treasury stock method. The Company has two forms of outstanding common stock: common stock and unvested RSAs. Holders of unvested RSAs receive non-forfeitable dividends at the same rate as common shareholders and they both share equally in undistributed earnings, and therefore the RSAs are considered participating securities. However, under the two-class method, the difference in EPS is not significant for these participating securities.
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Fair Value of Assets and Liabilities (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Fair Value of Assets and Liabilities Measured on Recurring Basis | The following table summarizes the Company’s assets and liabilities that were required to be recorded at fair value on a recurring basis.
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Summary of Fair Value Estimates for Financial Instruments by Balance Sheet Grouping | The table below is a summary of fair value estimates for financial instruments as of March 31, 2024 and December 31, 2023. The carrying amounts in the following table are recorded in the consolidated balance sheets under the indicated captions. Further, management has not disclosed the fair value of financial instruments specifically excluded from disclosure requirements, such as BOLI.
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Investment Securities (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Debt Securities Held-to-maturity | A summary of the amortized cost and fair value related to securities held-to-maturity as of March 31, 2024 and December 31, 2023 is presented below.
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Summary of Debt Securities Available-for-sale | A summary of the amortized cost and fair value related to securities available-for-sale as of March 31, 2024 and December 31, 2023 is presented below.
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Summary of Investment Debt Securities by Contractual Maturity | The amortized cost and fair value of investment securities by contractual maturity at March 31, 2024 and December 31, 2023 are shown below. Expected maturities may differ from contractual maturities if the issuers of the securities have the right to call or prepay obligations with or without call or prepayment penalties.
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Schedule of Pledged Investment Securities | Pledged investment securities are shown in the following table:
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Schedule of Unrealized Losses and Fair Value of Available-for-sale Securities | The following table details the gross unrealized losses and fair values aggregated by investment category and length of time that individual available-for-sale securities have been in a continuous unrealized loss position at March 31, 2024 and December 31, 2023:
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Loans and Allowance for Credit Losses (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts, Notes, Loans and Financing Receivable | The following table presents the balance of each major product type within the Company’s portfolio as of the dates indicated.
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Summary of Credit Quality Indicators | The amortized cost basis of the Company’s loans by origination year, where origination is defined as the later of origination or renewal date, and credit quality indicator as of the period indicated was as follows:
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Summary of Age Analysis of Past Due Loans | The age analysis of past due loans by class as of March 31, 2024 consisted of the following:
The age analysis of past due loans by class as of December 31, 2023 consisted of the following:
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Schedule of Non-accrual Loans | Non-accrual loans, segregated by class, were as follows as of March 31, 2024 and December 31, 2023:
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Disclosure of Activity in the Allowance For Loan Losses | The following table discloses activity in the allowance for credit losses - loans for the three months ended March 31, 2024.
The following table discloses activity in the allowance for credit losses - loans for the three months ended March 31, 2023.
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Interest-Bearing Deposits (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing Deposits | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Interest-Bearing Deposits. | Interest-bearing deposits consisted of the following as of March 31, 2024 and December 31, 2023:
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Time Deposit Maturities | As of March 31, 2024, scheduled maturities of time deposits for the next five years were as follows:
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Schedule of Composition of Network Deposits | The composition of network deposits as of March 31, 2024 and December 31, 2023 was as follows:
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Interest Expense Recognized on Interest-Bearing Deposits | Interest expense recognized on interest-bearing deposits for periods ended March 31, 2024 and 2023 consisted of the following:
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Long Term Debt and Other Borrowings (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Line of Credit Facilities | The Company’s total financing availability with the FHLB is decreased by outstanding borrowings and letters of credit (“LCs”) issued on behalf of the Company, as follows:
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Shareholders’ Equity (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share |
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Nonvested Restricted Stock Shares | The following table summarizes activity related to restricted shares for the periods indicated:
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Commitments and Contingencies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Commitments | The contractual amounts of unfunded loan commitments and standby letters of credit not reflected in the unaudited consolidated balance sheets were as follows:
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Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2024
segment
office
|
Jun. 02, 2003
shares
|
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Bank common stock exchanged for company common stock (in shares) | shares | 1 | |
Number of branch offices | office | 7 | |
Number of reportable segments | segment | 1 |
Investment Securities - Amortized Cost and Fair Value of Securities Held-to-maturity (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Marketable Securities [Line Items] | ||
Amortized Cost | $ 3,000 | $ 3,077 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | (172) | (164) |
Fair Value | 2,828 | 2,913 |
Obligations of states and political subdivisions | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 3,000 | 3,077 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | (172) | (164) |
Fair Value | $ 2,828 | $ 2,913 |
Investment Securities - Pledged Investment Securities (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Marketable Securities [Line Items] | ||
Securities available-for-sale | $ 105,006 | $ 108,083 |
Federal Funds Purchased | ||
Marketable Securities [Line Items] | ||
Securities available-for-sale | 47,939 | 48,964 |
Deposits and Federal Funds Purchased | ||
Marketable Securities [Line Items] | ||
Securities available-for-sale | 101,357 | 104,399 |
CALIFORNIA | Deposits | ||
Marketable Securities [Line Items] | ||
Securities available-for-sale | $ 53,418 | $ 55,435 |
Investment Securities - Narrative (Details) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024
USD ($)
security
$ / shares
|
Dec. 31, 2023
USD ($)
security
|
|
Investments, Debt and Equity Securities [Abstract] | ||
Number of securities in unrealized loss positions | 150 | 149 |
Number of investment securities in a continuous loss position for twelve months or more | 144 | |
Investment securities in a loss position for less than twelve months | 6 | |
Held-to-maturity securities in a continuous loss position for twelve months or less | 1 | |
FHLB stock price (in USD per share) | $ / shares | $ 100 | |
FHLB Stock | $ | $ 15,000 | $ 15,000 |
Loans and Allowance for Credit Losses - Narrative (Details) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2024
USD ($)
loan
|
Mar. 31, 2023
USD ($)
|
Dec. 31, 2023
USD ($)
loan
|
|
Financing Receivable, Past Due [Line Items] | |||
Loans greater than 90 days past due | $ 0 | $ 0 | |
Number of collateral dependent loans in process of foreclosure | loan | 0 | 0 | |
Interest income related to non-accrual loans | $ 39,200 | $ 9,100 | |
Pledged loans | 1,700,000,000 | $ 1,700,000,000 | |
Federal Reserve Bank of San Francisco | |||
Financing Receivable, Past Due [Line Items] | |||
FRB pledged loans | $ 1,200,000,000 |
Loans and Allowance for Credit Losses - Non-accrual Loans Segregated by Class (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Financing Receivable, Past Due [Line Items] | ||
Total non-accrual loans | $ 1,918 | $ 1,965 |
Commercial | ||
Financing Receivable, Past Due [Line Items] | ||
Total non-accrual loans | 1,852 | 1,893 |
Secured | ||
Financing Receivable, Past Due [Line Items] | ||
Total non-accrual loans | $ 66 | $ 72 |
Loans and Allowance for Credit Losses - Unfunded Loan Commitment Reserve (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning Balance | $ 34,431 | $ 28,389 |
Provision | 1,050 | 900 |
Ending Balance | 34,653 | 34,172 |
Cumulative Effect, Period of Adoption, Adjustment | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning Balance | 5,262 | |
Unfunded Loan Commitment | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning Balance | 1,247 | 125 |
Provision | (150) | 0 |
Ending Balance | 1,097 | 1,217 |
Unfunded Loan Commitment | Cumulative Effect, Period of Adoption, Adjustment | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning Balance | $ 0 | $ 1,092 |
Interest Bearing Deposits - Interest-Bearing Deposits (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Dec. 31, 2023 |
|
Interest-bearing Deposits | ||
Interest-bearing transaction accounts | $ 295,799 | $ 320,356 |
Savings accounts | 121,417 | 126,498 |
Money market accounts | 1,433,000 | 1,282,369 |
Time accounts, $250 or more | 221,976 | 344,694 |
Other time accounts | 66,192 | 121,878 |
Total interest-bearing deposits | 2,138,384 | $ 2,195,795 |
Time deposits minimum | $ 250 |
Interest-Bearing Deposits - Narrative (Details) - USD ($) |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Interest-bearing Deposits | ||
Interest-bearing domestic deposit, time deposits | $ 288,168,000 | $ 466,600,000 |
One-way deposits | $ 0 | $ 0 |
Interest Bearing Deposits - Maturities of Time Deposits (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Interest-bearing Deposits | ||
2024 | $ 256,125 | |
2025 | 30,546 | |
2026 | 1,361 | |
2027 | 0 | |
2028 | 136 | |
Total time deposits | $ 288,168 | $ 466,600 |
Interest Bearing Deposits - Composition of Network Deposits (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Interest Bearing Deposits [Line Items] | ||
Total network deposits | $ 629,491 | $ 636,524 |
CDARS | ||
Interest Bearing Deposits [Line Items] | ||
Total network deposits | 18,387 | 16,325 |
ICS | ||
Interest Bearing Deposits [Line Items] | ||
Total network deposits | $ 611,104 | $ 620,199 |
Interest Bearing Deposits - Interest Expense Recognized on Interest-bearing Deposits (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Interest-bearing Deposits | ||
Interest-bearing transaction accounts | $ 1,126 | $ 430 |
Savings accounts | 861 | 545 |
Money market accounts | 12,155 | 5,439 |
Time deposits minimum | 250 | |
Time accounts, $250 or more | 3,824 | 1,963 |
Other time accounts | 1,545 | 1,001 |
Total interest expense on interest-bearing deposits | $ 19,511 | $ 9,378 |
Shareholders' Equity - Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Equity [Abstract] | ||
Net income | $ 10,631 | $ 13,161 |
Basic weighted average common shares outstanding (in shares) | 17,190,867 | 17,150,174 |
Add: Dilutive effects of assumed vesting of restricted stock (in shares) | 82,127 | 44,710 |
Total dilutive weighted average common shares outstanding (in shares) | 17,272,994 | 17,194,884 |
Earnings per common share: | ||
Basic EPS (in USD per share) | $ 0.62 | $ 0.77 |
Diluted EPS (in USD per share) | $ 0.62 | $ 0.77 |
Shareholders' Equity - Summary of Unvested Shares Activity (Details) - Restricted Stock - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Shares | ||
Beginning of the period balance (in shares) | 69,338 | 96,826 |
Shares granted (in shares) | 96,380 | 16,978 |
Shares vested (in shares) | (3,252) | (5,441) |
Shares forfeited (in shares) | (118) | 0 |
End of the period balance (in shares) | 162,348 | 108,363 |
Weighted Average Grant Date Fair Value | ||
Beginning of the period balance (in USD per share) | $ 20.53 | $ 20.34 |
Shares granted (in USD per share) | 21.97 | 28.52 |
Shares vested (in USD per share) | 28.51 | 24.28 |
Shares forfeited (in USD per share) | 20.00 | 0 |
End of the period balance (in USD per share) | $ 21.22 | $ 21.43 |
Commitments and Contingencies - Narrative (Details) $ in Thousands |
Mar. 31, 2024
USD ($)
deposit_relationship
|
Dec. 31, 2023
USD ($)
|
Mar. 31, 2023
USD ($)
|
Dec. 31, 2022
USD ($)
|
---|---|---|---|---|
Other Commitments [Line Items] | ||||
Allowance for credit loss | $ 34,653 | $ 34,431 | $ 34,172 | $ 28,389 |
Real estate related loans (in percent) | 91.86% | 92.30% | ||
Number of deposits | deposit_relationship | 92 | |||
Deposits over five million, total | $ 5,000 | |||
Deposits over five million, amount | $ 1,700,000 | |||
Percentage of deposits over five million deposits (in percent) | 57.63% | |||
Largest single deposit | $ 200,900 | |||
Percentage of largest single deposit to total deposits (in percent) | 6.80% | |||
Uninsured amount | $ 24,700 | $ 22,300 | ||
Unfunded Loan Commitment | ||||
Other Commitments [Line Items] | ||||
Allowance for credit loss | $ 1,097 | $ 1,247 | $ 1,217 | $ 125 |
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