(State or other jurisdiction of incorporation or organization) | (I.R.S. employer identification number) | |||||||
(Address of principal executive offices) | (Zip Code) |
Securities Registered Pursuant to Section 12(b) of the Act | ||||||||||||||
Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | ||||||||||||
Large accelerated filer | o | ☒ | ||||||||||||
Non-accelerated filer | o | Smaller Reporting Company | ||||||||||||
Emerging Growth Company |
Page | ||||||||
PART I - FINANCIAL INFORMATION | ||||||||
Item 1. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
PART II - OTHER INFORMATION | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
September 30, 2023 (unaudited) | December 31, 2022 | ||||||||||
ASSETS | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Available for sale debt securities, at fair value | |||||||||||
Held to maturity debt securities, at amortized cost (fair value of $ | |||||||||||
Equity securities, at fair value | |||||||||||
Loans receivable, net of allowance for credit losses ("ACL") on loans of $ | |||||||||||
Accrued interest receivable | |||||||||||
Federal Home Loan Bank ("FHLB") stock, at cost | |||||||||||
Premises and equipment, net | |||||||||||
Goodwill | |||||||||||
Prepaid expenses and other assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Liabilities: | |||||||||||
Deposits | $ | $ | |||||||||
FHLB advances | |||||||||||
Junior subordinated deferrable interest debentures | |||||||||||
Senior debt | |||||||||||
$ | |||||||||||
Accrued interest payable | |||||||||||
Other liabilities and accrued expenses | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 17) | |||||||||||
Stockholders' equity: | |||||||||||
Preferred stock, no par value; | |||||||||||
Common stock, no par value; | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss, net of taxes | ( | ( | |||||||||
Total stockholders' equity | |||||||||||
Total liabilities and stockholders' equity | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Interest and fee income: | ||||||||||||||||||||||||||
Loans | $ | $ | $ | $ | ||||||||||||||||||||||
Investment securities | ||||||||||||||||||||||||||
Cash and cash equivalents | ||||||||||||||||||||||||||
Total interest and fee income | ||||||||||||||||||||||||||
Interest expense: | ||||||||||||||||||||||||||
Deposits | ||||||||||||||||||||||||||
FHLB advances | ||||||||||||||||||||||||||
Junior subordinated deferrable interest debentures | ||||||||||||||||||||||||||
Senior debt | ||||||||||||||||||||||||||
Total interest expense | ||||||||||||||||||||||||||
Net interest income before provision for credit losses | ||||||||||||||||||||||||||
Provision for credit losses | ||||||||||||||||||||||||||
Net interest income after provision for credit losses | ||||||||||||||||||||||||||
Noninterest income: | ||||||||||||||||||||||||||
FHLB dividends | ||||||||||||||||||||||||||
Other income | ( | ( | ||||||||||||||||||||||||
Total noninterest income | ||||||||||||||||||||||||||
Noninterest expense: | ||||||||||||||||||||||||||
Compensation and related benefits | ||||||||||||||||||||||||||
Deposit insurance premium | ||||||||||||||||||||||||||
Professional and regulatory fees | ||||||||||||||||||||||||||
Occupancy | ||||||||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||||||||
Data processing | ||||||||||||||||||||||||||
Marketing | ||||||||||||||||||||||||||
Other expenses | ||||||||||||||||||||||||||
Total noninterest expense | ||||||||||||||||||||||||||
Income before provision for income taxes | ||||||||||||||||||||||||||
Provision for income taxes | ||||||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Basic earnings per common share | $ | $ | $ | $ | ||||||||||||||||||||||
Diluted earnings per common share | $ | $ | $ | $ | ||||||||||||||||||||||
Dividends per common share | $ | $ | $ | $ | ||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive loss: | |||||||||||||||||||||||
Unrealized loss on available for sale debt securities: | |||||||||||||||||||||||
Unrealized holding loss arising during the period | ( | ( | ( | ( | |||||||||||||||||||
Tax effect | |||||||||||||||||||||||
Total other comprehensive loss, net of tax | ( | ( | ( | ( | |||||||||||||||||||
Comprehensive (loss) income | $ | ( | $ | $ | $ |
Accumulated Other Comprehensive Income (Loss) (Net of Taxes) | Total Stockholders' Equity | ||||||||||||||||||||||||||||
Common Stock | Retained Earnings | Available for Sale Securities | |||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||
Balance, June 30, 2022 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
Net income | — | — | — | ||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | ( | ( | ||||||||||||||||||||||||
Restricted stock award grants | — | — | — | — | |||||||||||||||||||||||||
Settled restricted stock units | — | — | — | — | |||||||||||||||||||||||||
Shares withheld to pay taxes on stock based compensation | ( | ( | — | — | ( | ||||||||||||||||||||||||
Stock based compensation expense | — | — | — | ||||||||||||||||||||||||||
Cash dividends ($ | — | — | ( | — | ( | ||||||||||||||||||||||||
Balance, September 30, 2022 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
Balance, June 30, 2023 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
Net income | — | — | — | ||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | ( | ( | ||||||||||||||||||||||||
Stock based compensation expense | — | — | — | ||||||||||||||||||||||||||
Balance, September 30, 2023 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
Balance, December 31, 2021 | $ | $ | $ | $ | |||||||||||||||||||||||||
Net income | — | — | — | ||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | ( | ( | ||||||||||||||||||||||||
Restricted stock award grants | — | — | — | — | |||||||||||||||||||||||||
Settled restricted stock units | — | — | — | — | |||||||||||||||||||||||||
Shares withheld to pay taxes on stock based compensation | ( | ( | — | — | ( | ||||||||||||||||||||||||
Restricted stock forfeitures | ( | ( | — | ( | |||||||||||||||||||||||||
Stock based compensation expense | — | — | — | ||||||||||||||||||||||||||
Shares repurchased | ( | ( | — | — | ( | ||||||||||||||||||||||||
Cash dividends ($ | — | — | ( | — | ( | ||||||||||||||||||||||||
Balance, September 30, 2022 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
Balance, December 31, 2022 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
Cumulative effect of change in accounting principal (1) | — | — | ( | — | ( | ||||||||||||||||||||||||
Net income | — | — | — | ||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | ( | ( | ||||||||||||||||||||||||
Restricted stock award grants | — | — | — | — | |||||||||||||||||||||||||
Settled restricted stock units | — | — | — | — | |||||||||||||||||||||||||
Shares withheld to pay taxes on stock based compensation | ( | ( | — | — | ( | ||||||||||||||||||||||||
Restricted stock forfeitures | ( | ( | — | ( | |||||||||||||||||||||||||
Stock based compensation expense | — | — | — | ||||||||||||||||||||||||||
Balance, September 30, 2023 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
(1) Represents the impact of the adoption of Accounting Standards Update ("ASU") 2016-13, Financial Instruments – Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments, and the related amendments which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss ("CECL") methodology. |
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Provision for credit losses | |||||||||||
Amortization of deferred loan costs, net | |||||||||||
Amortization of premiums on investment securities, net | |||||||||||
Stock based compensation expense, net of forfeitures | |||||||||||
Change in fair value of mortgage servicing rights | |||||||||||
Change in fair value of equity securities | |||||||||||
Other items, net | |||||||||||
Effect of changes in: | |||||||||||
Accrued interest receivable | ( | ( | |||||||||
Accrued interest payable | |||||||||||
Prepaid expenses and other assets | ( | ||||||||||
Other liabilities and accrued expenses | ( | ||||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Proceeds from maturities, paydowns and calls of available for sale debt securities | |||||||||||
Proceeds from maturities and paydowns of held to maturity debt securities | |||||||||||
Purchases of available for sale debt securities | ( | ||||||||||
Net decrease (increase) in loans receivable | ( | ||||||||||
Purchase of FHLB stock, net | ( | ( | |||||||||
Purchase of premises and equipment | ( | ( | |||||||||
Net cash provided by (used in) investing activities | ( | ||||||||||
Cash flows from financing activities: | |||||||||||
Net (decrease) increase in deposits | ( | ||||||||||
Proceeds from long-term FHLB advances | |||||||||||
Repayment of long-term FHLB advances | ( | ( | |||||||||
Net change in short-term FHLB advances | |||||||||||
Shares withheld for taxes on vested restricted stock | ( | ( | |||||||||
Shares repurchased | ( | ||||||||||
Cash paid for dividends | ( | ||||||||||
Net cash provided by financing activities | |||||||||||
Increase in cash and cash equivalents | |||||||||||
Cash and cash equivalents, beginning of period | |||||||||||
Cash and cash equivalents, end of period | $ | $ | |||||||||
Supplemental disclosure of cash flow information: | |||||||||||
Cash paid during the period for: | |||||||||||
Interest | $ | $ | |||||||||
Income taxes | $ | $ | |||||||||
Supplemental non-cash disclosures: | |||||||||||
Lease liabilities arising from obtaining right-of-use assets | $ | $ | |||||||||
(Dollars in thousands, except share amounts) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Weighted average basic common shares outstanding | ||||||||||||||||||||||||||
Add: Dilutive effects of assumed vesting of restricted stock | ||||||||||||||||||||||||||
Weighted average diluted common shares outstanding | ||||||||||||||||||||||||||
Income per common share: | ||||||||||||||||||||||||||
Basic EPS | $ | $ | $ | $ | ||||||||||||||||||||||
Diluted EPS | $ | $ | $ | $ | ||||||||||||||||||||||
Anti-dilutive shares not included in calculation of diluted earnings per share |
(Dollars in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||||||||
At September 30, 2023: | |||||||||||||||||||||||
Government and Government Sponsored Entities: | |||||||||||||||||||||||
Commercial mortgage backed securities ("MBS") and collateralized mortgage obligations ("CMOs") | $ | $ | $ | ( | $ | ||||||||||||||||||
Residential MBS and CMOs | ( | ||||||||||||||||||||||
Agency bonds | ( | ||||||||||||||||||||||
Other asset backed securities ("ABS") | ( | ||||||||||||||||||||||
Total available for sale debt securities | $ | $ | $ | ( | $ | ||||||||||||||||||
At December 31, 2022: | |||||||||||||||||||||||
Government and Government Sponsored Entities: | |||||||||||||||||||||||
Commercial MBS and CMOs | $ | $ | $ | ( | $ | ||||||||||||||||||
Residential MBS and CMOs | ( | ||||||||||||||||||||||
Agency bonds | ( | ||||||||||||||||||||||
Other ABS | ( | ||||||||||||||||||||||
Total available for sale debt securities | $ | $ | $ | ( | $ |
September 30, 2023 | |||||||||||||||||||||||||||||||||||
Less than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||||||||||||
(Dollars in thousands) | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||||||||||||||
Government and Government Sponsored Entities: | |||||||||||||||||||||||||||||||||||
Commercial MBS and CMOs | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
Residential MBS and CMOs | ( | ( | ( | ||||||||||||||||||||||||||||||||
Agency bonds | ( | ( | ( | ||||||||||||||||||||||||||||||||
Other ABS | ( | ( | |||||||||||||||||||||||||||||||||
Total available for sale debt securities | $ | $ | ( | $ | $ | ( | $ | $ | ( |
December 31, 2022 | |||||||||||||||||||||||||||||||||||
Less than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||||||||||||
(Dollars in thousands) | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||||||||||||||
Government and Government Sponsored Entities: | |||||||||||||||||||||||||||||||||||
Commercial MBS and CMOs | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
Residential MBS and CMOs | ( | ( | ( | ||||||||||||||||||||||||||||||||
Agency bonds | ( | ( | |||||||||||||||||||||||||||||||||
Other ABS | ( | ( | ( | ||||||||||||||||||||||||||||||||
Total available for sale debt securities | $ | $ | ( | $ | $ | ( | $ | $ | ( |
(Dollars in thousands) | Amortized Cost | Gross Unrecognized Gains | Gross Unrecognized Losses | Estimated Fair Value | |||||||||||||||||||
As of September 30, 2023: | |||||||||||||||||||||||
Government Sponsored Entities: | |||||||||||||||||||||||
Residential MBS | $ | $ | $ | ( | $ | ||||||||||||||||||
Other investments | |||||||||||||||||||||||
Total held to maturity investment securities | $ | $ | $ | ( | $ | ||||||||||||||||||
As of December 31, 2022: | |||||||||||||||||||||||
Government Sponsored Entities: | |||||||||||||||||||||||
Residential MBS | $ | $ | $ | ( | $ | ||||||||||||||||||
Other investments | |||||||||||||||||||||||
Total held to maturity investment securities | $ | $ | $ | ( | $ |
Less than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||||||||||||
(Dollars in thousands) | Fair Value | Unrecognized Losses | Fair Value | Unrecognized Losses | Fair Value | Unrecognized Losses | |||||||||||||||||||||||||||||
As of September 30, 2023: | |||||||||||||||||||||||||||||||||||
Government Sponsored Entities: | |||||||||||||||||||||||||||||||||||
Residential MBS | $ | $ | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||
As of December 31, 2022: | |||||||||||||||||||||||||||||||||||
Government Sponsored Entities: | |||||||||||||||||||||||||||||||||||
Residential MBS | $ | $ | ( | $ | $ | $ | $ | ( |
September 30, 2023 | |||||||||||
(Dollars in thousands) | Amortized Cost | Fair Value | |||||||||
Available for sale debt securities | |||||||||||
One to five years | $ | $ | |||||||||
Five to ten years | |||||||||||
Beyond ten years | |||||||||||
MBS, CMOs and other ABS | |||||||||||
Total available for sale debt securities | $ | $ | |||||||||
Held to maturity investments securities | |||||||||||
Five to ten years | $ | $ | |||||||||
MBS | |||||||||||
Total held to maturity debt securities | $ | $ |
(Dollars in thousands) | September 30, 2023 | December 31, 2022 | |||||||||
Mortgages on: | |||||||||||
Multifamily residential | $ | $ | |||||||||
Single family residential | |||||||||||
Commercial real estate | |||||||||||
Construction and land | |||||||||||
Total | |||||||||||
Allowance for credit losses on loans | ( | ( | |||||||||
Loans, net | $ | $ |
Allowance for Credit Losses | |||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Beginning Balance | Impact of CECL Adoption | Charge-Offs | Recoveries | Provision | Ending Balance | |||||||||||||||||||||||||||||
Three months ended September 30, 2023 | |||||||||||||||||||||||||||||||||||
Multifamily residential | $ | $ | — | $ | $ | $ | $ | ||||||||||||||||||||||||||||
Single family residential | — | ( | |||||||||||||||||||||||||||||||||
Commercial real estate | — | ||||||||||||||||||||||||||||||||||
Construction and land | — | ||||||||||||||||||||||||||||||||||
Allowance for credit losses on loans | — | ( | |||||||||||||||||||||||||||||||||
Allowance for credit losses on off-balance sheet credit exposures | — | ( | |||||||||||||||||||||||||||||||||
Total | $ | $ | — | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||
Nine months ended September 30, 2023 | |||||||||||||||||||||||||||||||||||
Multifamily residential | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Single family residential | ( | ( | |||||||||||||||||||||||||||||||||
Commercial real estate | ( | ||||||||||||||||||||||||||||||||||
Construction and land | ( | ||||||||||||||||||||||||||||||||||
Allowance for credit losses on loans | ( | ( | |||||||||||||||||||||||||||||||||
Allowance for credit losses on off-balance sheet credit exposures | ( | ||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | $ | $ |
Allowance for Loan Losses | |||||||||||||||||||||||||||||
(Dollars in thousands) | Beginning Balance | Charge-Offs | Recoveries | Provision | Ending Balance | ||||||||||||||||||||||||
Three months ended September 30, 2022 | |||||||||||||||||||||||||||||
Multifamily residential | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Single family residential | |||||||||||||||||||||||||||||
Commercial real estate | ( | ||||||||||||||||||||||||||||
Construction and land | ( | ||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Nine months ended September 30, 2022 | |||||||||||||||||||||||||||||
Multifamily residential | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Single family residential | |||||||||||||||||||||||||||||
Commercial real estate | ( | ||||||||||||||||||||||||||||
Construction and land | ( | ||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
(Dollars in thousands) | Loans by Origination Year | |||||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | Prior | Total | ||||||||||||||||||||
Multifamily residential | ||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||
Watch | ||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||
Year to date gross charge-offs | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||
Single family residential | ||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||
Watch | ||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||
Year to date gross charge-offs | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||
Commercial real estate | ||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||
Watch | ||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||
Year to date gross charge-offs | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||
Construction and land | ||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||
Watch | ||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||
Year to date gross charge-offs | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||
Total loans | ||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||
Watch | ||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||
Year to date gross charge-offs | $ | $ | $ | $ | $ | $ | $ |
(Dollars in thousands) | Multifamily Residential | Single Family Residential | Commercial Real Estate | Construction and Land | Total | ||||||||||||||||||||||||
Grade: | |||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Watch | |||||||||||||||||||||||||||||
Special mention | |||||||||||||||||||||||||||||
Substandard | |||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
(Dollars in thousands) | 30-59 Days | 60-89 Days | 90+ Days | Total Past Due | Current | Total | |||||||||||||||||||||||||||||
As of September 30, 2023: | |||||||||||||||||||||||||||||||||||
Loans: | |||||||||||||||||||||||||||||||||||
Multifamily residential | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Single family residential | |||||||||||||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||||||||||||
Construction and land | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
As of December 31, 2022: | |||||||||||||||||||||||||||||||||||
Loans: | |||||||||||||||||||||||||||||||||||
Multifamily residential | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Single family residential | |||||||||||||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||||||||||||
Construction and land | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
Amortized Cost by Collateral Type | Allowance for Credit Losses | ||||||||||||||||||||||
(Dollars in thousands) | Residential | Office | Industrial | ||||||||||||||||||||
Multifamily residential | $ | $ | $ | $ | |||||||||||||||||||
Single family residential | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
(Dollars in thousands) | Recorded Investment | Unpaid Principal Balance | Related Allowance | ||||||||||||||
With no related allowance recorded: | |||||||||||||||||
Multifamily residential | $ | $ | $ | — | |||||||||||||
Single family residential | — | ||||||||||||||||
— | |||||||||||||||||
With an allowance recorded: | |||||||||||||||||
Multifamily residential | |||||||||||||||||
Single family residential | |||||||||||||||||
Total: | |||||||||||||||||
Multifamily residential | |||||||||||||||||
Single family residential | |||||||||||||||||
$ | $ | $ |
Three Months Ended September 30, 2022 | Nine Months Ended September 30, 2022 | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Average Recorded Investment | Interest Income | Cash Basis Interest | Average Recorded Investment | Interest Income | Cash Basis Interest | |||||||||||||||||||||||||||||
With no related allowance recorded: | |||||||||||||||||||||||||||||||||||
Multifamily residential | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Single family residential | |||||||||||||||||||||||||||||||||||
With an allowance recorded: | |||||||||||||||||||||||||||||||||||
Single family residential | |||||||||||||||||||||||||||||||||||
Total: | |||||||||||||||||||||||||||||||||||
Multifamily residential | |||||||||||||||||||||||||||||||||||
Single family residential | |||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ |
(Dollars in thousands) | Multifamily Residential | Single Family Residential | Commercial Real Estate | Construction and Land | Total | ||||||||||||||||||||||||
Ending allowance balance allocated to: | |||||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Loans collectively evaluated for impairment | |||||||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Loans: | |||||||||||||||||||||||||||||
Ending balance: individually evaluated for impairment | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Ending balance: collectively evaluated for impairment | |||||||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | $ |
(Dollars in thousands) | |||||
Troubled debt restructurings: | |||||
Single family residential | $ | ||||
(Dollars in thousands) | Number of Contracts | Pre-Modification Outstanding Recorded Investment | Post-Modification Outstanding Recorded Investment | ||||||||||||||
Troubled debt restructurings: | |||||||||||||||||
Single family residential | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||
(Dollars in thousands) | Non-Accrual Loans with No ACL | Non-Accrual Loans | Non-Accrual Loans with No ALLL | Non-Accrual Loans | |||||||||||||||||||
Multifamily residential | $ | $ | $ | $ | |||||||||||||||||||
Single family residential | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
(Dollars in thousands) | September 30, 2023 | December 31, 2022 | |||||||||
Mortgage loans serviced for: | |||||||||||
Federal Home Loan Mortgage Corporation ("Freddie Mac") | $ | $ | |||||||||
Other financial institutions | |||||||||||
Total mortgage loans serviced for others | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(Dollars in thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Beginning balance | $ | $ | $ | $ | |||||||||||||||||||
Additions | |||||||||||||||||||||||
Disposals | |||||||||||||||||||||||
Changes in fair value due to changes in assumptions | |||||||||||||||||||||||
Other changes in fair value | ( | ( | ( | ( | |||||||||||||||||||
Ending balance | $ | $ | $ | $ |
(Dollars in thousands) | September 30, 2023 | December 31, 2022 | |||||||||||||||
Operating lease right-of-use assets included in prepaid expenses and other assets | $ | $ | |||||||||||||||
Operating lease liabilities included in other liabilities and accrued expenses | |||||||||||||||||
Weighted average remaining lease term (years) of operating leases | |||||||||||||||||
Weighted average discount rate of operating leases | % | % | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(Dollars in thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Operating lease costs included in occupancy expense | $ | $ | $ | $ | |||||||||||||||||||
Cash paid for amounts included in the measurement of operating lease liabilities |
(Dollars in thousands) | |||||
October 1 - December 31, 2023 | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
Thereafter | |||||
Total undiscounted lease payments | |||||
Less: Imputed interest | ( | ||||
Net lease liabilities | $ |
(Dollars in thousands) | September 30, 2023 | December 31, 2022 | |||||||||
Time deposits | $ | $ | |||||||||
Money market checking | |||||||||||
Money market savings | |||||||||||
Interest-bearing demand | |||||||||||
Noninterest-bearing demand | |||||||||||
Total | $ | $ |
(Dollars in thousands) | |||||
October 1 - December 31, 2023 | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
Thereafter | |||||
Total | $ |
Outstanding Balances | As of September 30, 2023 | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | September 30, 2023 | December 31, 2022 | Minimum Interest Rate | Maximum Interest Rate | Weighted Average Rate | Maturity Dates | |||||||||||||||||||||||||||||
Fixed rate short-term | $ | $ | % | % | % | October 2023 | |||||||||||||||||||||||||||||
Fixed rate long-term | % | % | % | December 2023 to March 2030 | |||||||||||||||||||||||||||||||
$ | $ |
(Dollars in thousands) | |||||
October 1 - December 31, 2023 | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
Thereafter | |||||
$ |
September 30, 2023 | December 31, 2022 | Date | Maturity | Rate Index | ||||||||||||||||||||||||||||||||||||||||
Issuer | Amount | Rate | Amount | Rate | Issued | Date | (Quarterly Reset) | |||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||
Luther Burbank Statutory Trust I | $ | % | $ | % | 3/1/2006 | 6/15/2036 | 3 month CME Term SOFR + Tenor Spread Adjustment (0.26%) + | |||||||||||||||||||||||||||||||||||||
Luther Burbank Statutory Trust II | $ | % | $ | % | 3/1/2007 | 6/15/2037 | 3 month CME Term SOFR + Tenor Spread Adjustment (0.26%) + |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Principal | Unamortized Debt Issuance Costs | Principal | Unamortized Debt Issuance Costs | Maturity Date | Fixed Interest Rate | ||||||||||||||||||||||||||||||||
Senior Unsecured Term Notes | $ | $ | $ | $ | 9/30/2024 | % |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
(Dollars in thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Derivative - interest rate swaps: | |||||||||||||||||||||||
Interest income | $ | $ | $ | $ | |||||||||||||||||||
Hedged items - loans: | |||||||||||||||||||||||
Interest loss | ( | ( | ( | ( | |||||||||||||||||||
Net increase in interest income | $ | $ | $ | $ |
Fair Values of Derivative Instruments | ||||||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||||||
(Dollars in thousands) | Notional Amount | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | |||||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||||||
As of September 30, 2023: | ||||||||||||||||||||
Interest Rate Swaps | $ | Prepaid Expenses and Other Assets | $ | Other Liabilities and Accrued Expenses | $ | |||||||||||||||
As of December 31, 2022: | ||||||||||||||||||||
Interest Rate Swaps | $ | Prepaid Expenses and Other Assets | $ | Other Liabilities and Accrued Expenses | $ |
Line Item in the Consolidated Statements of Financial Condition in Which the Hedged Items are Included (1) | Carrying Amount of the Hedged Assets | Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets | ||||||||||||
(Dollars in thousands) | ||||||||||||||
As of September 30, 2023: | ||||||||||||||
Loans receivable, net | $ | $ | ( | |||||||||||
As of December 31, 2022: | ||||||||||||||
Loans receivable, net | $ | $ | ( |
Nine Months Ended September 30, | |||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||
Number of Shares | Weighted Average Grant Date Fair Value | Number of Shares | Weighted Average Grant Date Fair Value | ||||||||||||||||||||
Beginning of the period balance | $ | $ | |||||||||||||||||||||
Shares granted | |||||||||||||||||||||||
Shares settled | ( | ( | |||||||||||||||||||||
Shares forfeited | ( | ( | |||||||||||||||||||||
End of the period balance | $ | $ |
Fair Level Measurements Using | |||||||||||||||||||||||||||||
(Dollars in thousands) | Carrying Amount | Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||
As of September 30, 2023: | |||||||||||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Debt securities: | |||||||||||||||||||||||||||||
Available for sale | |||||||||||||||||||||||||||||
Held to maturity | |||||||||||||||||||||||||||||
Equity securities | |||||||||||||||||||||||||||||
Loans receivable, net | |||||||||||||||||||||||||||||
Accrued interest receivable | |||||||||||||||||||||||||||||
FHLB stock | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||
Interest rate swaps | |||||||||||||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||||||||
Deposits | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
FHLB advances | |||||||||||||||||||||||||||||
Junior subordinated deferrable interest debentures | |||||||||||||||||||||||||||||
Senior debt | |||||||||||||||||||||||||||||
Accrued interest payable | |||||||||||||||||||||||||||||
As of December 31, 2022: | |||||||||||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Debt securities: | |||||||||||||||||||||||||||||
Available for sale | |||||||||||||||||||||||||||||
Held to maturity | |||||||||||||||||||||||||||||
Equity securities | |||||||||||||||||||||||||||||
Loans receivable, net | |||||||||||||||||||||||||||||
Accrued interest receivable | |||||||||||||||||||||||||||||
FHLB stock | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||
Interest rate swaps | |||||||||||||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||||||||
Deposits | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
FHLB advances | |||||||||||||||||||||||||||||
Junior subordinated deferrable interest debentures | |||||||||||||||||||||||||||||
Senior debt | |||||||||||||||||||||||||||||
Accrued interest payable | |||||||||||||||||||||||||||||
Interest rate swaps |
(Dollars in thousands) | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
As of September 30, 2023: | |||||||||||||||||||||||
Financial Assets: | |||||||||||||||||||||||
Available for sale debt securities: | |||||||||||||||||||||||
Government and Government Sponsored Entities: | |||||||||||||||||||||||
Commercial MBS and CMOs | $ | $ | $ | $ | |||||||||||||||||||
Residential MBS and CMOs | |||||||||||||||||||||||
Agency bonds | |||||||||||||||||||||||
Other ABS | |||||||||||||||||||||||
Total available for sale debt securities | $ | $ | $ | $ | |||||||||||||||||||
Equity securities | $ | $ | $ | $ | |||||||||||||||||||
Mortgage servicing rights | |||||||||||||||||||||||
Interest rate swaps | |||||||||||||||||||||||
As of December 31, 2022: | |||||||||||||||||||||||
Financial Assets: | |||||||||||||||||||||||
Available for sale debt securities: | |||||||||||||||||||||||
Government and Government Sponsored Entities: | |||||||||||||||||||||||
Commercial MBS and CMOs | $ | $ | $ | $ | |||||||||||||||||||
Residential MBS and CMOs | |||||||||||||||||||||||
Agency bonds | |||||||||||||||||||||||
Other ABS | |||||||||||||||||||||||
Total available for sale debt securities | $ | $ | $ | $ | |||||||||||||||||||
Equity securities | $ | $ | $ | $ | |||||||||||||||||||
Mortgage servicing rights | |||||||||||||||||||||||
Interest rate swaps | |||||||||||||||||||||||
Financial Liabilities: | |||||||||||||||||||||||
Interest rate swaps | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
(Dollars in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Proceeds from loan sales | $ | $ | $ | $ | ||||||||||||||||||||||
Servicing fees |
(Dollars in thousands) | Single Family Residential | Multifamily Residential | |||||||||
As of September 30, 2023: | |||||||||||
Principal balance of loans | $ | $ | |||||||||
Loans 90+ days past due | |||||||||||
Charge-offs, net | |||||||||||
As of December 31, 2022: | |||||||||||
Principal balance of loans | $ | $ | |||||||||
Loans 90+ days past due | |||||||||||
Charge-offs, net |
(Dollars in thousands, except per share data) | As of or For the Three Months Ended | As of or For the Nine Months Ended | ||||||||||||||||||||||||
September 30, 2023 | June 30, 2023 | September 30, 2023 | September 30, 2022 | |||||||||||||||||||||||
Statements of Income and Financial Condition Data | ||||||||||||||||||||||||||
Net Income | $ | 1,907 | $ | 6,917 | $ | 22,266 | $ | 66,509 | ||||||||||||||||||
Pre-tax, pre-provision net earnings (1) | $ | 5,560 | $ | 11,107 | $ | 34,954 | $ | 94,456 | ||||||||||||||||||
Total assets | $ | 8,133,913 | $ | 8,360,070 | $ | 8,133,913 | $ | 7,921,584 | ||||||||||||||||||
Per Common Share | ||||||||||||||||||||||||||
Diluted earnings per share | $ | 0.04 | $ | 0.14 | $ | 0.44 | $ | 1.30 | ||||||||||||||||||
Book value per share | $ | 13.62 | $ | 13.71 | $ | 13.62 | $ | 13.25 | ||||||||||||||||||
Tangible book value per share (1) | $ | 13.56 | $ | 13.64 | $ | 13.56 | $ | 13.18 | ||||||||||||||||||
Selected Ratios | ||||||||||||||||||||||||||
Return on average: | ||||||||||||||||||||||||||
Assets | 0.09 | % | 0.33 | % | 0.36 | % | 1.20 | % | ||||||||||||||||||
Stockholders' equity | 1.09 | % | 3.94 | % | 4.25 | % | 13.11 | % | ||||||||||||||||||
Dividend payout ratio | — | % | — | % | — | % | 27.80 | % | ||||||||||||||||||
Net interest margin | 0.97 | % | 1.27 | % | 1.32 | % | 2.52 | % | ||||||||||||||||||
Efficiency ratio (1) | 73.00 | % | 59.18 | % | 57.90 | % | 31.88 | % | ||||||||||||||||||
Noninterest expense to average assets | 0.73 | % | 0.76 | % | 0.78 | % | 0.80 | % | ||||||||||||||||||
Loan to deposit ratio | 118.53 | % | 118.50 | % | 118.53 | % | 118.29 | % | ||||||||||||||||||
Credit Quality Ratios | ||||||||||||||||||||||||||
Allowance for credit losses on loans to total loans | 0.58 | % | 0.54 | % | 0.58 | % | 0.53 | % | ||||||||||||||||||
Allowance for credit losses on loans to nonperforming loans | 601.95 | % | 751.04 | % | 601.95 | % | 940.86 | % | ||||||||||||||||||
Nonperforming assets to total assets | 0.08 | % | 0.06 | % | 0.08 | % | 0.05 | % | ||||||||||||||||||
Net charge-offs to average loans | 0.03 | % | — | % | 0.01 | % | — | % | ||||||||||||||||||
Capital Ratios | ||||||||||||||||||||||||||
Tier 1 leverage ratio | 9.66 | % | 9.40 | % | 9.66 | % | 9.99 | % | ||||||||||||||||||
Total risk-based capital ratio | 20.86 | % | 20.39 | % | 20.86 | % | 19.20 | % | ||||||||||||||||||
(1) Considered a non-GAAP financial measure. See Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations - ‘‘Non-GAAP Financial Measures’’ for a reconciliation of our non-GAAP measures to the most directly comparable GAAP financial measure. Pre-tax, pre-provision net earnings is defined as net income before taxes and provision for credit losses. Tangible book value per share is defined as total assets less goodwill and total liabilities divided by period end shares outstanding. Efficiency ratio is defined as the ratio of noninterest expense to net interest income plus noninterest income. |
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
(Dollars in thousands) | September 30, 2023 | June 30, 2023 | September 30, 2023 | September 30, 2022 | |||||||||||||||||||
Pre-tax, Pre-provision Net Earnings | |||||||||||||||||||||||
Income before taxes | $ | 2,559 | $ | 9,895 | $ | 31,536 | $ | 93,956 | |||||||||||||||
Plus: Provision for credit losses | 3,001 | 1,212 | 3,418 | 500 | |||||||||||||||||||
Pre-tax, pre-provision net earnings | $ | 5,560 | $ | 11,107 | $ | 34,954 | $ | 94,456 | |||||||||||||||
Efficiency Ratio | |||||||||||||||||||||||
Noninterest expense (numerator) | $ | 15,035 | $ | 16,104 | $ | 48,073 | $ | 44,213 | |||||||||||||||
Net interest income | $ | 19,563 | $ | 26,320 | 79,869 | 137,980 | |||||||||||||||||
Noninterest income | 1,032 | 891 | 3,158 | 689 | |||||||||||||||||||
Operating revenue (denominator) | $ | 20,595 | $ | 27,211 | $ | 83,027 | $ | 138,669 | |||||||||||||||
Efficiency ratio | 73.00 | % | 59.18 | % | 57.90 | % | 31.88 | % | |||||||||||||||
(Dollars in thousands, except per share data) | September 30, 2023 | June 30, 2023 | September 30, 2022 | ||||||||||||||
Tangible Book Value Per Share | |||||||||||||||||
Total assets | $ | 8,133,913 | $ | 8,360,070 | $ | 7,921,584 | |||||||||||
Less: Goodwill | (3,297) | (3,297) | (3,297) | ||||||||||||||
Tangible assets | 8,130,616 | 8,356,773 | 7,918,287 | ||||||||||||||
Less: Total liabilities | (7,438,908) | (7,660,723) | (7,244,915) | ||||||||||||||
Tangible stockholders' equity (numerator) | $ | 691,708 | $ | 696,050 | $ | 673,372 | |||||||||||
Period end shares outstanding (denominator) | 51,027,878 | 51,027,878 | 51,074,605 | ||||||||||||||
Tangible book value per share | $ | 13.56 | $ | 13.64 | $ | 13.18 |
For the Three Months Ended | |||||||||||||||||||||||||||||||||||||||||
September 30, 2023 | June 30, 2023 | ||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Average Balance | Interest Inc/Exp | Yield/Rate | Average Balance | Interest Inc/Exp | Yield/Rate | |||||||||||||||||||||||||||||||||||
Interest-Earning Assets | |||||||||||||||||||||||||||||||||||||||||
Multifamily residential | $ | 4,391,926 | $ | 49,176 | 4.48 | % | $ | 4,487,735 | $ | 50,780 | 4.53 | % | |||||||||||||||||||||||||||||
Single family residential | 2,301,841 | 23,085 | 4.01 | % | 2,317,880 | 22,249 | 3.84 | % | |||||||||||||||||||||||||||||||||
Commercial real estate | 159,917 | 2,279 | 5.70 | % | 164,733 | 2,256 | 5.48 | % | |||||||||||||||||||||||||||||||||
Construction and land | 20,947 | 576 | 10.91 | % | 24,753 | 729 | 11.81 | % | |||||||||||||||||||||||||||||||||
Total loans (1) | 6,874,631 | 75,116 | 4.37 | % | 6,995,101 | 76,014 | 4.35 | % | |||||||||||||||||||||||||||||||||
Investment securities | 569,925 | 5,711 | 4.01 | % | 595,223 | 5,613 | 3.77 | % | |||||||||||||||||||||||||||||||||
Cash and cash equivalents | 610,788 | 8,243 | 5.35 | % | 683,409 | 8,623 | 5.06 | % | |||||||||||||||||||||||||||||||||
Total interest-earning assets | 8,055,344 | 89,070 | 4.42 | % | 8,273,733 | 90,250 | 4.36 | % | |||||||||||||||||||||||||||||||||
Noninterest-earning assets (2) | 159,413 | 147,474 | |||||||||||||||||||||||||||||||||||||||
Total assets | $ | 8,214,757 | $ | 8,421,207 | |||||||||||||||||||||||||||||||||||||
Interest-Bearing Liabilities | |||||||||||||||||||||||||||||||||||||||||
Transaction accounts | $ | 125,908 | 245 | 0.76 | % | $ | 132,927 | 186 | 0.55 | % | |||||||||||||||||||||||||||||||
Money market demand accounts | 1,881,449 | 16,453 | 3.42 | % | 1,943,861 | 14,870 | 3.03 | % | |||||||||||||||||||||||||||||||||
Time deposits | 3,715,204 | 38,401 | 4.05 | % | 3,662,985 | 32,661 | 3.54 | % | |||||||||||||||||||||||||||||||||
Total deposits | 5,722,561 | 55,099 | 3.77 | % | 5,739,773 | 47,717 | 3.30 | % | |||||||||||||||||||||||||||||||||
FHLB advances | 1,453,821 | 11,722 | 3.20 | % | 1,640,939 | 13,630 | 3.33 | % | |||||||||||||||||||||||||||||||||
Junior subordinated debentures | 61,857 | 1,112 | 7.13 | % | 61,857 | 1,008 | 6.54 | % | |||||||||||||||||||||||||||||||||
Senior debt | 94,857 | 1,574 | 6.64 | % | 94,826 | 1,575 | 6.64 | % | |||||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 7,333,096 | 69,507 | 3.72 | % | 7,537,395 | 63,930 | 3.38 | % | |||||||||||||||||||||||||||||||||
Noninterest-bearing deposit accounts | 69,777 | 71,865 | |||||||||||||||||||||||||||||||||||||||
Other noninterest-bearing liabilities | 109,858 | 110,391 | |||||||||||||||||||||||||||||||||||||||
Total liabilities | 7,512,731 | 7,719,651 | |||||||||||||||||||||||||||||||||||||||
Total stockholders' equity | 702,026 | 701,556 | |||||||||||||||||||||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 8,214,757 | $ | 8,421,207 | |||||||||||||||||||||||||||||||||||||
Net interest spread (3) | 0.70 | % | 0.98 | % | |||||||||||||||||||||||||||||||||||||
Net interest income/margin (4) | $ | 19,563 | 0.97 | % | $ | 26,320 | 1.27 | % |
Three Months Ended September 30 vs June 30, 2023 | |||||||||||||||||
Variance Due To | |||||||||||||||||
(Dollars in thousands) | Volume | Yield/Rate | Total | ||||||||||||||
Interest-Earning Assets | |||||||||||||||||
Multifamily residential | $ | (1,057) | $ | (547) | $ | (1,604) | |||||||||||
Single family residential | (153) | 989 | 836 | ||||||||||||||
Commercial real estate | (67) | 90 | 23 | ||||||||||||||
Construction and land | (102) | (51) | (153) | ||||||||||||||
Total loans | (1,379) | 481 | (898) | ||||||||||||||
Investment securities | (246) | 344 | 98 | ||||||||||||||
Cash and cash equivalents | (890) | 510 | (380) | ||||||||||||||
Total interest-earning assets | (2,515) | 1,335 | (1,180) | ||||||||||||||
Interest-Bearing Liabilities | |||||||||||||||||
Transaction accounts | (10) | 69 | 59 | ||||||||||||||
Money market demand accounts | (441) | 2,024 | 1,583 | ||||||||||||||
Time deposits | 516 | 5,224 | 5,740 | ||||||||||||||
Total deposits | 65 | 7,317 | 7,382 | ||||||||||||||
FHLB advances | (1,422) | (486) | (1,908) | ||||||||||||||
Junior subordinated debentures | — | 104 | 104 | ||||||||||||||
Senior debt | (1) | — | (1) | ||||||||||||||
Total interest-bearing liabilities | (1,358) | 6,935 | 5,577 | ||||||||||||||
Net Interest Income | $ | (1,157) | $ | (5,600) | $ | (6,757) |
For the Three Months Ended | |||||||||||||||||||||||
(Dollars in thousands) | September 30, 2023 | June 30, 2023 | $ Increase (Decrease) | % Increase (Decrease) | |||||||||||||||||||
Noninterest Income | |||||||||||||||||||||||
FHLB dividends | $ | 886 | $ | 625 | $ | 261 | 41.8 | % | |||||||||||||||
Fee income | 128 | 98 | 30 | 30.6 | % | ||||||||||||||||||
Other | 18 | 168 | (150) | (89.3) | % | ||||||||||||||||||
Total noninterest income | $ | 1,032 | $ | 891 | $ | 141 | 15.8 | % |
For the Three Months Ended | |||||||||||||||||||||||
(Dollars in thousands) | September 30, 2023 | June 30, 2023 | $ Increase (Decrease) | % Increase (Decrease) | |||||||||||||||||||
Noninterest Expense | |||||||||||||||||||||||
Compensation and related benefits | $ | 8,527 | $ | 10,118 | $ | (1,591) | (15.7) | % | |||||||||||||||
Deposit insurance premium | 960 | 943 | 17 | 1.8 | % | ||||||||||||||||||
Professional and regulatory fees | 638 | 499 | 139 | 27.9 | % | ||||||||||||||||||
Occupancy | 1,115 | 1,134 | (19) | (1.7) | % | ||||||||||||||||||
Depreciation and amortization | 368 | 373 | (5) | (1.3) | % | ||||||||||||||||||
Data processing | 1,039 | 1,025 | 14 | 1.4 | % | ||||||||||||||||||
Marketing | 860 | 955 | (95) | (9.9) | % | ||||||||||||||||||
Merger costs | 555 | 41 | 514 | 1253.7 | % | ||||||||||||||||||
Other expenses | 973 | 1,016 | (43) | (4.2) | % | ||||||||||||||||||
Total noninterest expense | $ | 15,035 | $ | 16,104 | $ | (1,069) | (6.6) | % |
For the Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Average Balance | Interest Inc/Exp | Yield/Rate | Average Balance | Interest Inc/Exp | Yield/Rate | |||||||||||||||||||||||||||||||||||
Interest-Earning Assets | |||||||||||||||||||||||||||||||||||||||||
Multifamily residential | $ | 4,466,559 | $ | 148,917 | 4.45 | % | $ | 4,327,355 | $ | 120,306 | 3.71 | % | |||||||||||||||||||||||||||||
Single family residential | 2,301,224 | 68,325 | 3.96 | % | 1,976,356 | 45,115 | 3.04 | % | |||||||||||||||||||||||||||||||||
Commercial real estate | 164,605 | 6,682 | 5.41 | % | 189,499 | 6,597 | 4.64 | % | |||||||||||||||||||||||||||||||||
Construction and land | 23,112 | 1,810 | 10.47 | % | 21,960 | 893 | 5.44 | % | |||||||||||||||||||||||||||||||||
Total loans (1) | 6,955,500 | 225,734 | 4.33 | % | 6,515,170 | 172,911 | 3.54 | % | |||||||||||||||||||||||||||||||||
Investment securities | 593,062 | 16,812 | 3.78 | % | 660,069 | 9,290 | 1.88 | % | |||||||||||||||||||||||||||||||||
Cash and cash equivalents | 529,803 | 20,169 | 5.09 | % | 118,452 | 812 | 0.92 | % | |||||||||||||||||||||||||||||||||
Total interest-earning assets | 8,078,365 | 262,715 | 4.34 | % | 7,293,691 | 183,013 | 3.35 | % | |||||||||||||||||||||||||||||||||
Noninterest-earning assets (2) | 152,221 | 110,459 | |||||||||||||||||||||||||||||||||||||||
Total assets | $ | 8,230,586 | $ | 7,404,150 | |||||||||||||||||||||||||||||||||||||
Interest-Bearing Liabilities | |||||||||||||||||||||||||||||||||||||||||
Transaction accounts | $ | 136,332 | 592 | 0.57 | % | $ | 171,148 | 279 | 0.21 | % | |||||||||||||||||||||||||||||||
Money market demand accounts | 2,030,683 | 45,280 | 2.94 | % | 3,007,085 | 14,603 | 0.64 | % | |||||||||||||||||||||||||||||||||
Time deposits | 3,550,675 | 94,551 | 3.52 | % | 2,250,523 | 12,136 | 0.71 | % | |||||||||||||||||||||||||||||||||
Total deposits | 5,717,690 | 140,423 | 3.24 | % | 5,428,756 | 27,018 | 0.66 | % | |||||||||||||||||||||||||||||||||
FHLB advances | 1,474,669 | 34,614 | 3.14 | % | 899,838 | 12,071 | 1.79 | % | |||||||||||||||||||||||||||||||||
Junior subordinated debentures | 61,856 | 3,086 | 6.67 | % | 61,857 | 1,220 | 2.64 | % | |||||||||||||||||||||||||||||||||
Senior debt | 94,826 | 4,723 | 6.64 | % | 94,704 | 4,724 | 6.65 | % | |||||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 7,349,041 | 182,846 | 3.29 | % | 6,485,155 | 45,033 | 0.92 | % | |||||||||||||||||||||||||||||||||
Noninterest-bearing deposit accounts | 76,140 | 159,504 | |||||||||||||||||||||||||||||||||||||||
Other noninterest-bearing liabilities | 106,993 | 82,935 | |||||||||||||||||||||||||||||||||||||||
Total liabilities | 7,532,174 | 6,727,594 | |||||||||||||||||||||||||||||||||||||||
Total stockholders' equity | 698,412 | 676,556 | |||||||||||||||||||||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 8,230,586 | $ | 7,404,150 | |||||||||||||||||||||||||||||||||||||
Net interest spread (3) | 1.05 | % | 2.43 | % | |||||||||||||||||||||||||||||||||||||
Net interest income/margin (4) | $ | 79,869 | 1.32 | % | $ | 137,980 | 2.52 | % | |||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2023 vs 2022 | |||||||||||||||||
Variance Due To | |||||||||||||||||
(Dollars in thousands) | Volume | Yield/Rate | Total | ||||||||||||||
Interest-Earning Assets | |||||||||||||||||
Multifamily residential | $ | 3,973 | $ | 24,638 | $ | 28,611 | |||||||||||
Single family residential | 8,169 | 15,041 | 23,210 | ||||||||||||||
Commercial real estate | (929) | 1,014 | 85 | ||||||||||||||
Construction and land | 49 | 868 | 917 | ||||||||||||||
Total loans | 11,262 | 41,561 | 52,823 | ||||||||||||||
Investment securities | (1,031) | 8,553 | 7,522 | ||||||||||||||
Cash and cash equivalents | 8,396 | 10,961 | 19,357 | ||||||||||||||
Total interest-earning assets | 18,627 | 61,075 | 79,702 | ||||||||||||||
Interest-Bearing Liabilities | |||||||||||||||||
Transaction accounts | (65) | 378 | 313 | ||||||||||||||
Money market demand accounts | (6,055) | 36,732 | 30,677 | ||||||||||||||
Time deposits | 10,491 | 71,924 | 82,415 | ||||||||||||||
Total deposits | 4,371 | 109,034 | 113,405 | ||||||||||||||
FHLB advances | 10,338 | 12,205 | 22,543 | ||||||||||||||
Junior subordinated debentures | — | 1,866 | 1,866 | ||||||||||||||
Senior debt | 2 | (3) | (1) | ||||||||||||||
Total interest-bearing liabilities | 14,711 | 123,102 | 137,813 | ||||||||||||||
Net Interest Income | $ | 3,916 | $ | (62,027) | $ | (58,111) |
For the Nine Months Ended September 30, | |||||||||||||||||||||||
(Dollars in thousands) | 2023 | 2022 | $ Increase (Decrease) | % Increase (Decrease) | |||||||||||||||||||
Noninterest Income | |||||||||||||||||||||||
FHLB dividends | $ | 2,088 | $ | 1,059 | $ | 1,029 | 97.2 | % | |||||||||||||||
Fee income | 364 | 640 | (276) | (43.1) | % | ||||||||||||||||||
Other | 706 | (1,010) | 1,716 | (169.9) | % | ||||||||||||||||||
Total noninterest income | $ | 3,158 | $ | 689 | $ | 2,469 | 358.3 | % |
For the Nine Months Ended September 30, | |||||||||||||||||||||||
(Dollars in thousands) | 2023 | 2022 | $ Increase (Decrease) | % Increase (Decrease) | |||||||||||||||||||
Noninterest Expense | |||||||||||||||||||||||
Compensation and related benefits | $ | 29,316 | $ | 26,146 | $ | 3,170 | 12.1 | % | |||||||||||||||
Deposit insurance premium | 2,787 | 1,468 | 1,319 | 89.9 | % | ||||||||||||||||||
Occupancy | 3,433 | 3,590 | (157) | (4.4) | % | ||||||||||||||||||
Depreciation and amortization | 1,390 | 2,155 | (765) | (35.5) | % | ||||||||||||||||||
Professional and regulatory fees | 1,573 | 1,812 | (239) | (13.2) | % | ||||||||||||||||||
Data processing | 2,926 | 3,039 | (113) | (3.7) | % | ||||||||||||||||||
Marketing | 2,554 | 2,194 | 360 | 16.4 | % | ||||||||||||||||||
Merger costs | 1,149 | — | 1,149 | N/A | |||||||||||||||||||
Other expenses | 2,945 | 3,809 | (864) | (22.7) | % | ||||||||||||||||||
Total noninterest expense | $ | 48,073 | $ | 44,213 | $ | 3,860 | 8.7 | % |
As of September 30, 2023 | As of December 31, 2022 | |||||||||||||||||||||||||
(Dollars in thousands) | Amount | % of total | Amount | % of total | ||||||||||||||||||||||
Real estate loans | ||||||||||||||||||||||||||
Multifamily residential | $ | 4,319,138 | 63.8 | % | $ | 4,500,500 | 64.8 | % | ||||||||||||||||||
Single family residential | 2,273,660 | 33.6 | % | 2,253,987 | 32.4 | % | ||||||||||||||||||||
Commercial real estate | 153,594 | 2.3 | % | 171,767 | 2.5 | % | ||||||||||||||||||||
Construction and land | 20,370 | 0.3 | % | 22,533 | 0.3 | % | ||||||||||||||||||||
Total loans before deferred items | 6,766,762 | 100.0 | % | 6,948,787 | 100.0 | % | ||||||||||||||||||||
Deferred loan costs, net | 60,457 | 61,658 | ||||||||||||||||||||||||
Total loans | $ | 6,827,219 | $ | 7,010,445 | ||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
(Dollars in thousands) | September 30, 2023 | June 30, 2023 | September 30, 2023 | September 30, 2022 | |||||||||||||||||||
Loan increases: | |||||||||||||||||||||||
Multifamily residential | $ | 19,554 | $ | 18,994 | $ | 61,928 | $ | 1,084,956 | |||||||||||||||
Single family residential | 43,248 | 50,825 | 161,000 | 714,596 | |||||||||||||||||||
Commercial real estate | — | — | — | 24,471 | |||||||||||||||||||
Construction and land | — | — | — | 7,992 | |||||||||||||||||||
Total loans originated and purchased | 62,802 | 69,819 | 222,928 | 1,832,015 | |||||||||||||||||||
Loan decreases: | |||||||||||||||||||||||
Loan principal reductions and payoffs | (149,697) | (148,028) | (403,013) | (1,264,011) | |||||||||||||||||||
Other (1) | (6,881) | (24,276) | (3,141) | (10,969) | |||||||||||||||||||
Total loan outflows | (156,578) | (172,304) | (406,154) | (1,274,980) | |||||||||||||||||||
Net change in total loan portfolio | $ | (93,776) | $ | (102,485) | $ | (183,226) | $ | 557,035 | |||||||||||||||
(1) Other changes in loan balances primarily represent the net change in disbursements on unfunded commitments, deferred loan costs, fair value adjustments and, to the extent applicable, may include foreclosures and charge-offs. Fair value adjustments totaled $(13.7) million and $(26.2) million for the three months ended September 30, 2023 and June 30, 2023, respectively, and totaled $(13.0) million and $(24.1) million for the nine months ended September 30, 2023 and 2022, respectively. |
(Dollars in thousands) | Count | Balance | Weighted Average LTV | % of Total Loans | ||||||||||||||||||||||
Multifamily Real Estate | 2,675 | $ | 4,349,645 | 55.9% | 63.7% | |||||||||||||||||||||
Single Family Real Estate | 2,553 | 2,303,280 | 63.9% | 33.7% | ||||||||||||||||||||||
Commercial Real Estate Type: | ||||||||||||||||||||||||||
Mid Rise Office | 7 | 37,281 | 56.3% | 0.5% | ||||||||||||||||||||||
Strip Retail | 12 | 19,682 | 48.3% | 0.3% | ||||||||||||||||||||||
Medical Office | 5 | 18,314 | 58.6% | 0.3% | ||||||||||||||||||||||
Shopping Center | 5 | 17,748 | 56.0% | 0.3% | ||||||||||||||||||||||
Unanchored Retail | 8 | 14,399 | 43.9% | 0.2% | ||||||||||||||||||||||
Low Rise Office | 7 | 11,254 | 51.3% | 0.2% | ||||||||||||||||||||||
More than 50% commercial | 10 | 10,729 | 47.1% | 0.2% | ||||||||||||||||||||||
Anchored Retail | 2 | 7,851 | 47.9% | 0.1% | ||||||||||||||||||||||
Multi-Tenant Industrial | 5 | 6,888 | 41.0% | 0.1% | ||||||||||||||||||||||
Shadow Retail | 3 | 3,876 | 60.8% | 0.1% | ||||||||||||||||||||||
Flex Industrial | 2 | 2,340 | 60.3% | 0.0% | ||||||||||||||||||||||
Warehouse | 3 | 2,323 | 43.6% | 0.0% | ||||||||||||||||||||||
Restaurant | 2 | 1,231 | 25.6% | 0.0% | ||||||||||||||||||||||
Other | 1 | 70 | 13.3% | 0.0% | ||||||||||||||||||||||
Commercial Real Estate | 72 | 153,986 | 52.0% | 2.3% | ||||||||||||||||||||||
Construction (1) | 5 | 20,308 | 58.6% | 0.3% | ||||||||||||||||||||||
Total | 5,305 | $ | 6,827,219 | 58.5% | 100.0% |
(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 | ||||||||||||
As of September 30, 2023: | |||||||||||||||||
Loans | |||||||||||||||||
Real estate mortgage loans: | |||||||||||||||||
Multifamily residential | $ | — | $ | 571 | $ | 37,597 | $ | 4,280,970 | $ | 4,319,138 | |||||||
Single family residential | 49 | 269 | 49,147 | 2,224,195 | 2,273,660 | ||||||||||||
Commercial real estate | 934 | 66,482 | 86,178 | — | 153,594 | ||||||||||||
Construction and land | 19,680 | 690 | — | — | 20,370 | ||||||||||||
Total loans | $ | 20,663 | $ | 68,012 | $ | 172,922 | $ | 6,505,165 | $ | 6,766,762 | |||||||
Fixed interest rates | $ | — | $ | 193 | $ | 42,418 | $ | 265,730 | $ | 308,341 | |||||||
Floating or hybrid adjustable rates | 20,663 | 67,819 | 130,504 | 6,239,435 | 6,458,421 | ||||||||||||
Total loans | $ | 20,663 | $ | 68,012 | $ | 172,922 | $ | 6,505,165 | $ | 6,766,762 | |||||||
As of December 31, 2022: | |||||||||||||||||
Loans | |||||||||||||||||
Real estate mortgage loans: | |||||||||||||||||
Multifamily residential | $ | 72 | $ | 537 | $ | 39,917 | $ | 4,459,974 | $ | 4,500,500 | |||||||
Single family residential | 27 | 468 | 51,443 | 2,202,049 | 2,253,987 | ||||||||||||
Commercial real estate | — | 41,505 | 130,262 | — | 171,767 | ||||||||||||
Construction and land | 17,464 | 5,069 | — | — | 22,533 | ||||||||||||
Total loans | $ | 17,563 | $ | 47,579 | $ | 221,622 | $ | 6,662,023 | $ | 6,948,787 | |||||||
Fixed interest rates | $ | — | $ | 197 | $ | 45,045 | $ | 270,285 | $ | 315,527 | |||||||
Floating or hybrid adjustable rates | 17,563 | 47,382 | 176,577 | 6,391,738 | 6,633,260 | ||||||||||||
Total loans | $ | 17,563 | $ | 47,579 | $ | 221,622 | $ | 6,662,023 | $ | 6,948,787 |
(Dollars in thousands) | September 30, 2023 | December 31, 2022 | |||||||||||||||
Non-accrual loans | |||||||||||||||||
Multifamily residential portfolio | $ | 3,494 | $ | 3,509 | |||||||||||||
Single family residential portfolio | 3,132 | 2,962 | |||||||||||||||
Total non-accrual loans | 6,626 | 6,471 | |||||||||||||||
Real estate owned | — | — | |||||||||||||||
Total nonperforming assets | $ | 6,626 | $ | 6,471 | |||||||||||||
Allowance for credit losses on loans to period end nonperforming loans | 601.95 | % | 566.91 | % | |||||||||||||
Nonperforming loans to period end loans | 0.10 | % | 0.09 | % | |||||||||||||
Nonperforming assets to total assets | 0.08 | % | 0.08 | % | |||||||||||||
(Dollars in thousands) | Beginning Balance | Impact of CECL Adoption | Charge-Offs | Recoveries | Provision | Ending Balance | |||||||||||||||||||||||||||||
Three months ended September 30, 2023 | |||||||||||||||||||||||||||||||||||
Multifamily residential | $ | 29,223 | $ | — | $ | — | $ | — | $ | 2,203 | $ | 31,426 | |||||||||||||||||||||||
Single family residential | 6,874 | — | (463) | — | 718 | 7,129 | |||||||||||||||||||||||||||||
Commercial real estate | 776 | — | — | — | 207 | 983 | |||||||||||||||||||||||||||||
Construction and land | 341 | — | — | — | 6 | 347 | |||||||||||||||||||||||||||||
Allowance for credit losses on loans | 37,214 | — | (463) | — | 3,134 | 39,885 | |||||||||||||||||||||||||||||
Allowance for credit losses on off-balance sheet credit exposures | 570 | — | — | — | (133) | 437 | |||||||||||||||||||||||||||||
Total allowance for credit losses | $ | 37,784 | $ | — | $ | (463) | $ | — | $ | 3,001 | $ | 40,322 | |||||||||||||||||||||||
Three months ended June 30, 2023 | |||||||||||||||||||||||||||||||||||
Multifamily residential | $ | 27,292 | $ | — | $ | — | $ | — | $ | 1,931 | $ | 29,223 | |||||||||||||||||||||||
Single family residential | 7,431 | — | — | — | (557) | 6,874 | |||||||||||||||||||||||||||||
Commercial real estate | 777 | — | — | — | (1) | 776 | |||||||||||||||||||||||||||||
Construction and land | 414 | — | — | — | (73) | 341 | |||||||||||||||||||||||||||||
Allowance for credit losses on loans | 35,914 | — | — | — | 1,300 | 37,214 | |||||||||||||||||||||||||||||
Allowance for credit losses on off-balance sheet credit exposures | 658 | — | — | — | (88) | 570 | |||||||||||||||||||||||||||||
Total allowance for credit losses | $ | 36,572 | $ | — | $ | — | $ | — | $ | 1,212 | $ | 37,784 | |||||||||||||||||||||||
Nine months ended September 30, 2023 | |||||||||||||||||||||||||||||||||||
Multifamily residential | $ | 26,417 | $ | 2,882 | $ | — | $ | — | $ | 2,127 | $ | 31,426 | |||||||||||||||||||||||
Single family residential | 8,564 | (2,472) | (463) | — | 1,500 | 7,129 | |||||||||||||||||||||||||||||
Commercial real estate | 1,539 | (784) | — | — | 228 | 983 | |||||||||||||||||||||||||||||
Construction and land | 165 | 282 | — | — | (100) | 347 | |||||||||||||||||||||||||||||
Allowance for credit losses on loans | 36,685 | (92) | (463) | — | 3,755 | 39,885 | |||||||||||||||||||||||||||||
Allowance for credit losses on off-balance sheet credit exposures | 563 | 211 | — | — | (337) | 437 | |||||||||||||||||||||||||||||
Total allowance for credit losses | $ | 37,248 | $ | 119 | $ | (463) | $ | — | $ | 3,418 | $ | 40,322 | |||||||||||||||||||||||
Nine months ended September 30, 2022 | |||||||||||||||||||||||||||||||||||
Multifamily residential | $ | 26,043 | $ | — | $ | — | $ | — | $ | 161 | $ | 26,204 | |||||||||||||||||||||||
Single family residential | 7,224 | — | — | — | 933 | 8,157 | |||||||||||||||||||||||||||||
Commercial real estate | 2,094 | — | — | — | (551) | 1,543 | |||||||||||||||||||||||||||||
Construction and land | 174 | — | — | — | (43) | 131 | |||||||||||||||||||||||||||||
Total allowance for loan losses | $ | 35,535 | $ | — | $ | — | $ | — | $ | 500 | $ | 36,035 |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
(Dollars in thousands) | September 30, 2023 | June 30, 2023 | September 30, 2023 | September 30, 2022 | ||||||||||||||||||||||
Allowance for credit losses on loans to period end loans | 0.58 | % | 0.54 | % | 0.58 | % | 0.53 | % | ||||||||||||||||||
Annualized net charge-offs to average loans: | ||||||||||||||||||||||||||
Multifamily residential | — | % | — | % | — | % | — | % | ||||||||||||||||||
Single family residential | 0.08 | % | — | % | 0.03 | % | — | % | ||||||||||||||||||
Commercial real estate | — | % | — | % | — | % | — | % | ||||||||||||||||||
Construction and land | — | % | — | % | — | % | — | % | ||||||||||||||||||
Annualized net charge-offs to average loans | 0.03 | % | — | % | 0.01 | % | — | % |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||
(Dollars in thousands) | Book Value | % of Total | Book Value | % of Total | ||||||||||||||||||||||
Available for sale debt securities: | ||||||||||||||||||||||||||
Government and Government Sponsored Entities: | ||||||||||||||||||||||||||
Commercial mortgage backed securities ("MBS") and collateralized mortgage obligations ("CMOs") | $ | 298,906 | 54.45 | % | $ | 340,736 | 54.89 | % | ||||||||||||||||||
Residential MBS and CMOs | 178,125 | 32.45 | % | 199,384 | 32.11 | % | ||||||||||||||||||||
Agency bonds | 37,008 | 6.74 | % | 42,630 | 6.87 | % | ||||||||||||||||||||
Other asset backed securities | 21,885 | 3.99 | % | 24,598 | 3.96 | % | ||||||||||||||||||||
Total available for sale debt securities | 535,924 | 97.63 | % | 607,348 | 97.83 | % | ||||||||||||||||||||
Held to maturity: | ||||||||||||||||||||||||||
Government Sponsored Entities: | ||||||||||||||||||||||||||
Residential MBS | 2,971 | 0.54 | % | 3,047 | 0.49 | % | ||||||||||||||||||||
Other investments | 54 | 0.01 | % | 61 | 0.01 | % | ||||||||||||||||||||
Total held to maturity debt securities | 3,025 | 0.55 | % | 3,108 | 0.50 | % | ||||||||||||||||||||
Equity securities | 10,018 | 1.82 | % | 10,340 | 1.67 | % | ||||||||||||||||||||
Total investment securities | $ | 548,967 | 100.00 | % | $ | 620,796 | 100.00 | % |
Three Months Ended | |||||||||||||||||||||||||||||||||||
September 30, 2023 | June 30, 2023 | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Average amount | Weighted average rate paid | Percent of total deposits | Average amount | Weighted average rate paid | Percent of total deposits | |||||||||||||||||||||||||||||
Noninterest-bearing deposit accounts | $ | 69,777 | — | % | 1.2 | % | $ | 71,865 | — | % | 1.2 | % | |||||||||||||||||||||||
Interest-bearing transaction accounts | 125,908 | 0.76 | % | 2.2 | % | 132,927 | 0.55 | % | 2.3 | % | |||||||||||||||||||||||||
Money market demand accounts | 1,881,449 | 3.42 | % | 32.5 | % | 1,943,861 | 3.03 | % | 33.4 | % | |||||||||||||||||||||||||
Time deposits | 3,715,204 | 4.05 | % | 64.1 | % | 3,662,985 | 3.54 | % | 63.1 | % | |||||||||||||||||||||||||
Total | $ | 5,792,338 | 3.72 | % | 100.0 | % | $ | 5,811,638 | 3.25 | % | 100.0 | % |
Nine Months Ended | |||||||||||||||||||||||||||||||||||
September 30, 2023 | September 30, 2022 | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Average amount | Weighted average rate paid | Percent of total deposits | Average amount | Weighted average rate paid | Percent of total deposits | |||||||||||||||||||||||||||||
Noninterest-bearing deposit accounts | $ | 76,140 | — | % | 1.3 | % | $ | 159,504 | — | % | 2.9 | % | |||||||||||||||||||||||
Interest-bearing transaction accounts | 136,332 | 0.57 | % | 2.4 | % | 171,148 | 0.21 | % | 3.1 | % | |||||||||||||||||||||||||
Money market demand accounts | 2,030,683 | 2.94 | % | 35.0 | % | 3,007,085 | 0.64 | % | 53.8 | % | |||||||||||||||||||||||||
Time deposits | 3,550,675 | 3.52 | % | 61.3 | % | 2,250,523 | 0.71 | % | 40.2 | % | |||||||||||||||||||||||||
Total | $ | 5,793,830 | 3.20 | % | 100.0 | % | $ | 5,588,260 | 0.64 | % | 100.0 | % |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||
(Dollars in thousands) | Insured | Uninsured | Insured | Uninsured | ||||||||||||||||||||||
Consumer | $ | 3,372,444 | $ | 818,831 | $ | 3,090,797 | $ | 931,454 | ||||||||||||||||||
Business | 930,719 | 196,359 | 981,692 | 379,560 | ||||||||||||||||||||||
Brokered | 441,749 | — | 455,837 | — | ||||||||||||||||||||||
Total deposits | $ | 4,744,912 | $ | 1,015,190 | $ | 4,528,326 | $ | 1,311,014 |
(Dollars in thousands) | Insured | Uninsured | ||||||||||||
Remaining maturity: | ||||||||||||||
Three months or less | $ | 935,284 | $ | 215,940 | ||||||||||
Over three through six months | 832,461 | 178,258 | ||||||||||||
Over six through twelve months | 978,915 | 217,673 | ||||||||||||
Over twelve months | 249,639 | 39,652 | ||||||||||||
Total | $ | 2,996,299 | $ | 651,523 | ||||||||||
Percent of time deposits to total deposits | 52.02 | % | 11.31 | % |
September 30, 2023 | December 31, 2022 | Date | Maturity | Rate Index | ||||||||||||||||||||||||||||||||||||||||
Issuer | Amount | Rate | Amount | Rate | Issued | Date | (Quarterly Reset) | |||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||
Luther Burbank Statutory Trust I | $ | 41,238 | 7.05 | % | $ | 41,238 | 6.15 | % | 3/1/2006 | 6/15/2036 | 3 month CME Term SOFR + Tenor Spread Adjustment (0.26%) + 1.38% | |||||||||||||||||||||||||||||||||
Luther Burbank Statutory Trust II | $ | 20,619 | 7.29 | % | $ | 20,619 | 6.39 | % | 3/1/2007 | 6/15/2037 | 3 month CME Term SOFR + Tenor Spread Adjustment (0.26%) + 1.62% |
As of or For the Three Months Ended | As of or For the Nine Months Ended | |||||||||||||||||||||||||
(Dollars in thousands) | September 30, 2023 | June 30, 2023 | September 30, 2023 | September 30, 2022 | ||||||||||||||||||||||
FHLB advances | ||||||||||||||||||||||||||
Average amount outstanding during the period | $ | 1,453,821 | $ | 1,640,939 | $ | 1,474,669 | $ | 899,838 | ||||||||||||||||||
Maximum amount outstanding at any month-end during the period | 1,451,647 | 1,701,647 | 1,701,647 | 1,201,647 | ||||||||||||||||||||||
Balance outstanding at end of period | 1,426,647 | 1,576,647 | 1,426,647 | 1,201,647 | ||||||||||||||||||||||
Weighted average maturity (in years) | 1.1 | 1.5 | 1.1 | 1.7 | ||||||||||||||||||||||
Weighted average interest rate at end of period | 3.40 | % | 3.34 | % | 3.40 | % | 2.34 | % | ||||||||||||||||||
Weighted average interest rate during the period | 3.20 | % | 3.33 | % | 3.14 | % | 1.79 | % | ||||||||||||||||||
Junior subordinated deferrable interest debentures | ||||||||||||||||||||||||||
Balance outstanding at end of period | $ | 61,857 | $ | 61,857 | $ | 61,857 | $ | 61,857 | ||||||||||||||||||
Weighted average maturity (in years) | 13.2 | 13.5 | 13.2 | 14.3 | ||||||||||||||||||||||
Weighted average interest rate at end of period | 7.13 | % | 7.01 | % | 7.13 | % | 4.75 | % | ||||||||||||||||||
Weighted average interest rate during the period | 7.13 | % | 6.54 | % | 6.67 | % | 2.64 | % | ||||||||||||||||||
Senior unsecured term notes | ||||||||||||||||||||||||||
Balance outstanding at end of period | $ | 94,877 | $ | 94,846 | $ | 94,877 | $ | 94,754 | ||||||||||||||||||
Weighted average maturity (in years) | 1.0 | 1.3 | 1.0 | 2.0 | ||||||||||||||||||||||
Weighted average interest rate at end of period | 6.64 | % | 6.64 | % | 6.64 | % | 6.65 | % | ||||||||||||||||||
Weighted average interest rate during the period | 6.64 | % | 6.64 | % | 6.64 | % | 6.65 | % |
As of or For the Three Months Ended | As of or For the Nine Months Ended | |||||||||||||||||||||||||
(Dollars in thousands) | September 30, 2023 | June 30, 2023 | September 30, 2023 | September 30, 2022 | ||||||||||||||||||||||
Outstanding at period end | $ | 175,000 | $ | 125,000 | $ | 175,000 | $ | 200,000 | ||||||||||||||||||
Average amount outstanding | 6,522 | 123,352 | 59,467 | 128,227 | ||||||||||||||||||||||
Maximum amount outstanding at any month end | 175,000 | 150,000 | 175,000 | 288,900 | ||||||||||||||||||||||
Weighted average interest rate at end of period | 5.77 | % | 5.35 | % | 5.77 | % | 2.99 | % | ||||||||||||||||||
Weighted average interest rate during the period | 5.60 | % | 5.27 | % | 5.22 | % | 2.04 | % |
(Dollars in thousands) | September 30, 2023 | December 31, 2022 | ||||||||||||
Commitments to fund loans | $ | 20,957 | $ | 37,741 |
Payments Due by Period | ||||||||||||||||||||||||||||||||
Less than 1 Year | 1 to 3 Years | 3 to 5 Years | More than 5 Years | |||||||||||||||||||||||||||||
(Dollars in thousands) | Total | |||||||||||||||||||||||||||||||
Contractual Cash Obligations | ||||||||||||||||||||||||||||||||
Time deposits (1) | $ | 3,358,531 | $ | 279,142 | $ | 10,149 | $ | — | $ | 3,647,822 | ||||||||||||||||||||||
FHLB advances (1) | 625,000 | 801,500 | — | 147 | 1,426,647 | |||||||||||||||||||||||||||
Senior debt (1) | 95,000 | — | — | — | 95,000 | |||||||||||||||||||||||||||
Junior subordinated debentures (1) | — | — | — | 61,857 | 61,857 | |||||||||||||||||||||||||||
Operating leases | 3,420 | 6,045 | 4,650 | 1,169 | 15,284 | |||||||||||||||||||||||||||
Significant contract (2) | 1,684 | 2,707 | — | — | 4,391 | |||||||||||||||||||||||||||
Total | $ | 4,083,635 | $ | 1,089,394 | $ | 14,799 | $ | 63,173 | $ | 5,251,001 | ||||||||||||||||||||||
(1) Amounts exclude interest. | ||||||||||||||||||||||||||||||||
(2) We have one significant, long-term contract for core processing services which expires May 9, 2026. The actual obligation is unknown and dependent on certain factors including volume and activities. For purposes of this disclosure, future obligations are estimated using our year-to-date 2023 average monthly expense extrapolated over the remaining life of the contract. |
(Dollars in thousands) | As of September 30, 2023 | % of Assets | ||||||||||||
Unrestricted cash & cash equivalents | $ | 579,724 | 7.13% | |||||||||||
Unpledged liquid securities | 31,903 | 0.39% | ||||||||||||
Unutilized brokered deposit capacity(1) | 422,266 | 5.19% | ||||||||||||
Unutilized FHLB borrowing capacity(2)(3) | 1,276,920 | 15.70% | ||||||||||||
Unutilized FRB borrowing capacity(2) | 1,197,853 | 14.73% | ||||||||||||
Commercial line of credit | 25,000 | 0.31% | ||||||||||||
Total liquidity | $ | 3,533,666 | 43.44% |
Minimum Required | ||||||||||||||||||||||||||
Actual | For Capital Adequacy Purposes | For Well- Capitalized Institution | ||||||||||||||||||||||||
(Dollars in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||
Luther Burbank Corporation | ||||||||||||||||||||||||||
As of September 30, 2023 | ||||||||||||||||||||||||||
Tier 1 Leverage Ratio | $ | 797,767 | 9.66 | % | $ | 330,443 | 4.00 | % | N/A | N/A | ||||||||||||||||
Common Equity Tier 1 Risk-Based Ratio | 735,910 | 18.31 | % | 281,267 | 7.00 | % | N/A | N/A | ||||||||||||||||||
Tier 1 Risk-Based Capital Ratio | 797,767 | 19.85 | % | 341,539 | 8.50 | % | N/A | N/A | ||||||||||||||||||
Total Risk-Based Capital Ratio | 838,111 | 20.86 | % | 421,901 | 10.50 | % | N/A | N/A | ||||||||||||||||||
As of December 31, 2022 | ||||||||||||||||||||||||||
Tier 1 Leverage Ratio | $ | 775,259 | 9.72 | % | $ | 319,051 | 4.00 | % | N/A | N/A | ||||||||||||||||
Common Equity Tier 1 Risk-Based Ratio | 713,402 | 16.80 | % | 297,214 | 7.00 | % | N/A | N/A | ||||||||||||||||||
Tier 1 Risk-Based Capital Ratio | 775,259 | 18.26 | % | 360,902 | 8.50 | % | N/A | N/A | ||||||||||||||||||
Total Risk-Based Capital Ratio | 812,529 | 19.14 | % | 445,820 | 10.50 | % | N/A | N/A | ||||||||||||||||||
Luther Burbank Savings | ||||||||||||||||||||||||||
As of September 30, 2023 | ||||||||||||||||||||||||||
Tier 1 Leverage Ratio | $ | 875,418 | 10.60 | % | $ | 330,331 | 4.00 | % | $ | 412,913 | 5.00 | % | ||||||||||||||
Common Equity Tier 1 Risk-Based Ratio | 875,418 | 21.80 | % | 281,072 | 7.00 | % | 260,995 | 6.50 | % | |||||||||||||||||
Tier 1 Risk-Based Capital Ratio | 875,418 | 21.80 | % | 341,301 | 8.50 | % | 321,225 | 8.00 | % | |||||||||||||||||
Total Risk-Based Capital Ratio | 915,762 | 22.81 | % | 421,608 | 10.50 | % | 401,531 | 10.00 | % | |||||||||||||||||
As of December 31, 2022 | ||||||||||||||||||||||||||
Tier 1 Leverage Ratio | $ | 856,631 | 10.74 | % | $ | 318,970 | 4.00 | % | $ | 398,712 | 5.00 | % | ||||||||||||||
Common Equity Tier 1 Risk-Based Ratio | 856,631 | 20.19 | % | 297,026 | 7.00 | % | 275,809 | 6.50 | % | |||||||||||||||||
Tier 1 Risk-Based Capital Ratio | 856,631 | 20.19 | % | 360,674 | 8.50 | % | 339,458 | 8.00 | % | |||||||||||||||||
Total Risk-Based Capital Ratio | 893,901 | 21.07 | % | 445,538 | 10.50 | % | 424,322 | 10.00 | % |
Interest Rate Risk to Earnings (NII) | ||||||||
September 30, 2023 | ||||||||
(Dollars in millions) | ||||||||
Change in Interest Rates (basis points) | $ Change NII | % Change NII | ||||||
+400 BP | $(12.0) | (55.0)% | ||||||
+300 BP | (7.5) | (34.6)% | ||||||
+200 BP | (4.0) | (18.3)% | ||||||
+100 BP | (1.6) | (7.5)% | ||||||
-100 BP | 0.8 | 3.8% | ||||||
-200 BP | 1.9 | 8.9% | ||||||
-300 BP | 2.7 | 12.6% | ||||||
-400 BP | 3.4 | 15.8% |
Interest Rate Risk to Capital (EVE) | ||||||||
September 30, 2023 | ||||||||
(Dollars in millions) | ||||||||
Change in Interest Rates (basis points) | $ Change EVE | % Change EVE | ||||||
+400 BP | $(310.8) | (59.6)% | ||||||
+300 BP | (198.7) | (38.1)% | ||||||
+200 BP | (114.3) | (21.9)% | ||||||
+100 BP | (49.1) | (9.4)% | ||||||
-100 BP | 32.2 | 6.2% | ||||||
-200 BP | 47.4 | 9.1% | ||||||
-300 BP | 49.2 | 9.4% | ||||||
-400 BP | 45.0 | 8.6% |
(Dollars in thousands) | Fair Value | |||||||||||||||||||||||||
Hedging Instrument | Hedge Accounting Type | Months to Maturity | Notional | Other Assets | Other Liabilities | |||||||||||||||||||||
Interest rate swap | Fair value hedge | 6 | $ | 100,000 | $ | 1,574 | $ | — | ||||||||||||||||||
Interest rate swap | Fair value hedge | 9 | 100,000 | 1,750 | — | |||||||||||||||||||||
Interest rate swap | Fair value hedge | 20 | 100,000 | 3,807 | — | |||||||||||||||||||||
Interest rate swap | Fair value hedge | 24 | 300,000 | 106 | — | |||||||||||||||||||||
Interest rate swap | Fair value hedge | 29 | 200,000 | 3,662 | — | |||||||||||||||||||||
Interest rate swap | Fair value hedge | 30 | 100,000 | 1,152 | — | |||||||||||||||||||||
Interest rate swap | Fair value hedge | 33 | 200,000 | 1,990 | — | |||||||||||||||||||||
Interest rate swap | Fair value hedge | 47 | 100,000 | 5,206 | — | |||||||||||||||||||||
Interest rate swap | Fair value hedge | 48 | 200,000 | 4,859 | — | |||||||||||||||||||||
Interest rate swap | Fair value hedge | 49 | 200,000 | 3,898 | — | |||||||||||||||||||||
Interest rate swap | Fair value hedge | 55 | 200,000 | 4,819 | — | |||||||||||||||||||||
$ | 1,800,000 | $ | 32,823 | $ | — | |||||||||||||||||||||
Incorporated by Reference | ||||||||||||||||||||||||||||||||||||||
Exhibit Number | Description | Filed Herewith | Form | File No. | Exhibit | Filing Date | ||||||||||||||||||||||||||||||||
2.1 | 8-K | 001-38317 | 2.1 | 11/14/2022 | ||||||||||||||||||||||||||||||||||
3.1 | S-1 | 333-221455 | 3.1 | 11/9/2017 | ||||||||||||||||||||||||||||||||||
3.2 | 8-K | 001-38317 | 3.1 | 4/27/2018 | ||||||||||||||||||||||||||||||||||
4.1 | S-1 | 333-221455 | 4.1 | 11/9/2017 | ||||||||||||||||||||||||||||||||||
Pursuant to Item 601(b) (4) (iii) (A) of Regulation S-K, copies of instruments defining the rights of holders of long-term debt and preferred securities are not filed. The Company agrees to furnish a copy thereof to the SEC upon request. | ||||||||||||||||||||||||||||||||||||||
31.1 | X | |||||||||||||||||||||||||||||||||||||
31.2 | X | |||||||||||||||||||||||||||||||||||||
32.1 | X | |||||||||||||||||||||||||||||||||||||
32.2 | X | |||||||||||||||||||||||||||||||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | X | ||||||||||||||||||||||||||||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | X | ||||||||||||||||||||||||||||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||||||||||||||||||||||||||||||||||
101.DEF | Inline XBRL Taxonomy Extension Definitions Linkbase Document | X | ||||||||||||||||||||||||||||||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | X | ||||||||||||||||||||||||||||||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | X | ||||||||||||||||||||||||||||||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | X | ||||||||||||||||||||||||||||||||||||
*Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule will be furnished supplementally to the SEC upon request; provided, however, that the parties may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any document so furnished. |
LUTHER BURBANK CORPORATION | |||||||||||
DATED: | NOVEMBER 3, 2023 | By: /s/ Simone Lagomarsino | |||||||||
Simone Lagomarsino | |||||||||||
President and Chief Executive Officer | |||||||||||
DATED: | NOVEMBER 3, 2023 | By: /s/ Laura Tarantino | |||||||||
Laura Tarantino | |||||||||||
Executive Vice President and Chief Financial Officer | |||||||||||
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) - USD ($) |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Debt Instrument [Line Items] | ||
Fair value of held-to-maturity securities | $ 2,656,000 | $ 2,874,000 |
Allowance for credit losses on loans | $ 39,885,000 | $ 36,685,000 |
Preferred stock shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock shares issued (in shares) | 0 | 0 |
Preferred stock shares outstanding (in shares) | 0 | 0 |
Common stock shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock shares issued (in shares) | 51,027,878 | 51,073,272 |
Common stock shares outstanding (in shares) | 51,027,878 | 51,073,272 |
Senior Unsecured Term Notes, September 2014 | Senior Unsecured Term Notes | ||
Debt Instrument [Line Items] | ||
Principal | $ 95,000,000 | $ 95,000,000 |
Debt interest rate | 6.50% | |
Unamortized debt issuance costs | $ 123,000 | $ 215,000 |
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Interest and fee income: | ||||
Loans | $ 75,116 | $ 62,366 | $ 225,734 | $ 172,911 |
Investment securities | 5,711 | 4,127 | 16,812 | 9,290 |
Cash and cash equivalents | 8,243 | 547 | 20,169 | 812 |
Total interest and fee income | 89,070 | 67,040 | 262,715 | 183,013 |
Interest expense: | ||||
Deposits | 55,099 | 14,085 | 140,423 | 27,018 |
FHLB advances | 11,722 | 5,346 | 34,614 | 12,071 |
Junior subordinated deferrable interest debentures | 1,112 | 560 | 3,086 | 1,220 |
Senior debt | 1,574 | 1,575 | 4,723 | 4,724 |
Total interest expense | 69,507 | 21,566 | 182,846 | 45,033 |
Net interest income before provision for credit losses | 19,563 | 45,474 | 79,869 | 137,980 |
Provision for credit losses | 3,001 | 500 | 3,418 | 500 |
Net interest income after provision for credit losses | 16,562 | 44,974 | 76,451 | 137,480 |
Noninterest income: | ||||
FHLB dividends | 886 | 363 | 2,088 | 1,059 |
Other income | 146 | (94) | 1,070 | (370) |
Total noninterest income | 1,032 | 269 | 3,158 | 689 |
Noninterest expense: | ||||
Compensation and related benefits | 8,527 | 8,857 | 29,316 | 26,146 |
Deposit insurance premium | 960 | 508 | 2,787 | 1,468 |
Professional and regulatory fees | 638 | 639 | 1,573 | 1,812 |
Occupancy | 1,115 | 1,199 | 3,433 | 3,590 |
Depreciation and amortization | 368 | 806 | 1,390 | 2,155 |
Data processing | 1,039 | 1,044 | 2,926 | 3,039 |
Marketing | 860 | 1,211 | 2,554 | 2,194 |
Other expenses | 1,528 | 1,112 | 4,094 | 3,809 |
Total noninterest expense | 15,035 | 15,376 | 48,073 | 44,213 |
Income before provision for income taxes | 2,559 | 29,867 | 31,536 | 93,956 |
Provision for income taxes | 652 | 8,865 | 9,270 | 27,447 |
Net income | $ 1,907 | $ 21,002 | $ 22,266 | $ 66,509 |
Basic earnings per common share (in usd per share) | $ 0.04 | $ 0.41 | $ 0.44 | $ 1.31 |
Diluted earnings per common share (in usd per share) | 0.04 | 0.41 | 0.44 | 1.30 |
Dividends per common share (in usd per share) | $ 0 | $ 0.12 | $ 0 | $ 0.36 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 1,907 | $ 21,002 | $ 22,266 | $ 66,509 |
Unrealized loss on available for sale debt securities: | ||||
Unrealized holding loss arising during the period | (9,516) | (14,855) | (14,181) | (44,970) |
Tax effect | 2,788 | 4,334 | 4,142 | 13,066 |
Total other comprehensive loss, net of tax | (6,728) | (10,521) | (10,039) | (31,904) |
Comprehensive (loss) income | $ (4,821) | $ 10,481 | $ 12,227 | $ 34,605 |
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - $ / shares |
3 Months Ended | 9 Months Ended |
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Sep. 30, 2022 |
Sep. 30, 2022 |
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Statement of Stockholders' Equity [Abstract] | ||
Cash dividends (in usd per share) | $ 0.12 | $ 0.36 |
NATURE OF OPERATIONS |
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NATURE OF OPERATIONS | NATURE OF OPERATIONS Organization Luther Burbank Corporation (the ‘‘Company’’), a California corporation headquartered in Santa Rosa, is the bank holding company for its wholly-owned subsidiary, Luther Burbank Savings (the "Bank"), and the Bank's wholly-owned subsidiary, Burbank Investor Services. The Company also owns Burbank Financial Inc., a real estate investment company that provides limited loan administrative support to the Bank, and all the common interests in Luther Burbank Statutory Trusts I and II, entities created to issue trust preferred securities. The Bank conducts its business from its executive offices in Santa Rosa and Gardena, California, and an administrative office in Irvine, California. It has ten full service branches in California located in Sonoma, Marin, Santa Clara, and Los Angeles Counties and one full service branch in Washington located in King County. Additionally, there are several loan production offices located throughout California. On November 13, 2022, the Company entered into an Agreement and Plan of Reorganization (the “Merger Agreement”) with Washington Federal, Inc. (“WAFD”), pursuant to which the Company will merge with and into WAFD (the “Corporate Merger”), with WAFD surviving the Corporate Merger. Promptly following the Corporate Merger, the Company’s wholly-owned bank subsidiary, Luther Burbank Savings, will be merged with and into Washington Federal Bank, dba WaFd Bank, the wholly-owned bank subsidiary of WAFD (“WAFD Bank”), with WAFD Bank as the surviving institution. On May 4, 2023, the shareholders of the Company and WAFD approved the Corporate Merger at their respective special meetings and, on October 13, 2023, the Washington State Department of Financial Institutions granted conditional approval of the merger. Closing of the transaction, which is expected to occur in the fourth quarter of 2023, remains subject to the receipt of approvals from the Federal Deposit Insurance Corporation and the Board of Governors of the Federal Reserve System, along with the satisfaction of other customary closing conditions. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all footnotes as would be necessary for a fair presentation of financial position, results of operations and comprehensive income, changes in stockholders’ equity and cash flows in conformity with accounting principles generally accepted in the United States of America (“GAAP”). However, 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 stockholders’ 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, 2022, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission (the “SEC”), under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”). The unaudited consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated. The results of operations for the three and nine months ended September 30, 2023 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, 2023. The Company’s accounting and reporting policies conform to GAAP and to general practices within the banking industry. Use of Estimates Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions affect the amounts reported in the unaudited consolidated financial statements and the disclosures provided, and actual results could differ. Reclassifications Certain prior period balances have been reclassified to conform to current year presentation. These reclassifications had no effect on prior year net income or stockholders’ equity. Earnings Per Share ("EPS") Basic earnings per common share represents the amount of earnings for the period available to each share of common stock outstanding during the reporting period. Basic EPS is computed based upon net income divided by the weighted average number of common shares outstanding during the period. In determining the weighted average number of shares outstanding, vested restricted stock units are included. Diluted EPS represents the amount of earnings for the period available to each share of common stock outstanding including common stock that would have been outstanding assuming the issuance of common shares for all dilutive potential common shares outstanding during each reporting period. Diluted EPS is computed based upon net income divided by the weighted average number of common shares outstanding during each period, adjusted for the effect of dilutive potential common shares, such as restricted stock awards and units, calculated using the treasury stock method.
CECL The Company adopted CECL using the modified retrospective method for all financial assets measured at cost, including loans, HTM debt securities and off-balance sheet credit exposures. Results for reporting periods beginning January 1, 2023 are reported under ASU 2016-13, while prior period results continue to be reported under the incurred loss model which was the previously applicable GAAP. The Company recorded an increase to its ACL of $119 thousand as a cumulative effect adjustment of adopting ASU 2016-13, with a corresponding decrease in retained earnings, net of $35 thousand in taxes, of $84 thousand. The transition adjustment reflects the results of our model in estimating lifetime expected credit losses on loans, unfunded commitments and other off-balance sheet credit exposures.
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INVESTMENT SECURITIES |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENT SECURITIES | INVESTMENT SECURITIES Available for Sale The following table summarizes the amortized cost and the estimated fair value of available for sale debt securities as of the dates indicated:
Net unrealized losses on available for sale investment securities are recorded as accumulated other comprehensive loss within stockholders’ equity and totaled $44.2 million and $34.2 million, net of $18.1 million and $14.0 million in tax assets, at September 30, 2023 and December 31, 2022, respectively. There were no sales or transfers of available for sale investment securities and no realized gains or losses on these securities during the three or nine months ended September 30, 2023 or 2022. The following tables summarize the gross unrealized losses and fair value of available for sale debt securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:
At September 30, 2023, the Company held 58 commercial MBS and CMOs of which 52 were in a loss position and 45 had been in a loss position for twelve months or more. The Company held 88 residential MBS and CMOs of which 86 were in a loss position and 81 had been in a loss position for twelve months or more. The Company held six agency bonds of which four were in a loss position and three had been in a loss position for twelve months or more. The Company held three other ABS of which all three were in a loss position for twelve months or more.
At December 31, 2022, the Company held 58 commercial MBS and CMOs of which 50 were in a loss position and 15 had been in a loss position for twelve months or more. The Company held 90 residential MBS and CMOs of which 86 were in a loss position and 14 had been in a loss position for twelve months or more. The Company held six agency bonds of which one was in a loss position for less than twelve months. The Company held three other ABS of which three were in a loss position and two had been in a loss position for twelve months or more. The unrealized losses on the Company’s investments were caused by interest rate changes. In addition, the contractual cash flows of these investments are guaranteed by the U.S. government or agencies sponsored by the U.S. government. Accordingly, it is expected that the securities will not be settled at a price less than amortized cost. Because the decline in market value is attributable to changes in interest rates but not credit quality, and because the Company has the ability and intent to hold those investments until a recovery of fair value, which may be maturity, the Company does not consider these securities to be other-than-temporarily impaired at September 30, 2023 or December 31, 2022. Additionally, the Company had no ACL recorded for available for sale investment securities at September 30, 2023. As of September 30, 2023 and December 31, 2022, there were no holdings of securities of any one issuer in an amount greater than 10% of stockholders' equity, other than the U.S. government and its agencies. Held to Maturity The following table summarizes the amortized cost and estimated fair value of held to maturity investment securities as of the dates indicated:
The following table summarizes the gross unrecognized losses and fair value of held to maturity investment securities, aggregated by investment category and length of time that individual securities have been in a continuous unrecognized loss position:
At September 30, 2023, the Company had seven held to maturity residential MBS of which all seven had been in a loss position for twelve months or more. At December 31, 2022, the Company had seven held to maturity residential MBS of which all seven were in a loss position for less than twelve months. The unrecognized losses on the Company’s held to maturity investments at September 30, 2023 were caused by interest rate changes. In addition, the contractual cash flows of these investments are guaranteed by agencies sponsored by the U.S. government. Accordingly, it is expected that the securities will not be settled at a price less than amortized cost. Because the decline in market value is attributable to changes in interest rates but not credit quality, and because the Company has the ability and intent to hold those investments until maturity, the Company does not consider these securities to be other-than-temporarily impaired at September 30, 2023 or December 31, 2022. Additionally, the Company had no ACL recorded for held to maturity investment securities at September 30, 2023. The following table summarizes the scheduled maturities of available for sale and held to maturity investment securities as of September 30, 2023:
The amortized cost and fair value of debt securities are shown by contractual maturity. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. As such, mortgage backed securities, collateralized mortgage obligations and other asset backed securities are not included in the maturity categories above and instead are shown separately. As of September 30, 2023, securities with an amortized cost totaling $575.3 million were pledged to the FHLB and Federal Reserve Bank of San Francisco ("FRB") to secure borrowing arrangements. See Note 9 for additional information. No securities were pledged as of December 31, 2022. Equity Securities Equity securities consist of investments in a qualified community reinvestment fund. At September 30, 2023 and December 31, 2022, the fair value of equity securities totaled $10.0 million and $10.3 million, respectively. Changes in fair value are recognized in other noninterest income and totaled $(322) thousand during both the three and nine months ended September 30, 2023, compared to $(455) thousand and $(1.4) million during the three and nine months ended September 30, 2022, respectively. There were no sales of equity securities during the three or nine months ended September 30, 2023 or 2022.
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LOANS | LOANS Loans consist of the following:
Certain loans have been pledged to secure borrowing arrangements (see Note 9). Prior to the Company’s adoption of CECL on January 1, 2023, the Company maintained an allowance for loan losses ("ALLL") in accordance with the probable incurred loss model. The probable incurred loss model was reflective of estimates for loan losses incurred and inherent in the loan portfolio as of the balance sheet date, and did not reflect current estimates of future expected credit losses over the lives of the Company’s loans, as now required by CECL. The following table summarizes activity in and the allocation of the allowance for credit losses by portfolio segment during the three and nine months ended September 30, 2023:
The following table summarizes activity in and the allocation of the allowance for loan losses by portfolio segment during the three and nine months ended September 30, 2022:
The Company assigns a risk rating to all loans and periodically performs detailed reviews of loans to identify credit risks and to assess the overall collectability of the portfolio. During these internal reviews, management monitors and analyzes the financial condition of borrowers and guarantors, as well as the financial performance and/or other characteristics of loan collateral. These credit quality indicators are used to assign a risk rating to each individual loan. The risk ratings can be grouped into six major categories, defined as follows: Pass assets are those which are performing according to contract and have no existing or known weaknesses deserving of management’s close attention. The basic underwriting criteria used to approve the loans are still valid, and all payments have essentially been made as planned. Watch assets are expected to have an event occurring in the near future that will lead to a change in risk rating with the change being either favorable or unfavorable. These assets require heightened monitoring of the event by management. Special Mention assets have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Company’s credit position at some future date. Special mention assets are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification. Substandard assets are inadequately protected by the current net worth and/or paying capacity of the obligor or by the collateral pledged. These assets have well-defined weaknesses: the primary source of repayment is gone or severely impaired (i.e., bankruptcy or loss of employment) and/or there has been a deterioration in collateral value. In addition, there is the distinct possibility that the Company will sustain some loss, either directly or indirectly (i.e., the cost of monitoring), if the deficiencies are not corrected. A deterioration in collateral value alone does not mandate that an asset be adversely classified if such factor does not indicate that the primary source of repayment is in jeopardy. Doubtful assets have the weaknesses of those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable based on current facts, conditions and values. Loss assets are considered uncollectible and of such little value that their continuance as assets, without establishment of a specific valuation allowance or charge-off, is not warranted. This classification does not necessarily mean that an asset has absolutely no recovery or salvage value; but rather, it is not practical or desirable to defer writing off a basically worthless asset (or portion thereof) even though partial recovery may be affected in the future. The following table presents the internal risk ratings for total loans by portfolio segment of loan and origination year as of September 30, 2023, as well as gross charge-offs for the nine months ended September 30, 2023:
The following table summarizes the loan portfolio allocated by management’s internal risk ratings at December 31, 2022.
The following table summarizes an aging analysis of the loan portfolio by the time past due as of the dates indicated below:
As of both September 30, 2023 and December 31, 2022, there were no loans that were past due over 89 days and still accruing interest. Loans that have been classified as collateral dependent are loans where substantially all repayment of the loan is expected to come from the operation of or eventual liquidation of the collateral. Collateral dependent loans are evaluated individually for purposes of measuring the ACL, which is determined based on the estimated fair value of the collateral. Estimates for costs to sell are included in the determination of the ACL when liquidation of the collateral is anticipated. In cases where the loan is well secured and the estimated value of the collateral exceeds the amortized cost of the loan, no ACL is recorded. The following table presents the amortized cost basis of collateral dependent loans by loan type at September 30, 2023.
The following table summarizes information related to impaired loans at December 31, 2022:
The following table summarizes information related to impaired loans for the three and nine months ended September 30, 2022:
The following table summarizes the allocation of the allowance for loan losses by impairment methodology as of December 31, 2022:
There were no loans experiencing financial difficulty that were modified during the nine months ended September 30, 2023. The Company had no modified loans with a subsequent payment default within the twelve months following their modification during the three or nine months ended September 30, 2023. A loan is considered to be in default once it is 90 days contractually past due under the modified terms. The following table summarizes the recorded investment related to troubled debt restructurings ("TDRs") at December 31, 2022:
The Company had allocated $25 thousand of its allowance for loan losses for loans modified in TDRs at December 31, 2022. The Company does not have commitments to lend additional funds to borrowers with loans whose terms have been modified in TDRs. During the nine months ended September 30, 2022, the Company modified the terms of one loan that qualified as a TDR. The following table provides details of this modification:
Terms of the modification above included suspension of loan payments for six months and a similar extension of the loan term. The TDR above resulted in no increase to the allowance for loan losses and no charge-offs primarily due to collateral support provided by the secondary source of repayment. The Company had no TDRs with a subsequent payment default within the twelve months following their modification during the three or nine months ended September 30, 2022. A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms.
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NONPERFORMING ASSETS |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NONPERFORMING ASSETS | NONPERFORMING ASSETS Nonperforming assets include nonperforming loans plus real estate owned. The following table presents the composition of non-accrual loans as of the dates indicated below:
The allowance for non-accrual loans is based on the CECL cash flow methodology unless the loan is considered collateral dependent. The allowance for collateral dependent loans is determined based on the estimated fair value of the underlying collateral. Interest income on non-accrual loans is subsequently recognized on a cash basis as long as the remaining unpaid principal amount of the loans is deemed to be fully collectible. If there is doubt regarding the collectability of the loan, then any interest payments received are applied to principal. Interest income was recognized on a cash basis on non-accrual loans during the three and nine months ended September 30, 2023 totaling $23 thousand and $69 thousand, respectively, compared to $45 thousand and $99 thousand during the three and nine months ended September 30, 2022, respectively. Contractual interest not recorded on nonperforming loans during the three and nine months ended September 30, 2023 totaled $121 thousand and $362 thousand, respectively, compared to $6 thousand and $30 thousand during the three and nine months ended September 30, 2022, respectively. The Company did not own any other real estate owned as of September 30, 2023 or December 31, 2022.
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MORTGAGE SERVICING RIGHTS |
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Transfers and Servicing [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MORTGAGE SERVICING RIGHTS | MORTGAGE SERVICING RIGHTS Servicing loans for others generally consists of collecting mortgage payments, maintaining escrow accounts, disbursing payments to investors, and conducting foreclosure proceedings. Loan servicing income is recorded on the accrual basis and includes servicing fees from investors and certain charges collected from borrowers. Mortgage loans serviced for others are not reported as assets. The principal balances of these loans are as follows:
Custodial account balances maintained in connection with serviced loans totaled $360 thousand and $234 thousand at September 30, 2023 and December 31, 2022, respectively. The Company measures servicing rights at fair value at each reporting date and reports changes in the fair value of servicing assets in earnings in the period in which the changes occur. Fair value is based on a valuation model that calculates the present value of estimated future net servicing income. Activities for mortgage servicing rights are as follows:
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LEASES |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES | LEASES The Company leases various office premises under long-term operating lease agreements. These leases expire between 2024 and 2033, with certain leases containing five-year renewal options. The Company includes lease extension options in the lease term, if it is reasonably certain the Company will exercise the option, when considering the economic incentive to do so. Leases are classified as operating or finance leases at the lease commencement date. Lease expense for operating leases and short-term leases is recognized on a straight-line basis over the lease term. All of the Company’s leases are classified as operating leases. The Company records operating lease right-of-use assets and operating lease liabilities on the Company's consolidated statements of financial condition. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The Company uses its incremental borrowing rate at lease commencement to discount lease payments when the rate implicit in the lease is not readily determinable. The Company selected a FHLB advance rate at lease inception based on the lease term and other factors, as a reasonable incremental borrowing rate. In addition, the Company has elected to account for any non-lease components in its leases as part of the associated lease component. The Company also has elected to not recognize short-term leases with an original term of 12 months or less on the Company's consolidated statements of financial condition. Supplemental lease information as of September 30, 2023 and December 31, 2022 is as follows:
Supplemental lease information for the three and nine months ended September 30, 2023 and 2022 is as follows:
At September 30, 2023, future undiscounted lease payments with initial terms of one year or more are as follows:
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QUALIFIED AFFORABLE HOUSING PROJECT INVESTMENTS |
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Sep. 30, 2023 | |
Federal Home Loan Banks [Abstract] | |
QUALIFIED AFFORDABLE HOUSING PROJECT INVESTMENTS | QUALIFIED AFFORDABLE HOUSING PROJECT INVESTMENTSThe Company is invested in qualified affordable housing projects that are expected to provide federal and state tax credits in the future. The investments are accounted for using the proportional amortization method. As of September 30, 2023 and December 31, 2022, the Company was committed to invest $19.3 million and $17.9 million, respectively, of which $6.2 million and $4.8 million, respectively, had been funded and was included in prepaid expenses and other assets in the consolidated statements of financial condition. The total unfunded commitments related to the investments totaled $13.1 million at both September 30, 2023 and December 31, 2022 and were included in other liabilities and accrued expenses in the consolidated statements of financial condition. During the three and nine months ended September 30, 2023, the Company recognized amortization expense of $211 thousand and $955 thousand, respectively, and tax benefits related to the investments of $283 thousand and $1.3 million, respectively. During the three and nine months ended September 30, 2022, the Company recognized amortization expense of $130 thousand and $395 thousand, respectively, and tax benefits related to the investments of $200 thousand and $565 thousand, respectively. Amortization expense and tax benefits are included in the provision for income taxes in the unaudited consolidated statements of income. |
DEPOSITS |
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Deposits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEPOSITS | DEPOSITS A summary of deposits at September 30, 2023 and December 31, 2022 is as follows:
The Company had time deposits that met or exceeded the Federal Deposit Insurance Corporation ("FDIC") insurance limit of $250 thousand of $1.5 billion and $1.3 billion at September 30, 2023 and December 31, 2022, respectively. The Company utilizes brokered deposits as an additional source of funding. The Company had brokered deposits of $441.7 million and $455.8 million at September 30, 2023 and December 31, 2022, respectively. Maturities of the Company’s time deposits at September 30, 2023 are summarized as follows:
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FEDERAL HOME LOAN BANK AND FEDERAL RESERVE BANK ADVANCES |
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Advance from Federal Home Loan Bank [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FEDERAL HOME LOAN BANK AND FEDERAL RESERVE BANK ADVANCES | FEDERAL HOME LOAN BANK AND FEDERAL RESERVE BANK ADVANCES The Bank may borrow from the FHLB, on either a short-term or long-term basis, up to 40% of its assets, provided that adequate collateral has been pledged. As of September 30, 2023, the Bank had pledged various mortgage loans and securities to secure these borrowing arrangements totaling approximately $4.1 billion and $233.5 million, respectively, compared to pledged mortgage loans totaling approximately $4.2 billion as of December 31, 2022. Additionally, the FHLB stock held by the Bank as of both dates further secure these arrangements. The Bank has access to the Loan and Discount Window of the FRB and the FRB's Bank Term Funding Program ("BTFP"). Advances under these programs are subject to the Bank providing qualifying collateral. Mortgage loans totaling approximately $2.6 billion and $904.9 million as of September 30, 2023 and December 31, 2022, respectively, secure the discount window borrowing arrangement. Securities with a current par value totaling $339.9 million secure the BTFP as of September 30, 2023. No securities were pledged to secure FRB borrowings as of December 31, 2022. There were no borrowings outstanding with the FRB as of September 30, 2023 or December 31, 2022. The following table discloses the Bank’s outstanding advances from the FHLB of San Francisco:
The Bank's available borrowing capacity based on loans and securities pledged to the FHLB and the FRB totaled $2.5 billion and $1.7 billion at September 30, 2023 and December 31, 2022, respectively. As of September 30, 2023 and December 31, 2022, the Bank had aggregate loan balances of $11.4 million and $1.1 billion, respectively, available to pledge to the FHLB and FRB to increase its borrowing capacity. As of September 30, 2023 and December 31, 2022, the Bank pledged as collateral a $62.6 million FHLB letter of credit to Freddie Mac related to our multifamily securitization reimbursement obligation. Short-term borrowings are borrowings with original maturities of 90 days or less. During the three and nine months ended September 30, 2023, there was a maximum amount of short-term borrowings outstanding of $175.0 million for both periods, an average amount outstanding of $6.5 million and $59.5 million, respectively, with a weighted average interest rate of 5.60% and 5.22%, respectively. During the three and nine months ended September 30, 2022, there was a maximum amount of short-term borrowings outstanding of $406.9 million for both periods, an average amount outstanding of $265.3 million and $128.2 million, respectively, with a weighted average interest rate of 2.52% and 2.04%, respectively. The following table summarizes scheduled principal payments on FHLB advances over the next five years as of September 30, 2023:
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JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES | JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES The Company formed two wholly-owned trust companies (the ‘‘Trusts’’) which issued guaranteed preferred beneficial interests (the "Trust Securities") in the Company’s junior subordinated deferrable interest debentures (the "Notes"). The Company is not considered the primary beneficiary of the Trusts and therefore, the Trusts are not consolidated in the Company’s financial statements, but rather the junior subordinated debentures are shown as a liability. The Company’s investment in the common securities of the Trusts, totaling $1.9 million, is included in other assets in the consolidated statements of financial condition. The sole asset of the Trusts are the Notes that they hold. The Trusts have invested the proceeds of such Trust Securities in the Notes. Each of the Notes has an interest rate equal to the corresponding Trust Securities distribution rate. The Company has the right to defer payment of interest on the Notes at any time or from time to time for a period not exceeding five years provided that no extension period may extend beyond the stated maturity of the relevant Notes. During any such extension period, distributions on the Trust Securities will also be deferred, and the Company’s ability to pay dividends on its common stock will be restricted. The Company has entered into contractual arrangements which, taken collectively, fully and unconditionally guarantee payment of: (i) accrued and unpaid distributions required to be paid on the Trust Securities; (ii) the redemption price with respect to any Trust Securities called for redemption by the Trusts; and (iii) payments due upon a voluntary or involuntary dissolution, winding up or liquidation of the Trusts. The Trust Securities are mandatorily redeemable upon maturity of the Notes, or upon earlier redemption as provided in the indenture. The Company has the right to redeem the Notes purchased by the Trusts, in whole or in part, on or after the redemption date. As specified in the indenture, if the Notes are redeemed prior to maturity, the redemption price will be the principal amount and any accrued but unpaid interest. The following table is a summary of the outstanding Trust Securities and Notes at September 30, 2023 and December 31, 2022:
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SENIOR DEBT |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SENIOR DEBT | SENIOR DEBT In September 2014, the Company issued $95 million in senior unsecured term notes to qualified institutional investors. The following table summarizes information on these notes as of September 30, 2023 and December 31, 2022:
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DERIVATIVES AND HEDGING ACTIVITIES |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVES AND HEDGING ACTIVITIES | DERIVATIVES AND HEDGING ACTIVITIES From time to time, the Company utilizes interest rate swaps and other derivative financial instruments as part of its asset liability management strategy to manage interest rate risk positions. Fair Value Hedges of Interest Rate Risk As of September 30, 2023, the Company held 11 interest rate swaps with a total notional amount of $1.8 billion. The swaps provide a hedge against the interest rate risk associated with both fixed rate loans and hybrid adjustable loans in their fixed rate period. All outstanding swaps are designated as fair value hedges and involve the payment of a fixed rate amount to a counterparty in exchange for the Company receiving a variable rate payment over the life of the swaps without the exchange of the underlying notional amount. Any gain or loss on the derivatives, as well as any offsetting loss or gain on the hedged items attributable to the hedged risk are recognized in interest income on loans. The following table presents the effect of the Company’s interest rate swaps on the unaudited consolidated statements of income for the three and nine months ended September 30, 2023 and 2022:
The following table presents the fair value of the Company’s interest rate swaps, as well as their classification in the consolidated statements of financial condition as of September 30, 2023 and December 31, 2022:
As of September 30, 2023 and December 31, 2022, the following amounts were recorded in the consolidated statements of financial condition related to cumulative basis adjustments for its fair value hedges:
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STOCK BASED COMPENSATION |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK BASED COMPENSATION | STOCK BASED COMPENSATION The Company’s stock based compensation consists of restricted stock awards ("RSAs") and restricted stock units ("RSUs") granted under the Luther Burbank Corporation Omnibus Equity and Incentive Compensation Plan ("Omnibus Plan"). In connection with its initial public offering ("IPO") in December 2017, the Company granted RSUs in exchange for unvested phantom stock awards related to a then discontinued employee benefit plan that awarded phantom stock to certain key executives and nonemployee directors. The RSUs were granted on a per share basis, with the same vesting schedule and deferral elections that existed for the original phantom stock awards. Post IPO, the Company typically grants RSAs to nonemployee directors and certain employees on an annual basis. RSA grants vest after one year for nonemployee directors and ratably over to four years for employees. All RSAs and RSUs are granted at the fair value of the common stock at the time of the award. RSAs and RSUs 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 vesting and/or service period. Non-cash stock compensation expense recognized for RSAs for the three and nine months ended September 30, 2023 totaled $479 thousand and $1.4 million, respectively, compared to $756 thousand and $2.1 million for the three and nine months ended September 30, 2022. The fair value of RSAs that vested during the nine months ended September 30, 2023 totaled $2.7 million compared to $90 thousand and $2.7 million during the three and nine months ended September 30, 2022, respectively. No RSAs or RSUs vested during the three months ended September 30, 2023. As of September 30, 2023 and December 31, 2022, there was $1.4 million and $2.4 million, respectively, of unrecognized compensation expense related to 229,460 and 414,004 unvested RSAs, respectively, which amounts were expected to be expensed over a weighted average period of 1.17 years and 1.74 years, respectively. As of September 30, 2023 and December 31, 2022, 65,799 and 81,225 shares, respectively, of RSUs were vested and remain unsettled per the original deferral elections. There were no unvested RSUs at September 30, 2023 or December 31, 2022. The following table summarizes share information about RSAs and RSUs:
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FAIR VALUE MEASUREMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair Value Hierarchy The Company groups its assets and liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. Valuations within these levels are based upon: Level 1 - Quoted market prices for identical instruments traded in active exchange markets. Level 2 - Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable or can be corroborated by observable market data. Level 3 - Model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect the Company’s estimates of assumptions that market participants would use on pricing the asset or liability. Valuation techniques include management judgment and estimation which may be significant. Because broadly traded markets do not exist for most of the Company’s financial instruments, the fair value calculations attempt to incorporate the effect of current market conditions at a specific time. These determinations are subjective in nature, involve uncertainties and matters of significant judgment and do not include tax ramifications; therefore, the results cannot be determined with precision, substantiated by comparison to independent markets and may not be realized in an actual sale or immediate settlement of the instruments. There may be inherent weaknesses in any calculation technique, and changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results. For all of these reasons, the aggregation of the fair value calculations presented herein do not represent, and should not be construed to represent, the underlying value of the Company. Management monitors the availability of observable market data to assess the appropriate classification of assets and liabilities within the fair value hierarchy. Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. In such instances, the transfer is reported at the beginning of the reporting period. Management evaluates the significance of transfers between levels based upon the nature of the financial instrument and size of the transfer relative to total assets, total liabilities, or total earnings. The following methods and assumptions were used to estimate the fair value of financial instruments: For cash and cash equivalents, accrued interest receivable and payable, demand deposits and short-term borrowings, the carrying amount was estimated to be fair value. The fair value of accrued interest receivable/payable balances were determined using inputs and fair value measurements commensurate with the asset or liability from which the accrued interest is generated. Fair values for available for sale and held to maturity debt securities, which include primarily debt securities issued by U.S. government sponsored agencies, were based on quoted market prices for similar securities. Fair values for equity securities, which consist of investments in a qualified community reinvestment fund, were based on quoted market prices. Loans were valued using the exit price notion. The fair value was estimated using market quotes for similar assets or the present value of future cash flows, discounted using a market rate for similar products and giving consideration to estimated prepayment risk and credit risk. The fair value of loans was determined utilizing estimates resulting in a Level 3 classification. The fair value of collateral dependent loans were measured based on the fair value of the collateral at the reporting date, adjusted for selling costs. The fair value of collateral dependent loans was determined utilizing estimates resulting in a Level 3 classification. It was not practicable to determine the fair value of FHLB stock due to restrictions placed on its transferability. The fair value of servicing rights was determined using a valuation model that utilizes interest rate, prepayment speed, and default rate assumptions that market participants would use in estimating future net servicing income and that can be validated against available market data. The fair values of derivatives were based on valuation models using observable market data as of the measurement date. Fair values for fixed-rate time deposits were estimated using discounted cash flow analyses using interest rates offered at each reporting date by the Company for time deposits with similar remaining maturities. For deposits with no contractual maturity, the fair value was assumed to equal the carrying value. The fair value of FHLB advances was estimated based on discounting the future cash flows using the market rate currently offered for similar terms. The fair value of subordinated debentures was based on an indication of value provided by a third-party broker. For senior debt, the fair value was based on an indication of value provided by a third-party broker. Fair Value of Financial Instruments The carrying and estimated fair values of the Company’s financial instruments were as follows:
These estimates do not reflect any premium or discount that could result from offering the Company’s entire holdings of a particular financial instrument for sale at one time, nor do they attempt to estimate the value of anticipated future business related to the instruments. In addition, the tax ramifications related to the realization of unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of these estimates. Assets and Liabilities Recorded at Fair Value The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring and nonrecurring basis as of September 30, 2023 and December 31, 2022. Recurring Basis The Company is required or permitted to record the following assets and liabilities at fair value on a recurring basis:
There were no transfers between Level 1 and Level 2 during the three and nine months ended September 30, 2023 or 2022. Non-recurring Basis The Company may be required, from time to time, to measure certain assets and liabilities at fair value on a non-recurring basis. These include assets that are measured at the lower of cost or market value that were recognized at fair value which was below cost at the reporting date. At September 30, 2023, one single family residential collateral dependent loan was measured at a fair value resulting in a charge-off of the full loan balance of $463 thousand during the three months ended September 30, 2023. The fair value of collateral dependent loans were measured based on the fair value of the collateral at the reporting date, adjusted for selling costs. The fair value of collateral dependent loans was determined utilizing estimates resulting in a Level 3 classification. At December 31, 2022, there were no assets or liabilities measured at fair value on a non-recurring basis. At both September 30, 2023 and December 31, 2022, the Company held no other real estate owned
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VARIABLE INTEREST ENTITIES (VIE) |
9 Months Ended |
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Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
VARIABLE INTEREST ENTITIES (VIE) | VARIABLE INTEREST ENTITIES ("VIE") The Company is involved with VIEs through its loan securitization activities. The Company evaluated its association with VIEs for consolidation purposes. Specifically, a VIE is to be consolidated by its primary beneficiary, the entity that has both the power to direct the activities that most significantly impact the VIE, and a variable interest that could potentially be significant to the VIE. A variable interest is a contractual, ownership or other interest whose value fluctuates with the changes in the value of the VIE's assets and liabilities. The assessment includes an evaluation of the Company's continuing involvement with the VIE and the nature and significance of its variable interests. Multifamily loan securitization With respect to the securitization transaction with Freddie Mac which settled September 27, 2017, the Company's variable interests reside with a reimbursement agreement entered into with Freddie Mac that obligates the Company to reimburse Freddie Mac for defaulted contractual principal and interest payments identified after the ultimate resolution of any defaulted loans. Such reimbursement obligations are not to exceed 10% of the original principal amount of the loans comprising the securitization pool. As part of the securitization transaction, the Company released all servicing obligations and rights to Freddie Mac who was designated as the Master Servicer. As Master Servicer, Freddie Mac appointed the Company with sub-servicing obligations, which include obligations to collect and remit payments of principal and interest, manage payments of taxes and insurance, and otherwise administer the underlying loans. The servicing of defaulted loans and foreclosed loans was assigned to a separate third-party entity, independent of the Company and Freddie Mac. Freddie Mac, in its capacity as Master Servicer, can terminate the Company in its role as sub-servicer and direct such responsibilities accordingly. In evaluating the variable interests and continuing involvement in the VIE, the Company determined that it does not have the power to make significant decisions or direct the activities that most significantly impact the economic performance of the VIE's assets and liabilities. As sub-servicer of the loans, the Company does not have the authority to make significant decisions that influence the value of the VIE's net assets and therefore, is not the primary beneficiary of the VIE. Hence, the Company determined that the VIE associated with the multifamily securitization should not be included in the consolidated financial statements of the Company. The Company believes its maximum exposure to loss as a result of involvement with the VIE associated with the securitization under the reimbursement agreement executed with Freddie Mac is 10% of the original principal amount of the loans comprising the securitization pool, or $62.6 million. The reserve for estimated losses with respect to the reimbursement obligation totaled $247 thousand and $439 thousand as of September 30, 2023 and December 31, 2022, respectively, based upon an analysis of quantitative and qualitative data of the underlying loans included in the securitization pool. No disbursements have been made in connection with the reimbursement obligation. In connection with the adoption the CECL accounting standard on January 1, 2023, the Company decreased the allowance for the reimbursement obligation by $119 thousand, which represented the difference between the CECL methodology and the prior methodology utilized for estimating losses for its reimbursement obligation.
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LOAN SALE AND SECURITIZATION ACTIVITIES |
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Transfers and Servicing [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LOAN SALE AND SECURITIZATION ACTIVITIES | LOAN SALE AND SECURITIZATION ACTIVITIES The Company periodically sells loans as part of its business operations and overall management of liquidity, assets and liabilities, and financial performance. The transfer of loans is executed in securitization or sale transactions. With respect to sale transactions, the Company's continuing involvement may or may not include ongoing servicing responsibilities and general representations and warranties. With respect to securitization sales, the Company executed its first and only transaction to date on September 27, 2017 with Freddie Mac. The transaction involved the sale of $626.0 million in originated multifamily loans through a Freddie Mac sponsored transaction. The Company's continuing involvement includes sub-servicing responsibilities, general representations and warranties, and a limited reimbursement obligation. As sub-servicer for Freddie Mac, the Bank is required to maintain a minimum net worth in accordance with GAAP of not less than $2.0 million. If the Bank's capital were to fall below this threshold, Freddie Mac would have the authority to terminate and assume the Bank’s sub-servicing duties. At September 30, 2023, the Bank’s net worth was $834.5 million which equates to its Tier 1 capital of $875.4 million plus goodwill of $3.3 million less accumulated other comprehensive loss related to net unrealized losses on available for sale securities of $44.2 million. General representations and warranties associated with loan sales and the securitization transaction require the Company to uphold various assertions that pertain to the underlying loans at the time of the transaction, including, but not limited to, compliance with relevant laws and regulations, absence of fraud, enforcement of liens, no environmental damages, and maintenance of relevant environmental insurance. Such representations and warranties are limited to those that do not meet the quality represented at the transaction date and do not pertain to a decline in value or future payment defaults. In circumstances where the Company breaches its representations and warranties, the Company would generally be required to cure such instances through a repurchase or substitution of the subject loan(s). With respect to the securitization transaction, the Company also has continuing involvement through a reimbursement agreement executed with Freddie Mac. To the extent the ultimate resolution of defaulted loans results in contractual principal and interest payments that are deficient, the Company is obligated to reimburse Freddie Mac for such amounts, not to exceed 10% of the original principal amount of the loans comprising the securitization pool at the closing date of September 27, 2017. The following table provides cash flows associated with the Company's loan sale activities:
The following table provides information about the loans transferred through sales or securitization and not recorded in the consolidated statements of financial condition, for which the Company's continuing involvement includes sub-servicing or servicing responsibilities and/or reimbursement obligations:
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COMMITMENTS AND CONTINGENCIES |
9 Months Ended |
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Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Financial Instruments with Off-Balance Sheet Risk The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments represent commitments to originate fixed and variable rate loans and loans in process, and involve, to varying degrees, credit risk and interest rate risk in excess of the amount recognized in the Company’s consolidated statements of financial condition. The Company’s exposure to credit loss in the event of nonperformance by the other party for commitments to extend credit is represented by the contractual amount of those instruments. 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. As it relates to interest rate risk, the Company's exposure is generally limited to increases in interest rates that may result during the short period of time between the commitment and funding of fixed rate credit facilities and adjustable rate credit facilities with initial fixed rate periods. The limited timing risk associated with these credit facilities are considered within the Company's asset liability management process. Commitments to fund loans and lines of credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have expiration dates or other termination clauses. In addition, external market forces may impact the probability of commitments being exercised; therefore, total commitments outstanding do not necessarily represent future cash requirements. At September 30, 2023 and December 31, 2022, the Company had outstanding commitments of approximately $21.0 million and $37.7 million, respectively, for loans. Unfunded commitment reserves totaled $190 thousand and $125 thousand at September 30, 2023 and December 31, 2022, respectively. The Company adopted the CECL accounting standard on January 1, 2023. Upon adoption, the Company increased the allowance for unfunded loan commitments by $330 thousand, which represented the difference between the allowance calculated under the CECL methodology as of January 1, 2023 and the incurred loss methodology as of December 31, 2022. The $330 thousand increase in the allowance for unfunded loan commitments was primarily due to higher lifetime expected losses on unfunded commitments on construction loans under the CECL methodology. Contingencies At present, there are no pending or threatened proceedings against the Company which, if determined adversely, would have a material effect on the Company’s business, financial position, results of operations or cash flows. In the ordinary course of operations, as well as in connection with the pending merger with WAFD, the Company may be party to various legal proceedings. Correspondent Banking Agreements The Company maintains funds on deposit with other federally insured financial institutions under correspondent banking agreements. Insured portions of these balances are limited to $250 thousand per institution based on FDIC insurance limits. At September 30, 2023 and December 31, 2022, the Company had $800 thousand and $25.0 million, respectively, in uninsured available cash balances. The Company also has established federal funds lines of credit with correspondent banks totaling $25.0 million and $50.0 million at September 30, 2023 and December 31, 2022, respectively, none of which were advanced at those dates. The Company periodically monitors the financial condition and capital adequacy of these correspondent banks.
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NATURE OF OPERATIONS (Policies) |
9 Months Ended |
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Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Accounting | The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all footnotes as would be necessary for a fair presentation of financial position, results of operations and comprehensive income, changes in stockholders’ equity and cash flows in conformity with accounting principles generally accepted in the United States of America (“GAAP”). However, 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 stockholders’ 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, 2022, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission (the “SEC”), under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”). The unaudited consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated. |
Use of Estimates | Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions affect the amounts reported in the unaudited consolidated financial statements and the disclosures provided, and actual results could differ. |
Earnings Per Share | Basic earnings per common share represents the amount of earnings for the period available to each share of common stock outstanding during the reporting period. Basic EPS is computed based upon net income divided by the weighted average number of common shares outstanding during the period. In determining the weighted average number of shares outstanding, vested restricted stock units are included. Diluted EPS represents the amount of earnings for the period available to each share of common stock outstanding including common stock that would have been outstanding assuming the issuance of common shares for all dilutive potential common shares outstanding during each reporting period. Diluted EPS is computed based upon net income divided by the weighted average number of common shares outstanding during each period, adjusted for the effect of dilutive potential common shares, such as restricted stock awards and units, calculated using the treasury stock method. |
New Financial Accounting Standards | The Company adopted CECL using the modified retrospective method for all financial assets measured at cost, including loans, HTM debt securities and off-balance sheet credit exposures. Results for reporting periods beginning January 1, 2023 are reported under ASU 2016-13, while prior period results continue to be reported under the incurred loss model which was the previously applicable GAAP. The Company recorded an increase to its ACL of $119 thousand as a cumulative effect adjustment of adopting ASU 2016-13, with a corresponding decrease in retained earnings, net of $35 thousand in taxes, of $84 thousand. The transition adjustment reflects the results of our model in estimating lifetime expected credit losses on loans, unfunded commitments and other off-balance sheet credit exposures. |
Derivatives | Any gain or loss on the derivatives, as well as any offsetting loss or gain on the hedged items attributable to the hedged risk are recognized in interest income on loans. |
Fair Value Measurements | The Company groups its assets and liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. Valuations within these levels are based upon: Level 1 - Quoted market prices for identical instruments traded in active exchange markets. Level 2 - Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable or can be corroborated by observable market data. Level 3 - Model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect the Company’s estimates of assumptions that market participants would use on pricing the asset or liability. Valuation techniques include management judgment and estimation which may be significant. Because broadly traded markets do not exist for most of the Company’s financial instruments, the fair value calculations attempt to incorporate the effect of current market conditions at a specific time. These determinations are subjective in nature, involve uncertainties and matters of significant judgment and do not include tax ramifications; therefore, the results cannot be determined with precision, substantiated by comparison to independent markets and may not be realized in an actual sale or immediate settlement of the instruments. There may be inherent weaknesses in any calculation technique, and changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results. For all of these reasons, the aggregation of the fair value calculations presented herein do not represent, and should not be construed to represent, the underlying value of the Company. Management monitors the availability of observable market data to assess the appropriate classification of assets and liabilities within the fair value hierarchy. Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. In such instances, the transfer is reported at the beginning of the reporting period. Management evaluates the significance of transfers between levels based upon the nature of the financial instrument and size of the transfer relative to total assets, total liabilities, or total earnings. The following methods and assumptions were used to estimate the fair value of financial instruments: For cash and cash equivalents, accrued interest receivable and payable, demand deposits and short-term borrowings, the carrying amount was estimated to be fair value. The fair value of accrued interest receivable/payable balances were determined using inputs and fair value measurements commensurate with the asset or liability from which the accrued interest is generated. Fair values for available for sale and held to maturity debt securities, which include primarily debt securities issued by U.S. government sponsored agencies, were based on quoted market prices for similar securities. Fair values for equity securities, which consist of investments in a qualified community reinvestment fund, were based on quoted market prices. Loans were valued using the exit price notion. The fair value was estimated using market quotes for similar assets or the present value of future cash flows, discounted using a market rate for similar products and giving consideration to estimated prepayment risk and credit risk. The fair value of loans was determined utilizing estimates resulting in a Level 3 classification. The fair value of collateral dependent loans were measured based on the fair value of the collateral at the reporting date, adjusted for selling costs. The fair value of collateral dependent loans was determined utilizing estimates resulting in a Level 3 classification. It was not practicable to determine the fair value of FHLB stock due to restrictions placed on its transferability. The fair value of servicing rights was determined using a valuation model that utilizes interest rate, prepayment speed, and default rate assumptions that market participants would use in estimating future net servicing income and that can be validated against available market data. The fair values of derivatives were based on valuation models using observable market data as of the measurement date. Fair values for fixed-rate time deposits were estimated using discounted cash flow analyses using interest rates offered at each reporting date by the Company for time deposits with similar remaining maturities. For deposits with no contractual maturity, the fair value was assumed to equal the carrying value. The fair value of FHLB advances was estimated based on discounting the future cash flows using the market rate currently offered for similar terms. The fair value of subordinated debentures was based on an indication of value provided by a third-party broker. For senior debt, the fair value was based on an indication of value provided by a third-party broker.
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Leases | The Company includes lease extension options in the lease term, if it is reasonably certain the Company will exercise the option, when considering the economic incentive to do so. Leases are classified as operating or finance leases at the lease commencement date. Lease expense for operating leases and short-term leases is recognized on a straight-line basis over the lease term. All of the Company’s leases are classified as operating leases. The Company records operating lease right-of-use assets and operating lease liabilities on the Company's consolidated statements of financial condition. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term.The Company uses its incremental borrowing rate at lease commencement to discount lease payments when the rate implicit in the lease is not readily determinable. The Company selected a FHLB advance rate at lease inception based on the lease term and other factors, as a reasonable incremental borrowing rate. In addition, the Company has elected to account for any non-lease components in its leases as part of the associated lease component. The Company also has elected to not recognize short-term leases with an original term of 12 months or less on the Company's consolidated statements of financial condition. |
NATURE OF OPERATIONS (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted |
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INVESTMENT SECURITIES (Tables) |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt Securities, Available-for-sale | The following table summarizes the amortized cost and the estimated fair value of available for sale debt securities as of the dates indicated:
The following tables summarize the gross unrealized losses and fair value of available for sale debt securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:
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Schedule of Held-to-maturity Securities | The following table summarizes the amortized cost and estimated fair value of held to maturity investment securities as of the dates indicated:
The following table summarizes the gross unrecognized losses and fair value of held to maturity investment securities, aggregated by investment category and length of time that individual securities have been in a continuous unrecognized loss position:
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Schedule of Debt Maturities of Available-for-sale and Held-to-maturity Securities | The following table summarizes the scheduled maturities of available for sale and held to maturity investment securities as of September 30, 2023:
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LOANS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Loans Receivable | Loans consist of the following:
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Schedule Allowance for Loan Losses | The following table summarizes activity in and the allocation of the allowance for credit losses by portfolio segment during the three and nine months ended September 30, 2023:
The following table summarizes activity in and the allocation of the allowance for loan losses by portfolio segment during the three and nine months ended September 30, 2022:
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Schedule of Loan Portfolio by Internal Risk Indicators | The following table presents the internal risk ratings for total loans by portfolio segment of loan and origination year as of September 30, 2023, as well as gross charge-offs for the nine months ended September 30, 2023:
The following table summarizes the loan portfolio allocated by management’s internal risk ratings at December 31, 2022.
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Schedule or Past Due Loans Receivable | The following table summarizes an aging analysis of the loan portfolio by the time past due as of the dates indicated below:
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Schedule Of Collateral Dependent Loans By Collateral Type | The following table presents the amortized cost basis of collateral dependent loans by loan type at September 30, 2023.
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Schedule of Impaired Loans Receivables | The following table summarizes information related to impaired loans at December 31, 2022:
The following table summarizes information related to impaired loans for the three and nine months ended September 30, 2022:
The following table summarizes the allocation of the allowance for loan losses by impairment methodology as of December 31, 2022:
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Schedule of Modified Loans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Troubled Debt Restructurings | The following table summarizes the recorded investment related to troubled debt restructurings ("TDRs") at December 31, 2022:
During the nine months ended September 30, 2022, the Company modified the terms of one loan that qualified as a TDR. The following table provides details of this modification:
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NONPERFORMING ASSETS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Nonperforming Assets | The following table presents the composition of non-accrual loans as of the dates indicated below:
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MORTGAGE SERVICING RIGHTS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfers and Servicing [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Mortgage Loans Serviced for Others | The principal balances of these loans are as follows:
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Schedule of Changes in Servicing Assets | Activities for mortgage servicing rights are as follows:
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LEASES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Supplemental Lease Information | Supplemental lease information as of September 30, 2023 and December 31, 2022 is as follows:
Supplemental lease information for the three and nine months ended September 30, 2023 and 2022 is as follows:
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Schedule of Future Undiscounted Lease Payments | At September 30, 2023, future undiscounted lease payments with initial terms of one year or more are as follows:
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DEPOSITS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Deposits | A summary of deposits at September 30, 2023 and December 31, 2022 is as follows:
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Schedule of Certificate Account Maturities | Maturities of the Company’s time deposits at September 30, 2023 are summarized as follows:
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FEDERAL HOME LOAN BANK AND FEDERAL RESERVE BANK ADVANCES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Advance from Federal Home Loan Bank [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of FHLB Advances | The following table discloses the Bank’s outstanding advances from the FHLB of San Francisco:
The following table summarizes scheduled principal payments on FHLB advances over the next five years as of September 30, 2023:
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JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Outstanding Trust Securities | The following table is a summary of the outstanding Trust Securities and Notes at September 30, 2023 and December 31, 2022:
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SENIOR DEBT (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | The following table summarizes information on these notes as of September 30, 2023 and December 31, 2022:
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DERIVATIVES AND HEDGING ACTIVITIES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Interest Rate Swap on the Consolidated Statements of Income | The following table presents the effect of the Company’s interest rate swaps on the unaudited consolidated statements of income for the three and nine months ended September 30, 2023 and 2022:
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Schedule of Interest Rate Swap on Consolidated Balance Sheet | The following table presents the fair value of the Company’s interest rate swaps, as well as their classification in the consolidated statements of financial condition as of September 30, 2023 and December 31, 2022:
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Schedule of Amounts Recorded on the Balance Sheet Related to Cumulative Adjustments on Fair Value Hedges | As of September 30, 2023 and December 31, 2022, the following amounts were recorded in the consolidated statements of financial condition related to cumulative basis adjustments for its fair value hedges:
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STOCK BASED COMPENSATION (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restricted Stock Activity | The following table summarizes share information about RSAs and RSUs:
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FAIR VALUE MEASUREMENTS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value of Assets and Liabilities | The carrying and estimated fair values of the Company’s financial instruments were as follows:
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Schedule of Fair Value of Assets Measured on a Recurring Basis | The Company is required or permitted to record the following assets and liabilities at fair value on a recurring basis:
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Schedule of Fair Value of Liabilities Measured on a Recurring Basis | The Company is required or permitted to record the following assets and liabilities at fair value on a recurring basis:
|
LOAN SALE AND SECURITIZATION ACTIVITIES (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfers and Servicing [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash Flows From Loan Sale Activities | The following table provides cash flows associated with the Company's loan sale activities:
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Schedule of Loans Transfered Through Sale or Securitization | The following table provides information about the loans transferred through sales or securitization and not recorded in the consolidated statements of financial condition, for which the Company's continuing involvement includes sub-servicing or servicing responsibilities and/or reimbursement obligations:
|
NATURE OF OPERATIONS - Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Accounting Policies [Abstract] | ||||
Net income | $ 1,907 | $ 21,002 | $ 22,266 | $ 66,509 |
Weighted average common shares outstanding - basic (in shares) | 50,864,217 | 50,738,479 | 50,866,536 | 50,956,972 |
Add: Dilutive effects of assumed vesting of restricted stock (in shares) | 59,224 | 155,079 | 39,864 | 114,774 |
Weighted average common shares outstanding - diluted (in shares) | 50,923,441 | 50,893,558 | 50,906,400 | 51,071,746 |
Basic earnings per common share (in usd per share) | $ 0.04 | $ 0.41 | $ 0.44 | $ 1.31 |
Diluted earnings per common share (in usd per share) | $ 0.04 | $ 0.41 | $ 0.44 | $ 1.30 |
Anti-dilutive shares not included in calculation of diluted earnings per share (in shares) | 3,888 | 0 | 18,224 | 2,493 |
INVESTMENT SECURITIES - Held-to-maturity Securities (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | $ 3,025 | $ 3,108 |
Gross Unrecognized Gains | 0 | 0 |
Gross Unrecognized Losses | (369) | (234) |
Estimated Fair Value | 2,656 | 2,874 |
Residential MBS and CMOs | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 2,971 | 3,047 |
Gross Unrecognized Gains | 0 | 0 |
Gross Unrecognized Losses | (369) | (234) |
Estimated Fair Value | 2,602 | 2,813 |
Fair Value | ||
Less than 12 Months | 0 | 2,813 |
12 Months or More | 2,602 | 0 |
Total | 2,602 | 2,813 |
Unrealized Losses | ||
Less than 12 Months | 0 | (234) |
12 Months or More | (369) | 0 |
Total | (369) | (234) |
Other investments | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 54 | 61 |
Gross Unrecognized Gains | 0 | 0 |
Gross Unrecognized Losses | 0 | 0 |
Estimated Fair Value | $ 54 | $ 61 |
INVESTMENT SECURITIES - Schedule of Investment Securities Maturities (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Amortized Cost | ||
One to five years | $ 1,451 | |
Five to ten years | 32,762 | |
Beyond ten years | 2,856 | |
Amortized Cost | 598,261 | $ 655,504 |
Fair Value | ||
One to five years | 1,457 | |
Five to ten years | 32,681 | |
Beyond ten years | 2,870 | |
Fair Value | 535,924 | 607,348 |
Amortized Cost | ||
Five to ten years | 54 | |
Amortized Cost | 3,025 | 3,108 |
Fair Value | ||
Five to ten years | 54 | |
Estimated Fair Value | 2,656 | $ 2,874 |
MBS, CMOs and other ABS | ||
Amortized Cost | ||
MBS, CMOs and other ABS | 561,192 | |
Fair Value | ||
MBS, CMOs and other ABS | 498,916 | |
MBS | ||
Amortized Cost | ||
MBS | 2,971 | |
Fair Value | ||
MBS | $ 2,602 |
LOANS - Troubled Debt Restructurings (Details) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2023
loan
|
Sep. 30, 2022
loan
|
Sep. 30, 2023
USD ($)
loan
|
Sep. 30, 2022
USD ($)
loan
|
Dec. 31, 2022
USD ($)
|
|
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||
Number of Contracts | loan | 1 | ||||
Financing Receivable, Modified in Period, Amount | $ 0 | ||||
Modifications, suspension of loan payments, term | 6 months | ||||
Allowance for credit loss, increase from troubled debt restructuring | $ 0 | ||||
Impaired, troubled debt restructuring, write-down | $ 0 | ||||
Subsequent default, number of loans | loan | 0 | 0 | 0 | 0 | |
Single family residential | |||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||
Recorded investment | $ 1,211,000 | ||||
Related allowance | $ 25,000 | ||||
Number of Contracts | loan | 1 | ||||
Pre-Modification Outstanding Recorded Investment | $ 405,000 | ||||
Financing Receivable, Modified in Period, Amount | $ 412,000 |
NONPERFORMING ASSETS - Schedule of Nonperforming Assets (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Non-Accrual Loans with No ACL | $ 6,626 | $ 6,471 |
Non-Accrual Loans | 6,626 | 6,471 |
Multifamily residential | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Non-Accrual Loans with No ACL | 3,494 | 3,509 |
Non-Accrual Loans | 3,494 | 3,509 |
Single family residential | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Non-Accrual Loans with No ACL | 3,132 | 2,962 |
Non-Accrual Loans | $ 3,132 | $ 2,962 |
NONPERFORMING ASSETS - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Receivables [Abstract] | ||||
Interest income recognized on non-accrual loans | $ 23 | $ 45 | $ 69 | $ 99 |
Contractual interest not accrued during the quarter | $ 121 | $ 6 | $ 362 | $ 30 |
MORTGAGE SERVICING RIGHTS - Mortgage Loans Serviced for Others (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Schedule of Loans Serviced for Others [Line Items] | ||
Total mortgage loans serviced for others | $ 110,380 | $ 117,981 |
Federal Home Loan Mortgage Corporation ("Freddie Mac") | ||
Schedule of Loans Serviced for Others [Line Items] | ||
Total mortgage loans serviced for others | 75,631 | 80,478 |
Other financial institutions | ||
Schedule of Loans Serviced for Others [Line Items] | ||
Total mortgage loans serviced for others | $ 34,749 | $ 37,503 |
MORTGAGE SERVICING RIGHTS - Mortgage Servicing Rights Activity (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Beginning balance | $ 639 | $ 779 | $ 688 | $ 915 |
Additions | 0 | 0 | 0 | 0 |
Disposals | 0 | 0 | 0 | 0 |
Changes in fair value due to changes in assumptions | 0 | 0 | 0 | 0 |
Other changes in fair value | (6) | (54) | (55) | (190) |
Ending balance | $ 633 | $ 725 | $ 633 | $ 725 |
LEASES - Narrative (Details) |
Sep. 30, 2023 |
---|---|
Leases [Abstract] | |
Renewal term | 5 years |
LEASES - Supplemental Lease Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
|
Leases [Abstract] | |||||
Operating lease right-of-use assets included in prepaid expenses and other assets | $ 13,969 | $ 13,969 | $ 13,244 | ||
Operating lease liabilities included in other liabilities and accrued expenses | $ 13,969 | $ 13,969 | $ 13,316 | ||
Weighted average remaining lease term (years) of operating leases | 4 years 10 months 24 days | 4 years 10 months 24 days | 5 years 1 month 6 days | ||
Weighted average discount rate of operating leases | 3.24% | 3.24% | 2.69% | ||
Operating lease costs included in occupancy expense | $ 893 | $ 911 | $ 2,709 | $ 2,750 | |
Cash paid for amounts included in the measurement of operating lease liabilities | $ 893 | $ 1,019 | $ 2,781 | $ 3,071 |
LEASES - Schedule of Lease Payments (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Leases [Abstract] | ||
October 1 - December 31, 2023 | $ 862 | |
2024 | 3,394 | |
2025 | 3,050 | |
2026 | 2,886 | |
2027 | 2,667 | |
Thereafter | 2,425 | |
Total undiscounted lease payments | 15,284 | |
Less: Imputed interest | 1,315 | |
Net lease liabilities | $ 13,969 | $ 13,316 |
QUALIFIED AFFORABLE HOUSING PROJECT INVESTMENTS (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
|
Federal Home Loan Banks [Abstract] | |||||
Qualified affordable housing project investments, commitment | $ 19,300 | $ 19,300 | $ 17,900 | ||
Payments for affordable housing programs | 6,200 | 4,800 | |||
Qualified affordable housing project investments, unfunded commitment | 13,100 | 13,100 | $ 13,100 | ||
Amortization method qualified affordable housing project investments, amortization | 211 | $ 130 | 955 | $ 395 | |
Affordable Housing Tax Credits and Other Tax Benefits, Amount | $ 283 | $ 200 | $ 1,300 | $ 565 |
DEPOSITS - Deposits (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Deposits, by Type [Abstract] | ||
Time deposits | $ 3,647,822 | $ 3,134,373 |
Money market savings | 953,306 | 1,538,008 |
Money market checking | 965,944 | 908,231 |
Interest-bearing demand | 122,919 | 158,068 |
Noninterest-bearing demand | 70,111 | 100,660 |
Deposits | $ 5,760,102 | $ 5,839,340 |
DEPOSITS - Narrative (Details) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Deposits [Abstract] | ||
Certificates of deposit that meet or exceed FDIC insurance limit | $ 1,500.0 | $ 1,300.0 |
Brokered deposits | $ 441.7 | $ 455.8 |
DEPOSITS - Maturities (Details) $ in Thousands |
Sep. 30, 2023
USD ($)
|
---|---|
Maturities of Time Deposits, Twelve months ending March 31, | |
October 1 - December 31, 2023 | $ 1,151,224 |
2024 | 2,421,263 |
2025 | 63,093 |
2026 | 7,868 |
2027 | 3,498 |
Thereafter | 876 |
Time Deposits | $ 3,647,822 |
FEDERAL HOME LOAN BANK AND FEDERAL RESERVE BANK ADVANCES - Schedule of Maturities (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Federal Home Loan Bank, Advances, Fiscal Year Maturity [Abstract] | ||
Outstanding advances from FHLB | $ 1,426,647 | $ 1,208,147 |
FHLB of San Francisco | ||
Federal Home Loan Bank, Advances, Fiscal Year Maturity [Abstract] | ||
October 1 - December 31, 2023 | 275,000 | |
2024 | 500,000 | |
2025 | 551,500 | |
2026 | 100,000 | |
2027 | 0 | |
Thereafter | 147 | |
Outstanding advances from FHLB | $ 1,426,647 | $ 1,208,147 |
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES - Narrative (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2023
USD ($)
trust
| |
Investment Holdings [Line Items] | |
Number of wholly-owned trust companies | trust | 2 |
Trusts | |
Investment Holdings [Line Items] | |
Investment in common securities | $ | $ 1.9 |
Trust Preferred Securities Subject to Mandatory Redemption | Trusts | |
Investment Holdings [Line Items] | |
Interest deferment period (not exceeding) | 5 years |
SENIOR DEBT - Narrative (Details) - USD ($) |
Sep. 30, 2023 |
Dec. 31, 2022 |
Sep. 30, 2014 |
---|---|---|---|
Senior Unsecured Term Notes, September 2014 | Senior Unsecured Term Notes | |||
Debt Instrument [Line Items] | |||
Principal | $ 95,000,000 | $ 95,000,000 | $ 95,000,000 |
SENIOR DEBT - Schedule of Debt (Details) - Senior Unsecured Term Notes, September 2014 - Senior Unsecured Term Notes - USD ($) |
Sep. 30, 2023 |
Dec. 31, 2022 |
Sep. 30, 2014 |
---|---|---|---|
Debt Instrument [Line Items] | |||
Principal | $ 95,000,000 | $ 95,000,000 | $ 95,000,000 |
Unamortized Debt Issuance Costs | $ 123,000 | $ 215,000 | |
Fixed Interest Rate | 6.50% |
DERIVATIVES AND HEDGING ACTIVITIES - Narrative (Details) - Designated as Hedging Instrument - Interest Rate Swap |
Sep. 30, 2023
USD ($)
instrument
|
Dec. 31, 2022
USD ($)
|
---|---|---|
Derivative [Line Items] | ||
Closed portfolio loans used in hedging relationship | $ 4,400,000,000 | $ 3,900,000,000 |
Fair Value Hedging | ||
Derivative [Line Items] | ||
Notional amounts | $ 1,800,000,000 | $ 1,850,000,000 |
Fair Value Hedging | 11 Derivative Instruments Held | ||
Derivative [Line Items] | ||
Number of agreements entered into | instrument | 11 | |
Notional amounts | $ 1,800,000,000 |
DERIVATIVES AND HEDGING ACTIVITIES - Schedule of Interest Rate Swap on Consolidated Statement of Income (Details) - Interest Rate Swap - Designated as Hedging Instrument - Fair Value Hedging - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Net increase in interest income | $ 6,410 | $ 2,894 | $ 22,681 | $ 3,279 |
Interest Income on Loans | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Derivative - interest rate swap, interest income | 6,473 | 2,971 | 22,773 | 3,404 |
Hedged items - loans, interest income | $ (63) | $ (77) | $ (92) | $ (125) |
DERIVATIVES AND HEDGING ACTIVITIES - Schedule of Interest Rate Swap on Consolidated Balance Sheet (Details) - Interest Rate Swap - Designated as Hedging Instrument - Fair Value Hedging - USD ($) |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Derivatives, Fair Value [Line Items] | ||
Notional Amount | $ 1,800,000,000 | $ 1,850,000,000 |
Prepaid Expenses and Other Assets | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives, Fair Value | 32,823,000 | 21,323,000 |
Other Liabilities and Accrued Expenses | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives, Fair Value | $ 0 | $ 2,136,000 |
DERIVATIVES AND HEDGING ACTIVITIES - Schedule of Amounts Recorded on the Balance Sheet Related to Cumulative Adjustments on Fair Value Hedges (Details) - Interest Rate Swap - Designated as Hedging Instrument - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets | $ (33,087) | $ (19,359) |
Fair Value Hedging | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Carrying Amount of the Hedged Assets | $ 1,766,913 | $ 1,430,641 |
STOCK BASED COMPENSATION - Awards Activity (Details) - RSUs and RSAs - $ / shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Number of Shares | ||
Beginning of the period balance (in shares) | 495,229 | 581,189 |
Shares granted (in shares) | 42,034 | 218,048 |
Shares settled (in shares) | (239,005) | (264,836) |
Shares forfeited (in shares) | (2,999) | (37,839) |
End of the period balance (in shares) | 295,259 | 496,562 |
Weighted Average Grant Date Fair Value | ||
Beginning of the period balance (in usd per share) | $ 11.89 | $ 10.56 |
Shares granted (in usd per share) | 11.24 | 13.78 |
Shares settled (in usd per share) | 11.81 | 10.49 |
Shares forfeited (in usd per share) | 11.68 | 11.97 |
End of the period balance (in usd per share) | $ 11.87 | $ 11.90 |
FAIR VALUE MEASUREMENTS - Narrative (Details) $ in Thousands |
Sep. 30, 2023
USD ($)
|
---|---|
Level 3 | Single family residential | Nonrecurring Basis | Collateral Dependent Loans | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Loans receivable, net | $ 463 |
VARIABLE INTEREST ENTITIES (VIE) (Details) - USD ($) $ in Thousands |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2023 |
Jan. 01, 2023 |
Dec. 31, 2022 |
|
Variable Interest Entity [Line Items] | |||
Liabilities | $ 7,438,908 | $ 7,292,096 | |
Variable Interest Entity, Not Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Maximum loss exposure as a percentage of original principal amount | 10.00% | ||
Maximum loss exposure | $ 62,600 | ||
Liabilities | $ 247 | $ 439 | |
Variable Interest Entity, Not Primary Beneficiary | Cumulative Effect, Period of Adoption, Adjustment | |||
Variable Interest Entity [Line Items] | |||
Liabilities | $ (119) |
LOAN SALE AND SECURITIZATION ACTIVITIES - Cash Flow from Sale of Loans (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Transfers and Servicing [Abstract] | ||||
Proceeds from loan sales | $ 0 | $ 0 | $ 0 | $ 0 |
Servicing fees | $ 60 | $ 75 | $ 187 | $ 261 |
LOAN SALE AND SECURITIZATION ACTIVITIES - Loans Transferred Through Loans or Securitization (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Mar. 31, 2023 |
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Single family residential | |||
Derecognized Assets, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together [Line Items] | |||
Principal balance of loans | $ 10,717 | $ 11,000 | |
Loans 90+ days past due | 0 | 0 | |
Charge-offs, net | $ 0 | 0 | |
Multifamily residential | |||
Derecognized Assets, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together [Line Items] | |||
Principal balance of loans | 99,663 | 106,981 | |
Loans 90+ days past due | 0 | $ 0 | |
Charge-offs, net | $ 0 | $ 0 |
COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) |
Sep. 30, 2023 |
Jan. 01, 2023 |
Dec. 31, 2022 |
---|---|---|---|
Operating Leased Assets [Line Items] | |||
Cash balances held at other institutions that exceed FDIC insured limits | $ 800,000 | $ 25,000,000 | |
Federal Funds | Line of Credit | |||
Operating Leased Assets [Line Items] | |||
Maximum borrowing capacity | 25,000,000 | 50,000,000 | |
Commitments to Extend Credit | |||
Operating Leased Assets [Line Items] | |||
Real estate loan funding commitments | 21,000,000 | 37,700,000 | |
Unfunded Loan Commitment | |||
Operating Leased Assets [Line Items] | |||
Reserve recorded on real estate loan funding commitments | $ 190,000 | $ 125,000 | |
Unfunded Loan Commitment | Cumulative Effect, Period of Adoption, Adjustment | |||
Operating Leased Assets [Line Items] | |||
Reserve recorded on real estate loan funding commitments | $ 330,000 |
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