(State or other jurisdiction of Incorporation or organization) |
(I.R.S. Employer Identification No.) | |
|
||
(Address of principal executive offices) | (Zip Code) |
Title of each class |
Trading Symbol(s) | Name of each exchange on which registered | ||
The |
|
☒ | Accelerated filer | ☐ | |||||
Non-accelerated filer |
☐ | Smaller reporting company | ||||||
Emerging growth company |
PART I – |
FINANCIAL INFORMATION (UNAUDITED) | 3 | ||||
ITEM 1. |
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | 5 | ||||
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | 10 | |||||
ITEM 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 37 | ||||
CRITICAL ACCOUNTING POLICIES | 38 | |||||
OVERVIEW | 39 | |||||
ANALYSIS OF THE RESULTS OF OPERATIONS | 41 | |||||
ANALYSIS OF FINANCIAL CONDITION | 51 | |||||
ASSET/LIABILITY AND MARKET RISK MANAGEMENT | 65 | |||||
ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 68 | ||||
ITEM 4. |
CONTROLS AND PROCEDURES | 68 | ||||
PART II – |
OTHER INFORMATION | 69 | ||||
ITEM 1. |
LEGAL PROCEEDINGS | 69 | ||||
ITEM 1A. |
RISK FACTORS | 70 |
||||
ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 71 | ||||
ITEM 3. |
DEFAULTS UPON SENIOR SECURITIES | 71 | ||||
ITEM 4. |
MINE SAFETY DISCLOSURES | 71 | ||||
ITEM 5. |
OTHER INFORMATION | 72 | ||||
ITEM 6. |
EXHIBITS | 72 | ||||
73 |
• |
local, regional, national and international economic and market conditions and political events and the impact they may have on us, our customers and our assets and liabilities; |
• |
our ability to attract deposits and other sources of funding or liquidity; |
• |
supply and demand for commercial or residential real estate and periodic deterioration in real estate prices and/or values in California or other states where we lend; |
• |
a sharp or prolonged slowdown or decline in real estate construction, sales or leasing activities; |
• |
changes in the financial performance and/or condition of our borrowers, depositors, key vendors or counterparties; |
• |
changes in our levels of delinquent loans, nonperforming assets, allowance for credit losses and charge-offs; |
• |
the costs or effects of mergers, acquisitions or dispositions we may make, whether we are able to obtain any required governmental approvals in connection with any such mergers, acquisitions or dispositions, and/or our ability to realize the contemplated financial or business benefits or cost savings associated with any such mergers, acquisitions or dispositions; |
• |
the effects of new laws, regulations and/or government programs, including those laws, regulations and programs enacted by federal, state or local governments in the geographic jurisdictions in which we do business in response to the recent national emergency declared in connection with the COVID-19 pandemic; |
• |
the impact of the federal CARES Act and the significant additional lending activities undertaken by the Company in connection with the Small Business Administration’s Paycheck Protection Program enacted thereunder, including risks to the Company with respect to the uncertain application by the Small Business Administration of new borrower and loan eligibility, forgiveness and audit criteria; |
• |
the effects of the Company’s participation in one or more of the new lending programs recently established by the Federal Reserve, including the Main Street New Loan Facility, the Main Street Priority Loan Facility and the Nonprofit Organization New Loan Facility, and the impact of any related actions or decisions by the Federal Reserve Bank of Boston and its special purpose vehicle established pursuant to such lending programs; |
• |
the effect of changes in other pertinent laws, regulations and applicable judicial decisions (including laws, regulations and judicial decisions concerning financial reforms, taxes, bank capital levels, allowance for credit losses, consumer, commercial or secured lending, securities and securities trading and hedging, bank operations, compliance, fair lending, the Community Reinvestment Act, employment, executive compensation, insurance, cybersecurity, vendor management and information security technology) with which we and our subsidiaries must comply or believe we should comply or which may otherwise impact us; |
• |
changes in estimates of future reserve requirements and minimum capital requirements based upon the periodic review thereof under relevant regulatory and accounting standards, including changes in the Basel Committee framework establishing capital standards for bank credit, operations and market risks; |
• |
the accuracy of the assumptions and estimates and the absence of technical error in implementation or calibration of models used to estimate the fair value of financial instruments or currently expected credit losses or delinquencies; |
• |
the sensitivity of our assets and liabilities to changes in market interest rates, or our current allowance for credit losses; |
• |
inflation, changes in market interest rates, securities market and monetary fluctuations; |
• |
changes in government-established interest rates, reference rates or monetary policies, including the possible imposition of negative interest rates on bank reserves; |
• |
the impact of the anticipated phase-out of the London Interbank Offered Rate (LIBOR) on interest rate indexes specified in certain of our customer loan agreements and in our interest rate swap arrangements, including any economic and compliance effects related to the expected change from LIBOR to an alternative reference rate; |
• |
changes in the amount, cost and availability of deposit insurance; |
• |
disruptions in the infrastructure that supports our business and the communities where we are located, which are concentrated in California, involving or related to physical site access and/or communication facilities; |
• |
cyber incidents, attacks, infiltrations, exfiltrations, or theft or loss of Company or customer data or money; |
• |
political developments, uncertainties or instability, catastrophic events, acts of war or terrorism, or natural disasters, such as earthquakes, drought, the effects of pandemic diseases, climate change or extreme weather events, that may affect electrical, environmental and communications or other services, computer services or facilities we use, or that may affect our customers, employees or third parties with whom we conduct business; |
• |
our timely development and implementation of new banking products and services and the perceived overall value of these products and services by customers and potential customers; |
• |
the Company’s relationships with and reliance upon outside vendors with respect to certain of the Company’s key internal and external systems, applications and controls; |
• |
changes in commercial or consumer spending, borrowing and savings preferences or behaviors; |
• |
technological changes and the expanding use of technology in banking and financial services (including the adoption of mobile banking, funds transfer applications, electronic marketplaces for loans, block-chain technology and other banking products, systems or services); |
• |
our ability to retain and increase market share, to retain and grow customers and to control expenses; |
• |
changes in the competitive environment among banks and other financial services and technology providers; |
• |
competition and innovation with respect to financial products and services by banks, financial institutions and non-traditional providers, including retail businesses and technology companies; |
• |
volatility in the credit and equity markets and its effect on the general economy or local or regional business conditions or on the Company’s capital, assets, liabilities, or customers; |
• |
fluctuations in the price of the Company’s common stock or other securities, and the resulting impact on the Company’s ability to raise capital or make acquisitions; |
• |
the effect of changes in accounting policies and practices, as may be adopted from time-to-time |
• |
changes in our organization, management, compensation and benefit plans, and our ability to retain or expand our workforce, management team, key executive positions and/or our board of directors; |
• |
our ability to identify suitable and qualified replacements for any of our executive officers who may leave their employment with us, including our Chief Executive Officer; |
• |
the costs and effects of legal, compliance and regulatory actions, changes and developments, including the initiation and resolution of legal proceedings (including any securities, lender liability, bank operations, financial product or service, data privacy, consumer or employee class action litigation); |
• |
regulatory or other governmental inquiries or investigations, and/or the results of regulatory examinations or reviews; |
• |
our ongoing relations with our various federal and state regulators, including the SEC, Federal Reserve Board, FDIC and California DBO; |
• |
our success at managing the risks involved in the foregoing items; and |
• |
all other factors set forth in the Company’s public reports, including its Annual Report on Form 10-K for the year ended December 31, 2019, and particularly the discussion of risk factors within that document. |
June 30, 2020 |
December 31, 2019 |
|||||||
Assets |
||||||||
Cash and due from banks |
$ | $ | ||||||
Interest-earning balances due from Federal Reserve |
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|
|||||
Total cash and cash equivalents |
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|
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Interest-earning balances due from depository institutions |
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Investment securities available-for-sale, |
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Investment securities held-to-maturity |
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Total investment securities |
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|
|||||
Investment in stock of Federal Home Loan Bank (FHLB) |
||||||||
Loans and lease finance receivables |
||||||||
Allowance for credit losses |
( |
) | ( |
) | ||||
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|
|||||
Net loans and lease finance receivables |
||||||||
|
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|
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Premises and equipment, net |
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Bank owned life insurance (BOLI) |
||||||||
Accrued interest receivable |
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Intangibles |
||||||||
Goodwill |
||||||||
Other real estate owned (OREO) |
||||||||
Income taxes |
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Other assets |
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|
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Total assets |
$ | $ | ||||||
|
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|
|||||
Liabilities and Stockholders’ Equity |
||||||||
Liabilities: |
||||||||
Deposits: |
||||||||
Noninterest-bearing |
$ | $ | ||||||
Interest-bearing |
||||||||
|
|
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|
|||||
Total deposits |
||||||||
Customer repurchase agreements |
||||||||
Other borrowings |
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Deferred compensation |
||||||||
Junior subordinated debentures |
||||||||
Payable for securities purchased |
- | |||||||
Other liabilities |
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|
|
|||||
Total liabilities |
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|
|||||
Commitments and Contingencies |
||||||||
Stockholders’ Equity |
||||||||
Common stock, authorized, |
||||||||
Retained earnings |
||||||||
Accumulated other comprehensive income, net of tax |
||||||||
|
|
|
|
|||||
Total stockholders’ equity |
||||||||
|
|
|
|
|||||
Total liabilities and stockholders’ equity |
$ | $ | ||||||
|
|
|
|
Three Months Ended June 30, |
Six Months Ended June 30, | |||||||||||||||
2020 |
2019 |
2020 |
2019 | |||||||||||||
Interest income: |
||||||||||||||||
Loans and leases, including fees |
$ | $ | $ | $ | ||||||||||||
Investment securities: |
||||||||||||||||
Investment securities available-for-sale |
||||||||||||||||
Investment securities held-to-maturity |
||||||||||||||||
|
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|
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|
|
|
|
|
|
|
| |||||
Total investment income |
||||||||||||||||
|
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|
|
|
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|
|
|
|
| |||||
Dividends from FHLB stock |
||||||||||||||||
Interest-earning deposits with other institutions |
||||||||||||||||
|
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|
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|
|
|
|
|
|
|
| |||||
Total interest income |
||||||||||||||||
|
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|
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|
|
|
|
|
|
| |||||
Interest expense: |
||||||||||||||||
Deposits |
||||||||||||||||
Borrowings and customer repurchase agreements |
||||||||||||||||
Junior subordinated debentures |
||||||||||||||||
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|
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|
|
|
|
|
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|
| |||||
Total interest expense |
||||||||||||||||
|
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|
|
|
|
|
| |||||
Net interest income before provision for credit losses |
||||||||||||||||
Provision for credit losses |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net interest income after provision for credit losses |
||||||||||||||||
|
|
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|
|
|
|
|
|
|
| |||||
Noninterest income: |
||||||||||||||||
Service charges on deposit accounts |
||||||||||||||||
Trust and investment services |
||||||||||||||||
Bankcard services |
||||||||||||||||
BOLI income |
||||||||||||||||
Gain on OREO, net |
- | |||||||||||||||
Gain on sale of building, net |
- | - | - | |||||||||||||
Gain on eminent domain condemnation, net |
- | - | ||||||||||||||
Other |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total noninterest income |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Noninterest expense: |
||||||||||||||||
Salaries and employee benefits |
||||||||||||||||
Occupancy and equipment |
||||||||||||||||
Professional services |
||||||||||||||||
Computer software expense |
||||||||||||||||
Marketing and promotion |
||||||||||||||||
Amortization of intangible assets |
||||||||||||||||
Acquisition related expenses |
- | - | ||||||||||||||
Other |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total noninterest expense |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Earnings before income taxes |
||||||||||||||||
Income taxes |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net earnings |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Other comprehensive income: |
||||||||||||||||
Unrealized (loss) gain on securities arising during the period, before tax |
$ | ( |
) | $ | $ | $ | ||||||||||
Less: Income tax benefit (expense) related to items of other comprehensive income |
( |
) | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Other comprehensive income (loss), net of tax |
( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Comprehensive income |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Basic earnings per common share |
$ | $ | $ | $ | ||||||||||||
Diluted earnings per common share |
$ | $ | $ | $ |
Common Shares Outstanding |
Common Stock |
Retained Earnings |
Accumulated Other Comprehensive Income (Loss) |
Total | ||||||||||||||||
Balance, April 1, 2020 |
$ | $ | $ | $ | ||||||||||||||||
Repurchase of common stock |
( |
) | ( |
) | - | - | ( |
) | ||||||||||||
Exercise of stock options |
- | - | ||||||||||||||||||
Shares issued pursuant to stock-based compensation plan |
- | - | - | |||||||||||||||||
Cash dividends declared on common stock ($ |
- | - | ( |
) | - | ( |
) | |||||||||||||
Net earnings |
- | - | - | |||||||||||||||||
Other comprehensive income |
- | - | - | ( |
) | ( |
) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Balance, June 30, 2020 |
$ | $ | $ | $ | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Balance, April 1, 2019 |
$ | $ | $ | ( |
) | $ | ||||||||||||||
Repurchase of common stock |
( |
) | ( |
) | - | - | ( |
) | ||||||||||||
Exercise of stock options |
- | - | ||||||||||||||||||
Shares issued pursuant to stock-based compensation plan |
- | - | - | |||||||||||||||||
Cash dividends declared on common stock ($ |
- | - | ( |
) | - | ( |
) | |||||||||||||
Net earnings |
- | - | - | |||||||||||||||||
Other comprehensive income |
- | - | - | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Balance, June 30, 2019 |
$ | $ | $ | $ | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shares Outstanding |
Common Stock |
Retained Earnings |
Accumulated Other Comprehensive Income (Loss) |
Total |
||||||||||||||||
Balance, January 1, 2020 |
$ | $ | $ | $ | ||||||||||||||||
Cumulative adjustment upon adoption of ASU 2016-13 |
- | - | ( |
) | - | ( |
) | |||||||||||||
Repurchase of common stock |
( |
) | ( |
) | - | - | ( |
) | ||||||||||||
Exercise of stock options |
- | - | ||||||||||||||||||
Shares issued pursuant to stock-based compensation plan |
- | - | ||||||||||||||||||
Cash dividends declared on common stock ($ |
- | - | ( |
) | - | ( |
) | |||||||||||||
Net earnings |
- | - | - | |||||||||||||||||
Other comprehensive income |
- | - | - | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance, June 30, 2020 |
$ | $ | $ | $ | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance, January 1, 2019 |
$ | $ | $ | ( |
) | $ | ||||||||||||||
Repurchase of common stock |
( |
) | ( |
) | - | - | ( |
) | ||||||||||||
Exercise of stock options |
- | - | ||||||||||||||||||
Shares issued pursuant to stock-based compensation plan |
- | - | ||||||||||||||||||
Cash dividends declared on common stock ($ |
- | - | ( |
) | - | ( |
) | |||||||||||||
Net earnings |
- | - | - | |||||||||||||||||
Other comprehensive income |
- | - | - | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance, June 30, 2019 |
$ | $ | $ | $ | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, | ||||||||
2020 |
2019 | |||||||
Cash Flows from Operating Activities |
||||||||
Interest and dividends received |
$ | $ | ||||||
Service charges and other fees received |
||||||||
Interest paid |
( |
) | ( |
) | ||||
Net cash paid to vendors, employees and others |
( |
) | ( |
) | ||||
Income taxes |
( |
) | ( |
) | ||||
|
|
|
|
|
| |||
Net cash provided by operating activities |
||||||||
|
|
|
|
|
| |||
Cash Flows from Investing Activities |
||||||||
Net change in interest-earning balances from depository institutions |
( |
) | ||||||
Proceeds from repayment of investment securities available-for-sale |
||||||||
Proceeds from maturity of investment securities available-for-sale |
||||||||
Proceeds from repayment and maturity of investment securities held-to-maturity |
||||||||
Purchases of investment securities held-to-maturity |
( |
) | ( |
) | ||||
Net increase in equity investments |
( |
) | ( |
) | ||||
Net (increase) decrease in loan and lease finance receivables |
( |
) | ||||||
Proceeds on eminent domain condemnation, net |
||||||||
Proceeds from sale of building, net |
||||||||
Purchase of premises and equipment |
( |
) | ( |
) | ||||
Proceeds from BOLI death benefit |
||||||||
Proceeds from sales of other real estate owned |
||||||||
|
|
|
|
|
| |||
Net cash (used in) provided by investing activities |
( |
) | ||||||
|
|
|
|
|
| |||
Cash Flows from Financing Activities |
||||||||
Net increase (decrease) in other deposits |
( |
) | ||||||
Net increase (decrease) in time deposits |
( |
) | ||||||
Net increase (decrease) in other borrowings |
( |
) | ||||||
Net increase (decrease) in customer repurchase agreements |
( |
) | ||||||
Cash dividends on common stock |
( |
) | ( |
) | ||||
Repurchase of common stock |
( |
) | ( |
) | ||||
Proceeds from exercise of stock options |
||||||||
|
|
|
|
|
| |||
Net cash provided by (used in) financing activities |
( |
) | ||||||
|
|
|
|
|
| |||
Net increase in cash and cash equivalents |
||||||||
Cash and cash equivalents, beginning of period |
||||||||
|
|
|
|
|
| |||
Cash and cash equivalents, end of period |
$ | $ | ||||||
|
|
|
|
|
|
Six Months Ended June 30, | ||||||||
2020 |
2019 | |||||||
Reconciliation of Net Earnings to Net Cash Provided by Operating Activities |
||||||||
Net earnings |
$ | |
$ | |
||||
Adjustments to reconcile net earnings to net cash provided by operating activities: |
||||||||
Gain on eminent domain condemnation, net |
( |
) | ||||||
Gain on sale of building, net |
( |
) | ||||||
Gain on sale of other real estate owned |
( |
) | ||||||
Increase in BOLI |
( |
) | ( |
) | ||||
Net amortization of premiums and discounts on investment securities |
||||||||
Accretion of discount for acquired loans, net |
( |
) | ( |
) | ||||
Provision for credit losses |
||||||||
Stock-based compensation |
||||||||
Depreciation and amortization, net |
||||||||
Change in other assets and liabilities |
( |
) | ( |
) | ||||
|
|
|
|
|
| |||
Total adjustments |
( |
) | ||||||
|
|
|
|
|
| |||
Net cash provided by operating activities |
$ | $ | ||||||
|
|
|
|
|
| |||
Supplemental Disclosure of Non-cash Investing Activities |
||||||||
Securities purchased and not settled |
$ | $ | ||||||
Transfer of loans to other real estate owned |
$ | $ |
1. |
BUSINESS |
2. |
BASIS OF PRESENTATION |
3. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
4. |
INVESTMENT SECURITIES |
June 30, 2020 | ||||||||||||||||||||
Amortized Cost |
Gross Unrealized Holding Gain |
Gross Unrealized Holding Loss |
Fair Value |
Total Percent | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Investment securities available-for-sale: |
||||||||||||||||||||
Mortgage-backed securities |
$ | $ | $ | $ | ||||||||||||||||
CMO/REMIC |
( |
|||||||||||||||||||
Municipal bonds |
||||||||||||||||||||
Other securities |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total available-for-sale |
$ | $ | $ | ( |
$ | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Investment securities held-to-maturity: |
||||||||||||||||||||
Government agency/GSE |
$ | $ | $ | $ | ||||||||||||||||
Mortgage-backed securities |
||||||||||||||||||||
CMO/REMIC |
||||||||||||||||||||
Municipal bonds |
( |
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total held-to-maturity |
$ | $ | $ | ( |
$ | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
December 31, 2019 | ||||||||||||||||||||
Amortized Cost |
Gross Unrealized Holding Gain |
Gross Unrealized Holding Loss |
Fair Value |
Total Percent | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Investment securities available-for-sale: |
||||||||||||||||||||
Mortgage-backed securities |
$ | $ | $ | ( |
$ | |||||||||||||||
CMO/REMIC |
( |
|||||||||||||||||||
Municipal bonds |
( |
|||||||||||||||||||
Other securities |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total available-for-sale |
$ | $ | $ | ( |
$ | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Investment securities held-to-maturity: |
||||||||||||||||||||
Government agency/GSE |
$ | $ | $ | ( |
$ | |||||||||||||||
Mortgage-backed securities |
( |
|||||||||||||||||||
CMO/REMIC |
( |
|||||||||||||||||||
Municipal bonds |
( |
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total held-to-maturity |
$ | $ | $ | ( |
$ | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||
(Dollars in thousands) |
||||||||||||||||
Investment securities available-for-sale: |
||||||||||||||||
Taxable |
$ | $ | $ | $ | ||||||||||||
Tax-advantaged |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total interest income from available-for-sale |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Investment securities held-to-maturity: |
||||||||||||||||
Taxable |
||||||||||||||||
Tax-advantaged |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total interest income from held-to-maturity |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total interest income from investment securities |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
June 30, 2020 | ||||||||||||||||||||||||
Less Than 12 Months |
12 Months or Longer |
Total | ||||||||||||||||||||||
Fair Value |
Gross Unrealized Holding Losses |
Fair Value |
Gross Unrealized Holding Losses |
Fair Value |
Gross Unrealized Holding Losses | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Investment securities available-for-sale: |
||||||||||||||||||||||||
Mortgage-backed securities |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
CMO/REMIC |
( |
( |
||||||||||||||||||||||
Municipal bonds |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Total available-for-sale |
$ | $ | ( |
$ | $ | $ | $ | ( |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2019 | ||||||||||||||||||||||||
Less Than 12 Months |
12 Months or Longer |
Total | ||||||||||||||||||||||
Fair Value |
Gross Unrealized Holding Losses |
Fair Value |
Gross Unrealized Holding Losses |
Fair Value |
Gross Unrealized Holding Losses | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Investment securities available-for-sale: |
||||||||||||||||||||||||
Mortgage-backed securities |
$ | $ | ( |
$ | $ | ( |
$ | $ | ( |
|||||||||||||||
CMO/REMIC |
( |
( |
( |
|||||||||||||||||||||
Municipal bonds |
( |
( |
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Total available-for-sale |
$ | $ | ( |
$ | $ | ( |
$ | $ | ( |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Investment securities held-to-maturity: |
||||||||||||||||||||||||
Government agency/GSE |
$ | $ | ( |
$ | $ | ( |
$ | $ | ( |
|||||||||||||||
Mortgage-backed securities |
( |
( |
||||||||||||||||||||||
CMO/REMIC |
( |
( |
( |
|||||||||||||||||||||
Municipal bonds |
( |
( |
( |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Total held-to-maturity |
$ | $ | ( |
$ | $ | ( |
$ | $ | ( |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2020 | ||||||||||||||||
Available-for-sale |
Held-to-maturity | |||||||||||||||
Amortized Cost |
Fair Value |
Amortized Cost |
Fair Value | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Due in one year or less |
$ | $ | $ | $ | ||||||||||||
Due after one year through five years |
||||||||||||||||
Due after five years through ten years |
||||||||||||||||
Due after ten years |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total investment securities |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
5. |
LOANS AND LEASE FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES |
June 30, 2020 |
December 31, 2019 | |||||||
(Dollars in thousands) | ||||||||
Commercial and industrial |
$ |
$ |
||||||
SBA |
||||||||
SBA - Paycheck Protection Program (PPP) |
||||||||
Real estate: |
||||||||
Commercial real estate |
||||||||
Construction |
||||||||
SFR mortgage |
||||||||
Dairy & livestock and agribusiness |
||||||||
Municipal lease finance receivables |
||||||||
Consumer and other loans |
||||||||
|
|
|
|
|
| |||
Total loans |
||||||||
Less: Deferred loan fees, net (1) |
( |
) | ||||||
|
|
|
|
|
| |||
Total loans, net of deferred loan fees |
||||||||
Less: Allowance for credit losses |
( |
) |
( |
) | ||||
|
|
|
|
|
| |||
Total loans and lease finance receivables, net |
$ |
$ |
||||||
|
|
|
|
|
|
(1) | Beginning with March 31, 2020, total loans are presented net of deferred loan fees by respective class of financing receivables. |
Origination Year |
Revolving loans amortized cost basis |
Revolving loans converted to term loans |
||||||||||||||||||||||||||||||||||
June 30, 2020 |
2020 |
2019 |
2018 |
2017 |
2016 |
Prior |
Total | |||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||
Commercial and industrial loans: |
||||||||||||||||||||||||||||||||||||
Risk Rating: |
||||||||||||||||||||||||||||||||||||
Pass |
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Special Mention |
||||||||||||||||||||||||||||||||||||
Substandard |
||||||||||||||||||||||||||||||||||||
Doubtful & Loss |
||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Total Commercial and industrial loans: |
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
SBA: |
||||||||||||||||||||||||||||||||||||
Risk Rating: |
||||||||||||||||||||||||||||||||||||
Pass |
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Special Mention |
||||||||||||||||||||||||||||||||||||
Substandard |
||||||||||||||||||||||||||||||||||||
Doubtful & Loss |
||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Total SBA: |
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
SBA- PPP |
||||||||||||||||||||||||||||||||||||
Risk Rating: |
||||||||||||||||||||||||||||||||||||
Pass |
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Special Mention |
||||||||||||||||||||||||||||||||||||
Substandard |
||||||||||||||||||||||||||||||||||||
Doubtful & Loss |
||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Total SBA- PPP : |
$ | $ | $ | $ | $ | $ | $ | $ | $ | |
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Commercial real estate loans: |
||||||||||||||||||||||||||||||||||||
Risk Rating: |
||||||||||||||||||||||||||||||||||||
Pass |
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Special Mention |
||||||||||||||||||||||||||||||||||||
Substandard |
||||||||||||||||||||||||||||||||||||
Doubtful & Loss |
||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Total Commercial real estate loans: |
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Construction loans: |
||||||||||||||||||||||||||||||||||||
Risk Rating: |
||||||||||||||||||||||||||||||||||||
Pass |
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Special Mention |
||||||||||||||||||||||||||||||||||||
Substandard |
||||||||||||||||||||||||||||||||||||
Doubtful & Loss |
||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Total Construction loans: |
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
SFR mortgage loans: |
||||||||||||||||||||||||||||||||||||
Risk Rating: |
||||||||||||||||||||||||||||||||||||
Pass |
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Special Mention |
||||||||||||||||||||||||||||||||||||
Substandard |
||||||||||||||||||||||||||||||||||||
Doubtful & Loss |
||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Total SFR mortgage loans: |
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Origination Year |
Revolving loans amortized cost basis |
Revolving loans converted to term loans |
||||||||||||||||||||||||||||||||||
June 30, 2020 |
2020 |
2019 |
2018 |
2017 |
2016 |
Prior |
Total | |||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||
Dairy & livestock and agribusiness loans: |
||||||||||||||||||||||||||||||||||||
Risk Rating: |
||||||||||||||||||||||||||||||||||||
Pass |
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Special Mention |
||||||||||||||||||||||||||||||||||||
Substandard |
||||||||||||||||||||||||||||||||||||
Doubtful & Loss |
||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Total Dairy & livestock and agribusiness loans: |
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Municipal lease finance receivables loans: |
||||||||||||||||||||||||||||||||||||
Risk Rating: |
||||||||||||||||||||||||||||||||||||
Pass |
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Special Mention |
||||||||||||||||||||||||||||||||||||
Substandard |
||||||||||||||||||||||||||||||||||||
Doubtful & Loss |
||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Total Municipal lease finance receivables loans: |
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Consumer and other loans: |
||||||||||||||||||||||||||||||||||||
Risk Rating: |
||||||||||||||||||||||||||||||||||||
Pass |
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Special Mention |
||||||||||||||||||||||||||||||||||||
Substandard |
||||||||||||||||||||||||||||||||||||
Doubtful & Loss |
||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Total Consumer and other loans: |
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Gross loans: |
||||||||||||||||||||||||||||||||||||
Risk Rating: |
||||||||||||||||||||||||||||||||||||
Pass |
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Special Mention |
||||||||||||||||||||||||||||||||||||
Substandard |
||||||||||||||||||||||||||||||||||||
Doubtful & Loss |
||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Total Gross loans: |
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2019 |
||||||||||||||||||||
Pass |
Special Mention |
Substandard |
Doubtful & Loss |
Total |
||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||
Commercial and industrial |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
SBA |
||||||||||||||||||||
Real estate: |
||||||||||||||||||||
Commercial real estate |
||||||||||||||||||||
Owner occupied |
||||||||||||||||||||
Non-owner occupied |
||||||||||||||||||||
Construction |
||||||||||||||||||||
Speculative |
||||||||||||||||||||
Non-speculative |
||||||||||||||||||||
SFR mortgage |
||||||||||||||||||||
Dairy & livestock and agribusiness |
||||||||||||||||||||
Municipal lease finance receivables |
||||||||||||||||||||
Consumer and other loans |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total gross loans |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2020 |
||||||||||||||||||||
Ending Balance March 31, 2020 |
Charge-offs |
Recoveries |
Provision for (Recapture of) Credit Losses |
Ending Balance June 30, 2020 |
||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||
Commercial and industrial |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
$ |
|||||||||||
SBA |
( |
) |
( |
) |
||||||||||||||||
SBA - PPP |
||||||||||||||||||||
Real estate: |
||||||||||||||||||||
Commercial real estate |
||||||||||||||||||||
Construction |
( |
) |
||||||||||||||||||
SFR mortgage |
( |
) |
||||||||||||||||||
Dairy & livestock and agribusiness |
( |
) |
||||||||||||||||||
Municipal lease finance receivables |
||||||||||||||||||||
Consumer and other loans |
( |
) |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total allowance for credit losses |
$ |
$ |
( |
) |
$ |
$ |
$ |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2019 |
||||||||||||||||||||
Ending Balance March 31, 2019 |
Charge-offs |
Recoveries |
Provision for (Recapture of) Loan Losses |
Ending Balance June 30, 2019 |
||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||
Commercial and industrial |
$ |
$ |
( |
) |
$ |
$ |
$ |
|||||||||||||
SBA |
( |
) |
||||||||||||||||||
Real estate: |
||||||||||||||||||||
Commercial real estate |
||||||||||||||||||||
Construction |
||||||||||||||||||||
SFR mortgage |
||||||||||||||||||||
Dairy & livestock and agribusiness |
( |
) |
||||||||||||||||||
Municipal lease finance receivables |
( |
) |
||||||||||||||||||
Consumer and other loans |
( |
) |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total allowance for loan losses |
$ |
$ |
( |
) |
$ |
$ |
$ |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2020 |
||||||||||||||||||||||||
Ending Balance, prior to adoption of ASU 2016-13 December 31, 2019 |
Impact of Adoption ASU 2016-13 |
Charge-offs |
Recoveries |
Provision for (Recapture of) Credit Losses |
Ending Balance June 30, 2020 |
|||||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||||||
Commercial and industrial |
$ | $ | ( |
) | $ | ( |
) | $ | $ | $ | ||||||||||||||
SBA |
( |
) | ||||||||||||||||||||||
SBA - PPP |
||||||||||||||||||||||||
Real estate: |
||||||||||||||||||||||||
Commercial real estate |
||||||||||||||||||||||||
Construction |
||||||||||||||||||||||||
SFR mortgage |
( |
) | ( |
) | ||||||||||||||||||||
Dairy & livestock and agribusiness |
( |
) | ( |
) | ||||||||||||||||||||
Municipal lease finance receivables |
( |
) | ||||||||||||||||||||||
Consumer and other loans |
( |
) | ( |
) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total allowance for credit losses |
$ | $ | $ | ( |
) | $ | $ | $ | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2019 |
||||||||||||||||||||
Ending Balance December 31, 2018 |
Charge-offs |
Recoveries |
Provision for (Recapture of) Loan Losses |
Ending Balance June 30, 2019 |
||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||
Commercial and industrial |
$ | $ | ( |
) | $ | $ | $ | |||||||||||||
SBA |
( |
) | ||||||||||||||||||
Real estate: |
||||||||||||||||||||
Commercial real estate |
||||||||||||||||||||
Construction |
( |
) | ||||||||||||||||||
SFR mortgage |
( |
) | ||||||||||||||||||
Dairy & livestock and agribusiness |
( |
) | ||||||||||||||||||
Municipal lease finance receivables |
( |
) | ||||||||||||||||||
Consumer and other loans |
( |
) | ( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total allowance for loan losses |
$ | $ | ( |
) | $ | $ | $ | |||||||||||||
|
|
|
|
|
|
|
|
|
|
June 30, 2019 |
||||||||||||||||
Recorded Investment in Loans |
Allowance for Loan Losses |
|||||||||||||||
Individually Evaluated for Impairment |
Collectively Evaluated for Impairment |
Individually Evaluated for Impairment |
Collectively Evaluated for Impairment |
|||||||||||||
(Dollars in thousands) |
||||||||||||||||
Commercial and industrial |
$ | $ | $ | $ | ||||||||||||
SBA |
||||||||||||||||
Real estate: |
||||||||||||||||
Commercial real estate |
||||||||||||||||
Construction |
||||||||||||||||
SFR mortgage |
||||||||||||||||
Dairy & livestock and agribusiness |
||||||||||||||||
Municipal lease finance receivables |
||||||||||||||||
Consumer and other loans |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
June 30, 2020 |
||||||||||||||||||||||||
30-59 Days Past Due |
60-89 Days Past Due |
Greater than 89 Days Past Due |
Total Past Due |
Loans Not Past Due |
Total Loans and Financing Receivables |
|||||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||||||
Commercial and industrial |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
SBA |
||||||||||||||||||||||||
SBA - PPP |
||||||||||||||||||||||||
Real estate: |
||||||||||||||||||||||||
Commercial real estate |
||||||||||||||||||||||||
Owner occupied |
||||||||||||||||||||||||
Non-owner occupied |
||||||||||||||||||||||||
Construction |
||||||||||||||||||||||||
Speculative (1) |
||||||||||||||||||||||||
Non-speculative |
||||||||||||||||||||||||
SFR mortgage |
||||||||||||||||||||||||
Dairy & livestock and agribusiness |
||||||||||||||||||||||||
Municipal lease finance receivables |
||||||||||||||||||||||||
Consumer and other loans |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total gross loans |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Speculative construction loans are generally for properties where there is no identified buyer or renter. |
June 30, 2020 |
||||||||||||
Nonaccrual with No Allowance for Credit Losses |
Total Nonaccrual (1) (3) |
Loans Past Due Over 89 Days Still Accruing |
||||||||||
(Dollars in thousands) |
||||||||||||
Commercial and industrial |
$ |
$ |
$ |
|||||||||
SBA |
||||||||||||
SBA - PPP |
||||||||||||
Real estate: |
||||||||||||
Commercial real estate |
||||||||||||
Owner occupied |
||||||||||||
Non-owner occupied |
||||||||||||
Construction |
||||||||||||
Speculative (2) |
||||||||||||
Non-speculative |
||||||||||||
SFR mortgage |
||||||||||||
Dairy & livestock and agribusiness |
||||||||||||
Municipal lease finance receivables |
||||||||||||
Consumer and other loans |
||||||||||||
|
|
|
|
|
|
|||||||
Total gross loans |
$ |
$ |
$ |
|||||||||
|
|
|
|
|
|
(1) | As of June 30, 2020, $ 60-89 days past due, and $ |
(2) | Speculative construction loans are generally for properties where there is no identified buyer or renter. |
(3) | Excludes $ |
December 31, 2019 |
||||||||||||||||||||||||
30-59 Days Past Due |
60-89 Days Past Due |
Total Past Due and Accruing |
Nonaccrual (1) (3) |
Current |
Total Loans and Financing Receivables |
|||||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||||||
Commercial and industrial |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
SBA |
||||||||||||||||||||||||
Real estate: |
||||||||||||||||||||||||
Commercial real estate |
||||||||||||||||||||||||
Owner occupied |
||||||||||||||||||||||||
Non-owner occupied |
||||||||||||||||||||||||
Construction |
||||||||||||||||||||||||
Speculative (2) |
||||||||||||||||||||||||
Non-speculative |
||||||||||||||||||||||||
SFR mortgage |
||||||||||||||||||||||||
Dairy & livestock and agribusiness |
||||||||||||||||||||||||
Municipal lease finance receivables |
||||||||||||||||||||||||
Consumer and other loans |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total gross loans |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) | As of December 31, 2019, $ 30-59 days past due, $60-89 days past due and $ |
(2) | Speculative construction loans are generally for properties where there is no identified buyer or renter. |
(3) | Excludes $ |
Six Months Ended June 30, 2019 |
||||||||||||||||||||
Recorded Investment |
Unpaid Principal Balance |
Related Allowance |
Average Recorded Investment |
Interest Income Recognized |
||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||
With no related allowance recorded: |
||||||||||||||||||||
Commercial and industrial |
$ |
$ |
$ |
- |
$ |
$ |
||||||||||||||
SBA |
- |
|||||||||||||||||||
Real estate: |
||||||||||||||||||||
Commercial real estate |
||||||||||||||||||||
Owner occupied |
- |
- |
||||||||||||||||||
Non-owner occupied |
- |
|||||||||||||||||||
Construction |
||||||||||||||||||||
Speculative |
- |
- |
- |
- |
- |
|||||||||||||||
Non-speculative |
- |
- |
- |
- |
- |
|||||||||||||||
SFR mortgage |
- |
|||||||||||||||||||
Dairy & livestock and agribusiness |
- |
- |
- |
- |
- |
|||||||||||||||
Municipal lease finance receivables |
- |
- |
- |
- |
- |
|||||||||||||||
Consumer and other loans |
- |
- |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
- |
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
With a related allowance recorded: |
||||||||||||||||||||
Commercial and industrial |
- |
|||||||||||||||||||
SBA |
- |
|||||||||||||||||||
Real estate: |
||||||||||||||||||||
Commercial real estate |
||||||||||||||||||||
Owner occupied |
- |
- |
- |
- |
- |
|||||||||||||||
Non-owner occupied |
- |
- |
- |
- |
- |
|||||||||||||||
Construction |
||||||||||||||||||||
Speculative |
- |
- |
- |
- |
- |
|||||||||||||||
Non-speculative |
- |
- |
- |
- |
- |
|||||||||||||||
SFR mortgage |
- |
- |
- |
- |
- |
|||||||||||||||
Dairy & livestock and agribusiness |
- |
- |
- |
- |
- |
|||||||||||||||
Municipal lease finance receivables |
- |
- |
- |
- |
- |
|||||||||||||||
Consumer and other loans |
- |
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
- |
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total impaired loans |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
December 31, 2019 |
||||||||||||
Recorded Investment |
Unpaid Principal Balance |
Related Allowance |
||||||||||
(Dollars in thousands) |
||||||||||||
With no related allowance recorded: |
||||||||||||
Commercial and industrial |
$ |
$ |
$ |
- |
||||||||
SBA |
- |
|||||||||||
Real estate: |
||||||||||||
Commercial real estate |
||||||||||||
Owner occupied |
- |
|||||||||||
Non-owner occupied |
- |
|||||||||||
Construction |
||||||||||||
Speculative |
- |
- |
- |
|||||||||
Non-speculative |
- |
- |
- |
|||||||||
SFR mortgage |
- |
|||||||||||
Dairy & livestock and agribusiness |
- |
- |
- |
|||||||||
Municipal lease finance receivables |
- |
- |
- |
|||||||||
Consumer and other loans |
- |
|||||||||||
|
|
|
|
|
|
|||||||
Total |
- |
|||||||||||
|
|
|
|
|
|
|||||||
With a related allowance recorded: |
||||||||||||
Commercial and industrial |
||||||||||||
SBA |
||||||||||||
Real estate: |
||||||||||||
Commercial real estate |
||||||||||||
Owner occupied |
- |
- |
- |
|||||||||
Non-owner occupied |
- |
- |
- |
|||||||||
Construction |
||||||||||||
Speculative |
- |
- |
- |
|||||||||
Non-speculative |
- |
- |
- |
|||||||||
SFR mortgage |
- |
- |
- |
|||||||||
Dairy & livestock and agribusiness |
- |
- |
- |
|||||||||
Municipal lease finance receivables |
- |
- |
- |
|||||||||
Consumer and other loans |
- |
- |
- |
|||||||||
|
|
|
|
|
|
|||||||
Total |
||||||||||||
|
|
|
|
|
|
|||||||
Total impaired loans |
$ |
$ |
$ |
|||||||||
|
|
|
|
|
|
June 30, 2020 |
Number of Loans Dependent on Collateral | |||||||||||||||
Real Estate |
Business Assets |
Other | ||||||||||||||
(Dollars in thousands) |
||||||||||||||||
Commercial and industrial |
$ |
$ |
$ |
|||||||||||||
SBA |
||||||||||||||||
SBA - PPP |
||||||||||||||||
Real estate: |
||||||||||||||||
Commercial real estate |
||||||||||||||||
Construction |
||||||||||||||||
SFR mortgage |
||||||||||||||||
Dairy & livestock and agribusiness |
||||||||||||||||
Municipal lease finance receivables |
||||||||||||||||
Consumer and other loans |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total collateral-dependent loans |
$ |
$ |
$ |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
Six Months Ended June 30, | |||||||||||||||
2020 |
2019 |
2020 |
2019 | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Performing TDRs: |
||||||||||||||||
Beginning balance |
$ |
$ |
$ |
$ |
||||||||||||
New modifications |
||||||||||||||||
Payoffs/payments, net and other |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
TDRs returned to accrual status |
||||||||||||||||
TDRs placed on nonaccrual status |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Ending balance |
$ |
$ |
$ |
$ |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Nonperforming TDRs: |
||||||||||||||||
Beginning balance |
$ |
$ |
$ |
$ |
||||||||||||
New modifications |
||||||||||||||||
Charge-offs |
( |
) | ||||||||||||||
Transfer to OREO |
( |
) | ||||||||||||||
Payoffs/payments, net and other |
( |
) |
( |
) |
( |
) | ||||||||||
TDRs returned to accrual status |
||||||||||||||||
TDRs placed on nonaccrual status |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Ending balance |
$ |
$ |
$ |
$ |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total TDRs |
$ |
$ |
$ |
$ |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
6. |
EARNINGS PER SHARE RECONCILIATION |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||
(In thousands, except per share amounts) |
||||||||||||||||
Earnings per common share: |
||||||||||||||||
Net earnings |
$ | |
$ | |
$ | |
$ | |
||||||||
Less: Net earnings allocated to restricted stock |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net earnings allocated to common shareholders |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Weighted average shares outstanding |
||||||||||||||||
Basic earnings per common share |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Diluted earnings per common share: |
||||||||||||||||
Net income allocated to common shareholders |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Weighted average shares outstanding |
||||||||||||||||
Incremental shares from assumed exercise of outstanding options |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Diluted weighted average shares outstanding |
||||||||||||||||
Diluted earnings per common share |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
7. |
FAIR VALUE INFORMATION |
· |
Level 1 |
· |
Level 2 |
· |
Level 3 |
Carrying Value at June 30, 2020 |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
|||||||||||||
(Dollars in thousands) |
||||||||||||||||
Description of assets |
||||||||||||||||
Investment securities - AFS: |
||||||||||||||||
Mortgage-backed securities |
$ | $ | $ | $ | ||||||||||||
CMO/REMIC |
||||||||||||||||
Municipal bonds |
||||||||||||||||
Other securities |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total investment securities - AFS |
||||||||||||||||
Interest rate swaps |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Description of liability |
||||||||||||||||
Interest rate swaps |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Carrying Value at December 31, 2019 |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
|||||||||||||
(Dollars in thousands) |
||||||||||||||||
Description of assets |
||||||||||||||||
Investment securities - AFS: |
||||||||||||||||
Mortgage-backed securities |
$ | $ | $ | $ | ||||||||||||
CMO/REMIC |
||||||||||||||||
Municipal bonds |
||||||||||||||||
Other securities |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total investment securities - AFS |
||||||||||||||||
Interest rate swaps |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Description of liability |
||||||||||||||||
Interest rate swaps |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
Carrying Value at June 30, 2020 |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
Total Losses For the Six Months Ended June 30, 2020 |
||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||
Description of assets |
||||||||||||||||||||
Loans: |
||||||||||||||||||||
Commercial and industrial |
$ | $ | $ | $ | $ | |||||||||||||||
SBA |
||||||||||||||||||||
Real estate: |
||||||||||||||||||||
Commercial real estate |
||||||||||||||||||||
Construction |
||||||||||||||||||||
SFR mortgage |
||||||||||||||||||||
Dairy & livestock and agribusiness |
||||||||||||||||||||
Consumer and other loans |
||||||||||||||||||||
Other real estate owned |
||||||||||||||||||||
Asset held-for-sale |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
$ | $ | $ | $ | $ | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Carrying Value at December 31, 2019 |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
Total Losses For the Year Ended December 31, 2019 |
||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||
Description of assets |
||||||||||||||||||||
Impaired loans: |
||||||||||||||||||||
Commercial and industrial |
$ | $ | $ | $ | $ | |||||||||||||||
SBA |
||||||||||||||||||||
Real estate: |
||||||||||||||||||||
Commercial real estate |
||||||||||||||||||||
Construction |
||||||||||||||||||||
SFR mortgage |
||||||||||||||||||||
Dairy & livestock and agribusiness |
||||||||||||||||||||
Consumer and other loans |
||||||||||||||||||||
Other real estate owned |
||||||||||||||||||||
Asset held-for-sale |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
$ | $ | $ | $ | $ | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
June 30, 2020 | ||||||||||||||||||||
Estimated Fair Value | ||||||||||||||||||||
Carrying Amount |
Level 1 |
Level 2 |
Level 3 |
Total | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Assets |
||||||||||||||||||||
Total cash and cash equivalents |
$ | $ | $ | $ | $ | |||||||||||||||
Interest-earning balances due from depository institutions |
||||||||||||||||||||
Investment securities available-for-sale |
||||||||||||||||||||
Investment securities held-to-maturity |
||||||||||||||||||||
Total loans, net of allowance for credit losses |
||||||||||||||||||||
Swaps |
||||||||||||||||||||
Liabilities |
||||||||||||||||||||
Deposits: |
||||||||||||||||||||
Interest-bearing |
$ | $ | $ | $ | $ | |||||||||||||||
Borrowings |
||||||||||||||||||||
Junior subordinated debentures |
||||||||||||||||||||
Swaps |
||||||||||||||||||||
December 31, 2019 | ||||||||||||||||||||
Estimated Fair Value | ||||||||||||||||||||
Carrying Amount |
Level 1 |
Level 2 |
Level 3 |
Total | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Assets |
||||||||||||||||||||
Total cash and cash equivalents |
$ | $ | $ | $ | $ | |||||||||||||||
Interest-earning balances due from depository institutions |
||||||||||||||||||||
Investment securities available-for-sale |
||||||||||||||||||||
Investment securities held-to-maturity |
||||||||||||||||||||
Total loans, net of allowance for loan losses |
||||||||||||||||||||
Swaps |
||||||||||||||||||||
Liabilities |
||||||||||||||||||||
Deposits: |
||||||||||||||||||||
Interest-bearing |
$ | $ | $ | $ | $ | |||||||||||||||
Borrowings |
||||||||||||||||||||
Junior subordinated debentures |
||||||||||||||||||||
Swaps |
8. |
DERIVATIVE FINANCIAL INSTRUMENTS |
June 30, 2020 |
||||||||||||||||
Asset Derivatives |
Liability Derivatives |
|||||||||||||||
Balance Sheet Location |
Fair Value |
Balance Sheet Location |
Fair Value |
|||||||||||||
(Dollars in thousands) |
||||||||||||||||
Derivatives not designated as hedging instruments: |
||||||||||||||||
Interest rate swaps |
Other assets | $ | Other liabilities | $ | ||||||||||||
|
|
|
|
|||||||||||||
Total derivatives |
$ | $ | ||||||||||||||
|
|
|
|
|||||||||||||
December 31, 2019 |
||||||||||||||||
Asset Derivatives |
Liability Derivatives |
|||||||||||||||
Balance Sheet Location |
Fair Value |
Balance Sheet Location |
Fair Value |
|||||||||||||
(Dollars in thousands) |
||||||||||||||||
Derivatives not designated as hedging instruments: |
||||||||||||||||
Interest rate swaps |
Other assets | $ | Other liabilities | $ | ||||||||||||
|
|
|
|
|||||||||||||
Total derivatives |
$ | $ | ||||||||||||||
|
|
|
|
Derivatives Not Designated as Hedging Instruments |
Location of Gain Recognized in Income on Derivative Instruments |
Amount of Gain Recognized in Income on Derivative Instruments |
||||||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||
Interest rate swaps |
Other income | $ | $ | $ | $ | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total |
$ | $ | $ | $ | ||||||||||||||||
|
|
|
|
|
|
|
|
9. |
OTHER COMPREHENSIVE INCOME |
Three Months Ended June 30, | ||||||||||||||||||||||||
2020 |
2019 | |||||||||||||||||||||||
Before-tax |
Tax effect |
After-tax |
Before-tax |
Tax effect |
After-tax | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Investment securities: |
||||||||||||||||||||||||
Net change in fair value recorded in accumulated OCI |
$ | ( |
) | $ | $ | ( |
) | $ | $ | ( |
) | $ | ||||||||||||
Amortization of net unrealized losses on securities transferred from available-for-sale held-to-maturity |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Net change |
$ | ( |
) | $ | $ | ( |
) | $ | $ | ( |
) | $ | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Six Months Ended June 30, | ||||||||||||||||||||||||
2020 |
2019 | |||||||||||||||||||||||
Before-tax |
Tax effect |
After-tax |
Before-tax |
Tax effect |
After-tax | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Investment securities: |
||||||||||||||||||||||||
Net change in fair value recorded in accumulated OCI |
$ | $ | ( |
) | $ | $ | $ | ( |
) | $ | ||||||||||||||
Amortization of net unrealized losses on securities transferred from available-for-sale held-to-maturity |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Net change |
$ | $ | ( |
) | $ | $ | $ | ( |
) | $ | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10. |
BALANCE SHEET OFFSETTING |
Gross Amounts Recognized in |
Gross Amounts Offset in the |
Net Amounts of Assets Presented |
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets |
|||||||||||||||||||||
the Condensed Consolidated Balance Sheets |
Condensed Consolidated Balance Sheets |
in the Condensed Consolidated Balance Sheets |
Financial Instruments |
Collateral Pledged |
Net Amount | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
June 30, 2020 |
||||||||||||||||||||||||
Financial assets: |
||||||||||||||||||||||||
Derivatives not designated as hedging instruments |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Total |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Financial liabilities: |
||||||||||||||||||||||||
Derivatives not designated as hedging instruments |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||||
Repurchase agreements |
( |
) | ( |
) | ||||||||||||||||||||
Total |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||||
December 31, 2019 |
||||||||||||||||||||||||
Financial assets: |
||||||||||||||||||||||||
Derivatives not designated as hedging instruments |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Total |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Financial liabilities: |
||||||||||||||||||||||||
Derivatives not designated as hedging instruments |
$ | $ | ( |
) | $ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||
Repurchase agreements |
( |
) | ( |
) | ||||||||||||||||||||
Total |
$ | $ | ( |
) | $ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||
June 30, 2020 |
December 31, 2019 |
|||||||
(Dollars in thousands) |
||||||||
Lease Assets and Liabilities |
||||||||
ROU assets |
$ | $ | ||||||
Total lease liabilities |
Three Months Ended June 30, |
Six Months Ended June 30, | |||||||||||||||
2020 |
2019 |
2020 |
2019 | |||||||||||||
(Dollars in thousands) |
(Dollars in thousands) | |||||||||||||||
Lease Cost |
||||||||||||||||
Operating lease expense (1) |
$ | $ | $ | $ | ||||||||||||
Sublease income |
- | - | - | - | ||||||||||||
Total lease expense |
$ | $ | $ | $ | ||||||||||||
(1) Includes short-term leases and variable lease costs, which are immaterial. |
||||||||||||||||
Other Information |
||||||||||||||||
Cash paid for amounts included in the measurement of lease liabilities: |
||||||||||||||||
Operating cash outflows from operating leases, net |
$ | $ | $ | $ |
June 30, 2020 |
December 31, 2019 |
|||||||
Lease Term and Discount Rate |
||||||||
Weighted average remaining lease term (years) |
||||||||
Weighted average discount rate |
June 30, 2020 |
||||
(Dollars in thousands) |
||||
Year: |
||||
2020 (excluding the six months ended June 30, 2020) |
$ | |||
2021 |
||||
2022 |
||||
2023 |
||||
2024 |
||||
Thereafter |
||||
Total future lease payments |
||||
Less: Imputed interest |
( |
|||
Present value of lease liabilities |
$ | |||
12. |
REVENUE RECOGNITION |
Three Months Ended |
Six Months Ended | |||||||||||||||
June 30, |
June 30, | |||||||||||||||
2020 |
2019 |
2020 |
2019 | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Noninterest income: |
||||||||||||||||
In-scope of Topic 606: |
||||||||||||||||
Service charges on deposit accounts |
$ | $ | $ | $ | ||||||||||||
Trust and investment services |
||||||||||||||||
Bankcard services |
||||||||||||||||
Gain on OREO, net |
- | |||||||||||||||
Other |
||||||||||||||||
Noninterest Income (in-scope of Topic 606) |
||||||||||||||||
Noninterest Income (out-of-scope |
||||||||||||||||
Total noninterest income |
$ | $ | $ | $ | ||||||||||||
· |
Allowance for Credit Losses (“ACL”) |
· |
Business Combinations |
· |
Valuation and Recoverability of Goodwill |
· |
Income Taxes |
Standard |
Description |
Adoption Timing |
Impact on Financial Statements | |||
ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial ReportingIssued March 2020 |
The FASB issued ASU 2020-04, Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in this update provide temporary, optional guidance to ease the potential burden in accounting for transitioning away from reference rates such as LIBOR. The amendments provide optional expedients and exceptions for applying GAAP to transactions affected by reference rate reform if certain criteria are met. The amendments primarily include relief related to contract modifications and hedging relationships, as well as providing a one-time election for the sale or transfer of debt securities classified as held-to-maturity. |
1st Quarter 2020 through the 4th Quarter 2022 | Although the Company is assessing the impacts of this transition and exploring alternatives to use in place of LIBOR for various financial instruments, primarily related to our variable-rate loans, our subordinated debentures, and interest rate swap derivatives that are indexed to LIBOR, we do not expect this ASU to have a material impact on the Company’s consolidated financial statements. | |||
ASU 2020-01 “Investments - Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) |
The FASB issued ASU 2020-01 “Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815). This ASU clarifies the interactions between ASC 321, ASC 323 and ASC 815 and addresses accounting for the transition into and out of the equity method and also provides guidance on whether equity method accounting would be applied to certain purchased options and forward contracts upon settlement. |
1st Quarter 2021 | The adoption of this ASU will not have an impact on our consolidated financial statements. | |||
Issued January 2020 |
Three Months Ended |
Variance |
|||||||||||||||
June 30, 2020 |
March 31, 2020 |
$ |
% |
|||||||||||||
(Dollars in thousands, except per share amounts) |
||||||||||||||||
Net interest income |
$ | 104,569 | $ | 102,306 | $ | 2,263 | 2.21% | |||||||||
Provision for credit losses |
(11,500) | (12,000) | 500 | 4.17% | ||||||||||||
Noninterest income |
12,152 | 11,640 | 512 | 4.40% | ||||||||||||
Noninterest expense |
(46,398) | (48,641) | 2,243 | 4.61% | ||||||||||||
Income taxes |
(17,192) | (15,325) | (1,867) | -12.18% | ||||||||||||
|
|
|
|
|
|
|||||||||||
Net earnings |
$ | 41,631 | $ | 37,980 | $ | 3,651 | 9.61% | |||||||||
|
|
|
|
|
|
|||||||||||
Earnings per common share: |
||||||||||||||||
Basic |
$ | 0.31 | $ | 0.27 | $ | 0.04 | ||||||||||
Diluted |
$ | 0.31 | $ | 0.27 | $ | 0.04 | ||||||||||
Return on average assets |
1.33% | 1.34% | -0.01% | |||||||||||||
Return on average shareholders’ equity |
8.51% | 7.61% | 0.90% | |||||||||||||
Efficiency ratio |
39.75% | 42.69% | -2.94% | |||||||||||||
Noninterest expense to average assets |
1.48% | 1.72% | -0.24% |
Three Months Ended June 30, |
Variance |
Six Months Ended June 30, |
Variance |
|||||||||||||||||||||||||||||
2020 |
2019 |
$ |
% |
2020 |
2019 |
$ |
% | |||||||||||||||||||||||||
(Dollars in thousands, except per share amounts) |
||||||||||||||||||||||||||||||||
Net interest income |
$ | 104,569 | $ | 111,057 | $ | (6,488) | -5.84% | $ | 206,875 | $ | 220,593 | $ | (13,718) | -6.22% | ||||||||||||||||||
Provision for credit losses |
(11,500 | ) | (2,000 | ) | (9,500) | -475.00% | (23,500 | ) | (3,500 | ) | (20,000) | -571.43% | ||||||||||||||||||||
Noninterest income |
12,152 | 18,205 | (6,053) | -33.25% | 23,792 | 34,508 | (10,716) | -31.05% | ||||||||||||||||||||||||
Noninterest expense |
(46,398 | ) | (50,528 | ) | 4,130 | 8.17% | (95,039 | ) | (102,132 | ) | 7,093 | 6.94% | ||||||||||||||||||||
Income taxes |
(17,192 | ) | (22,253 | ) | 5,061 | 22.74% | (32,517 | ) | (43,346 | ) | 10,829 | 24.98% | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net earnings |
$ | 41,631 | $ | 54,481 | $ | (12,850) | -23.59% | $ | 79,611 | $ | 106,123 | $ | (26,512) | -24.98% | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Earnings per common share: |
||||||||||||||||||||||||||||||||
Basic |
$ | 0.31 | $ | 0.39 | $ | (0.08) | $ | 0.58 | $ | 0.76 | $ | (0.18) | ||||||||||||||||||||
Diluted |
$ | 0.31 | $ | 0.39 | $ | (0.08) | $ | 0.58 | $ | 0.76 | $ | (0.18) | ||||||||||||||||||||
Return on average assets |
1.33% | 1.95% | -0.62% | 1.33% | 1.89% | -0.56% | ||||||||||||||||||||||||||
Return on average shareholders’ equity |
8.51% | 11.38% | -2.87% | 8.06% | 11.26% | -3.20% | ||||||||||||||||||||||||||
Efficiency ratio |
39.75% | 39.09% | 0.66% | 41.20% | 40.04% | 1.16% | ||||||||||||||||||||||||||
Noninterest expense to average assets |
1.48% | 1.81% | -0.33% | 1.59% | 1.82% | -0.23% |
Three Months Ended |
Six Months Ended |
|||||||||||||||||||
June 30, 2020 |
March 31, 2020 |
June 30, 2019 |
June 30, 2020 |
June 30, 2019 |
||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||
Net Income |
$ | 41,631 | $ | 37,980 | $ | 54,481 | $ | 79,611 | $ | 106,123 | ||||||||||
Add: Amortization of intangible assets |
2,445 | 2,445 | 2,833 | 4,890 | 5,690 | |||||||||||||||
Less: Tax effect of amortization of intangible assets (1) |
(723) | (723) | (838) | (1,446) | (1,682) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Tangible net income |
$ | 43,353 | $ | 39,702 | $ | 56,476 | $ | 83,055 | $ | 110,131 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Average stockholders’ equity |
$ | 1,966,600 | $ | 2,006,464 | $ | 1,919,888 | $ | 1,986,532 | $ | 1,899,898 | ||||||||||
Less: Average goodwill |
(663,707) | (663,707) | (666,196) | (663,707) | (666,366) | |||||||||||||||
Less: Average intangible assets |
(39,287) | (41,732) | (49,615) | (40,510) | (51,188) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Average tangible common equity |
$ | 1,263,606 | $ | 1,301,025 | $ | 1,204,077 | $ | 1,282,315 | $ | 1,182,344 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Return on average equity, annualized |
8.51% | 7.61% | 11.38% | 8.06% | 11.26% | |||||||||||||||
Return on average tangible common equity, annualized |
13.80% | 12.27% | 18.81% | 13.03% | 18.78% |
(1) | Tax effected at respective statutory rates. |
Three Months Ended June 30, |
||||||||||||||||||||||||
2020 |
2019 |
|||||||||||||||||||||||
Average Balance |
Interest |
Yield/ Rate |
Average Balance |
Interest |
Yield/ Rate |
|||||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||||||
INTEREST-EARNING ASSETS |
||||||||||||||||||||||||
Investment securities (1) |
||||||||||||||||||||||||
Available-for-sale |
||||||||||||||||||||||||
Taxable |
$ | 1,580,483 | $ | 8,244 | 2.09% | $ | 1,590,959 | $ | 9,821 | 2.47% | ||||||||||||||
Tax-advantaged |
36,424 | 205 | 3.27% | 43,719 | 297 | 3.75% | ||||||||||||||||||
Held-to-maturity |
||||||||||||||||||||||||
Taxable |
448,667 | 2,447 | 2.18% | 511,938 | 2,932 | 2.29% | ||||||||||||||||||
Tax-advantaged |
177,890 | 1,213 | 3.30% | 215,366 | 1,494 | 3.35% | ||||||||||||||||||
Investment in FHLB stock |
17,688 | 214 | 4.87% | 17,688 | 298 | 6.76% | ||||||||||||||||||
Interest-earning deposits with other institutions |
1,080,433 | 283 | 0.11% | 18,022 | 100 | 2.23% | ||||||||||||||||||
Loans (2) |
8,047,054 | 95,352 | 4.77% | 7,558,483 | 101,843 | 5.40% | ||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Total interest-earning assets |
11,388,639 | 107,958 | 3.82% | 9,956,175 | 116,785 | 4.72% | ||||||||||||||||||
Total noninterest-earning assets |
1,222,416 | 1,264,592 | ||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Total assets |
$ | 12,611,055 | $ | 11,220,767 | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
INTEREST-BEARING LIABILITIES |
||||||||||||||||||||||||
Savings deposits (3) |
$ | 3,393,105 | 2,010 | 0.24% | $ | 3,024,664 | 2,973 | 0.39% | ||||||||||||||||
Time deposits |
450,920 | 985 | 0.88% | 494,507 | 1,120 | 0.91% | ||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Total interest-bearing deposits |
3,844,025 | 2,995 | 0.31% | 3,519,171 | 4,093 | 0.47% | ||||||||||||||||||
FHLB advances, other borrowings, and customer repurchase agreements |
472,335 | 394 | 0.33% | 585,550 | 1,635 | 1.11% | ||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Interest-bearing liabilities |
4,316,360 | 3,389 | 0.32% | 4,104,721 | 5,728 | 0.56% | ||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Noninterest-bearing deposits |
6,204,329 | 5,093,781 | ||||||||||||||||||||||
Other liabilities |
123,766 | 102,377 | ||||||||||||||||||||||
Stockholders’ equity |
1,966,600 | 1,919,888 | ||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Total liabilities and stockholders’ equity |
$ | 12,611,055 | $ | 11,220,767 | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Net interest income |
$ | 104,569 | $ | 111,057 | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Net interest spread - tax equivalent |
3.50% | 4.16% | ||||||||||||||||||||||
Net interest margin |
3.69% | 4.47% | ||||||||||||||||||||||
Net interest margin - tax equivalent |
3.70% | 4.49% |
(1) | Includes tax equivalent (TE) adjustments utilizing federal statutory rates of 21% in effect for the three months ended June 30, 2020 and 2019. The non TE rates were 2.16% and 2.46% for the three months ended June 30, 2020 and 2019, respectively. |
(2) | Includes loan fees of $7.3 million and $727,000 for the three months ended June 30, 2020 and 2019, respectively. Prepayment penalty fees of $2.1 million and $1.3 million are included in interest income for the three months ended June 30, 2020 and 2019, respectively. |
(3) | Includes interest-bearing demand and money market accounts. |
Six Months Ended June 30, | ||||||||||||||||||||||||
2020 |
2019 | |||||||||||||||||||||||
Average Balance |
Interest |
Yield/ Rate |
Average Balance |
Interest |
Yield/ Rate | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
INTEREST-EARNING ASSETS |
||||||||||||||||||||||||
Investment securities (1) |
||||||||||||||||||||||||
Available-for-sale |
||||||||||||||||||||||||
Taxable |
$ | 1,619,929 | $ | 18,069 | 2.23 | % | $ | 1,622,465 | $ | 20,130 | 2.48 | % | ||||||||||||
Tax-advantaged |
37,256 | 429 | 3.32 | % | 44,048 | 633 | 3.91 | % | ||||||||||||||||
Held-to-maturity |
||||||||||||||||||||||||
Taxable |
459,039 | 5,145 | 2.24 | % | 510,781 | 5,842 | 2.29 | % | ||||||||||||||||
Tax-advantaged |
183,706 | 2,513 | 3.31 | % | 221,602 | 3,109 | 3.39 | % | ||||||||||||||||
Investment in FHLB stock |
17,688 | 546 | 6.21 | % | 17,688 | 630 | 7.18 | % | ||||||||||||||||
Interest-earning deposits with other institutions |
670,737 | 896 | 0.27 | % | 18,356 | 194 | 2.13 | % | ||||||||||||||||
Loans (2) |
7,764,930 | 187,469 | 4.85 | % | 7,610,241 | 201,530 | 5.34 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total interest-earning assets |
10,753,285 | 215,067 | 4.03 | % | 10,045,181 | 232,068 | 4.67 | % | ||||||||||||||||
Total noninterest-earning assets |
1,240,143 | 1,268,812 | ||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total assets |
$ | 11,993,428 | $ | 11,313,993 | ||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
INTEREST-BEARING LIABILITIES |
||||||||||||||||||||||||
Savings deposits (3) |
$ | 3,224,924 | 5,121 | 0.32 | % | $ | 3,075,966 | 5,658 | 0.37 | % | ||||||||||||||
Time deposits |
448,176 | 1,998 | 0.90 | % | 509,581 | 2,306 | 0.91 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total interest-bearing deposits |
3,673,100 | 7,119 | 0.39 | % | 3,585,547 | 7,964 | 0.45 | % | ||||||||||||||||
FHLB advances, other borrowings, and customer repurchase agreements |
488,460 | 1,073 | 0.44 | % | 638,463 | 3,511 | 1.10 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Interest-bearing liabilities |
4,161,560 | 8,192 | 0.40 | % | 4,224,010 | 11,475 | 0.55 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Noninterest-bearing deposits |
5,725,677 | 5,089,795 | ||||||||||||||||||||||
Other liabilities |
119,659 | 100,290 | ||||||||||||||||||||||
Stockholders’ equity |
1,986,532 | 1,899,898 | ||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total liabilities and stockholders’ equity |
$ | 11,993,428 | $ | 11,313,993 | ||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Net interest income |
$ | 206,875 | $ | 220,593 | ||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Net interest spread - tax equivalent |
3.64 | % | 4.12 | % | ||||||||||||||||||||
Net interest margin |
3.87 | % | 4.42 | % | ||||||||||||||||||||
Net interest margin - tax equivalent |
3.88 | % | 4.44 | % |
(1) | Includes tax equivalent (TE) adjustments utilizing federal statutory rates of 21% in effect for the six months ended June 30, 2020 and 2019. The non TE rates were 2.28% and 2.48% for the six months ended June 30, 2020 and 2019, respectively. |
(2) | Includes loan fees of $7.8 million and $1.6 million for the six months ended June 30, 2020 and 2019, respectively. Prepayment penalty fees of $3.6 million and $2.3 million are included in interest income for the six months ended June 30, 2020 and 2019, respectively. |
(3) | Includes interest-bearing demand and money market accounts. |
Comparison of Three Months Ended June 30, 2020 Compared to 2019 Increase (Decrease) Due to | ||||||||||||||||
Volume |
Rate |
Rate/ Volume |
Total | |||||||||||||
(Dollars in thousands) |
||||||||||||||||
Interest income: |
||||||||||||||||
Available-for-sale |
||||||||||||||||
Taxable investment securities |
$ | (80 | ) | $ | (1,485 | ) | $ | (12 | ) | $ | (1,577 | ) | ||||
Tax-advantaged investment securities |
(42 | ) | (43 | ) | (7 | ) | (92 | ) | ||||||||
Held-to-maturity |
||||||||||||||||
Taxable investment securities |
(339 | ) | (130 | ) | (16 | ) | (485 | ) | ||||||||
Tax-advantaged investment securities |
(252 | ) | (25 | ) | (4 | ) | (281 | ) | ||||||||
Investment in FHLB stock |
- | (84 | ) | - | (84 | ) | ||||||||||
Interest-earning deposits with other institutions |
5,871 | (95 | ) | (5,593 | ) | 183 | ||||||||||
Loans |
6,851 | (12,532 | ) | (810 | ) | (6,491 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total interest income |
12,009 | (14,394 | ) | (6,442 | ) | (8,827 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Interest expense: |
||||||||||||||||
Savings deposits |
364 | (1,183 | ) | (144 | ) | (963 | ) | |||||||||
Time deposits |
(96 | ) | (36 | ) | (3 | ) | (135 | ) | ||||||||
FHLB advances, other borrowings, and customer repurchase agreements |
(234 | ) | (844 | ) | (163 | ) | (1,241 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total interest expense |
34 | (2,063 | ) | (310 | ) | (2,339 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net interest income |
$ | 11,975 | $ | (12,331 | ) | $ | (6,132 | ) | $ | (6,488 | ) | |||||
|
|
|
|
|
|
|
|
|
|
|
|
Comparision of Six Months Ended June 30, 2020 Compared to 2019 Increase (Decrease) Due to | ||||||||||||||||
Volume |
Rate |
Rate/ Volume |
Total | |||||||||||||
(Dollars in thousands) |
||||||||||||||||
Interest income: |
||||||||||||||||
Available-for-sale |
||||||||||||||||
Taxable investment securities |
$ | (48 | ) | $ | (2,018 | ) | $ | 5 | $ | (2,061 | ) | |||||
Tax-advantaged investment securities |
(97 | ) | (126 | ) | 19 | (204 | ) | |||||||||
Held-to-maturity |
||||||||||||||||
Taxable investment securities |
(580 | ) | (130 | ) | 13 | (697 | ) | |||||||||
Tax-advantaged investment securities |
(532 | ) | (78 | ) | 14 | (596 | ) | |||||||||
Investment in FHLB stock |
- | (84 | ) | - | (84 | ) | ||||||||||
Interest-earning deposits with other institutions |
6,917 | (170 | ) | (6,045 | ) | 702 | ||||||||||
Loans |
3,954 | (17,656 | ) | (359 | ) | (14,061 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total interest income |
9,614 | (20,262 | ) | (6,353 | ) | (17,001 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Interest expense: |
||||||||||||||||
Savings deposits |
267 | (767 | ) | (37 | ) | (537 | ) | |||||||||
Time deposits |
(273 | ) | (40 | ) | 5 | (308 | ) | |||||||||
FHLB advances, other borrowings, and customer repurchase agreements |
(825 | ) | (2,108 | ) | 495 | (2,438 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total interest expense |
(831 | ) | (2,915 | ) | 463 | (3,283 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net interest income |
$ | 10,445 | $ | (17,347 | ) | $ | (6,816 | ) | $ | (13,718 | ) | |||||
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
Variance |
Six Months Ended June 30, |
Variance |
|||||||||||||||||||||||||||||
2020 |
2019 |
$ |
% |
2020 |
2019 |
$ |
% |
|||||||||||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||||||||||||||
Noninterest income: |
||||||||||||||||||||||||||||||||
Service charges on deposit accounts |
$ | 3,809 | $ | 5,065 | $ | (1,256) | -24.80% | $ | 8,585 | $ | 10,206 | $ | (1,621) | -15.88% | ||||||||||||||||||
Trust and investment services |
2,477 | 2,452 | 25 | 1.02% | 4,897 | 4,634 | 263 | 5.68% | ||||||||||||||||||||||||
Bankcard services |
405 | 1,027 | (622) | -60.56% | 982 | 1,977 | (995) | -50.33% | ||||||||||||||||||||||||
BOLI income |
1,683 | 1,349 | 334 | 24.76% | 3,742 | 2,685 | 1,057 | 39.37% | ||||||||||||||||||||||||
Gain on OREO, net |
- | 24 | (24) | -100.00% | 10 | 129 | (119) | -92.25% | ||||||||||||||||||||||||
Gain on sale of building, net |
- | - | - | - | - | 4,545 | (4,545) | -100.00% | ||||||||||||||||||||||||
Gain on eminent domain condemnation, net |
- | 5,685 | (5,685) | -100.00% | - | 5,685 | (5,685) | -100.00% | ||||||||||||||||||||||||
Other |
3,778 | 2,603 | 1,175 | 45.14% | 5,576 | 4,647 | 929 | 19.99% | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total noninterest income |
$ | 12,152 | $ | 18,205 | $ | (6,053) | -33.25% | $ | 23,792 | $ | 34,508 | $ | (10,716) | -31.05% | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
Variance |
Six Months Ended June 30, |
Variance | |||||||||||||||||||||||||||||
2020 |
2019 |
$ |
% |
2020 |
2019 |
$ |
% | |||||||||||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||||||||||||||
Noninterest expense: |
||||||||||||||||||||||||||||||||
Salaries and employee benefits |
$ | 28,706 | $ | 28,862 | $ | (156) | -0.54% | $ | 59,583 | $ | 58,164 | $ | 1,419 | 2.44% | ||||||||||||||||||
Occupancy |
4,078 | 4,388 | (310) | -7.06% | 7,881 | 8,795 | (914) | -10.39% | ||||||||||||||||||||||||
Equipment |
953 | 1,039 | (86) | -8.28% | 1,987 | 2,056 | (69) | -3.36% | ||||||||||||||||||||||||
Professional services |
2,368 | 2,040 | 328 | 16.08% | 4,624 | 3,965 | 659 | 16.62% | ||||||||||||||||||||||||
Computer software expense |
2,754 | 2,756 | (2) | -0.07% | 5,570 | 5,369 | 201 | 3.74% | ||||||||||||||||||||||||
Marketing and promotion |
1,255 | 1,238 | 17 | 1.37% | 2,810 | 2,632 | 178 | 6.76% | ||||||||||||||||||||||||
Amortization of intangible assets |
2,445 | 2,833 | (388) | -13.70% | 4,890 | 5,690 | (800) | -14.06% | ||||||||||||||||||||||||
Telecommunications expense |
650 | 712 | (62) | -8.71% | 1,286 | 1,470 | (184) | -12.52% | ||||||||||||||||||||||||
Regulatory assessments |
167 | 734 | (567) | -77.25% | 315 | 1,658 | (1,343) | -81.00% | ||||||||||||||||||||||||
Insurance |
386 | 469 | (83) | -17.70% | 792 | 938 | (146) | -15.57% | ||||||||||||||||||||||||
Loan expense |
369 | 491 | (122) | -24.85% | 626 | 807 | (181) | -22.43% | ||||||||||||||||||||||||
Directors’ expenses |
358 | 356 | 2 | 0.56% | 709 | 679 | 30 | 4.42% | ||||||||||||||||||||||||
Stationery and supplies |
382 | 316 | 66 | 20.89% | 667 | 608 | 59 | 9.70% | ||||||||||||||||||||||||
Acquisition related expenses |
- | 2,612 | (2,612) | -100.00% | - | 5,761 | (5,761) | -100.00% | ||||||||||||||||||||||||
Other |
1,527 | 1,682 | (155) | -9.22% | 3,299 | 3,540 | (241) | -6.81% | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Total noninterest expense |
$ | 46,398 | $ | 50,528 | $ | (4,130) | -8.17% | $ | 95,039 | $ | 102,132 | $ | (7,093) | -6.94% | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Noninterest expense to average assets |
1.48% | 1.81% | 1.59% | 1.82% | ||||||||||||||||||||||||||||
Efficiency ratio (1) |
39.75% | 39.09% | 41.20% | 40.04% |
(1) | Noninterest expense divided by net interest income before provision for credit losses plus noninterest income. |
June 30, 2020 | ||||||||||||||||||||
Amortized Cost |
Gross Unrealized Holding Gain |
Gross Unrealized Holding Loss |
Fair Value |
Total Percent | ||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||
Investment securities available-for-sale: |
||||||||||||||||||||
Mortgage-backed securities |
$ | 1,191,431 | $ | 46,868 | $ | - | $ | 1,238,299 | 73.88 | % | ||||||||||
CMO/REMIC |
391,586 | 8,962 | (12) | 400,536 | 23.90 | % | ||||||||||||||
Municipal bonds |
35,015 | 1,438 | - | 36,453 | 2.17 | % | ||||||||||||||
Other securities |
779 | - | - | 779 | 0.05 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total available-for-sale |
$ | 1,618,811 | $ | 57,268 | $ | (12) | $ | 1,676,067 | 100.00 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Investment securities held-to-maturity: |
||||||||||||||||||||
Government agency/GSE |
$ | 106,981 | $ | 6,285 | $ | - | $ | 113,266 | 17.45 | % | ||||||||||
Mortgage-backed securities |
164,174 | 8,135 | - | 172,309 | 26.77 | % | ||||||||||||||
CMO/REMIC |
171,821 | 5,283 | - | 177,104 | 28.02 | % | ||||||||||||||
Municipal bonds |
170,193 | 6,418 | (340) | 176,271 | 27.76 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total held-to-maturity |
$ | 613,169 | $ | 26,121 | $ | (340) | $ | 638,950 | 100.00 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2019 | ||||||||||||||||||||
Amortized Cost |
Gross Unrealized Holding Gain |
Gross Unrealized Holding Loss |
Fair Value |
Total Percent | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Investment securities available-for-sale: |
||||||||||||||||||||
Mortgage-backed securities |
$ | 1,185,757 | $ | 21,306 | $ | (750) | $ | 1,206,313 | 69.32% | |||||||||||
CMO/REMIC |
493,214 | 1,392 | (896) | 493,710 | 28.37% | |||||||||||||||
Municipal bonds |
38,506 | 850 | (2) | 39,354 | 2.26% | |||||||||||||||
Other securities |
880 | - | - | 880 | 0.05% | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total available-for-sale |
$ | 1,718,357 | $ | 23,548 | $ | (1,648) | $ | 1,740,257 | 100.00% | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Investment securities held-to-maturity: |
||||||||||||||||||||
Government agency/GSE |
$ | 117,366 | $ | 2,280 | $ | (657) | $ | 118,989 | 17.40% | |||||||||||
Mortgage-backed securities |
168,479 | 2,083 | (54) | 170,508 | 24.98% | |||||||||||||||
CMO/REMIC |
192,548 | - | (2,458) | 190,090 | 28.55% | |||||||||||||||
Municipal bonds |
196,059 | 3,867 | (565) | 199,361 | 29.07% | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total held-to-maturity |
$ | 674,452 | $ | 8,230 | $ | (3,734) | $ | 678,948 | 100.00% | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2020 | ||||||||||||||||||||||||
Less Than 12 Months |
12 Months or Longer |
Total | ||||||||||||||||||||||
Fair Value |
Gross Unrealized Holding Losses |
Fair Value |
Gross Unrealized Holding Losses |
Fair Value |
Gross Unrealized Holding Losses | |||||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||||||
Investment securities available-for-sale: |
||||||||||||||||||||||||
Mortgage-backed securities |
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
CMO/REMIC |
2,754 | (12 | ) | - | - | 2,754 | (12 | ) | ||||||||||||||||
Municipal bonds |
- | - | - | - | - | - | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Total available-for-sale |
$ | 2,754 | $ | (12 | ) | $ | - | $ | - | $ | 2,754 | $ | (12 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2019 | ||||||||||||||||||||||||
Less Than 12 Months |
12 Months or Longer |
Total | ||||||||||||||||||||||
Fair Value |
Gross Unrealized Holding Losses |
Fair Value |
Gross Unrealized Holding Losses |
Fair Value |
Gross Unrealized Holding Losses | |||||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||||||
Investment securities available-for-sale: |
||||||||||||||||||||||||
Mortgage-backed securities |
$ | 20,289 | $ | (6 | ) | $ | 97,964 | $ | (744 | ) | $ | 118,253 | $ | (750 | ) | |||||||||
CMO/REMIC |
177,517 | (705 | ) | 34,565 | (191 | ) | 212,082 | (896 | ) | |||||||||||||||
Municipal bonds |
- | - | 563 | (2 | ) | 563 | (2 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Total available-for-sale |
$ | 197,806 | $ | (711 | ) | $ | 133,092 | $ | (937 | ) | $ | 330,898 | $ | (1,648 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Investment securities held-to-maturity: |
||||||||||||||||||||||||
Government agency/GSE |
$ | 28,359 | $ | (252 | ) | $ | 19,405 | $ | (405 | ) | $ | 47,764 | $ | (657 | ) | |||||||||
Mortgage-backed securities |
10,411 | (54 | ) | - | - | 10,411 | (54 | ) | ||||||||||||||||
CMO/REMIC |
23,897 | (104 | ) | 166,193 | (2,354 | ) | 190,090 | (2,458 | ) | |||||||||||||||
Municipal bonds |
7,583 | (32 | ) | 29,981 | (533 | ) | 37,564 | (565 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Total held-to-maturity |
$ | 70,250 | $ | (442 | ) | $ | 215,579 | $ | (3,292 | ) | $ | 285,829 | $ | (3,734 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2020 |
December 31, 2019 | |||||||
(Dollars in thousands) | ||||||||
Commercial and industrial |
$ | 840,738 | $ | 935,127 | ||||
SBA |
300,156 | 305,008 | ||||||
SBA - Paycheck Protection Program (PPP) |
1,097,150 | - | ||||||
Real estate: |
||||||||
Commercial real estate |
5,365,120 | 5,374,617 | ||||||
Construction |
125,815 | 116,925 | ||||||
SFR mortgage |
286,526 | 283,468 | ||||||
Dairy & livestock and agribusiness |
251,821 | 383,709 | ||||||
Municipal lease finance receivables |
49,876 | 53,146 | ||||||
Consumer and other loans |
85,332 | 116,319 | ||||||
|
|
|
|
|
| |||
Total loans |
8,402,534 | 7,568,319 | ||||||
Less: Deferred loan fees, net (1) |
- | (3,742 | ) | |||||
|
|
|
|
|
| |||
Total loans, net of deferred loan fees |
8,402,534 | 7,564,577 | ||||||
Less: Allowance for credit losses |
(93,983 | ) | (68,660 | ) | ||||
|
|
|
|
|
| |||
Total loans and lease finance receivables, net |
$ | 8,308,551 | $ | 7,495,917 | ||||
|
|
|
|
|
|
(1) | Beginning with March 31, 2020, total loans are presented net of deferred loan fees by respective class of financing receivables. |
June 30, 2020 | ||||||||||||||||
Total Loans |
Commercial Real Estate Loans | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||
Los Angeles County |
$ | 3,634,362 | 43.3% | $ | 2,222,552 | 41.4% | ||||||||||
Central Valley |
1,271,770 | 15.1% | 909,330 | 17.0% | ||||||||||||
Orange County |
1,120,793 | 13.3% | 658,092 | 12.3% | ||||||||||||
Inland Empire |
1,188,132 | 14.2% | 831,614 | 15.5% | ||||||||||||
Central Coast |
522,025 | 6.2% | 359,920 | 6.7% | ||||||||||||
San Diego |
238,460 | 2.8% | 134,770 | 2.5% | ||||||||||||
Other California |
131,686 | 1.6% | 81,087 | 1.5% | ||||||||||||
Out of State |
295,306 | 3.5% | 167,755 | 3.1% | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
$ | 8,402,534 | 100.0% | $ | 5,365,120 | 100.0% | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2020 |
||||||||||||||||
Loan Balance |
Percent |
Percent Owner- Occupied (1) |
Average Loan Balance |
|||||||||||||
(Dollars in thousands) |
||||||||||||||||
Commercial real estate: |
||||||||||||||||
Industrial |
$ | 1,844,152 | 34.4% | 54.5% | $ | 1,373 | ||||||||||
Office |
944,552 | 17.6% | 25.1% | 1,536 | ||||||||||||
Retail |
784,139 | 14.6% | 13.1% | 1,654 | ||||||||||||
Multi-family |
619,073 | 11.6% | 0.5% | 1,682 | ||||||||||||
Medical |
286,174 | 5.3% | 45.8% | 1,767 | ||||||||||||
Secured by farmland (2) |
248,558 | 4.6% | 98.2% | 2,005 | ||||||||||||
Other (3) |
638,472 | 11.9% | 55.1% | 1,373 | ||||||||||||
|
|
|
|
|||||||||||||
Total commercial real estate |
$ | 5,365,120 | 100.0% | 38.7% | $ | 1,511 | ||||||||||
|
|
|
|
(1) | Represents percentage of reported owner-occupied at origination in each real estate loan category. |
(2) | The loans secured by farmland included $121.9 million for loans secured by dairy & livestock land and $126.7 million for loans secured by agricultural land at June 30, 2020. |
(3) | Other loans consist of a variety of loan types, none of which exceeds 2.0% of total commercial real estate loans. |
June 30, 2020 |
December 31, 2019 |
|||||||
(Dollars in thousands) |
||||||||
Nonaccrual loans |
$ | 6,792 | $ | 5,033 | ||||
Loans past due 90 days or more and still accruing interest |
25 | - | ||||||
Nonperforming troubled debt restructured loans (TDRs) |
- | 244 | ||||||
|
|
|
|
|||||
Total nonperforming loans |
6,817 |
5,277 |
||||||
OREO, net |
4,889 | 4,889 | ||||||
|
|
|
|
|||||
Total nonperforming assets |
$ |
11,706 |
$ |
10,166 |
||||
|
|
|
|
|||||
Performing TDRs |
$ |
2,771 |
$ |
3,112 |
||||
|
|
|
|
|||||
Total nonperforming loans and performing TDRs (1) |
$ | 9,588 | $ | 8,389 | ||||
Percentage of nonperforming loans and performing TDRs to total loans, net of deferred fees |
0.11% | 0.11% | ||||||
Percentage of nonperforming assets to total loans, net of deferred fees, and OREO |
0.14% | 0.13% | ||||||
Percentage of nonperforming assets to total assets |
0.09% | 0.09% |
(1) | Includes $7.2 million that were considered collateral dependent and measured using the fair value of the collateral based on current appraisals (obtained within 1 year). |
June 30, 2020 |
December 31, 2019 | |||||||||||||||
Balance |
Number of Loans |
Balance |
Number of Loans | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Performing TDRs: |
||||||||||||||||
Commercial and industrial |
$ | 51 | 1 | $ | 78 | 2 | ||||||||||
SBA |
517 | 1 | 536 | 1 | ||||||||||||
Real Estate: |
||||||||||||||||
Commercial real estate |
371 | 1 | 397 | 1 | ||||||||||||
Construction |
- | - | - | - | ||||||||||||
SFR mortgage |
1,832 | 7 | 2,101 | 8 | ||||||||||||
Dairy & livestock and agribusiness |
- | - | - | - | ||||||||||||
Consumer and other |
- | - | - | - | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total performing TDRs |
$ | 2,771 | 10 | $ | 3,112 | 12 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Nonperforming TDRs: |
||||||||||||||||
Commercial and industrial |
$ | - | - | $ | - | - | ||||||||||
SBA |
- | - | - | - | ||||||||||||
Real Estate: |
||||||||||||||||
Commercial real estate |
- | - | - | - | ||||||||||||
Construction |
- | - | - | - | ||||||||||||
SFR mortgage |
- | - | - | - | ||||||||||||
Dairy & livestock and agribusiness |
- | - | - | - | ||||||||||||
Consumer and other |
- | - | 244 | 1 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total nonperforming TDRs |
$ | - | - | $ | 244 | 1 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total TDRs |
$ | 2,771 | 10 | $ | 3,356 | 13 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2020 |
March 31, 2020 |
December 31, 2019 |
September 30, 2019 |
June 30, 2019 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Nonperforming loans (1) : |
||||||||||||||||||||
Commercial and industrial |
$ | 1,222 | $ | 1,703 | $ | 1,266 | $ | 1,550 | $ | 1,993 | ||||||||||
SBA |
1,598 | 2,748 | 2,032 | 2,706 | 5,082 | |||||||||||||||
Real estate: |
||||||||||||||||||||
Commercial real estate |
2,628 | 947 | 724 | 1,083 | 1,095 | |||||||||||||||
Construction |
- | - | - | - | - | |||||||||||||||
SFR mortgage |
1,080 | 864 | 878 | 888 | 2,720 | |||||||||||||||
Dairy & livestock and agribusiness |
- | - | - | - | - | |||||||||||||||
Consumer and other loans |
289 | 166 | 377 | 385 | 397 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total |
$ |
6,817 |
$ |
6,428 |
$ |
5,277 |
$ |
6,612 |
$ |
11,287 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
% of Total loans |
0.08% |
0.09% |
0.07% |
0.09% |
0.15% |
|||||||||||||||
Past due 30-89 days: |
||||||||||||||||||||
Commercial and industrial |
$ | 630 | $ | 665 | $ | 2 | $ | 756 | $ | 310 | ||||||||||
SBA |
214 | 3,086 | 1,402 | 303 | - | |||||||||||||||
Real estate: |
||||||||||||||||||||
Commercial real estate |
4 | 210 | - | 368 | - | |||||||||||||||
Construction |
- | - | - | - | - | |||||||||||||||
SFR mortgage |
446 | 233 | 249 | - | - | |||||||||||||||
Dairy & livestock and agribusiness |
882 | 166 | - | - | - | |||||||||||||||
Consumer and other loans |
413 | - | - | - | 22 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total |
$ |
2,589 |
$ |
4,360 |
$ |
1,653 |
$ |
1,427 |
$ |
332 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
% of Total loans |
0.03% |
0.06% |
0.02% |
0.02% |
0.004% |
|||||||||||||||
OREO: |
||||||||||||||||||||
SBA |
$ | 797 | $ | 797 | $ | 797 | $ | 444 | $ | - | ||||||||||
Real estate: |
||||||||||||||||||||
Commercial real estate |
2,275 | 2,275 | 2,275 | 2,275 | 2,275 | |||||||||||||||
SFR mortgage |
1,817 | 1,817 | 1,817 | 6,731 | - | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total |
$ |
4,889 |
$ |
4,889 |
$ |
4,889 |
$ |
9,450 |
$ |
2,275 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total nonperforming, past due, and OREO |
$ |
14,295 |
$ |
15,677 |
$ |
11,819 |
$ |
17,489 |
$ |
13,894 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
% of Total loans |
0.17% |
0.21% |
0.16% |
0.23% |
0.18% |
(1) | As of June 30, 2020, nonperforming loans included $25,000 of commercial and industrial loans past due 90 days or more and still accruing interest. |
As of and For the Six Months Ended June 30, | ||||||||
2020 |
2019 | |||||||
(Dollars in thousands) | ||||||||
Allowance for credit losses at beginning of period |
$ | 68,660 | $ | 63,613 | ||||
Impact of adopting ASU 2016-13 |
1,840 | - | ||||||
Charge-offs: |
||||||||
Commercial and industrial |
(11 | ) | (48 | ) | ||||
SBA |
(156 | ) | (230 | ) | ||||
Commercial real estate |
- | - | ||||||
Construction |
- | - | ||||||
SFR mortgage |
- | - | ||||||
Dairy & livestock and agribusiness |
- | (78 | ) | |||||
Consumer and other loans |
(86 | ) | (4 | ) | ||||
|
|
|
|
|
| |||
Total charge-offs |
(253 | ) | (360 | ) | ||||
|
|
|
|
|
| |||
Recoveries: |
||||||||
Commercial and industrial |
5 | 159 | ||||||
SBA |
3 | 9 | ||||||
Commercial real estate |
- | - | ||||||
Construction |
6 | 6 | ||||||
SFR mortgage |
206 | 183 | ||||||
Dairy & livestock and agribusiness |
- | 19 | ||||||
Consumer and other loans |
16 | 3 | ||||||
|
|
|
|
|
| |||
Total recoveries |
236 | 379 | ||||||
|
|
|
|
|
| |||
Net (charge-offs) recoveries |
(17 | ) | 19 | |||||
Provision for credit losses |
23,500 | 3,500 | ||||||
|
|
|
|
|
| |||
Allowance for credit losses at end of period |
$ | 93,983 | $ | 67,132 | ||||
|
|
|
|
|
| |||
Summary of reserve for unfunded loan commitments: |
||||||||
Reserve for unfunded loan commitments at beginning of period |
$ | 8,959 | $ | 8,959 | ||||
Impact of adopting ASU 2016-13 |
41 | - | ||||||
Provision for unfunded loan commitments |
- | - | ||||||
|
|
|
|
|
| |||
Reserve for unfunded loan commitments at end of period |
$ | 9,000 | $ | 8,959 | ||||
|
|
|
|
|
| |||
Reserve for unfunded loan commitments to total unfunded loan commitments |
0.52% | 0.53% | ||||||
Amount of total loans at end of period (1) |
$ | 8,402,534 | $ | 7,535,690 | ||||
Average total loans outstanding (1) |
$ | 7,764,930 | $ | 7,610,241 | ||||
Net recoveries to average total loans |
-0.0002% | 0.0002% | ||||||
Net recoveries to total loans at end of period |
-0.0002% | 0.0003% | ||||||
Allowance for credit losses to average total loans |
1.21% | 0.88% | ||||||
Allowance for credit losses to total loans at end of period |
1.12% | 0.89% | ||||||
Net (charge-offs) recoveries to allowance for credit losses |
-0.02% | 0.03% | ||||||
Net (charge-offs) recoveries to provision for credit losses |
-0.07% | 0.54% |
(1) | Net of deferred loan origination fees, costs and discounts. |
June 30, 2020 |
December 31, 2019 | |||||||||||||||
|
|
|
|
|
| |||||||||||
Balance |
Percent |
Balance |
Percent | |||||||||||||
|
|
|
|
|
| |||||||||||
(Dollars in thousands) | ||||||||||||||||
Noninterest-bearing deposits |
$ | 6,901,368 | 62.83 | % | $ | 5,245,517 | 60.26 | % | ||||||||
Interest-bearing deposits |
||||||||||||||||
Investment checking |
472,509 | 4.30 | % | 454,565 | 5.22 | % | ||||||||||
Money market |
2,681,962 | 24.42 | % | 2,158,161 | 24.79 | % | ||||||||||
Savings |
468,051 | 4.26 | % | 400,377 | 4.60 | % | ||||||||||
Time deposits |
459,690 | 4.19 | % | 446,308 | 5.13 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total deposits |
$ | 10,983,580 | 100.00 | % | $ | 8,704,928 | 100.00 | % | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Maturity by Period | ||||||||||||||||||||
Total |
Less Than One Year |
One Year Through Three Years |
Four Years Through Five Years |
Over Five Years | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Deposits (1) |
$ | 10,983,580 | $ | 10,942,750 | $ | 30,610 | $ | 9,626 | $ | 594 | ||||||||||
Customer repurchase agreements (1) |
468,156 | 468,156 | - | - | - | |||||||||||||||
Junior subordinated debentures (1) |
25,774 | - | - | - | 25,774 | |||||||||||||||
Deferred compensation |
23,241 | 678 | 1,245 | 622 | 20,696 | |||||||||||||||
Operating leases |
20,928 | 6,619 | 8,958 | 3,443 | 1,908 | |||||||||||||||
Affordable housing investment |
3,159 | 2,285 | 814 | 47 | 13 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total |
$ | 11,524,838 | $ | 11,420,488 | $ | 41,627 | $ | 13,738 | $ | 48,985 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Amounts exclude accrued interest. |
Maturity by Period | ||||||||||||||||||||
Total |
Less Than One Year |
One Year to Three Years |
Four Years to Five Years |
After Five Years | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Commitment to extend credit: |
||||||||||||||||||||
Commercial and industrial |
$ | 949,212 | $ | 647,113 | $ | 193,588 | $ | 9,023 | $ | 99,488 | ||||||||||
SBA |
221 | 187 | 4 | - | 30 | |||||||||||||||
SBA - PPP |
- | - | - | - | - | |||||||||||||||
Real estate: |
||||||||||||||||||||
Commercial real estate |
284,860 | 52,947 | 81,256 | 141,025 | 9,632 | |||||||||||||||
Construction |
82,734 | 53,625 | 29,109 | - | - | |||||||||||||||
SFR Mortgage |
1,885 | - | - | - | 1,885 | |||||||||||||||
Dairy & livestock and agribusiness (1) |
218,722 | 126,287 | 91,357 | 378 | 700 | |||||||||||||||
Consumer and other loans |
136,150 | 10,558 | 10,391 | 5,833 | 109,368 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total commitment to extend credit |
1,673,784 | 890,717 | 405,705 | 156,259 | 221,103 | |||||||||||||||
Obligations under letters of credit |
46,705 | 37,325 | 9,332 | 48 | - | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total |
$ | 1,720,489 | $ | 928,042 | $ | 415,037 | $ | 156,307 | $ | 221,103 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Total commitments to extend credit to agribusiness were $17.1 million at June 30, 2020. |
June 30, 2020 |
December 31, 2019 |
|||||||||||||||||||||||||||
Capital Ratios |
Adequately Capitalized Ratios |
Minimum Required Plus Capital Conservation Buffer |
Well Capitalized Ratios |
CVB Financial Corp. Consolidated |
Citizens Business Bank |
CVB Financial Corp. Consolidated |
Citizens Business Bank |
|||||||||||||||||||||
Tier 1 leverage capital ratio |
4.00 | % | 4.00 | % | 5.00 | % | 10.59 | % | 10.45 | % | 12.33 | % | 12.19 | % | ||||||||||||||
Common equity Tier 1 capital ratio |
4.50 | % | 7.00 | % | 6.50 | % | 14.47 | % | 14.58 | % | 14.83 | % | 14.94 | % | ||||||||||||||
Tier 1 risk-based capital ratio |
6.00 | % | 8.50 | % | 8.00 | % | 14.76 | % | 14.58 | % | 15.11 | % | 14.94 | % | ||||||||||||||
Total risk-based capital ratio |
8.00 | % | 10.50 | % | 10.00 | % | 15.97 | % | 15.79 | % | 16.00 | % | 15.83 | % |
Six Months Ended June 30, | ||||||||
2020 |
2019 | |||||||
(Dollars in thousands) | ||||||||
Average cash and cash equivalents |
$ | 799,989 | $ | 184,301 | ||||
Percentage of total average assets |
6.67% | 1.63% | ||||||
Net cash provided by operating activities |
$ | 97,081 | $ | 82,602 | ||||
Net cash (used in) provided by investing activities |
(541,488 | ) | 438,532 | |||||
Net cash provided by (used in) financing activities |
2,186,172 | (509,242 | ) | |||||
|
|
|
|
|
| |||
Net increase in cash and cash equivalents |
$ | 1,741,765 | $ | 11,892 | ||||
|
|
|
|
|
|
Estimated Net Interest Income Sensitivity (1) | ||||||||||
June 30, 2020 |
December 31, 2019 | |||||||||
Interest Rate Scenario |
12-month Period |
24-month Period (Cumulative) |
Interest Rate Scenario |
12-month Period |
24-month Period (Cumulative) | |||||
+ 200 basis points |
5.80% | 11.30% | + 200 basis points | 5.20% | 10.00% | |||||
- 100 basis points |
-0.90% | -2.00% | - 100 basis points | -2.10% | -4.60% |
(1) | Percentage change from base scenario, but the current low interest rate environment limits the absolute decline in rates as the model does not assume rates go below zero. |
Instantaneous Rate Change |
June 30, 2020 |
December 31, 2019 | ||||
100 bp decrease in interest rates |
-20.3% | -17.5% | ||||
100 bp increase in interest rates |
11.7% | 14.2% | ||||
200 bp increase in interest rates |
21.1% | 25.5% | ||||
300 bp increase in interest rates |
24.1% | 30.0% | ||||
400 bp increase in interest rates |
28.8% | 36.2% |
Exhibit No. |
Description of Exhibits | |
31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | |
31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | |
32.1 | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002** | |
32.2 | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002** | |
101.INS | Inline 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. | |
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, has been formatted in Inline XBRL. |
* | Filed herewith |
** | Furnished herewith |
CVB FINANCIAL CORP. | ||||
(Registrant) | ||||
Date: August 10, 2020 | ||||
/s/ E. Allen Nicholson | ||||
E. Allen Nicholson | ||||
Executive Vice President and Chief Financial Officer | ||||
(Principal Financial Officer) |
Exhibit 31.1
CERTIFICATION
I, David A. Brager, certify that:
1. | I have reviewed this quarterly report on Form 10-Q of CVB Financial Corp.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants Board of Directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: August 10, 2020 | By: | /s/ David A. Brager | ||||
David A. Brager | ||||||
Chief Executive Officer |
Exhibit 31.2
CERTIFICATION
I, E. Allen Nicholson, certify that:
1. | I have reviewed this quarterly report on Form 10-Q of CVB Financial Corp.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants Board of Directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: August 10, 2020 | By: | /s/ E. Allen Nicholson | ||||
E. Allen Nicholson | ||||||
Chief Financial Officer |
Exhibit 32.1
CERTIFICATION
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of CVB Financial Corp. (the Company) on Form 10-Q for the period ended June 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, David A. Brager, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge that:
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: August 10, 2020 | By: | /s/ David A. Brager | ||||
David A. Brager | ||||||
Chief Executive Officer |
Exhibit 32.2
CERTIFICATION
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of CVB Financial Corp. (the Company) on Form 10-Q for the period ended June 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, E. Allen Nicholson, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge that:
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: August 10, 2020 | By: | /s/ E. Allen Nicholson | ||||
E. Allen Nicholson | ||||||
Chief Financial Officer |