Washington | 91-1857900 | |||||||||||||
(State or other jurisdiction of
incorporation or organization) |
(I.R.S. Employer
Identification No.) |
|||||||||||||
201 Fifth Avenue SW, | Olympia | WA | 98501 | |||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class
|
Trading symbol
|
Name of each exchange on which registered
|
||||||
Common stock, no par value
|
HFWA
|
NASDAQ
|
Large accelerated filer
|
☒
|
Accelerated filer
|
☐ | |||||||||||
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐ | |||||||||||
Emerging growth company
|
☐ |
Page | ||||||||||||||
PART I. | ||||||||||||||
ITEM 1. | ||||||||||||||
NOTE 1. | ||||||||||||||
NOTE 2. | ||||||||||||||
NOTE 3. | ||||||||||||||
NOTE 4. | ||||||||||||||
NOTE 5. | ||||||||||||||
NOTE 6. | ||||||||||||||
NOTE 7. | ||||||||||||||
NOTE 8. | ||||||||||||||
NOTE 9. | ||||||||||||||
NOTE 10. | ||||||||||||||
NOTE 11. | ||||||||||||||
NOTE 12. | ||||||||||||||
NOTE 13. | ||||||||||||||
NOTE 14. | ||||||||||||||
ITEM 2. | ||||||||||||||
ITEM 3. |
ITEM 4. | ||||||||||||||
Part II. |
OTHER INFORMATION
|
|||||||||||||
ITEM 1. | ||||||||||||||
ITEM 1A. | ||||||||||||||
ITEM 2. | ||||||||||||||
ITEM 3. | ||||||||||||||
ITEM 4. | ||||||||||||||
ITEM 5. | ||||||||||||||
ITEM 6. | ||||||||||||||
2020 Annual Form 10-K | Company's Annual Report on Form 10-K for the year ended December 31, 2020 | ||||
ACL | Allowance for credit losses | ||||
ASC | Accounting Standards Codification | ||||
ASU | Accounting Standards Update | ||||
Bank | Heritage Bank | ||||
CA Act | Consolidated Appropriations Act of 2021 | ||||
CARES Act | Coronavirus Aid, Relief, and Economic Security Act of 2020 | ||||
CECL | Current expected credit loss | ||||
CECL Adoption |
Company's adoption on January 1, 2020 of FASB ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as amended, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the CECL methodology
|
||||
CMO | Collateralized Mortgage Obligation | ||||
Company | Heritage Financial Corporation | ||||
COVID Modifications | Loans with modifications made in compliance with the CARES Act, as amended, and related regulatory guidance | ||||
COVID-19 Pandemic | Coronavirus Disease of 2019 pandemic | ||||
CRE | Commercial real estate | ||||
FASB | Financial Accounting Standards Board | ||||
FDIC | Federal Deposit Insurance Corporation | ||||
Federal Reserve | Board of Governors of the Federal Reserve System | ||||
Federal Reserve Bank | Federal Reserve Bank of San Francisco | ||||
FHLB | Federal Home Loan Bank of Des Moines | ||||
GAAP | U.S. Generally Accepted Accounting Principles | ||||
Heritage | Heritage Financial Corporation | ||||
LIBOR | London Interbank Offering Rate | ||||
MBS | Mortgage-backed security | ||||
PPP | Paycheck Protection Program | ||||
PPP1 | First tranche of the SBA's PPP commencing in April 2020 through August 8, 2020 | ||||
PPP2 | Second tranche of the SBA'S PPP commencing in January 2021 and expiring May 31, 2021 | ||||
PPPLF | Paycheck Protection Program Liquidity Facility | ||||
SBA | Small Business Administration | ||||
SEC | Securities and Exchange Commission | ||||
SM | Special Mention |
SS | Substandard | ||||
TDR | Troubled debt restructured | ||||
March 31,
2021 |
December 31,
2020 |
||||||||||
ASSETS | |||||||||||
Cash on hand and in banks | $ | 93,306 | $ | 91,918 | |||||||
Interest earning deposits | 841,010 | 651,404 | |||||||||
Cash and cash equivalents | 934,316 | 743,322 | |||||||||
Investment securities available for sale, at fair value, net (amortized cost of $876,357 and $770,195, respectively)
|
893,558 | 802,163 | |||||||||
Loans held for sale | 6,801 | 4,932 | |||||||||
Loans receivable | 4,595,869 | 4,468,647 | |||||||||
Allowance for credit losses on loans | (64,225) | (70,185) | |||||||||
Loans receivable, net | 4,531,644 | 4,398,462 | |||||||||
Other real estate owned | — | — | |||||||||
Premises and equipment, net | 84,533 | 85,452 | |||||||||
Federal Home Loan Bank stock, at cost | 7,933 | 6,661 | |||||||||
Bank owned life insurance | 108,341 | 107,580 | |||||||||
Accrued interest receivable | 19,447 | 19,418 | |||||||||
Prepaid expenses and other assets | 188,589 | 193,301 | |||||||||
Other intangible assets, net | 12,291 | 13,088 | |||||||||
Goodwill | 240,939 | 240,939 | |||||||||
Total assets | $ | 7,028,392 | $ | 6,615,318 | |||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Deposits | $ | 6,019,698 | $ | 5,597,990 | |||||||
Junior subordinated debentures | 20,960 | 20,887 | |||||||||
Securities sold under agreement to repurchase | 36,503 | 35,683 | |||||||||
Accrued expenses and other liabilities | 124,080 | 140,319 | |||||||||
Total liabilities | 6,201,241 | 5,794,879 | |||||||||
Stockholders’ equity: | |||||||||||
Preferred stock, no par value, 2,500,000 shares authorized; no shares issued and outstanding, respectively
|
— | — | |||||||||
Common stock, no par value, 50,000,000 shares authorized; 35,981,317 and 35,912,243 shares issued and outstanding, respectively
|
571,204 | 571,021 | |||||||||
Retained earnings | 242,486 | 224,400 | |||||||||
Accumulated other comprehensive income, net | 13,461 | 25,018 | |||||||||
Total stockholders’ equity | 827,151 | 820,439 | |||||||||
Total liabilities and stockholders’ equity | $ | 7,028,392 | $ | 6,615,318 |
Three Months Ended
March 31, |
|||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
INTEREST INCOME: | |||||||||||||||||||||||
Interest and fees on loans | $ | 49,524 | $ | 46,277 | |||||||||||||||||||
Taxable interest on investment securities | 3,534 | 5,633 | |||||||||||||||||||||
Nontaxable interest on investment securities | 958 | 756 | |||||||||||||||||||||
Interest on interest earning deposits | 175 | 420 | |||||||||||||||||||||
Total interest income | 54,191 | 53,086 | |||||||||||||||||||||
INTEREST EXPENSE: | |||||||||||||||||||||||
Deposits | 1,728 | 4,216 | |||||||||||||||||||||
Junior subordinated debentures | 187 | 285 | |||||||||||||||||||||
Other borrowings | 38 | 34 | |||||||||||||||||||||
Total interest expense | 1,953 | 4,535 | |||||||||||||||||||||
Net interest income | 52,238 | 48,551 | |||||||||||||||||||||
(Reversal of) provision for credit losses | (7,199) | 7,946 | |||||||||||||||||||||
Net interest income after (reversal of) provision for credit losses | 59,437 | 40,605 | |||||||||||||||||||||
NONINTEREST INCOME: | |||||||||||||||||||||||
Service charges and other fees | 4,000 | 4,376 | |||||||||||||||||||||
Gain on sale of investment securities, net | 29 | 1,014 | |||||||||||||||||||||
Gain on sale of loans, net | 1,370 | 547 | |||||||||||||||||||||
Interest rate swap fees | 152 | 296 | |||||||||||||||||||||
Bank owned life insurance income | 656 | 885 | |||||||||||||||||||||
Other income | 2,044 | 2,368 | |||||||||||||||||||||
Total noninterest income | 8,251 | 9,486 | |||||||||||||||||||||
NONINTEREST EXPENSE: | |||||||||||||||||||||||
Compensation and employee benefits | 22,461 | 22,506 | |||||||||||||||||||||
Occupancy and equipment | 4,454 | 4,564 | |||||||||||||||||||||
Data processing | 3,812 | 3,527 | |||||||||||||||||||||
Marketing | 669 | 866 | |||||||||||||||||||||
Professional services | 1,331 | 1,377 | |||||||||||||||||||||
State/municipal business and use taxes | 972 | 757 | |||||||||||||||||||||
Federal deposit insurance premium | 589 | — | |||||||||||||||||||||
Other real estate owned, net | — | 25 | |||||||||||||||||||||
Amortization of intangible assets | 797 | 903 | |||||||||||||||||||||
Other expense | 2,157 | 2,735 | |||||||||||||||||||||
Total noninterest expense | 37,242 | 37,260 | |||||||||||||||||||||
Income before income taxes | 30,446 | 12,831 | |||||||||||||||||||||
Income tax expense | 5,102 | 640 | |||||||||||||||||||||
Net income | $ | 25,344 | $ | 12,191 | |||||||||||||||||||
Basic earnings per share | $ | 0.70 | $ | 0.34 | |||||||||||||||||||
Diluted earnings per share | $ | 0.70 | $ | 0.34 | |||||||||||||||||||
Dividends declared per share | $ | 0.20 | $ | 0.20 | |||||||||||||||||||
Average number of basic shares outstanding | 35,926,950 | 36,342,090 | |||||||||||||||||||||
Average number of diluted shares outstanding | 36,232,204 | 36,596,641 |
Three Months Ended
March 31, |
|||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
Net income | $ | 25,344 | $ | 12,191 | |||||||||||||||||||
Change in fair value of investment securities available for sale, net of tax of $(3,204) and $2,419, respectively
|
(11,534) | 8,707 | |||||||||||||||||||||
Reclassification adjustment for net gain from sale of investment securities available for sale included in income, net of tax of $(6), and $(221), respectively
|
(23) | (793) | |||||||||||||||||||||
Other comprehensive (loss) income | (11,557) | 7,914 | |||||||||||||||||||||
Comprehensive income | $ | 13,787 | $ | 20,105 |
Three Months Ended March 31, 2021 | |||||||||||||||||||||||||||||
Number of
common shares |
Common
stock |
Retained
earnings |
Accumulated other comprehensive income (loss), net |
Total
stockholders’ equity |
|||||||||||||||||||||||||
Balance at December 31, 2020 | 35,912 | $ | 571,021 | $ | 224,400 | $ | 25,018 | $ | 820,439 | ||||||||||||||||||||
Restricted stock units vested | 92 | — | — | — | — | ||||||||||||||||||||||||
Stock-based compensation expense | — | 870 | — | — | 870 | ||||||||||||||||||||||||
Common stock repurchased | (23) | (687) | — | — | (687) | ||||||||||||||||||||||||
Net income | — | — | 25,344 | 25,344 | |||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | (11,557) | (11,557) | ||||||||||||||||||||||||
Cash dividend declared on common stock ($0.20 per share)
|
— | — | (7,258) | — | (7,258) | ||||||||||||||||||||||||
Balance at March 31, 2021 | 35,981 | $ | 571,204 | $ | 242,486 | $ | 13,461 | $ | 827,151 |
Three Months Ended March 31, 2020 | |||||||||||||||||||||||||||||
Number of
common shares |
Common
stock |
Retained
earnings |
Accumulated other comprehensive income, net |
Total
stockholders’ equity |
|||||||||||||||||||||||||
Balance at December 31, 2019 | 36,619 | $ | 586,459 | $ | 212,474 | $ | 10,378 | $ | 809,311 | ||||||||||||||||||||
Cumulative effect from change in accounting policy (1)
|
— | — | (5,615) | — | (5,615) | ||||||||||||||||||||||||
Restricted stock units vested, net of forfeitures of restricted stock awards | 87 | — | — | — | — | ||||||||||||||||||||||||
Exercise of stock options | 5 | 71 | — | — | 71 | ||||||||||||||||||||||||
Stock-based compensation expense | — | 969 | — | — | 969 | ||||||||||||||||||||||||
Common stock repurchased | (822) | (19,060) | — | — | (19,060) | ||||||||||||||||||||||||
Net income | — | — | 12,191 | — | 12,191 | ||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | 7,914 | 7,914 | ||||||||||||||||||||||||
Cash dividend declared on common stock ($0.20 per share)
|
— | — | (7,343) | — | (7,343) | ||||||||||||||||||||||||
Balance at March 31, 2020 | 35,889 | $ | 568,439 | $ | 211,707 | $ | 18,292 | $ | 798,438 |
Three Months Ended
March 31, |
|||||||||||
2021 | 2020 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 25,344 | $ | 12,191 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation, amortization and accretion | (6,796) | 67 | |||||||||
(Reversal of) provision for credit losses | (7,199) | 7,946 | |||||||||
Net change in accrued interest receivable, prepaid expenses and other assets, and accrued expenses and other liabilities | (1,205) | (7,581) | |||||||||
Stock-based compensation expense | 870 | 969 | |||||||||
Amortization of intangible assets | 797 | 903 | |||||||||
Origination of mortgage loans held for sale | (32,254) | (16,026) | |||||||||
Proceeds from sale of mortgage loans held for sale | 31,755 | 18,298 | |||||||||
Bank owned life insurance income | (656) | (885) | |||||||||
Valuation adjustment on interest rate swaps | (244) | — | |||||||||
Loss on sale of other real estate owned, net | — | 4 | |||||||||
Gain on sale of mortgage loans held for sale, net | (1,370) | (547) | |||||||||
Gain on sale of investment securities available for sale, net | (29) | (1,014) | |||||||||
Gain on sale of assets held for sale | (22) | (9) | |||||||||
Loss (gain) on sale or write-off of premises and equipment, net | 90 | (9) | |||||||||
Net cash provided by operating activities | 9,081 | 14,307 | |||||||||
Cash flows from investing activities: | |||||||||||
Loans originated, net of principal payments | (117,892) | (84,807) | |||||||||
Maturities, calls and payments of investment securities available for sale | 62,675 | 74,320 | |||||||||
Purchase of investment securities available for sale | (166,038) | (90,517) | |||||||||
Proceeds from sales of investment securities available for sale | 1,248 | 25,177 | |||||||||
Purchase of premises and equipment | (475) | (1,423) | |||||||||
Proceeds from sales of other real estate owned | — | 266 | |||||||||
Proceeds from sales of assets held for sale | 1,731 | 394 | |||||||||
Proceeds from redemption of Federal Home Loan Bank stock | — | 760 | |||||||||
Purchases of Federal Home Loan Bank stock | (1,272) | (1,044) | |||||||||
Proceeds from sales of premises and equipment | — | 9 | |||||||||
Purchases of bank owned life insurance | (105) | (3,579) | |||||||||
Proceeds from bank owned life insurance death benefit | — | 1,324 | |||||||||
Capital contributions to low-income housing tax credit partnerships | (12,617) | (1,434) | |||||||||
Net cash used by investing activities | (232,745) | (80,554) | |||||||||
Cash flows from financing activities: | |||||||||||
Net increase in deposits | 421,708 | 35,272 | |||||||||
Federal Home Loan Bank advances | 10 | 19,000 | |||||||||
Repayment of Federal Home Loan Bank advances | (10) | (19,000) | |||||||||
Common stock cash dividends paid | (7,183) | (7,314) | |||||||||
Net increase (decrease) in securities sold under agreement to repurchase | 820 | (8,377) | |||||||||
Proceeds from exercise of stock options | — | 71 | |||||||||
Repurchase of common stock | (687) | (19,060) | |||||||||
Net cash provided by financing activities | 414,658 | 592 |
Three Months Ended
March 31, |
|||||||||||
2021 | 2020 | ||||||||||
Net increase (decrease) in cash and cash equivalents | 190,994 | (65,655) | |||||||||
Cash and cash equivalents at beginning of period | 743,322 | 228,568 | |||||||||
Cash and cash equivalents at end of period | $ | 934,316 | $ | 162,913 | |||||||
Supplemental disclosures of cash flow information: | |||||||||||
Cash paid for interest | $ | 1,889 | $ | 4,507 | |||||||
Cash paid for income taxes, net of refunds | 64 | 58 | |||||||||
Supplemental non-cash disclosures of cash flow information: | |||||||||||
Transfers of loans receivable to other real estate owned | $ | — | $ | 270 | |||||||
Purchase of investment securities available for sale not settled | 5,000 | 7,303 | |||||||||
Cumulative effect from change in accounting policy (1)
|
— | 7,175 | |||||||||
Right of use assets obtained in exchange for new operating lease liabilities | 7,381 | 591 | |||||||||
March 31, 2021 | |||||||||||||||||||||||
Amortized
Cost |
Gross
Unrealized Gains |
Gross
Unrealized Losses |
Fair
Value |
||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
U.S. government and agency securities | $ | 96,415 | $ | 630 | $ | (2,188) | $ | 94,857 | |||||||||||||||
Municipal securities | 219,373 | 10,001 | (1,711) | 227,663 | |||||||||||||||||||
Residential CMO and MBS | 179,680 | 4,233 | (917) | 182,996 | |||||||||||||||||||
Commercial CMO and MBS | 341,620 | 9,168 | (2,619) | 348,169 | |||||||||||||||||||
Corporate obligations | 10,989 | 66 | — | 11,055 | |||||||||||||||||||
Other asset-backed securities | 28,280 | 548 | (10) | 28,818 | |||||||||||||||||||
Total | $ | 876,357 | $ | 24,646 | $ | (7,445) | $ | 893,558 |
December 31, 2020 | |||||||||||||||||||||||||||||
Amortized
Cost |
Gross
Unrealized Gains |
Gross
Unrealized Losses |
Fair
Value |
||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
U.S. government and agency securities | $ | 44,713 | $ | 947 | $ | — | $ | 45,660 | |||||||||||||||||||||
Municipal securities | 197,634 | 12,561 | (227) | 209,968 | |||||||||||||||||||||||||
Residential CMO and MBS | 196,956 | 5,125 | (209) | 201,872 | |||||||||||||||||||||||||
Commercial CMO and MBS | 290,638 | 13,198 | (90) | 303,746 | |||||||||||||||||||||||||
Corporate obligations | 10,971 | 125 | — | 11,096 | |||||||||||||||||||||||||
Other asset-backed securities | 29,283 | 565 | (27) | 29,821 | |||||||||||||||||||||||||
Total | $ | 770,195 | $ | 32,521 | $ | (553) | $ | 802,163 |
Amortized Cost |
Fair
Value |
||||||||||
(In thousands) | |||||||||||
Due in one year or less | $ | 48,897 | $ | 49,279 | |||||||
Due after one year through five years | 134,310 | 140,053 | |||||||||
Due after five years through ten years | 285,906 | 290,676 | |||||||||
Due after ten years | 407,244 | 413,550 | |||||||||
Total | $ | 876,357 | $ | 893,558 |
March 31, 2021 | |||||||||||||||||||||||||||||||||||
Less than 12 Months | 12 Months or Longer | Total | |||||||||||||||||||||||||||||||||
Fair
Value |
Unrealized
Losses |
Fair
Value |
Unrealized
Losses |
Fair
Value |
Unrealized
Losses |
||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
U.S. government and agency securities | $ | 54,549 | $ | (2,188) | $ | — | $ | — | $ | 54,549 | $ | (2,188) | |||||||||||||||||||||||
Municipal securities | 48,130 | (1,558) | 2,312 | (153) | 50,442 | (1,711) | |||||||||||||||||||||||||||||
Residential CMO and MBS | 16,359 | (768) | 24,221 | (149) | 40,580 | (917) | |||||||||||||||||||||||||||||
Commercial CMO and MBS | 79,240 | (2,612) | 2,606 | (7) | 81,846 | (2,619) | |||||||||||||||||||||||||||||
Other asset-backed securities | — | — | 1,330 | (10) | 1,330 | (10) | |||||||||||||||||||||||||||||
Total | $ | 198,278 | $ | (7,126) | $ | 30,469 | $ | (319) | $ | 228,747 | $ | (7,445) |
December 31, 2020 | |||||||||||||||||||||||||||||||||||
Less than 12 Months | 12 Months or Longer | Total | |||||||||||||||||||||||||||||||||
Fair
Value |
Unrealized
Losses |
Fair
Value |
Unrealized
Losses |
Fair
Value |
Unrealized
Losses |
||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Municipal securities | 10,264 | (227) | — | — | 10,264 | (227) | |||||||||||||||||||||||||||||
Residential CMO and MBS | — | — | 25,293 | (209) | 25,293 | (209) | |||||||||||||||||||||||||||||
Commercial CMO and MBS | 11,404 | (29) | 7,499 | (61) | 18,903 | (90) | |||||||||||||||||||||||||||||
Other asset-backed securities | — | — | 4,570 | (27) | 4,570 | (27) | |||||||||||||||||||||||||||||
Total | $ | 21,668 | $ | (256) | $ | 37,362 | $ | (297) | $ | 59,030 | $ | (553) |
Three Months Ended
March 31, |
|||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Gross realized gains | $ | 29 | $ | 1,028 | |||||||||||||||||||
Gross realized losses | — | (14) | |||||||||||||||||||||
Net realized gains | $ | 29 | $ | 1,014 |
March 31, 2021 | December 31, 2020 | ||||||||||||||||||||||
Amortized
Cost |
Fair
Value |
Amortized
Cost |
Fair
Value |
||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Washington and Oregon state public deposits | $ | 118,333 | $ | 122,419 | $ | 119,652 | $ | 124,228 | |||||||||||||||
Securities sold under agreement to repurchase | 47,467 | 48,178 | 38,630 | 39,945 | |||||||||||||||||||
Other securities pledged | 27,928 | 28,679 | 29,665 | 30,717 | |||||||||||||||||||
Total | $ | 193,728 | $ | 199,276 | $ | 187,947 | $ | 194,890 |
March 31,
2021 |
December 31,
2020 |
||||||||||
(In thousands) | |||||||||||
Commercial business: | |||||||||||
Commercial and industrial | $ | 693,539 | $ | 733,098 | |||||||
SBA PPP | 886,761 | 715,121 | |||||||||
Owner-occupied CRE | 881,168 | 856,684 | |||||||||
Non-owner occupied CRE | 1,427,953 | 1,410,303 | |||||||||
Total commercial business | 3,889,421 | 3,715,206 | |||||||||
Residential real estate | 114,856 | 122,756 | |||||||||
Real estate construction and land development: | |||||||||||
Residential
|
79,878 | 78,259 | |||||||||
Commercial and multifamily
|
217,815 | 227,454 | |||||||||
Total real estate construction and land development | 297,693 | 305,713 | |||||||||
Consumer | 293,899 | 324,972 | |||||||||
Loans receivable | 4,595,869 | 4,468,647 | |||||||||
Allowance for credit losses on loans | (64,225) | (70,185) | |||||||||
Loans receivable, net | $ | 4,531,644 | $ | 4,398,462 | |||||||
Balances included in the amortized cost of Loans receivable: | |||||||||||
Unamortized net discount on acquired loans | $ | (5,501) | $ | (6,575) | |||||||
Unamortized net deferred fee | $ | (24,017) | $ | (15,458) |
March 31, 2021 | |||||||||||||||||||||||
Nonaccrual without ACL | Nonaccrual with ACL | Total Nonaccrual | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Commercial business: | |||||||||||||||||||||||
Commercial and industrial | $ | 17,400 | $ | 12,872 | $ | 30,272 | |||||||||||||||||
Owner-occupied CRE | 4,518 | 11,918 | 16,436 | ||||||||||||||||||||
Non-owner occupied CRE | 1,424 | 3,623 | 5,047 | ||||||||||||||||||||
Total commercial business | 23,342 | 28,413 | 51,755 | ||||||||||||||||||||
Residential real estate | 66 | — | 66 | ||||||||||||||||||||
Real estate construction and land development: | |||||||||||||||||||||||
Commercial and multifamily
|
— | 1,021 | 1,021 | ||||||||||||||||||||
Consumer | 26 | — | 26 | ||||||||||||||||||||
Total | $ | 23,434 | $ | 29,434 | $ | 52,868 |
December 31, 2020 | |||||||||||||||||||||||
Nonaccrual without ACL | Nonaccrual with ACL | Total Nonaccrual | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Commercial business: | |||||||||||||||||||||||
Commercial and industrial | $ | 22,039 | $ | 9,208 | $ | 31,247 | |||||||||||||||||
Owner-occupied CRE | 4,693 | 13,700 | 18,393 | ||||||||||||||||||||
Non-owner occupied CRE | 3,424 | 3,722 | 7,146 | ||||||||||||||||||||
Total commercial business | 30,156 | 26,630 | 56,786 | ||||||||||||||||||||
Residential real estate
|
67 | 117 | 184 | ||||||||||||||||||||
Real estate construction and land development: | |||||||||||||||||||||||
Commercial and multifamily
|
572 | 450 | 1,022 | ||||||||||||||||||||
Consumer | 31 | 69 | 100 | ||||||||||||||||||||
Total | $ | 30,826 | $ | 27,266 | $ | 58,092 |
Three Months Ended
March 31, 2021 |
Three Months Ended
March 31, 2020 |
||||||||||||||||||||||
Interest Income Reversed | Interest Income Recognized | Interest Income Reversed | Interest Income Recognized | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Commercial business: | |||||||||||||||||||||||
Commercial and industrial | $ | (2) | $ | 63 | $ | (16) | $ | 219 | |||||||||||||||
Owner-occupied CRE | — | 114 | — | 46 | |||||||||||||||||||
Non-owner occupied CRE | — | 313 | — | 45 | |||||||||||||||||||
Total commercial business | (2) | 490 | (16) | 310 | |||||||||||||||||||
Real estate construction and land development: | |||||||||||||||||||||||
Residential
|
— | 73 | — | — | |||||||||||||||||||
Consumer | — | — | — | 10 | |||||||||||||||||||
Total | $ | (2) | $ | 563 | $ | (16) | $ | 320 |
March 31, 2021 | |||||||||||||||||||||||||||||
30-89 Days |
90 Days or
Greater |
Total Past
Due |
Current | Loans Receivable | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Commercial business: | |||||||||||||||||||||||||||||
Commercial and industrial | $ | 4,393 | $ | 8,178 | $ | 12,571 | $ | 680,968 | $ | 693,539 | |||||||||||||||||||
SBA PPP | — | — | — | 886,761 | 886,761 | ||||||||||||||||||||||||
Owner-occupied CRE | — | — | — | 881,168 | 881,168 | ||||||||||||||||||||||||
Non-owner occupied CRE | 482 | — | 482 | 1,427,471 | 1,427,953 | ||||||||||||||||||||||||
Total commercial business | 4,875 | 8,178 | 13,053 | 3,876,368 | 3,889,421 | ||||||||||||||||||||||||
Residential real estate
|
— | 46 | 46 | 114,810 | 114,856 | ||||||||||||||||||||||||
Real estate construction and land development: | |||||||||||||||||||||||||||||
Residential
|
— | — | — | 79,878 | 79,878 | ||||||||||||||||||||||||
Commercial and multifamily
|
— | 571 | 571 | 217,244 | 217,815 | ||||||||||||||||||||||||
Total real estate construction and land development | — | 571 | 571 | 297,122 | 297,693 | ||||||||||||||||||||||||
Consumer | 739 | — | 739 | 293,160 | 293,899 | ||||||||||||||||||||||||
Total | $ | 5,614 | $ | 8,795 | $ | 14,409 | $ | 4,581,460 | $ | 4,595,869 |
December 31, 2020 | |||||||||||||||||||||||||||||
30-89 Days |
90 Days or
Greater |
Total Past
Due |
Current | Loans Receivable | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Commercial business: | |||||||||||||||||||||||||||||
Commercial and industrial | $ | 4,621 | $ | 8,082 | $ | 12,703 | $ | 720,395 | $ | 733,098 | |||||||||||||||||||
SBA PPP | — | — | — | 715,121 | 715,121 | ||||||||||||||||||||||||
Owner-occupied CRE | 991 | 403 | 1,394 | 855,290 | 856,684 | ||||||||||||||||||||||||
Non-owner occupied CRE | 412 | 1,970 | 2,382 | 1,407,921 | 1,410,303 | ||||||||||||||||||||||||
Total commercial business | 6,024 | 10,455 | 16,479 | 3,698,727 | 3,715,206 | ||||||||||||||||||||||||
Residential real estate
|
765 | 16 | 781 | 121,975 | 122,756 | ||||||||||||||||||||||||
Real estate construction and land development: | |||||||||||||||||||||||||||||
Residential
|
— | — | — | 78,259 | 78,259 | ||||||||||||||||||||||||
Commercial and multifamily
|
2,225 | — | 2,225 | 225,229 | 227,454 | ||||||||||||||||||||||||
Total real estate construction and land development | 2,225 | — | 2,225 | 303,488 | 305,713 | ||||||||||||||||||||||||
Consumer | 1,407 | 30 | 1,437 | 323,535 | 324,972 | ||||||||||||||||||||||||
Total | $ | 10,421 | $ | 10,501 | $ | 20,922 | $ | 4,447,725 | $ | 4,468,647 |
March 31, 2021
|
|||||||||||||||||||||||||||||||||||
CRE(1)
|
Farmland(1)
|
Residential Real Estate(1)
|
Non-real property business assets(1)
|
Total(1)
|
|||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Commercial business: | |||||||||||||||||||||||||||||||||||
Commercial and industrial | $ | 1,967 | $ | 13,760 | $ | 825 | $ | 592 | $ | 17,144 | |||||||||||||||||||||||||
Owner-occupied CRE | 4,517 | — | — | — | 4,517 | ||||||||||||||||||||||||||||||
Non-owner occupied CRE | 1,424 | — | — | — | 1,424 | ||||||||||||||||||||||||||||||
Total commercial business | 7,908 | 13,760 | 825 | 592 | 23,085 | ||||||||||||||||||||||||||||||
Residential real estate
|
— | — | 66 | — | 66 | ||||||||||||||||||||||||||||||
Real estate construction and land development: | |||||||||||||||||||||||||||||||||||
Commercial and multifamily
|
571 | — | — | — | 571 | ||||||||||||||||||||||||||||||
Consumer | — | — | 30 | — | 30 | ||||||||||||||||||||||||||||||
Total | $ | 8,479 | $ | 13,760 | $ | 921 | $ | 592 | $ | 23,752 |
December 31, 2020
|
|||||||||||||||||||||||||||||||||||
CRE(1)
|
Farmland(1)
|
Residential Real Estate(1)
|
Non-real property business assets(1)
|
Other(1)
|
Total(1)
|
||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Commercial business: | |||||||||||||||||||||||||||||||||||
Commercial and industrial | $ | 1,893 | $ | 18,738 | $ | 584 | $ | 774 | $ | 631 | $ | 22,620 | |||||||||||||||||||||||
Owner-occupied CRE | 4,693 | — | — | — | — | 4,693 | |||||||||||||||||||||||||||||
Non-owner occupied CRE | 3,424 | — | — | — | — | 3,424 | |||||||||||||||||||||||||||||
Total commercial business | 10,010 | 18,738 | 584 | 774 | 631 | 30,737 | |||||||||||||||||||||||||||||
Residential real estate
|
— | — | 67 | — | — | 67 | |||||||||||||||||||||||||||||
Real estate construction and land development: | |||||||||||||||||||||||||||||||||||
Commercial and multifamily
|
572 | — | — | — | — | 572 | |||||||||||||||||||||||||||||
Consumer | — | — | 30 | — | — | 30 | |||||||||||||||||||||||||||||
Total | $ | 10,582 | $ | 18,738 | $ | 681 | $ | 774 | $ | 631 | $ | 31,406 |
Three Months Ended March 31,
|
|||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
Number of
Contracts |
Amortized Cost (1) (2)
|
Number of
Contracts |
Amortized Cost (1) (2)
|
||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Commercial business: | |||||||||||||||||||||||
Commercial and industrial | 24 | $ | 12,102 | 13 | $ | 3,688 | |||||||||||||||||
Owner-occupied CRE | 2 | 4,660 | 4 | 2,183 | |||||||||||||||||||
Non-owner occupied CRE | 1 | 1,979 | 3 | 2,210 | |||||||||||||||||||
Total commercial business | 27 | 18,741 | 20 | 8,081 | |||||||||||||||||||
Residential real estate
|
1 | 180 | — | — | |||||||||||||||||||
Real estate construction and land development: | |||||||||||||||||||||||
Residential
|
— | — | 4 | 1,516 | |||||||||||||||||||
Commercial and multifamily
|
1 | 450 | — | — | |||||||||||||||||||
Total real estate construction and land development | 1 | 450 | 4 | 1,516 | |||||||||||||||||||
Consumer | 15 | 379 | 5 | 93 | |||||||||||||||||||
Total | 44 | $ | 19,750 | 29 | $ | 9,690 |
Three Months Ended March 31,
|
|||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
Number of
Contracts (1)
|
Amortized Cost (1)
|
Number of
Contracts (1)
|
Amortized Cost (1)
|
||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Commercial business: | |||||||||||||||||||||||
Commercial and industrial | 2 | $ | 2,792 | 2 | $ | 1,873 | |||||||||||||||||
Non-owner occupied CRE | — | — | 3 | 590 | |||||||||||||||||||
Total commercial business | 2 | 2,792 | 5 | 2,463 | |||||||||||||||||||
Total | 2 | $ | 2,792 | 5 | $ | 2,463 |
Three Months Ended March 31, | |||||||||||
2021 | 2020 | ||||||||||
(In thousands) | |||||||||||
Balance at the beginning of the year | $ | 70,185 | $ | 36,171 | |||||||
Impact of CECL Adoption | — | 1,822 | |||||||||
Balance at the beginning of the year, as adjusted | 70,185 | 37,993 | |||||||||
Charge-offs | (187) | (1,597) | |||||||||
Recoveries of loans previously charged-off | 362 | 1,180 | |||||||||
(Reversal of) provision for loan losses | (6,135) | 9,964 | |||||||||
Balance at the end of the year | $ | 64,225 | $ | 47,540 |
Three Months Ended March 31, 2021 | |||||||||||||||||||||||||||||
Beginning Balance | Charge-offs | Recoveries | (Reversal of) Provision for Credit Losses | Ending Balance | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Commercial business: | |||||||||||||||||||||||||||||
Commercial and industrial | $ | 30,010 | $ | (1) | $ | 205 | $ | (8,444) | $ | 21,770 | |||||||||||||||||||
SBA PPP
|
— | — | — | — | — | ||||||||||||||||||||||||
Owner-occupied CRE | 9,486 | — | 2 | 976 | 10,464 | ||||||||||||||||||||||||
Non-owner occupied CRE | 10,112 | — | — | 2,858 | 12,970 | ||||||||||||||||||||||||
Total commercial business | 49,608 | (1) | 207 | (4,610) | 45,204 | ||||||||||||||||||||||||
Residential real estate
|
1,591 | — | — | (189) | 1,402 | ||||||||||||||||||||||||
Real estate construction and land development: | |||||||||||||||||||||||||||||
Residential
|
1,951 | — | 16 | 81 | 2,048 | ||||||||||||||||||||||||
Commercial and multifamily
|
11,141 | (1) | — | 83 | 11,223 | ||||||||||||||||||||||||
Total real estate construction and land development | 13,092 | (1) | 16 | 164 | 13,271 | ||||||||||||||||||||||||
Consumer | 5,894 | (185) | 139 | (1,500) | 4,348 | ||||||||||||||||||||||||
Total | $ | 70,185 | $ | (187) | $ | 362 | $ | (6,135) | $ | 64,225 |
Three Months Ended March 31, 2020 | |||||||||||||||||||||||||||||||||||||||||
Beginning Balance | Impact of CECL Adoption |
Beginning Balance,
as Adjusted |
Charge-offs | Recoveries | (Reversal of) Provision for Credit Losses | Ending Balance | |||||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||||||||
Commercial business: | |||||||||||||||||||||||||||||||||||||||||
Commercial and industrial | $ | 11,739 | $ | (1,348) | $ | 10,391 | $ | (1,087) | $ | 1,057 | $ | 3,539 | $ | 13,900 | |||||||||||||||||||||||||||
SBA PPP
|
— | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Owner-occupied CRE | 4,512 | 452 | 4,964 | (135) | 12 | 1,375 | 6,216 | ||||||||||||||||||||||||||||||||||
Non-owner occupied CRE | 7,682 | (2,039) | 5,643 | — | — | 2,107 | 7,750 | ||||||||||||||||||||||||||||||||||
Total commercial business | 23,933 | (2,935) | 20,998 | (1,222) | 1,069 | 7,021 | 27,866 | ||||||||||||||||||||||||||||||||||
Residential real estate
|
1,458 | 1,471 | 2,929 | — | 3 | 94 | 3,026 |
Three Months Ended March 31, 2020 | |||||||||||||||||||||||||||||||||||||||||
Beginning Balance | Impact of CECL Adoption |
Beginning Balance,
as Adjusted |
Charge-offs | Recoveries | (Reversal of) Provision for Credit Losses | Ending Balance | |||||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||||||||
Real estate construction and land development: | |||||||||||||||||||||||||||||||||||||||||
Residential
|
1,455 | (571) | 884 | — | 14 | (34) | 864 | ||||||||||||||||||||||||||||||||||
Commercial and multifamily
|
1,605 | 7,240 | 8,845 | — | — | 2,599 | 11,444 | ||||||||||||||||||||||||||||||||||
Total real estate construction and land development | 3,060 | 6,669 | 9,729 | — | 14 | 2,565 | 12,308 | ||||||||||||||||||||||||||||||||||
Consumer | 6,821 | (2,484) | 4,337 | (375) | 94 | 284 | 4,340 | ||||||||||||||||||||||||||||||||||
Unallocated | 899 | (899) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Total | $ | 36,171 | $ | 1,822 | $ | 37,993 | $ | (1,597) | $ | 1,180 | $ | 9,964 | $ | 47,540 |
Three Months Ended
March 31, |
|||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Balance at the beginning of the period | $ | — | $ | 841 | |||||||||||||||||||
Additions | — | 270 | |||||||||||||||||||||
Proceeds from dispositions | — | (266) | |||||||||||||||||||||
Loss on sale, net | — | (4) | |||||||||||||||||||||
Balance at the end of the period | $ | — | $ | 841 |
Three Months Ended
March 31, |
|||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Balance at the beginning of the period | $ | 13,088 | $ | 16,613 | |||||||||||||||||||
Amortization | (797) | (903) | |||||||||||||||||||||
Balance at the end of the period | $ | 12,291 | $ | 15,710 |
March 31,
2021 |
December 31,
2020 |
||||||||||
(In thousands) | |||||||||||
Residential CMO and MBS | $ | 8,083 | $ | 7,388 | |||||||
Commercial CMO and MBS | 28,420 | 28,295 | |||||||||
Total | $ | 36,503 | $ | 35,683 |
March 31, 2021 | December 31, 2020 | ||||||||||||||||||||||
Notional Amounts | Estimated Fair Value | Notional Amounts | Estimated Fair Value | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Non-hedging interest rate derivatives | |||||||||||||||||||||||
Interest rate swap asset (1)
|
$ | 315,681 | $ | 16,955 | $ | 308,126 | $ | 25,740 | |||||||||||||||
Interest rate swap liability (1)
|
315,681 | (17,133) | 308,126 | (26,162) |
Three Months Ended
March 31, |
|||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
(In thousands, except shares) | |||||||||||||||||||||||
Net income: | |||||||||||||||||||||||
Net income | $ | 25,344 | $ | 12,191 | |||||||||||||||||||
Dividends and undistributed earnings allocated to participating securities (1)
|
— | (6) | |||||||||||||||||||||
Net income allocated to common shareholders | $ | 25,344 | $ | 12,185 | |||||||||||||||||||
Basic: | |||||||||||||||||||||||
Weighted average common shares outstanding | 35,926,950 | 36,357,812 | |||||||||||||||||||||
Restricted stock awards | — | (15,722) | |||||||||||||||||||||
Total basic weighted average common shares outstanding | 35,926,950 | 36,342,090 | |||||||||||||||||||||
Diluted: | |||||||||||||||||||||||
Basic weighted average common shares outstanding | 35,926,950 | 36,342,090 | |||||||||||||||||||||
Effect of potentially dilutive common shares (2)
|
305,254 | 254,551 | |||||||||||||||||||||
Total diluted weighted average common shares outstanding | 36,232,204 | 36,596,641 | |||||||||||||||||||||
Potentially dilutive shares that were excluded from the computation of diluted earnings per share because to do so would be anti-dilutive (3)
|
15,538 | 21,475 |
Declared | Cash Dividend per Share | Record Date | Paid Date | |||||||||||||||||||||||
January 22, 2020 | $0.20 | February 6, 2020 | February 20, 2020 | |||||||||||||||||||||||
April 29, 2020 | $0.20 | May 13, 2020 | May 27, 2020 | |||||||||||||||||||||||
July 22, 2020 | $0.20 | August 5, 2020 | August 19, 2020 | |||||||||||||||||||||||
October 21, 2020 | $0.20 | November 4, 2020 | November 18, 2020 | |||||||||||||||||||||||
January 27, 2021 | $0.20 | February 10, 2021 | February 24, 2021 | |||||||||||||||||||||||
Three Months Ended
March 31, |
|||||||||||||||||
2021 | 2020 |
Plan Total(1)
|
|||||||||||||||
Eleventh Stock Repurchase Plan | |||||||||||||||||
Repurchased shares | — | 639,922 | 1,512,600 | ||||||||||||||
Stock repurchase average share price | $ | — | $ | 23.95 | $ | 21.69 | |||||||||||
Twelfth Stock Repurchase Plan | |||||||||||||||||
Repurchased shares | — | 155,778 | 155,778 | ||||||||||||||
Stock repurchase average share price | $ | — | $ | 20.34 | $ | 20.34 |
Three Months Ended
March 31, |
|||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
Repurchased shares to pay withholding taxes | 23,246 | 25,882 | |||||||||||||||||||||
Stock repurchase to pay withholding taxes average share price | $ | 29.54 | $ | 21.79 |
March 31, 2021 | |||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Investment securities available for sale: | |||||||||||||||||||||||
U.S. government and agency securities | $ | 94,857 | $ | 5,000 | $ | 89,857 | $ | — | |||||||||||||||
Municipal securities | 227,663 | 1,632 | 226,031 | — | |||||||||||||||||||
Residential CMO and MBS | 182,996 | — | 182,996 | — | |||||||||||||||||||
Commercial CMO and MBS | 348,169 | — | 348,169 | — | |||||||||||||||||||
Corporate obligations | 11,055 | — | 11,055 | — | |||||||||||||||||||
Other asset-backed securities | 28,818 | — | 28,818 | — | |||||||||||||||||||
Total investment securities available for sale | 893,558 | 6,632 | 886,926 | — | |||||||||||||||||||
Equity security | 180 | 180 | — | — | |||||||||||||||||||
Derivative assets - interest rate swaps | 16,955 | — | 16,955 | — | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Derivative liabilities - interest rate swaps | $ | 17,133 | $ | — | $ | 17,133 | $ | — |
December 31, 2020 | |||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Investment securities available for sale: | |||||||||||||||||||||||
U.S. government and agency securities | $ | 45,660 | $ | — | $ | 45,660 | $ | — | |||||||||||||||
Municipal securities | 209,968 | — | 209,968 | — | |||||||||||||||||||
Residential CMO and MBS | 201,872 | — | 201,872 | — | |||||||||||||||||||
Commercial CMO and MBS | 303,746 | — | 303,746 | — | |||||||||||||||||||
Corporate obligations | 11,096 | — | 11,096 | — | |||||||||||||||||||
Other asset-backed securities | 29,821 | — | 29,821 | — | |||||||||||||||||||
Total investment securities available for sale | 802,163 | — | 802,163 | — | |||||||||||||||||||
Equity security | 131 | 131 | — | — | |||||||||||||||||||
Derivative assets - interest rate swaps | 25,740 | — | 25,740 | — | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Derivative liabilities - interest rate swaps | $ | 26,162 | $ | — | $ | 26,162 | $ | — |
Fair Value at March 31, 2021 | |||||||||||||||||||||||||||||
Basis(1)
|
Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Collateral-dependent loans: | |||||||||||||||||||||||||||||
Commercial business: | |||||||||||||||||||||||||||||
Commercial and industrial | $ | 474 | $ | 424 | $ | — | $ | — | $ | 424 |
Fair Value at December 31, 2020 | |||||||||||||||||||||||||||||
Basis(1)
|
Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Collateral-dependent loans: | |||||||||||||||||||||||||||||
Commercial business: | |||||||||||||||||||||||||||||
Commercial and industrial | $ | 1,305 | $ | 1,289 | $ | — | $ | — | $ | 1,289 | |||||||||||||||||||
Prepaid expenses and other assets: | |||||||||||||||||||||||||||||
Branch held for sale (2)
|
1,330 | 1,330 | — | — | 1,330 | ||||||||||||||||||||||||
Total assets measured at fair value on a nonrecurring basis | $ | 2,635 | $ | 2,619 | $ | — | $ | — | $ | 2,619 |
Three Months Ended
March 31, |
|||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Collateral-dependent loans: | |||||||||||||||||||||||
Commercial business: | |||||||||||||||||||||||
Commercial and industrial | $ | 34 | $ | 5 | |||||||||||||||||||
Real estate construction and land development: | |||||||||||||||||||||||
Commercial and multifamily
|
14 | — | |||||||||||||||||||||
Total | 48 | 5 | |||||||||||||||||||||
Prepaid expenses and other assets: | |||||||||||||||||||||||
Branch held for sale | (20) | — | |||||||||||||||||||||
Net losses from nonrecurring fair value adjustments | $ | 28 | $ | 5 |
March 31, 2021 | |||||||||||||||||||||||
Fair
Value |
Valuation
Technique(s) |
Unobservable Input(s) |
Range of Inputs; Weighted
Average |
||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Collateral-dependent loans | $ | 981 | Market approach | Adjustment for differences between the comparable sales |
47.0% - (11.0)%; 18.8%
|
||||||||||||||||||
March 31, 2021 | |||||||||||||||||||||||||||||
Carrying
Value |
Fair
Value |
Fair Value Measurements Using: | |||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Financial Assets: | |||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 934,316 | $ | 934,316 | $ | 934,316 | $ | — | $ | — | |||||||||||||||||||
Investment securities available for sale | 893,558 | 893,558 | 6,632 | 886,926 | — | ||||||||||||||||||||||||
Loans held for sale | 6,801 | 7,070 | — | — | 7,070 | ||||||||||||||||||||||||
Loans receivable, net | 4,531,644 | 4,660,232 | — | — | 4,660,232 | ||||||||||||||||||||||||
Accrued interest receivable | 19,447 | 19,447 | 32 | 3,373 | 16,042 | ||||||||||||||||||||||||
Banked owned life insurance | 108,341 | 108,341 | 108,341 | — | — | ||||||||||||||||||||||||
Derivative assets - interest rate swaps | 16,955 | 16,955 | — | 16,955 | — | ||||||||||||||||||||||||
Equity security | 180 | 180 | 180 | — | — | ||||||||||||||||||||||||
Financial Liabilities: | |||||||||||||||||||||||||||||
Noninterest deposits, interest bearing demand deposits, money market accounts and savings accounts | $ | 5,633,295 | $ | 5,633,295 | $ | 5,633,295 | $ | — | $ | — | |||||||||||||||||||
Certificates of deposit | 386,403 | 388,488 | — | 388,488 | — | ||||||||||||||||||||||||
Securities sold under agreement to repurchase | 36,503 | 36,503 | 36,503 | — | — | ||||||||||||||||||||||||
Junior subordinated debentures | 20,960 | 18,250 | — | — | 18,250 | ||||||||||||||||||||||||
Accrued interest payable | 85 | 85 | 39 | 26 | 20 | ||||||||||||||||||||||||
Derivative liabilities - interest rate swaps | 17,133 | 17,133 | — | 17,133 | — |
December 31, 2020 | |||||||||||||||||||||||||||||
Carrying
Value |
Fair
Value |
Fair Value Measurements Using: | |||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Financial Assets: | |||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 743,322 | $ | 743,322 | $ | 743,322 | $ | — | $ | — | |||||||||||||||||||
Investment securities available for sale | 802,163 | 802,163 | — | 802,163 | — | ||||||||||||||||||||||||
Loans held for sale | 4,932 | 5,156 | — | — | 5,156 |
December 31, 2020 | |||||||||||||||||||||||||||||
Carrying
Value |
Fair
Value |
Fair Value Measurements Using: | |||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Loans receivable, net | 4,398,462 | 4,556,862 | — | — | 4,556,862 | ||||||||||||||||||||||||
Accrued interest receivable | 19,418 | 19,418 | 2 | 3,648 | 15,768 | ||||||||||||||||||||||||
Bank owned life insurance | 107,580 | 107,580 | 107,580 | — | — | ||||||||||||||||||||||||
Derivative assets - interest rate swaps | 25,740 | 25,740 | — | 25,740 | — | ||||||||||||||||||||||||
Equity security | 131 | 131 | 131 | — | — | ||||||||||||||||||||||||
Financial Liabilities: | |||||||||||||||||||||||||||||
Noninterest deposits, interest bearing demand deposits, money market accounts and savings accounts | $ | 5,198,456 | $ | 5,198,456 | $ | 5,198,456 | $ | — | $ | — | |||||||||||||||||||
Certificates of deposit | 399,534 | 402,701 | — | 402,701 | — | ||||||||||||||||||||||||
Securities sold under agreement to repurchase | 35,683 | 35,683 | 35,683 | — | — | ||||||||||||||||||||||||
Junior subordinated debentures | 20,887 | 18,500 | — | — | 18,500 | ||||||||||||||||||||||||
Accrued interest payable | 94 | 94 | 42 | 33 | 19 | ||||||||||||||||||||||||
Derivative liabilities - interest rate swaps | 26,162 | 26,162 | — | 26,162 | — |
March 31, 2021 | December 31, 2020 | ||||||||||
(In thousands) | |||||||||||
Commercial business: | |||||||||||
Commercial and industrial | $ | 627,702 | $ | 640,018 | |||||||
Owner-occupied CRE | 4,494 | 3,488 | |||||||||
Non-owner occupied CRE | 14,523 | 18,396 | |||||||||
Total commercial business | 646,719 | 661,902 | |||||||||
Real estate construction and land development: | |||||||||||
Residential
|
60,099 | 52,453 | |||||||||
Commercial and multifamily
|
142,432 | 127,821 | |||||||||
Total real estate construction and land development | 202,531 | 180,274 | |||||||||
Consumer | 269,516 | 263,249 | |||||||||
Total outstanding commitments | $ | 1,118,766 | $ | 1,105,425 |
Three Months Ended | |||||||||||||||||||||||
March 31,
2021 |
March 31,
2020 |
||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Balance, beginning of period | $ | 4,681 | $ | 306 | |||||||||||||||||||
Impact of CECL Adoption | — | 3,702 | |||||||||||||||||||||
Adjusted balance, beginning of period | 4,681 | 4,008 | |||||||||||||||||||||
Reversal of provision for credit losses on unfunded commitments | (1,064) | (2,018) | |||||||||||||||||||||
Balance, end of period | $ | 3,617 | $ | 1,990 |
Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | Change | |||||||||||||||||||||||||||||||||||||||||||||||||||
Average
Balance |
Interest
Earned/ Paid |
Average
Yield/ Rate (1) |
Average
Balance |
Interest
Earned/ Paid |
Average
Yield/ Rate (1) |
Average
Balance |
Interest
Earned/ Paid |
Average
Yield/ Rate |
|||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest Earning Assets: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans receivable, net (2) (3)
|
$ | 4,490,499 | $ | 49,524 | 4.47 | % | $ | 3,748,573 | $ | 46,277 | 4.97 | % | $ | 741,926 | $ | 3,247 | (0.50) | % | |||||||||||||||||||||||||||||||||||
Taxable securities | 674,268 | 3,534 | 2.13 | 815,686 | 5,633 | 2.78 | (141,418) | (2,099) | (0.65) | ||||||||||||||||||||||||||||||||||||||||||||
Nontaxable securities (3)
|
163,914 | 958 | 2.37 | 122,153 | 756 | 2.49 | 41,761 | 202 | (0.12) | ||||||||||||||||||||||||||||||||||||||||||||
Interest earning deposits | 713,885 | 175 | 0.10 | 125,357 | 420 | 1.35 | 588,528 | (245) | (1.25) | ||||||||||||||||||||||||||||||||||||||||||||
Total interest earning assets | 6,042,566 | 54,191 | 3.64 | % | 4,811,769 | 53,086 | 4.44 | % | 1,230,797 | 1,105 | (0.80) | % | |||||||||||||||||||||||||||||||||||||||||
Noninterest earning assets | 757,059 | 748,443 | 8,616 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 6,799,625 | $ | 5,560,212 | $ | 1,239,413 | |||||||||||||||||||||||||||||||||||||||||||||||
Interest Bearing Liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Certificates of Deposit | $ | 393,268 | $ | 559 | 0.58 | % | $ | 528,009 | $ | 2,012 | 1.53 | % | $ | (134,741) | $ | (1,453) | (0.95) | % | |||||||||||||||||||||||||||||||||||
Savings accounts | 560,094 | 95 | 0.07 | 434,459 | 188 | 0.17 | 125,635 | (93) | (0.10) | ||||||||||||||||||||||||||||||||||||||||||||
Interest bearing demand and money market accounts | 2,732,134 | 1,074 | 0.16 | 2,201,921 | 2,016 | 0.37 | 530,213 | (942) | (0.21) | ||||||||||||||||||||||||||||||||||||||||||||
Total interest bearing deposits | 3,685,496 | 1,728 | 0.19 | 3,164,389 | 4,216 | 0.54 | 521,107 | (2,488) | (0.35) |
Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | Change | |||||||||||||||||||||||||||||||||||||||||||||||||||
Average
Balance |
Interest
Earned/ Paid |
Average
Yield/ Rate (1) |
Average
Balance |
Interest
Earned/ Paid |
Average
Yield/ Rate (1) |
Average
Balance |
Interest
Earned/ Paid |
Average
Yield/ Rate |
|||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Junior subordinated debentures | 20,913 | 187 | 3.63 | 20,620 | 285 | 5.56 | 293 | (98) | (1.93) | ||||||||||||||||||||||||||||||||||||||||||||
Securities sold under agreement to repurchase | 40,074 | 38 | 0.38 | 19,246 | 33 | 0.69 | 20,828 | 5 | (0.31) | ||||||||||||||||||||||||||||||||||||||||||||
FHLB advances and other borrowings | — | — | — | 989 | 1 | 0.41 | (989) | (1) | (0.41) | ||||||||||||||||||||||||||||||||||||||||||||
Total interest bearing liabilities | 3,746,483 | 1,953 | 0.21 | % | 3,205,244 | 4,535 | 0.57 | % | 541,239 | (2,582) | (0.36) | % | |||||||||||||||||||||||||||||||||||||||||
Noninterest bearing demand deposits | 2,091,359 | 1,420,247 | 671,112 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other noninterest bearing liabilities | 134,762 | 128,650 | 6,112 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders’ equity | 827,021 | 806,071 | 20,950 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities and stock-holders’ equity | $ | 6,799,625 | $ | 5,560,212 | $ | 1,239,413 | |||||||||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 52,238 | $ | 48,551 | $ | 3,687 | |||||||||||||||||||||||||||||||||||||||||||||||
Net interest spread | 3.43 | % | 3.87 | % | (0.44) | % | |||||||||||||||||||||||||||||||||||||||||||||||
Net interest margin | 3.51 | % | 4.06 | % | (0.55) | % | |||||||||||||||||||||||||||||||||||||||||||||||
Average interest earning assets to average interest bearing liabilities | 161.29 | % | 150.12 | % | 11.17 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Cost of total deposits | 0.12 | % | 0.37 | % | (0.25) | % |
Three Months Ended | |||||||||||||||||||||||
March 31,
2021 |
March 31,
2020 |
||||||||||||||||||||||
Non-GAAP Measure:(1)
|
|||||||||||||||||||||||
Loan yield (GAAP) | 4.47 | % | 4.97 | % | |||||||||||||||||||
Exclude impact from SBA PPP loans | 0.01 | — | |||||||||||||||||||||
Exclude impact from incremental accretion on purchased loans(2)
|
(0.12) | (0.11) | |||||||||||||||||||||
Loan yield, excluding SBA PPP loans and incremental accretion on purchased loans (non-GAAP) | 4.36 | % | 4.86 | % | |||||||||||||||||||
Three Months Ended
March 31, |
|||||||||||||||||||||||||||||||||||
2021 | 2020 | Change | Percentage Change | ||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
(Reversal of) provision for credit losses on loans | $ | (6,135) | $ | 9,964 | $ | (16,099) | (161.6) | % | |||||||||||||||||||||||||||
Reversal of provision for credit losses on unfunded commitments | (1,064) | (2,018) | 954 | (47.3) | |||||||||||||||||||||||||||||||
(Reversal of) provision for credit losses | $ | (7,199) | $ | 7,946 | $ | (15,145) | (190.6) | % |
Three Months Ended
March 31, |
|||||||||||||||||||||||
2021 | 2020 | Change | Percentage Change | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Service charges and other fees | $ | 4,000 | $ | 4,376 | $ | (376) | (8.6) | % | |||||||||||||||
Gain on sale of investment securities, net | 29 | 1,014 | (985) | (97.1) | |||||||||||||||||||
Gain on sale of loans, net | 1,370 | 547 | 823 | 150.5 | |||||||||||||||||||
Interest rate swap fees | 152 | 296 | (144) | (48.6) | |||||||||||||||||||
Bank owned life insurance income | 656 | 885 | (229) | (25.9) | |||||||||||||||||||
Other income | 2,044 | 2,368 | (324) | (13.7) | |||||||||||||||||||
Total noninterest income | $ | 8,251 | $ | 9,486 | $ | (1,235) | (13.0) | % |
Three Months Ended
March 31, |
|||||||||||||||||||||||
2021 | 2020 | Change | Percentage Change | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Compensation and employee benefits | $ | 22,461 | $ | 22,506 | $ | (45) | (0.2) | % | |||||||||||||||
Occupancy and equipment | 4,454 | 4,564 | (110) | (2.4) | |||||||||||||||||||
Data processing | 3,812 | 3,527 | 285 | 8.1 | |||||||||||||||||||
Marketing | 669 | 866 | (197) | (22.7) | |||||||||||||||||||
Professional services | 1,331 | 1,377 | (46) | (3.3) | |||||||||||||||||||
State/municipal business and use tax | 972 | 757 | 215 | 28.4 | |||||||||||||||||||
Federal deposit insurance premium | 589 | — | 589 | 100.0 | |||||||||||||||||||
Other real estate owned, net | — | 25 | (25) | (100.0) | |||||||||||||||||||
Amortization of intangible assets | 797 | 903 | (106) | (11.7) | |||||||||||||||||||
Other expense | 2,157 | 2,735 | (578) | (21.1) | |||||||||||||||||||
Total noninterest expense | $ | 37,242 | $ | 37,260 | $ | (18) | — | % |
Three Months Ended
March 31, |
|||||||||||||||||||||||
2021 | 2020 | Change | Percentage Change | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Pre-tax income | $ | 30,446 | $ | 12,831 | $ | 17,615 | 137.3 | % | |||||||||||||||
Income tax expense | 5,102 | 640 | 4,462 | 697.2 | |||||||||||||||||||
Effective tax rate | 16.8 | % | 5.0 | % | 11.8 | % | 236.0 |
March 31,
2021 |
December 31, 2020 | Change | Percentage Change | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Cash and cash equivalents | $ | 934,316 | $ | 743,322 | $ | 190,994 | 25.7 | % | |||||||||||||||
Investment securities available for sale, at fair value, net | 893,558 | 802,163 | 91,395 | 11.4 | |||||||||||||||||||
Loans held for sale | 6,801 | 4,932 | 1,869 | 37.9 | |||||||||||||||||||
Loans receivable, net | 4,531,644 | 4,398,462 | 133,182 | 3.0 | |||||||||||||||||||
Other real estate owned | — | — | — | n/a | |||||||||||||||||||
Premises and equipment, net | 84,533 | 85,452 | (919) | (1.1) | |||||||||||||||||||
Federal Home Loan Bank stock, at cost | 7,933 | 6,661 | 1,272 | 19.1 | |||||||||||||||||||
Bank owned life insurance | 108,341 | 107,580 | 761 | 0.7 | |||||||||||||||||||
Accrued interest receivable | 19,447 | 19,418 | 29 | 0.1 | |||||||||||||||||||
Prepaid expenses and other assets | 188,589 | 193,301 | (4,712) | (2.4) | |||||||||||||||||||
Other intangible assets, net | 12,291 | 13,088 | (797) | (6.1) | |||||||||||||||||||
Goodwill | 240,939 | 240,939 | — | — | |||||||||||||||||||
Total assets | $ | 7,028,392 | $ | 6,615,318 | $ | 413,074 | 6.2 | % | |||||||||||||||
March 31,
2021 |
December 31, 2020 | Change | Percentage Change | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Deposits | $ | 6,019,698 | $ | 5,597,990 | $ | 421,708 | 7.5 | % | |||||||||||||||
Junior subordinated debentures | 20,960 | 20,887 | 73 | 0.3 | |||||||||||||||||||
Securities sold under agreement to repurchase | 36,503 | 35,683 | 820 | 2.3 | |||||||||||||||||||
Accrued expenses and other liabilities | 124,080 | 140,319 | (16,239) | (11.6) | |||||||||||||||||||
Total liabilities | 6,201,241 | 5,794,879 | 406,362 | 7.0 | |||||||||||||||||||
Stockholders' equity | |||||||||||||||||||||||
Common stock | 571,204 | 571,021 | 183 | — | |||||||||||||||||||
Retained earnings | 242,486 | 224,400 | 18,086 | 8.1 | |||||||||||||||||||
Accumulated other comprehensive income, net | 13,461 | 25,018 | (11,557) | (46.2) | |||||||||||||||||||
Total stockholders' equity | 827,151 | 820,439 | 6,712 | 0.8 | |||||||||||||||||||
Total liabilities and stockholders' equity | $ | 7,028,392 | $ | 6,615,318 | $ | 413,074 | 6.2 | % |
March 31, 2021 | December 31, 2020 | ||||||||||||||||||||||||||||||||||
Balance (1)
|
% of Total (2)
|
Balance (1)
|
% of Total (2)
|
Change | Percentage Change | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Commercial business: | |||||||||||||||||||||||||||||||||||
Commercial and industrial | $ | 693,539 | 15.1 | % | $ | 733,098 | 16.4 | % | $ | (39,559) | (5.4) | % | |||||||||||||||||||||||
SBA PPP | 886,761 | 19.3 | 715,121 | 16.0 | 171,640 | 24.0 | |||||||||||||||||||||||||||||
Owner-occupied CRE | 881,168 | 19.2 | 856,684 | 19.2 | 24,484 | 2.9 | |||||||||||||||||||||||||||||
Non-owner occupied CRE | 1,427,953 | 31.1 | 1,410,303 | 31.5 | 17,650 | 1.3 | |||||||||||||||||||||||||||||
Total commercial business | 3,889,421 | 84.7 | 3,715,206 | 83.1 | 174,215 | 4.7 | |||||||||||||||||||||||||||||
Residential real estate (3)
|
114,856 | 2.5 | 122,756 | 2.7 | (7,900) | (6.4) | |||||||||||||||||||||||||||||
Real estate construction and land development: | |||||||||||||||||||||||||||||||||||
Residential
|
79,878 | 1.7 | 78,259 | 1.8 | 1,619 | 2.1 | |||||||||||||||||||||||||||||
Commercial and multifamily
|
217,815 | 4.7 | 227,454 | 5.1 | (9,639) | (4.2) | |||||||||||||||||||||||||||||
Total real estate construction and land development | 297,693 | 6.4 | 305,713 | 6.9 | (8,020) | (2.6) | |||||||||||||||||||||||||||||
Consumer | 293,899 | 6.4 | 324,972 | 7.3 | (31,073) | (9.6) | |||||||||||||||||||||||||||||
Total | $ | 4,595,869 | 100.0 | % | $ | 4,468,647 | 100.0 | % | $ | 127,222 | 2.8 | % |
As of March 31, 2021 | |||||||||||||||||
PPP1 | PPP2 | Total PPP | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Number of funded loans | 4,642 | 2,235 | 6,877 | ||||||||||||||
Total amount funded | $ | 897,353 | $ | 353,491 | $ | 1,250,844 | |||||||||||
Average funded loan size | $ | 193 | $ | 158 | $ | 182 | |||||||||||
Net fees deferred at funding | $ | 28,805 | $ | 14,627 | $ | 43,432 |
As of or for the Three Months Ended | |||||||||||||||||
March 31, 2021 | |||||||||||||||||
PPP1 | PPP2 | Total PPP | |||||||||||||||
(In thousands) | |||||||||||||||||
Net deferred fees recognized during the period | $ | 6,592 | $ | 448 | $ | 7,040 | |||||||||||
Net deferred fees unrecognized as of period end | 8,814 | 14,165 | 22,979 | ||||||||||||||
Principal payments received during the period, including forgiveness payments from the SBA | 174,264 | — | 174,264 | ||||||||||||||
Principal balance remaining as of period end | 556,249 | 353,491 | 909,740 | ||||||||||||||
Amortized cost as of period end | 547,435 | 339,326 | 886,761 |
March 31,
2021 |
December 31, 2020 | ||||||||||
(Dollars in thousands) | |||||||||||
Nonaccrual loans: | |||||||||||
Commercial business | $ | 51,755 | $ | 56,786 | |||||||
Residential real estate
|
66 | 184 | |||||||||
Real estate construction and land development | 1,021 | 1,022 | |||||||||
Consumer | 26 | 100 | |||||||||
Total nonaccrual loans | 52,868 | 58,092 | |||||||||
Other real estate owned | — | — | |||||||||
Total nonperforming assets | $ | 52,868 | $ | 58,092 | |||||||
March 31,
2021 |
December 31, 2020 | ||||||||||
(Dollars in thousands) | |||||||||||
ACL on loans | $ | 64,225 | $ | 70,185 | |||||||
Nonperforming loans to loans receivable | 1.15 | % | 1.30 | % | |||||||
ACL on loans to loans receivable | 1.40 | 1.57 | |||||||||
ACL on loans to loans receivable, excluding SBA PPP loans (1)
|
1.73 | 1.87 | |||||||||
ACL on loans to nonperforming loans | 121.48 | 120.82 | |||||||||
Nonperforming assets to total assets | 0.75 | % | 0.88 | % | |||||||
Performing TDR loans: | |||||||||||
Commercial business | $ | 54,075 | $ | 49,403 | |||||||
Residential real estate | 365 | 188 | |||||||||
Real estate construction and land development | — | 1,926 | |||||||||
Consumer | 1,251 | 1,355 | |||||||||
Total performing TDR loans | $ | 55,691 | $ | 52,872 | |||||||
Accruing loans past due 90 days or more | $ | — | $ | — | |||||||
Potential problem loans (2)
|
$ | 163,813 | $ | 182,342 |
Three Months Ended
March 31, |
|||||||||||
2021 | 2020 | ||||||||||
(In thousands) | |||||||||||
Nonaccrual loans | |||||||||||
Balance, beginning of period | $ | 58,092 | $ | 44,525 | |||||||
Addition of previously classified pass graded loans | 24 | 255 | |||||||||
Addition of previously classified performing TDR loans and potential problem loans | 444 | 2,579 | |||||||||
Net principal payments and transfers to accruing status | (5,690) | (12,300) | |||||||||
Charge-offs | (2) | (626) | |||||||||
Transfer to OREO | — | (270) | |||||||||
Balance, end of period | $ | 52,868 | $ | 34,163 |
Three Months Ended
March 31, |
|||||||||||
2021 | 2020 | ||||||||||
(In thousands) | |||||||||||
Performing TDR loans | |||||||||||
Balance, beginning of period | $ | 52,872 | $ | 14,469 | |||||||
Addition of previously classified pass graded loans | 1,031 | 1,008 | |||||||||
Addition of previously classified potential problem loans | 4,451 | 2,660 | |||||||||
Addition of previously classified nonaccrual loans | 994 | 177 | |||||||||
Net principal payments | (3,657) | (266) | |||||||||
Balance, end of period | $ | 55,691 | $ | 18,048 |
Three Months Ended
March 31, |
|||||||||||
2021 | 2020 | ||||||||||
(in thousands) | |||||||||||
Potential problem loans | |||||||||||
Balance, beginning of period | $ | 182,342 | $ | 87,788 | |||||||
Addition of previously classified pass graded loans | 6,831 | 31,180 | |||||||||
Addition of previously classified nonaccrual loans | 1,138 | — | |||||||||
Upgrades to pass graded loan status | (2,395) | (476) | |||||||||
Net principal payments | (19,208) | (9,824) | |||||||||
Transfers of loans to nonaccrual status | (444) | (2,579) | |||||||||
Transfers of loans to TDR status | (4,451) | (2,660) | |||||||||
Balance, end of period | $ | 163,813 | $ | 103,429 |
Three Months Ended
March 31, |
|||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
ACL on loans at the beginning of the period | $ | 70,185 | $ | 36,171 | |||||||||||||||||||
Impact of CECL adoption | — | 1,822 | |||||||||||||||||||||
Adjusted ACL on loans, beginning of period | 70,185 | 37,993 | |||||||||||||||||||||
Charge-offs: | |||||||||||||||||||||||
Commercial business | (1) | (1,222) | |||||||||||||||||||||
Real estate construction and land development | (1) | — | |||||||||||||||||||||
Consumer | (185) | (375) | |||||||||||||||||||||
Total charge-offs | (187) | (1,597) | |||||||||||||||||||||
Recoveries: | |||||||||||||||||||||||
Commercial business | 207 | 1,069 | |||||||||||||||||||||
Residential real estate
|
— | 3 | |||||||||||||||||||||
Real estate construction and land development | 16 | 14 | |||||||||||||||||||||
Consumer | 139 | 94 | |||||||||||||||||||||
Total recoveries | 362 | 1,180 | |||||||||||||||||||||
Net recoveries (charge-offs) | 175 | (417) | |||||||||||||||||||||
(Reversal of) provision for credit losses on loans | (6,135) | 9,964 | |||||||||||||||||||||
ACL on loans at the end of period | $ | 64,225 | $ | 47,540 | |||||||||||||||||||
ACL on loans to loans receivable | 1.40 | % | 1.23 | % | |||||||||||||||||||
ACL on loans to loans receivable, excluding SBA PPP loans (1)
|
1.73 | 1.23 | |||||||||||||||||||||
Net recoveries (charge-offs) on loans to average loans receivable, net (2)
|
0.02 | % | (0.04) | % | |||||||||||||||||||
Loans receivable at the end of the period (3)
|
$ | 4,595,869 | $ | 3,852,376 | |||||||||||||||||||
Average loans receivable, net during the period | 4,490,499 | 3,748,573 |
March 31, 2021 | December 31, 2020 | ||||||||||||||||||||||||||||||||||
Balance | % of Total | Balance | % of Total | Change | Percentage Change | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Noninterest demand deposits | $ | 2,205,562 | 36.6 | % | $ | 1,980,531 | 35.4 | % | $ | 225,031 | 11.4 | % | |||||||||||||||||||||||
Interest bearing demand deposits | 1,796,949 | 29.9 | 1,716,123 | 30.7 | 80,826 | 4.7 | |||||||||||||||||||||||||||||
Money market accounts | 1,046,202 | 17.4 | 962,983 | 17.2 | 83,219 | 8.6 | |||||||||||||||||||||||||||||
Savings accounts | 584,582 | 9.7 | 538,819 | 9.6 | 45,763 | 8.5 | |||||||||||||||||||||||||||||
Total non-maturity deposits | 5,633,295 | 93.6 | 5,198,456 | 92.9 | 434,839 | 8.4 | |||||||||||||||||||||||||||||
Certificates of deposit | 386,403 | 6.4 | 399,534 | 7.1 | (13,131) | (3.3) | |||||||||||||||||||||||||||||
Total deposits | $ | 6,019,698 | 100.0 | % | $ | 5,597,990 | 100.0 | % | $ | 421,708 | 7.5 | % |
Three Months Ended
March 31, |
|||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Balance, beginning of period | $ | 820,439 | $ | 809,311 | |||||||||||||||||||
Cumulative effect from change in accounting policy (1)
|
— | (5,615) | |||||||||||||||||||||
Net income | 25,344 | 12,191 | |||||||||||||||||||||
Dividends declared | (7,258) | (7,343) | |||||||||||||||||||||
Other comprehensive (loss) income, net of tax | (11,557) | 7,914 | |||||||||||||||||||||
Repurchase of common stock | (687) | (19,060) | |||||||||||||||||||||
Other | 870 | 1,040 | |||||||||||||||||||||
Balance, end of period | $ | 827,151 | $ | 798,438 |
Three Months Ended
March 31, |
|||||||||||
2021 | 2020 | ||||||||||
Dividends paid per common share | $ | 0.20 | $ | 0.20 | |||||||
Dividend payout ratio (1)
|
28.6 | % | 58.8 | % |
Minimum Requirements | Well-Capitalized Requirements | Actual | |||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
As of March 31, 2021: | |||||||||||||||||||||||||||||||||||
The Company consolidated | |||||||||||||||||||||||||||||||||||
Common equity Tier 1 capital to risk-weighted assets | $ | 202,080 | 4.5 | % | N/A | N/A | $ | 572,953 | 12.8 | % | |||||||||||||||||||||||||
Tier 1 leverage capital to average assets | 261,184 | 4.0 | N/A | N/A | 593,913 | 9.1 | |||||||||||||||||||||||||||||
Tier 1 capital to risk-weighted assets | 269,440 | 6.0 | N/A | N/A | 593,913 | 13.2 | |||||||||||||||||||||||||||||
Total capital to risk-weighted assets | 359,253 | 8.0 | N/A | N/A | 649,967 | 14.5 | |||||||||||||||||||||||||||||
Heritage Bank | |||||||||||||||||||||||||||||||||||
Common equity Tier 1 capital to risk-weighted assets | 201,833 | 4.5 | $ | 291,537 | 6.5 | % | 581,240 | 13.0 | |||||||||||||||||||||||||||
Tier 1 leverage capital to average assets | 260,991 | 4.0 | 326,239 | 5.0 | 581,240 | 8.9 | |||||||||||||||||||||||||||||
Tier 1 capital to risk-weighted assets | 269,111 | 6.0 | 358,815 | 8.0 | 581,240 | 13.0 | |||||||||||||||||||||||||||||
Total capital to risk-weighted assets | 358,815 | 8.0 | 448,518 | 10.0 | 636,951 | 14.2 | |||||||||||||||||||||||||||||
As of December 31, 2020: | |||||||||||||||||||||||||||||||||||
The Company consolidated | |||||||||||||||||||||||||||||||||||
Common equity Tier 1 capital to risk-weighted assets | $ | 203,314 | 4.5 | % | N/A | N/A | $ | 555,644 | 12.3 | % | |||||||||||||||||||||||||
Tier 1 leverage capital to average assets | 256,216 | 4.0 | N/A | N/A | 576,531 | 9.0 | |||||||||||||||||||||||||||||
Tier 1 capital to risk-weighted assets | 271,086 | 6.0 | N/A | N/A | 576,531 | 12.8 | |||||||||||||||||||||||||||||
Total capital to risk-weighted assets | 361,448 | 8.0 | N/A | N/A | 633,061 | 14.0 | |||||||||||||||||||||||||||||
Heritage Bank | |||||||||||||||||||||||||||||||||||
Common equity Tier 1 capital to risk-weighted assets | 203,112 | 4.5 | $ | 293,383 | 6.5 | % | 563,630 | 12.5 | |||||||||||||||||||||||||||
Tier 1 leverage capital to average assets | 256,051 | 4.0 | 320,064 | 5.0 | 563,630 | 8.8 | |||||||||||||||||||||||||||||
Tier 1 capital to risk-weighted assets | 270,815 | 6.0 | 361,087 | 8.0 | 563,630 | 12.5 | |||||||||||||||||||||||||||||
Total capital to risk-weighted assets | 361,087 | 8.0 | 451,359 | 10.0 | 620,124 | 13.7 |
Three Months Ended
March 31, |
|||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Loan yield, excluding SBA PPP loans and incremental accretion on purchased loans, annualized: | |||||||||||||||||||||||
Interest and fees on loans (GAAP) | $ | 49,524 | $ | 46,277 | |||||||||||||||||||
Exclude SBA PPP loan interest and fees | (9,136) | — | |||||||||||||||||||||
Exclude incremental accretion on purchased loans | (1,075) | (1,012) | |||||||||||||||||||||
Adjusted interest and fees on loans (non-GAAP) | $ | 39,313 | $ | 45,265 | |||||||||||||||||||
Average loans receivable, net (GAAP) | $ | 4,490,499 | $ | 3,748,573 | |||||||||||||||||||
Exclude average SBA PPP loans | (832,148) | — | |||||||||||||||||||||
Adjusted average loans receivable, net (non-GAAP) | $ | 3,658,351 | $ | 3,748,573 | |||||||||||||||||||
Loan yield, annualized (GAAP) | 4.47 | % | 4.97 | % | |||||||||||||||||||
Loan yield, excluding SBA PPP loans and incremental accretion on purchased loans, annualized (non-GAAP) | 4.36 | % | 4.86 | % |
March 31,
2021 |
December 31,
2020 |
||||||||||
(Dollars in thousands) | |||||||||||
ACL on loans to loans receivable, excluding SBA PPP loans: | |||||||||||
Allowance for credit losses on loans (GAAP) | $ | 64,225 | $ | 70,185 | |||||||
Loans receivable (GAAP) | $ | 4,595,869 | $ | 4,468,647 | |||||||
Exclude SBA PPP loans | 886,761 | 715,121 | |||||||||
Loans receivable, excluding SBA PPP (non-GAAP) | $ | 3,709,108 | $ | 3,753,526 | |||||||
ACL on loans to loans receivable (GAAP) | 1.40 | % | 1.57 | % | |||||||
ACL on loans to loans receivable, excluding SBA PPP loans (non-GAAP) | 1.73 | % | 1.87 | % |
Three Months Ended
March 31, |
|||||||||||
2021 | 2020 | ||||||||||
(Dollars in thousands) | |||||||||||
Pre-tax, Pre-provision Income: | |||||||||||
Net income (GAAP) | $ | 25,344 | $ | 12,191 | |||||||
Exclude income tax expense | 5,102 | 640 | |||||||||
Exclude (reversal of) provision for credit losses
|
(7,199) | 7,946 | |||||||||
Pre-tax, pre-provision income (non-GAAP)
|
$ | 23,247 | $ | 20,777 |
Period |
Total Number
of Shares
Purchased (1)
|
Average Price
Paid Per
Share (1)
|
Total number of shares purchased as part of publicly announced plans or programs |
Maximum number of shares that may yet be purchased under the plans or programs (2)
|
|||||||||||||||||||
January 1, 2021— January 31, 2021 | 759 | $ | 25.95 | 8,981,801 | 1,643,276 | ||||||||||||||||||
February 1, 2021— February 28, 2021 | — | — | 8,981,801 | 1,643,276 | |||||||||||||||||||
March 1, 2021— March 31, 2021 | 22,487 | 29.66 | 8,981,801 | 1,643,276 | |||||||||||||||||||
Total | 23,246 | $ | 29.54 |
Incorporated by Reference | ||||||||||||||||||||||||||
Exhibit No.
|
Description of Exhibit | Form | Exhibit | Filing Date/Period End Date | ||||||||||||||||||||||
10.34* | ||||||||||||||||||||||||||
31.1 | ||||||||||||||||||||||||||
31.2 | ||||||||||||||||||||||||||
32.1 | ||||||||||||||||||||||||||
101.INS |
XBRL Instance Document (1)
|
|||||||||||||||||||||||||
101.SCH |
XBRL Taxonomy Extension Schema Document (1)
|
|||||||||||||||||||||||||
101.CAL |
XBRL Taxonomy Extension Calculation Linkbase Document (1)
|
|||||||||||||||||||||||||
101.DEF |
XBRL Taxonomy Extension Definition Linkbase Document (1)
|
|||||||||||||||||||||||||
101.LAB |
XBRL Taxonomy Extension Label Linkbase Document (1)
|
|||||||||||||||||||||||||
101.PRE |
XBRL Taxonomy Extension Presentation Linkbase Document (1)
|
|||||||||||||||||||||||||
HERITAGE FINANCIAL CORPORATION | ||||||||
Date: | ||||||||
May 5, 2021 | /S/ JEFFREY J. DEUEL | |||||||
Jeffrey J. Deuel | ||||||||
President and Chief Executive Officer | ||||||||
Date: | ||||||||
May 5, 2021 | /S/ DONALD J. HINSON | |||||||
Donald J. Hinson | ||||||||
Executive Vice President and Chief Financial Officer |
/s/ Jeffrey J. Deuel
|
||
Jeffrey J. Deuel
|
||
Chief Executive Officer
Principal Executive Officer |
/s/ Donald J. Hinson
|
||
Donald J. Hinson
|
||
Executive Vice President and Chief Financial Officer
Principal Financial and Accounting Officer |
May 5, 2021 |
/s/ Jeffrey J. Deuel
|
||||
Jeffrey J. Deuel
|
|||||
Chief Executive Officer
Principal Executive Officer |
|||||
May 5, 2021 |
/s/ Donald J. Hinson
|
||||
Donald J. Hinson
|
|||||
Executive Vice President and Chief Financial Officer
Principal Financial and Accounting Officer |