0001104659-21-042532 | 10-K | XBRL Viewer

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Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Dec. 31, 2020	Mar. 19, 2021	Jun. 30, 2020
Document and Entity Information
Document Type	10-K
Document Annual Report	true
Document Transition Report.	false
Document Period End Date	Dec. 31, 2020
Entity File Number	001-38290
Entity Registrant Name	Sterling Bancorp, Inc.
Entity Incorporation, State or Country Code	MI
Entity Tax Identification Number	38-3163775
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Public Float			$ 55.2
Entity Address, Address Line One	One Towne Square
Entity Address, Address Line Two	Suite 1900
Entity Address, City or Town	Southfield
Entity Address, State or Province	MI
Entity Address, Postal Zip Code	48076
City Area Code	248
Local Phone Number	355-2400
Title of 12(b) Security	Common Stock
Trading Symbol	SBT
Security Exchange Name	NASDAQ
Entity Current Reporting Status	No
Entity Interactive Data Current	No
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		50,004,490
Entity Central Index Key	0001680379
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Amendment Flag	false
ICFR Auditor Attestation Flag	false

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Assets
Cash and due from banks	$ 998,497	$ 77,819
Interest-bearing time deposits with other banks	7,021	1,025
Investment securities	304,958	152,544
Loans, net of allowance for loan losses of $72,387 and $21,730	2,434,356	2,891,530
Accrued interest receivable	10,990	13,718
Mortgage servicing rights, net	5,688	9,765
Leasehold improvements and equipment, net	8,512	9,198
Operating lease right-of-use assets	19,232	18,715
Federal Home Loan Bank stock, at cost	22,950	22,950
Cash surrender value of bank-owned life insurance	32,495	31,917
Deferred tax asset, net	24,326	12,095
Other assets	22,736	2,271
Total assets	3,914,045	3,244,884
Liabilities:
Noninterest-bearing deposits	58,458	77,563
Interest-bearing deposits	3,040,508	2,417,877
Total deposits	3,098,966	2,495,440
Federal Home Loan Bank borrowings	318,000	229,000
Subordinated notes, net	65,341	65,179
Operating lease liabilities	20,497	19,868
Accrued expenses and other liabilities	91,650	102,783
Total liabilities	3,594,454	2,912,270
Commitments and contingencies (Note 19)
Shareholders' equity:
Preferred stock, authorized 10,000,000 shares; no shares issued and outstanding
Common stock, no par value, authorized 500,000,000 shares; issued and outstanding 49,981,861 shares and 49,944,473 shares at December 31, 2020 and 2019, respectively	80,807	80,889
Additional paid-in capital	13,544	13,210
Retained earnings	224,853	238,319
Accumulated other comprehensive income (loss)	387	196
Total shareholders' equity	319,591	332,614
Total liabilities and shareholders' equity	3,914,045	3,244,884
Mortgage Loans
Assets
Mortgage loans held for sale	$ 22,284	$ 1,337

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Allowance for loan losses	$ 72,387	$ 21,730
Preferred stock, authorized (in shares)	10,000,000	10,000,000
Preferred stock, issued (in shares)	0	0
Preferred stock, outstanding (in shares)	0	0
Common stock
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, authorized (in shares)	500,000,000	500,000,000
Common stock, issued (in shares)	49,981,861	49,944,473
Common stock, outstanding (in shares)	49,981,861	49,944,473

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Interest income
Interest and fees on loans	$ 146,702	$ 168,955	$ 157,499
Interest and dividends on investment securities and restricted stock	3,618	4,976	3,679
Other interest	1,043	1,438	593
Total interest income	151,363	175,369	161,771
Interest expense
Interest on deposits	37,482	45,693	32,031
Interest on Federal Home Loan Bank borrowings	3,403	3,991	4,951
Interest on subordinated notes	4,713	4,701	4,689
Total interest expense	45,598	54,385	41,671
Net interest income	105,765	120,984	120,100
Provision (recovery) for loan losses	54,865	(133)	3,229
Net interest income after provision (recovery) for loan losses	50,900	121,117	116,871
Non-interest income
Gain on sale of investment securities	179	6	86
Gain on sale of mortgage loans held for sale	2,050	396	240
Gain on sale of portfolio loans		5,970	16,433
Unrealized gains (losses) on equity securities	108	114	(87)
Net servicing (loss) income	(1,324)	238	1,381
Income on cash surrender value of bank-owned life insurance	1,160	1,275	1,193
Other	613	1,427	377
Total non-interest income	4,336	11,447	22,037
Non-interest expense
Salaries and employee benefits	30,655	29,503	28,438
Occupancy and equipment	8,788	8,988	7,250
Professional fees	32,646	5,984	3,118
Advertising and marketing	529	1,364	1,640
FDIC assessments	1,768	436	1,447
Data processing	1,458	1,233	1,223
Provision for mortgage repurchase liability	2,527	7,823
Provision (recovery) for contingent losses, net	(10,000)	25,000
Other	5,741	7,342	7,220
Total non-interest expense	74,112	87,673	50,336
Income (loss) before income taxes	(18,876)	44,891	88,572
Income tax (benefit) expense	(5,909)	15,643	25,104
Net income (loss)	$ (12,967)	$ 29,248	$ 63,468
Income (loss) per share, basic and diluted (in dollars per share)	$ (0.26)	$ 0.57	$ 1.20
Weighted average common shares outstanding:
Basic	49,840,882	51,115,986	52,963,308
Diluted	49,840,882	51,127,879	52,965,567
Service charges and fees
Non-interest income
Non-interest income	$ 426	$ 444	$ 379
Investment management and advisory fees
Non-interest income
Non-interest income	$ 1,124	$ 1,577	$ 2,035

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Consolidated Statements of Comprehensive Income (Loss)
Net income (loss)	$ (12,967)	$ 29,248	$ 63,468
Other comprehensive income, net of tax:
Unrealized gains on investment securities, arising during the period, net of tax effect of $129, $56 and $48, respectively	320	210	181
Reclassification adjustment for gains included in net income of $179, $6, and $86, respectively, included in gain on sale of investment securities, net of tax effect of $50, $1 and $18, respectively	(129)	(5)	(68)
Total other comprehensive income	191	205	113
Comprehensive income (loss)	$ (12,776)	$ 29,453	$ 63,581

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Consolidated Statements of Comprehensive Income (Loss)
Unrealized gains on investment securities, arising during the period, tax effect	$ 129	$ 56	$ 48
Reclassification adjustment for gains included in net income on sale of investment securities, before tax	179	6	86
Reclassification adjustment for gains included in net income on sale of investment securities, tax effect	$ 50	$ 1	$ 18

Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands	Common stock, voting Common stock	Common stock	Additional Paid-in Capital	Retained Earnings Cumulative effect adjustment	Retained Earnings	Accumulated Other Comprehensive Income (Loss) Cumulative effect adjustment	Accumulated Other Comprehensive Income (Loss)	Total
Balance at beginning of the period at Dec. 31, 2017	$ 111,238		$ 12,416	$ (50)	$ 149,816	$ 50	$ (172)	$ 273,298
Balance at beginning of the period (in shares) at Dec. 31, 2017	52,963,308
Increase (Decrease) in Stockholders' Equity
Net income (loss)					63,468			63,468
Stock-based compensation			297					297
Stock-based compensation (in shares)	48,975
Other comprehensive income							113	113
Dividends distributed					(2,119)			(2,119)
Balance at end of the period at Dec. 31, 2018	$ 111,238		12,713		211,115		(9)	335,057
Balance at end of the period (in shares) at Dec. 31, 2018	53,012,283
Increase (Decrease) in Stockholders' Equity
Net income (loss)					29,248			29,248
Repurchases of shares of common stock (Note 10)	$ (30,349)	$ (30,349)						(30,349)
Repurchases of shares of common stock (Note 10) (in shares)	(3,134,806)	(3,134,806)
Stock-based compensation			497					497
Stock-based compensation (in shares)	66,996
Other comprehensive income							205	205
Dividends distributed					(2,044)			(2,044)
Balance at end of the period at Dec. 31, 2019	$ 80,889		13,210		238,319		196	332,614
Balance at end of the period (in shares) at Dec. 31, 2019	49,944,473
Increase (Decrease) in Stockholders' Equity
Net income (loss)					(12,967)			(12,967)
Repurchases of shares of common stock (Note 10)	$ (82)	$ (82)						(82)
Repurchases of shares of common stock (Note 10) (in shares)	(10,912)	(10,912)
Stock-based compensation			334					334
Stock-based compensation (in shares)	48,300
Other comprehensive income							191	191
Dividends distributed					(499)			(499)
Balance at end of the period at Dec. 31, 2020	$ 80,807		$ 13,544		$ 224,853		$ 387	$ 319,591
Balance at end of the period (in shares) at Dec. 31, 2020	49,981,861

Condensed Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Consolidated Statements of Changes in Shareholders' Equity
Dividends paid per common share (in dollars per share)	$ 0.01	$ 0.04	$ 0.04

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Cash Flows From Operating Activities
Net income (loss)	$ (12,967)	$ 29,248	$ 63,468
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Provision (recovery) for loan losses	54,865	(133)	3,229
Deferred income taxes	(12,305)	(6,052)	696
Gain on sale of investment securities	(179)	(6)	(86)
Unrealized (gains) losses on equity securities	(108)	(114)	87
Amortization (accretion), net, on investment securities	598	(1,535)	(876)
Depreciation and amortization on leasehold improvements and equipment	1,608	1,621	1,399
Amortization of intangible asset		450	450
Origination, premium paid and purchase of loans, net of principal payments, mortgage loans held for sale	(174,700)	(96,418)	(47,778)
Proceeds from sale of mortgage loans held for sale	174,066	93,648	47,868
Gain on sale of mortgage loans held for sale	(2,050)	(396)	(240)
Gain on sale of portfolio loans		(5,970)	(16,433)
Provision for mortgage repurchase liability	2,527	7,823
Provision for contingent losses	2,500	25,000
Recovery of contingent losses	(12,500)
Increase in cash surrender value of bank-owned life insurance, net of premiums	(578)	(615)	(622)
Valuation allowance adjustments and amortization of mortgage servicing rights	4,790	3,831	1,915
Stock-based compensation	334	497	297
Other	162	163	140
Change in operating assets and liabilities:
Accrued interest receivable	2,728	(189)	(2,036)
Other assets	(8,946)	5,032	(1,245)
Accrued expenses and other liabilities	(14,900)	15,403	10,342
Net cash provided by operating activities	4,945	71,288	60,575
Cash Flows From Investing Activities
Maturities of interest-bearing time deposits with other banks	2,710	1,100
Purchases of interest-bearing time deposits with other banks	(8,706)	(1,025)	(1,100)
Maturities and principal receipts of investment securities	144,203	144,694	121,179
Sales of investment securities	99,971	2,914	14,964
Purchases of investment securities	(396,634)	(149,317)	(157,174)
Net decrease (increase) in loans	452,631	(162,775)	(658,322)
Purchases of portfolio loans	(69,465)
Proceeds from the sale of portfolio loans		173,382	475,646
Purchase of leasehold improvements and equipment	(922)	(1,330)	(3,845)
Net cash provided by (used in) investing activities	223,788	7,643	(208,652)
Cash Flows From Financing Activities
Net increase in deposits	603,526	42,755	207,575
Proceeds from advances from Federal Home Loan Bank	100,000	2,476,000	6,222,000
Repayments of advances from Federal Home Loan Bank	(11,000)	(2,540,000)	(6,267,000)
Repurchases of shares of common stock	(82)	(30,349)
Dividend paid to shareholders	(499)	(2,044)	(2,119)
Net cash provided by (used in) financing activities	691,945	(53,638)	160,456
Net change in cash and due from banks	920,678	25,293	12,379
Cash and due from banks at beginning of period	77,819	52,526	40,147
Cash and due from banks at end of period	998,497	77,819	52,526
Cash paid for:
Interest	48,270	38,196	34,792
Income taxes	13,906	21,246	26,055
Noncash investing and financing activities:
Transfers of residential real estate loans to mortgage loans held for sale	19,375	169,844	431,384
Transfers of residential real estate loans from mortgage loans held for sale	399	2,546	$ 77,887
Right-of-use assets obtained in exchange for new operating lease liabilities	$ 4,405	$ 740

Nature of Operations and Basis of Presentation

12 Months Ended

Dec. 31, 2020

Nature of Operations and Basis of Presentation

Nature of Operations and Basis of Presentation

Note 1—Nature of Operations and Basis of Presentation

Nature of Operations

Sterling Bancorp, Inc. (unless stated otherwise or the context otherwise requires, with its subsidiaries, the “Company”) is a unitary thrift holding company that was incorporated in 1989 and the parent company to its wholly-owned subsidiary, Sterling Bank and Trust, F.S.B. (the “Bank”). The Company’s business is conducted through the Bank, which was formed in 1984. The Bank originates residential and commercial real estate loans, construction loans, commercial lines of credit and other consumer loans and provides deposit products, consisting primarily of checking, savings and term certificate accounts. The Bank operates through a network of 30 branches of which 26 branches are located in San Francisco and Los Angeles, California with the remaining branches located in New York, New York, Southfield, Michigan and the greater Seattle market.

The Company is headquartered in Southfield, Michigan, and its operations are in the financial services industry. Management evaluates the performance of the Company's business based on one reportable segment, community banking.

The Company is subject to regulation, examination and supervision by the Board of Governors of the Federal Reserve System (the “FRB” or “Federal Reserve”). The Bank is a federally chartered stock savings bank that is subject to regulation, supervision and examination by the Office of the Comptroller of the Currency (“OCC”) of the U.S. Department of Treasury and the Federal Deposit Insurance Corporation (“FDIC”) and is a member of the Federal Home Loan Bank (“FHLB”) system.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2020

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Note 2—Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“ U.S. GAAP”). The consolidated financial statements include the results of the Company and its wholly-owned subsidiaries.

On October 14, 2020, QCM, LLC, doing business as Quantum Capital Management, a wholly-owned subsidiary of Quantum Fund, LLC and an indirect wholly-owned subsidiary of the Bank entered into an Asset Purchase Agreement to sell substantially all of its assets, which consisted primarily of client advisory agreements for aggregate consideration of $250. The transaction closed on December 21, 2020. The Company recorded a gain on sale of $189 in 2020 that is recorded in other income within non-interest income in the consolidated statements of operations. The operations of Quantum Capital Management were not significant for all periods presented.

All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Due to the inherent uncertainty involved in making estimates, actual results reported in the future periods may be based upon amounts that could differ from those estimates.

Fair Value Measurements

The Bank utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine its fair value disclosures. The determination of fair values of financial instruments often requires the use of estimates. In cases where quoted market values in an active market are not readily available, the Bank uses present value techniques and other valuation methods, as disclosed in Note 15—Fair Values of Financial Instruments, to estimate the fair value of its financial instruments. These

valuation methods require considerable judgment, and the resulting estimates of fair value can be significantly affected by the assumptions made and methods used.

Debt securities available for sale and equity securities with readily determinable fair values are recorded at fair value on a recurring basis. Additionally, from time to time, the Bank may be required to record other assets and liabilities on a nonrecurring basis, such as impaired loans, other real estate owned, nonmarketable equity securities and certain other assets and liabilities. These nonrecurring fair value adjustments generally involve write-downs of individual assets or application of lower of amortized cost or fair value accounting.

Cash and Due from Banks

For the purposes of the accompanying consolidated statements of cash flows, cash includes cash and time deposits and other deposits held with other banks with original maturities of three months or less.

Cash on hand or on deposit with the Federal Reserve was required to meet regulatory reserve and clearing requirements through March 26, 2020. After this date, the Federal Reserve eliminated such reserve and clearing requirements. Required cash on hand or on deposit with the Federal Reserve Bank was $23,969 at December 31, 2019.

The Company presents the cash flows from customer loans, deposit transactions and short-term borrowings on a net basis in its consolidated statements of cash flows.

Interest-bearing Deposits with Other Banks

Interest-bearing deposits with other banks, consisting of certificates of deposit, have maturities greater than three months and are carried at cost. Each certificate of deposit is below the FDIC insurance limit of $250. Interest income is recorded when earned.

Concentration of Credit Risk

The loan portfolio consists primarily of residential real estate loans, which are collateralized by real estate. At December 31, 2020 and 2019, residential real estate loans accounted for 81% and 85%, respectively, of the loan portfolio. In addition, most of these residential loans and other commercial loans have been made to individuals and businesses in the state of California, which are dependent on the area economy for their livelihoods and servicing of their loan obligation. At December 31, 2020 and 2019, approximately 87% and 89%, respectively, of the loan portfolio was originated to customers in California.

Starting December 9, 2019, the Bank suspended its Advantage Loan Program and announced that it permanently discontinued this program on March 6, 2020. Loans originated under this Program comprised a significant component of the Bank’s total loan originations. Advantage Loan Program loans (including nonaccrual residential real estate loans held for sale of $19,375 at December 31, 2020) totaled $1,515,248 and $1,942,657, or 74% and 78%, of the residential loan portfolio, at December 31, 2020 and 2019, respectively.

Risks and Uncertainties – COVID-19

The coronavirus disease 2019 (“COVID-19”) pandemic, which was declared a national emergency in the United States in March 2020, continues to create extensive disruptions to United States and global economic conditions and financial markets and to businesses and the lives of individuals throughout the world. Federal and state governments have taken, and continue to take, unprecedented actions to contain the spread of the disease, including quarantines, travel bans, shelter-in-place orders, closures of businesses and schools, fiscal stimulus, and legislation designed to deliver monetary aid and other relief for businesses and individuals impacted by the pandemic. The Company’s primary market areas of California, the greater Seattle market, and New York City became part of several epicenters of the COVID-19 pandemic. Banking and financial services have been designated essential businesses, and the Bank’s operations are continuing, subject to certain modifications to business practices imposed to safeguard the health and wellness of the Bank’s customers and employees and to comply with applicable government directives.

The COVID-19 pandemic, and related efforts to contain it, have caused significant disruptions in the functioning of the financial markets, resulted in an unprecedented slowdown in economic activity and a related increase in unemployment, and have increased economic and market uncertainty and volatility. In particular, COVID-19 has disrupted our normal course of providing services to our clients and adversely impacted our clients and could impair their ability to fulfill their obligations to the Bank. During the year ended December 31, 2020, the Bank experienced an increase in delinquent and nonaccrual loans, primarily in residential real estate loans, commercial real estate loans related to single-room occupancy hotels (“SROs”) and construction loans. A much higher provision for loan losses was recorded during 2020 reflecting, in part, the impact of the COVID-19 pandemic.

The COVID-19 pandemic and the related adverse local and national economic consequences could have a material adverse effect on the Company’s business, financial condition, liquidity, results of operations, risk-weighted assets and regulatory capital. Currently, significant uncertainties exist concerning the magnitude of the impact and duration of the COVID-19 pandemic.

Investment Securities

Investment securities includes debt securities and equity securities.

Debt Securities

Debt securities are classified as either available for sale or held to maturity. Management determines the classification of the debt securities when they are purchased.

Debt securities available for sale are stated at fair value, with unrealized gains and losses excluded from income and shown as a separate component of shareholders’ equity in accumulated other comprehensive income (loss), net of tax. Held to maturity securities are carried at amortized cost when management has the positive intent and ability to hold them to maturity. The amortized cost of debt securities classified as held to maturity or available for sale is adjusted for amortization of premiums (noncallable) and accretion of discounts over the contractual life of the investment security using the effective interest method or, in the case of asset-backed securities, over the estimated life of the investment security using the effective yield method.

Interest income includes amortization or accretion of purchase premium or discount. Gains and losses on sales are recorded on the settlement date and determined using the specific identification method.

Management evaluates debt securities for other-than-temporary impairment at least on a quarterly basis and more frequently when economic or market conditions warrant such an evaluation. In determining other-than-temporary impairment for debt securities, management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the Company has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. The assessment of whether a decline is other-than-temporary involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time. A charge is recognized against income for all or a portion of the impairment if the loss is determined to be other than temporary.

If the Bank intends to sell the debt security or it is more likely than not that the Bank will be required to sell the debt security prior to the recovery of its amortized cost basis, the debt security is written down to fair value, and the full amount of any impairment charge is recorded as a loss in the consolidated statements of income. If the Bank does not intend to sell the debt security and it is more likely than not that the Bank will not be required to sell the debt security prior to recovery of its amortized cost basis, only the current period credit loss of any impairment of a debt security is recognized in the consolidated statements of income, with the remaining impairment recorded in other comprehensive income (loss).

Equity Securities

Equity securities with readily determinable fair values are stated at fair value with unrealized and realized gains and losses reported in income. Those equity securities without readily determinable fair values are recorded at cost, less any impairments,

adjusted for subsequent observable price changes in orderly transactions for an identical or similar investment of the same issuer. Any changes in the carrying value of the equity investments are recognized in income.

Management performs a qualitative assessment each reporting period to identify impairment of equity securities without readily determinable fair values. When a qualitative assessment indicates that an impairment exists, management determines the fair value of the investment and if the fair value is less than the investment's carrying value, an impairment charge is recorded in income equal to the difference between the fair value and the carrying amount of the investment.

Mortgage Loans Held for Sale

Residential real estate loans originated or purchased and intended for sale in the secondary market are carried at the lower of amortized cost or fair value on an individual loan basis as determined by outstanding commitments from investors. Net unrealized losses, if any, are recorded as a valuation allowance and charged to noninterest income in the consolidated statements of operations.

Residential real estate loans originated as held for investment are periodically sold in order to manage liquidity, interest rate or concentration risk. Loans that are transferred into loans held for sale from loans held for investment, due to a change in intent, are recorded at the lower of amortized cost or fair value. Any changes in fair value attributable to credit deterioration are charged against the allowance for loan losses at the time of transfer.

When loans originally classified as held for sale or as held for investment are reclassified due to a change in intent or ability to hold, cash flows associated with the loans are classified in the consolidated statements of cash flows by operating or investing activities, as appropriate, in accordance with the initial classification of the loans.

Residential real estate loans held for sale are generally sold with servicing rights retained. Upon the sale of an originated loan, the mortgage servicing right asset is established and recorded at its estimated fair value, and a corresponding gain is recognized in gain on sale of mortgage loans held for sale or gain on sale of portfolio loans. Gains and losses on sales of residential real estate loans are based on the difference between the selling price and the carrying value of the related loans sold.

Loans

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at the principal balance outstanding, net of unearned income, including unamortized loan fees and costs on originated loans, and allowances for loan losses. Loan origination fees, net of certain direct loan origination costs, are deferred and amortized over the contractual lives of the respective loans as a yield adjustment using the effective interest method. Other credit-related fees are recognized as fee income, as a component of noninterest income.

Interest income on loans is accrued as earned using the interest method over the term of the loan. The accrual of interest income is discontinued at the time the loan is 90 days past due or earlier if conditions warrant (i.e. nonaccrual loan). In all cases, loans are placed on nonaccrual status at an earlier date if collection of principal or interest is considered doubtful. When a loan is placed on nonaccrual status, interest accrued and unpaid during prior periods is reversed. Any payments received on nonaccrual loans are applied to interest income on a cash basis if the loan is considered well secured. Otherwise, all payments received are applied first to outstanding loan principal amounts and then to the recovery of the charged off loan amounts. Any excess is treated as a recovery of interest and fees. Loans are returned to accrual status after all principal and interest amounts contractually due are made and future payments are reasonably assured.

A loan is considered impaired when, based on current information and events, it is probable that Bank will be unable to collect all amounts due according to the contractual terms of the loan agreement. Loans that have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings, as defined below, and classified as impaired.

Factors considered by management in determining if a loan is impaired include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and

payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed.

Commercial real estate loans, construction loans and commercial lines of credit are individually evaluated for impairment. If a loan is impaired, a portion of the allowance for loan losses is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral or operations of collateral. Large groups of homogeneous loans, such as other consumer and residential real estate loans, are collectively evaluated for impairment and accordingly, are not separately identified for impairment disclosures.

Troubled Debt Restructurings

The Bank periodically grants concessions to its customers in an attempt to protect as much of its investment as possible and minimize risk of loss. Loans that have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings. To determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed as part of the credit underwriting process.

Troubled debt restructurings are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a troubled debt restructuring is considered a collateral dependent loan, the loan is reported, net, at the fair value of the collateral. For loans that are considered troubled debt restructurings that subsequently go into default, the Bank determines the amount of the allowance for loan losses in accordance with the accounting policy for the allowance for loan losses on loans individually identified as impaired.

Allowance for Loan Losses

The allowance for loan losses is a valuation allowance for probable incurred credit losses, increased or decreased by the provision for loan losses and decreased by charge offs less recoveries. Loan losses are charged against the allowance for loan losses when a loan is considered partially or fully uncollectible, or has such little value that continuance as an asset is not warranted. Subsequent recoveries, if any, are credited to the allowance for loan losses. Management estimates the allowance for loan losses balance using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations, estimated collateral values, economic conditions and other factors. Allocations of the allowance for loan losses may be made for specific loans, but the entire allowance for loan losses is available for any loan that, in management’s judgment, should be charged off.

The allowance for loan losses consists of specific and general components. The specific component relates to loans that are individually classified as impaired. The general component covers all other loans and is based on historical loss experience adjusted for general economic conditions and other qualitative factors by portfolio segment. The historical loss experience is determined by portfolio segment, discussed below, and is based on the actual loss history experienced over the most recent three-year period. This actual loss experience is supplemented with economic and other factors based on the risks present for each portfolio segment. These economic and other risk factors include consideration of the following: levels of and trends in delinquencies and impaired loans; levels of and trends in charge offs and recoveries; trends in portfolio volume; effects of any changes in underwriting standards; other changes in lending policies, procedures and practices; experience, ability and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations.

The following portfolio segments have been identified:

A)Residential Real Estate—The degree of risk in residential real estate lending depends primarily on the loan amount in relation to collateral value, the interest rate and the borrower’s ability to repay in an orderly fashion. Economic trends determined by unemployment rates and other key economic indicators are closely correlated to the credit quality of

these loans. Weak economic trends indicate that the borrowers’ capacity to repay their obligations may be deteriorating. The classes in the residential real estate portfolio segment consist of residential first mortgages and residential second mortgages.

B)Commercial Real Estate—Adverse economic developments or an overbuilt market impact commercial real estate projects and may result in troubled loans. Trends in vacancy rates of commercial properties impact the credit quality of these loans. High vacancy rates reduce operating revenues and the ability for the properties to produce sufficient cash flow to service debt obligations. The segmentation classes in the commercial real estate portfolio consist of retail, multifamily, offices, hotels/ SROs, industrial and other.

C)Construction Loans—The construction loan portfolio is comprised of loans to builders and developers primarily for residential, commercial and mixed-use development. In addition to general commercial real estate risks, construction loans have additional risk of cost overruns, market deterioration during construction, lack of permanent financing and no operating history. There is no further segmentation of the construction portfolio segment into classes.

D)Commercial Lines of Credit—The commercial lines of credit portfolio is comprised of loans to businesses such as sole proprietorships, partnerships, limited liability companies and corporations for the daily operating needs of the business. The risk characteristics of these loans vary based on the borrowers’ business and industry as repayment is typically dependent on cash flows generated from the underlying business. These loans may be secured by real estate or other assets or may be unsecured. The segmentation classes in the commercial lines of credit portfolio consist of private banking loans and commercial & industrial (“C&I”) lending.

E)Other Consumer—The consumer loan portfolio currently consists only of overdraft protection lines with no further segmentation into classes. Economic trends determined by unemployment rates and other key economic indicators are closely correlated to the credit quality of these loans. Weak economic trends indicate the borrowers’ capacity to repay their obligations may be deteriorating.

Mortgage Servicing Rights, net

Servicing assets (i.e. mortgage servicing rights) are recognized separately when residential real estate loans are sold with servicing rights retained by the Bank. Mortgage servicing rights are initially recorded at fair value, which is determined based on an internal valuation model that calculates the present value of estimated future net servicing income. The servicing assets are subsequently measured using the amortization method which requires servicing assets to be amortized into non-interest income in the consolidated statements of income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans. Servicing fee income is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal, or a fixed amount per loan, and are recognized as income when earned. The Bank also records late fees and ancillary fees related to loan servicing which were not material for the periods presented.

On a quarterly basis, servicing assets are evaluated for impairment based upon the fair value of the mortgage servicing rights as compared to their carrying amount. Impairment is determined by stratifying rights into groupings based on predominant risk characteristics, such as interest rate, loan type and investor type. If the carrying amount of an individual grouping exceeds fair value, impairment is recorded on that grouping so that the servicing asset is carried at fair value. Impairment is recognized through a valuation allowance for an individual grouping. If it is later determined that all or a portion of the impairment no longer exists for a particular grouping, a reduction of the valuation allowance may be recorded as an increase to income. The fair values of servicing assets are subject to significant fluctuations due to changes in estimated and actual prepayment speeds and default rates and losses.

Transfers of Financial Assets

Transfers of financial assets are accounted for as sales when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

FHLB Stock

The Bank is a member of the FHLB system. Members are required to own a certain amount of stock based on the level of FHLB borrowings and other factors and may invest additional amounts. The FHLB stock is carried at cost, classified as a restricted security and periodically evaluated for impairment based on ultimate recovery of par value. The FHLB stock does not have a readily determinable fair value and no quoted market value as the ownership is restricted to member institutions. Also, the FHLB stock is pledged as collateral on FHLB borrowings. Cash and stock dividends are reported as income in interest and dividends on investment securities and restricted stock in the consolidated statements of operations. Cash dividends received amounted to $847, $1,219 and $1,149 for the year ended December 31, 2020, 2019 and 2018, respectively.

Cash Surrender Value of Bank-Owned Life Insurance

The Bank has purchased life insurance policies on certain officers and employees; in addition, the Bank still owns policies on retired and former employees. Cash surrender value of bank-owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement.

Long-Lived Assets

Long-lived assets, such as leasehold improvements and equipment, and definite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require long-lived assets or asset groups to be tested for possible impairment, the Company compares the undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment charge is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques, such as discounted cash flow models and third-party independent appraisals.

Definite-lived intangible assets, consisting of customer-related intangibles, are amortized on a straight-line basis over their estimated useful lives of ten years. Amortization expense related to the customer-related intangibles was $450 for the year ended December 31, 2019 and 2018.

Mortgage Repurchase Liability

In connection with portfolio loans sold in the secondary market, the Company makes customary representations and warranties about certain characteristics of each loan. The Company establishes a liability which may result from breaches in such representations and warranties. The repurchase liability reflects management’s estimate of such losses based on a combination of factors. The Company’s estimation process requires management to make subjective and complex judgments about matters that are inherently uncertain, such as expectations of future repurchase demands, economic factors, and findings from the Internal Review discussed in Note 19 - Commitments and Contingencies. The actual loss on repurchases could vary significantly from the recorded repurchase liability, depending on the outcome of various factors.

Legal Contingencies and Litigation Accruals

The Company is involved in several material legal proceedings, as disclosed in Note 19—Commitments and Contingencies. On a quarterly basis, management assesses potential losses in relation to these and other pending or threatened legal matters. If a loss is considered probable and the amount can be reasonably estimated, the Company recognizes an expense for the estimated loss. Estimates of any such loss are subjective in nature and require the evaluation of numerous facts and assumptions as to future events, including the application of legal precedent that may be conflicting. To the extent these estimates are more or less than the actual liability resulting from the resolution of these matters, the Company’s net income (loss) will be increased or decreased accordingly. If the differences are material, the Company’s consolidated financial statements could be materially impacted.

Revenue from Contracts with Customers

In accordance with ASC 606, Revenue from Contracts with Customers, the Company recognizes revenue when control of promised goods or services is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those goods or services as performance obligations are satisfied.

The majority of the Company's revenues are from interest income and other sources, including loans and investment securities, as well as fees related to mortgage servicing activities, which are not within the scope of ASC 606 and are instead subject to other accounting guidance. The Company's services that are within the scope of ASC 606 are recorded within non-interest income, which includes investment management and advisory fees, service charges on deposit accounts, interchange income and other service charges and fees. Descriptions of these activities that are within the scope of ASC 606, which are presented in the consolidated statements of operations as components of non-interest income, are as follows:

Service charges on deposit accounts: The Bank earns fees from its deposit customers for transaction-based, account maintenance and overdraft services. Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Bank fulfills the customer's request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Bank satisfies the performance obligations. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on deposit accounts are withdrawn from the customer's account balance.

Investment management and advisory fees: The Bank enters into contracts with certain customers to provide asset management services that will continue indefinitely unless terminated in writing by either party to the contract. The Bank receives a quarterly management fee, payable in advance, based on the customer's assets held under management at the beginning of the period. These fees are earned over time as the Bank provides the contracted services and are assessed based on a tiered rate applied to the market value of assets held under management. The Bank does not earn performance-based incentives.

Interchange fees: The Bank earns interchange fees from debit cardholder transactions conducted through the MasterCard payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder. Such interchange activity is shown on a net basis through non-interest income, other income.

Other service charges and fees: Other charges and fees includes revenue generated from wire transfers, lockboxes and bank issuance of checks. Such fees are recognized at the point in time the customer requests the service and the service is rendered.

Stock-based Compensation

Compensation cost is recognized for stock options and restricted stock awards issued to employees and non-employee members of the Company's board of directors, based on the fair value of these awards at the date of grant. The fair value of stock options is estimated using a Black-Scholes option pricing model, and the fair value of restricted stock awards is based on the market price of the Company's common stock at the date of grant reduced by the present value of dividends per share expected to be paid during the period the shares are not vested.

Compensation cost is recorded over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recorded on a straight-line basis over the requisite service period of the entire award. The Company's accounting policy is to record forfeitures in the period that they occur.

Comprehensive Income

Comprehensive income consists of net income and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized gains and losses on debt securities available for sale, net of income taxes, which is also recognized as a separate

component of shareholders’ equity. The Company releases the income tax effects on unrealized gains and losses on debt securities available for sale that are reported in other comprehensive income (loss) on a security-by-security basis when debt securities are sold.

Loan Commitments and Related Financial Instruments

Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded.

Assets Held under Administration and Investment Management and Advisory Fees

The Company does not include assets held in fiduciary or agency capacities in the consolidated balance sheets, as such assets held under administration are not assets of the Company. Fees from asset management activities are recorded on an accrual basis over the period in which the service is provided. Fees, as set forth in the underlying customer contract, are a function of the market value of assets administrated and managed. Effective December 21, 2020, the Bank no longer offers asset management services.

Income Taxes

Income taxes are provided for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period the change occurs. Deferred tax assets are reduced, through a valuation allowance, if necessary, by the amount of such benefits that are not expected to be realized based on current available evidence.

A tax position is recognized as a benefit only if it is more likely than not that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the more likely than not test, no tax benefit is recorded. The Company recognizes interest and/or penalties related to income tax matters in income tax expense.

Income (Loss) per Share, Basic and Diluted

Basic income (loss) per share represents net income (loss) divided by the weighted average number of common shares outstanding during the period. In periods of income, diluted income per share represents net income divided by the weighted average number of common shares outstanding during the period, plus the effect of outstanding potential dilutive common shares. In periods of a loss, basic and diluted per share information are the same.

Recently Issued Accounting Guidance Not Yet Adopted

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which is intended to improve financial reporting by requiring recording of credit losses on loans and other financial instruments on a more timely basis. The guidance will replace the current incurred loss accounting model with an expected loss approach and requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The guidance requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, which clarifies the scope of the credit losses standard and addresses issues related to accrued interest receivable balances and recoveries, among other things. In May 2019, the FASB issued ASU No. 2019-05, Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief. The amendments provide entities with an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis, upon adoption of Topic 326. In November 2019, the FASB issued ASU No. 2019-10, Financial

Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates . This update deferred the effective dates of Topic 326 to January 1, 2023 for certain entities including smaller reporting companies (as defined by the U.S. Securities and Exchange Commission(the “SEC”)). The Company, as a smaller reporting company as of the relevant measuring period, qualified for this extension.

At this time, the Company has formed a cross-functional implementation team consisting of individuals from credit, finance and information systems. The implementation team has been working with a software vendor to assist in implementing required changes to credit loss estimation models and processes. The historical data set for model development has been finalized, and the credit loss estimation models are in the process of being developed and tested. The Company expects to recognize a cumulative effect adjustment to the opening balance of retained earnings as of the beginning of the first reporting period in which ASU No. 2016-13 is effective. The Company has not yet determined the magnitude of any such one-time adjustment or of the overall impact of ASU No. 2016-13 on its consolidated financial statements.

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The relief provided by this guidance is elective and applies to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. The guidance provides that changes in contract terms that are made to effect the reference rate reform transition are considered related to the replacement of a reference rate if they are not the result of a business decision that is separate from or in addition to changes to the terms of a contract to effect that transition. If certain criteria are met, entities can elect to not apply certain modification accounting requirements to contracts affected by reference rate reform. The Company’s primary contracts that reference LIBOR are its loan contracts, purchase and sale agreements for investment securities transactions, customer deposit agreements and borrowing agreements with the FHLB. The Company has not yet determined an alternative rate to LIBOR at this time. The optional amendments in ASU No. 2020-04 are effective for all entities as of March 12, 2020 through December 31, 2022. The Company may take advantage of the LIBOR transition relief allowed under this ASU in the future.

In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848), Scope. The amendments in this guidance refine the scope of Topic 848 and clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting also apply to derivative instruments that use an interest rate for margining, discounting or contract price alignment that is modified as a result of reference rate reform (commonly referred to as the discounting transition). ASU No. 2021-01 expands the scope of Topic 848 to also include certain derivative instruments that do not reference LIBOR or a reference rate that is expected to be discontinued, but that are being modified as a result of the discounting transition. Currently, the Company does not use derivative instruments and does not anticipate taking advantage of the LIBOR transition relief allowed under this ASU.

Investment Securities

12 Months Ended

Dec. 31, 2020

Investment Securities

Investment Securities

Note 3—Investment Securities

Debt Securities

The following tables summarize the amortized cost and fair value of debt securities available for sale at December 31, 2020 and 2019 and the corresponding amounts of gross unrealized gains and losses:


	December 31, 2020
	Amortized		Gross Unrealized				Fair
	Cost		Gain		Loss		Value
Available for sale:
U.S. Treasury & Agency securities	$	138,742	$	255	$	—	$	138,997
Mortgage-backed securities		33,743		72		(1)		33,814
Collateralized mortgage obligations		126,359		628		(391)		126,596
Collateralized debt obligations		214		—		(27)		187
Total	$	299,058	$	955	$	(419)	$	299,594


	December 31, 2019
	Amortized		Gross Unrealized				Fair
	Cost		Gain		Loss		Value
Available for sale:
U.S. Treasury securities	$	122,634	$	170	$	(1)	$	122,803
Mortgage-backed securities		23,028		76		—		23,104
Collateralized mortgage obligations		1,138		45		—		1,183
Collateralized debt obligations		216		—		(17)		199
Total	$	147,016	$	291	$	(18)	$	147,289

Securities with a fair value of $73,792 were pledged as collateral on FHLB borrowings at December 31, 2020.

All of the Company’s mortgage-backed securities , and a majority of the Company's collateralized mortgage obligations purchased during 2020, are issued and/or guaranteed by a U.S. government agency (Government National Mortgage Association) or a U.S. government-sponsored enterprise (Federal Home Loan Mortgage Corporation (“Freddie Mac”) or Federal National Mortgage Association (“Fannie Mae”)). The fair value of the private-label collateralized mortgage obligations was $816 and $1,183 at December 31, 2020 and 2019.

No securities of any single issuer, other than debt securities issued by the U.S. government, government agency and government-sponsored enterprises, were in excess of 10% of total shareholders' equity as of December 31, 2020 and 2019.

Information pertaining to sales of debt securities available for sale for the year ended December 31, 2020, 2019 and 2018 is as follows:


	2020		2019		2018
Proceeds	$	99,971	$	2,914	$	14,964

Gross realized gains	$	337	$	6	$	89
Gross realized losses		(158)		—		(3)
Total net realized gains	$	179	$	6	$	86

The income tax expense related to the net realized gains was $50, $1 and $18 for the year ended December 31, 2020, 2019 and 2018, respectively.

The amortized cost and fair value of U.S. Treasury and Agency securities at December 31, 2020 are shown by contractual maturity. Mortgage-backed securities, collateralized mortgage obligations and collateralized debt obligations are disclosed separately in the table below, as the expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties.


	Amortized		Fair
	Cost		Value
U.S. Treasury & Agency securities
Due less than one year	$	64,974	$	65,205
Due after one year through five years		73,768		73,792
Mortgage-backed securities		33,743		33,814
Collateralized mortgage obligations		126,359		126,596
Collateralized debt obligations		214		187
Total	$	299,058	$	299,594

The following table summarizes debt securities available for sale, at fair value, with unrealized losses at December 31, 2020 and 2019 aggregated by major security type and length of time the individual securities have been in a continuous unrealized loss position:


	December 31, 2020
	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
Mortgage-backed securities	$	5,694	$	(1)	$	—	$	—	$	5,694	$	(1)
Collateralized mortgage obligations		75,740		(391)		—		—		75,740		(391)
Collateralized debt obligations		—		—		187		(27)		187		(27)
Total	$	81,434	$	(392)	$	187	$	(27)	$	81,621	$	(419)


	December 31, 2019
	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
U.S. Treasury securities	$	5,011	$	(1)	$	—	$	—	$	5,011	$	(1)
Collateralized debt obligations		—		—		199		(17)		199		(17)
Total	$	5,011	$	(1)	$	199	$	(17)	$	5,210	$	(18)

As of December 31, 2020, the debt securities portfolio consisted of 23 debt securities, with eight debt securities in an unrealized loss position. For debt securities in an unrealized loss position, management has both the intent and ability to hold these investments until the recovery of the decline. The fair value is expected to increase as these securities approach their maturity date or repricing date or if market yields for such investments decline. Accordingly, as of December 31, 2020, the unrealized losses in these securities are due to non-credit-related factors, including changes in interest rates and other market conditions; thus, the impairment was determined to be temporary. All interest and dividends are considered taxable.

A collateralized debt obligation with a carrying value of $187 and $199 at December 31, 2020 and 2019, respectively, was rated high quality at inception, but it was subsequently rated by Moody’s as Ba1, which is defined as speculative. The issuers of the underlying investments (the collateral) of the collateralized debt obligation are primarily banks. Management uses in-house and third-party other-than-temporary impairment evaluation models to compare the present value of expected cash flows to the previous estimate to ensure there are no adverse changes in cash flows during the period. The other-than-temporary impairment model considers the structure and term of the collateralized debt obligations and the financial condition of the underlying issuers. Assumptions used in the model include expected future default rates and prepayments. The collateralized debt obligation remained classified as available for sale and represented $27 and $17 of the unrealized losses reported at December 31, 2020 and 2019, respectively.

Equity Securities

Equity securities consist of an investment in a qualified community reinvestment act investment fund, which is a publicly-traded mutual fund and an investment in the common equity of Pacific Coast Banker's Bank, a thinly traded restricted stock. At December 31, 2020 and 2019, equity securities totaled $5,364 and $5,255, respectively. Equity securities with readily determinable fair values are stated at fair value with realized and unrealized gains and losses reported in income.

At December 31, 2020 and 2019, equity securities with readily determinable fair values were $5,118 and $5,009, respectively. The following is a summary of unrealized and realized gains and losses recognized in the consolidated statements of operations:


	Year Ended
	December 31,
	2020		2019		2018
Net gains (losses) recorded during the period on equity securities	$	108	$	114	$	(87)
Less: net gains (losses) recorded during the period on equity securities sold during the period		—		—		—
Unrealized gains (losses) recorded during the period on equity securities held at the reporting date	$	108	$	114	$	(87)

The Company has elected to account for its investment in a thinly traded restricted stock using the measurement alternative for equity securities without readily determinable fair values, resulting in the investment carried at cost based on no evidence of impairment or observable trading activity during 2020 and 2019. The investment was reported at $246 at December 31, 2020 and 2019.

Loans

12 Months Ended

Dec. 31, 2020

Loans

Loans

Note 4—Loans

Major categories of loans were as follows:


	December 31,
	2020		2019
Residential real estate	$	2,033,526	$	2,476,866
Commercial real estate		259,958		240,081
Construction		206,581		178,376
Commercial lines of credit		6,671		17,903
Other consumer		7		34
Total loans		2,506,743		2,913,260
Less: allowance for loan losses		(72,387)		(21,730)
Loans, net	$	2,434,356	$	2,891,530

Loans totaling $630,197 and $933,747 were pledged as collateral on FHLB borrowings at December 31, 2020 and 2019, respectively.

The following table presents the activity in the allowance for loan losses by portfolio segment for the year ended December 31, 2020, 2019 and 2018:


							Commercial
	Residential		Commercial				Lines of		Other
December 31, 2020	Real Estate		Real Estate		Construction		Credit		Consumer		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	12,336	$	5,243	$	3,822	$	328	$	1	$	—	$	21,730
Provision (recovery) for loan losses		23,604		16,634		14,866		(237)		(2)		—		54,865
Charge offs		(3,594)		—		(707)		—		—		—		(4,301)
Recoveries		20		65		7		—		1		—		93
Total ending balance	$	32,366	$	21,942	$	17,988	$	91	$	—	$	—	$	72,387

							Commercial
	Residential		Commercial				Lines of		Other
December 31, 2019	Real Estate		Real Estate		Construction		Credit		Consumer		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	13,826	$	2,573	$	3,273	$	1,058	$	1	$	1,119	$	21,850
Provision (recovery) for loan losses		(1,511)		2,509		542		(554)		—		(1,119)		(133)
Charge offs		—		—		—		(176)		—		—		(176)
Recoveries		21		161		7		—		—		—		189
Total ending balance	$	12,336	$	5,243	$	3,822	$	328	$	1	$	—	$	21,730

							Commercial
	Residential		Commercial				Lines of		Other
December 31, 2018	Real Estate		Real Estate		Construction		Credit		Consumer		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	12,279	$	2,040	$	2,218	$	469	$	1	$	1,450	$	18,457
Provision (recovery) for loan losses		1,533		398		1,040		589		—		(331)		3,229
Charge offs		(4)		—		—		—		—		—		(4)
Recoveries		18		135		15		—		—		—		168
Total ending balance	$	13,826	$	2,573	$	3,273	$	1,058	$	1	$	1,119	$	21,850

The following tables present the balance in the allowance for loan losses and the recorded investment by portfolio segment and based on impairment evaluation method as of December 31, 2020 and 2019:


							Commercial
	Residential		Commercial				Lines of		Other
December 31, 2020	Real Estate		Real Estate		Construction		Credit		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	41	$	287	$	1,905	$	4	$	—	$	—	$	2,237
Collectively evaluated for impairment		32,325		21,655		16,083		87		—		—		70,150
Total ending allowance balance	$	32,366	$	21,942	$	17,988	$	91	$	—	$	—	$	72,387
Loans:
Loans individually evaluated for impairment	$	208	$	20,974	$	48,871	$	3,981	$	—	$	—	$	74,034
Loans collectively evaluated for impairment		2,033,318		238,984		157,710		2,690		7		—		2,432,709
Total ending loans balance	$	2,033,526	$	259,958	$	206,581	$	6,671	$	7	$	—	$	2,506,743


							Commercial
	Residential		Commercial				Lines of		Other
December 31, 2019	Real Estate		Real Estate		Construction		Credit		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	43	$	—	$	—	$	5	$	—	$	—	$	48
Collectively evaluated for impairment		12,293		5,243		3,822		323		1		—		21,682
Total ending allowance balance	$	12,336	$	5,243	$	3,822	$	328	$	1	$	—	$	21,730
Loans:
Loans individually evaluated for impairment	$	215	$	1,100	$	17,112	$	1,377	$	—	$	—	$	19,804
Loans collectively evaluated for impairment		2,476,651		238,981		161,264		16,526		34		—		2,893,456
Total ending loans balance	$	2,476,866	$	240,081	$	178,376	$	17,903	$	34	$	—	$	2,913,260

The following tables present information related to impaired loans by class of loans as of and for the periods indicated:


	At December 31, 2020						Year Ended December 31, 2020
	Unpaid						Average		Interest		Cash Basis
	Principal		Recorded		Allowance for		Recorded		Income		Interest
	Balance		Investment		Loan Losses		Investment		Recognized		Recognized
With no related allowance for loan losses recorded:
Residential real estate, first mortgage	$	116	$	94	$	—	$	96	$	—	$	—
Commercial real estate:
Retail		1,247		1,029		—		1,065		58		48
Multifamily		—		—		—		—		—		—
Offices		—		—		—		—		—		—
Hotels/SROs		11,428		11,419		—		5,221		—		—
Construction		42,669		41,951		—		29,395		964		744
Commercial lines of credit:
Private banking		—		—		—		1,505		42		35
C&I lending		3,857		3,857		—		1,184		—		—
Subtotal		59,317		58,350		—		38,466		1,064		827
With an allowance for loan losses recorded:
Residential real estate, first mortgage		114		114		41		116		5		4
Commercial real estate:
Hotels/SROs		8,645		8,526		287		3,858		—		—
Construction		6,920		6,920		1,905		6,189		255		226
Commercial lines of credit, private banking		124		124		4		128		7		6
Subtotal		15,803		15,684		2,237		10,291		267		236
Total	$	75,120	$	74,034	$	2,237	$	48,757	$	1,331	$	1,063


	At December 31, 2019						Year Ended December 31, 2019
	Unpaid						Average		Interest		Cash Basis
	Principal		Recorded		Allowance for		Recorded		Income		Interest
	Balance		Investment		Loan Losses		Investment		Recognized		Recognized
With no related allowance for loan losses recorded:
Residential real estate, first mortgage	$	125	$	98	$	—	$	104	$	—	$	—
Commercial real estate:
Retail		1,308		1,100		—		1,136		60		55
Multifamily		—		—		—		449		12		12
Offices		—		—		—		378		25		25
Construction		17,156		17,112		—		6,682		582		575
Commercial lines of credit:
Private banking		1,245		1,245		—		—		—		—
C&I lending		—		—		—		67		5		5
Subtotal		19,834		19,555		—		8,816		684		672
With an allowance for loan losses recorded:
Residential real estate, first mortgage		116		117		43		118		5		5
Commercial lines of credit, private banking		132		132		5		136		7		7
Subtotal		248		249		48		254		12		12
Total	$	20,082	$	19,804	$	48	$	9,070	$	696	$	684


	At December 31, 2018						Year Ended December 31, 2018
	Unpaid						Average		Interest		Cash Basis
	Principal		Recorded		Allowance for		Recorded		Income		Interest
	Balance		Investment		Loan Losses		Investment		Recognized		Recognized
With no related allowance for loan losses recorded:
Construction	$	4,751	$	4,751	$	—	$	3,563	$	301	$	230
Commercial real estate:
Retail		1,370		1,174		—		1,210		64		58
Multifamily		1,088		1,083		—		812		37		33
Subtotal		7,209		7,008		—		5,585		402		321
With an allowance for loan losses recorded:
Residential real estate, first mortgage		254		228		46		148		5		4
Construction		2,661		2,661		78		1,996		163		144
Commercial real estate, offices		1,530		1,522		30		1,538		88		80
Commercial lines of credit:
Private banking		316		316		95		330		19		16
C&I lending		100		100		100		75		5		4
Subtotal		4,861		4,827		349		4,087		280		248
Total	$	12,070	$	11,835	$	349	$	9,672	$	682	$	569

In the above tables, the unpaid principal balance is not reduced for partial charge offs. Also, the recorded investment excludes accrued interest receivable on loans, which was not significant.

Also presented in the tables above is the average recorded investment of the impaired loans and the related amount of interest recognized during the time within the period that the impaired loans were impaired. When the ultimate collectability of the total principal of an impaired loan is in doubt and the loan is on nonaccrual status, all payments are applied to principal under the cost recovery method. When the ultimate collectability of the total principal of an impaired loan is not in doubt and the loan is on nonaccrual status, contractual interest is credited to interest income when received under the cash basis method. The average balances are calculated based on the month-end balances of the loans for the period reported.

The following tables present the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans as of December 31, 2020 and 2019:


	At December 31,
	2020				2019
			Loans Past				Loans Past
			Due Over 90				Due Over 90
			Days Still				Days Still
	Nonaccrual		Accruing		Nonaccrual		Accruing
Residential real estate:
Residential first mortgage	$	20,043	$	46	$	14,482	$	50
Residential second mortgage		686		—		210		—
Commercial real estate:
Retail		20		—		40		—
Hotels/SROs		19,945		—		—		—
Construction		41,873		—		—		—
Commercial lines of credit
Private banking		2,285		—		—		—
C&I lending		1,572		—		—		—
Total	$	86,424	$	46	$	14,732	$	50

The following tables present the aging of the recorded investment in past due loans as of December 31, 2020 and 2019 by class of loans:


	30 ‑ 59		60 ‑ 89		Greater than
	Days		Days		89 Days		Total		Loans Not
December 31, 2020	Past Due		Past Due		Past Due		Past Due		Past Due		Total
Residential real estate:
Residential first mortgage	$	37,819	$	14,524	$	20,089	$	72,432	$	1,943,602	$	2,016,034
Residential second mortgage		362		134		686		1,182		16,310		17,492
Commercial real estate:
Retail		1,010		—		20		1,030		15,170		16,200
Multifamily		3,835		—		—		3,835		75,374		79,209
Offices		—		—		—		—		27,061		27,061
Hotels/SROs		—		—		19,945		19,945		47,690		67,635
Industrial		—		—		—		—		13,186		13,186
Other		—		—		—		—		56,667		56,667
Construction		8,593		2,514		41,873		52,980		153,601		206,581
Commercial lines of credit:
Private banking		—		—		2,285		2,285		124		2,409
C&I lending		—		—		1,572		1,572		2,690		4,262
Other consumer		—		—		—		—		7		7
Total	$	51,619	$	17,172	$	86,470	$	155,261	$	2,351,482	$	2,506,743


	30 ‑ 59		60 ‑ 89		Greater than
	Days		Days		89 Days		Total		Loans Not
December 31, 2019	Past Due		Past Due		Past Due		Past Due		Past Due		Total
Residential real estate:
Residential first mortgage	$	36,112	$	5,112	$	14,532	$	55,756	$	2,396,800	$	2,452,556
Residential second mortgage		97		295		210		602		23,708		24,310
Commercial real estate:
Retail		—		—		40		40		6,089		6,129
Multifamily		—		—		—		—		64,873		64,873
Offices		—		—		—		—		28,048		28,048
Hotels/SROs		5,605		—		—		5,605		76,165		81,770
Industrial		—		—		—		—		14,150		14,150
Other		—		—		—		—		45,111		45,111
Construction		15,008		—		—		15,008		163,368		178,376
Commercial lines of credit:
Private banking		—		—		—		—		11,914		11,914
C&I lending		1,249		—		—		1,249		4,740		5,989
Other consumer		—		—		—		—		34		34
Total	$	58,071	$	5,407	$	14,782	$	78,260	$	2,835,000	$	2,913,260

The aging of the loans in the above table as of December 31, 2020 has not been adjusted for customers granted a payment deferral in response to COVID-19. These loans remain in the aging category that was applicable at the time of payment deferral. Interest continues to accrue on these loans. Refer to the discussion of forbearance loans below.

The Company considers the performance of the loan portfolio and its impact on the allowance for loan losses. For residential real estate and other consumer loans, the Company also evaluates credit quality based on the aging status of the loan, which is presented above, and by payment activity. The Company reviews the status of nonperforming loans, which include loans 90 days past due and still accruing and nonaccrual loans.

Troubled Debt Restructurings

At December 31, 2020 and 2019, the balance of outstanding loans identified as troubled debt restructurings , along with the allocated portion of the allowance for loan losses with respect to these loans, was as follows:


	At December 31,
	2020				2019
	Recorded		Allowance for		Recorded		Allowance for
	Investment		Loan Losses		Investment		Loan Losses
Residential real estate, first mortgage	$	209	$	41	$	215	$	43
Commercial real estate, retail		1,029		—		1,110		—
Construction		26,985		1,906		12,261		—
Commercial lines of credit, private banking		124		4		132		5
Total	$	28,347	$	1,951	$	13,718	$	48

During the year ended December 31, 2020, the terms of three construction loans and one private banking loan were modified by providing for an extension of the maturity dates at the contract’s existing rate of interest, which is lower than the current market rate for new debt with similar risk. The outstanding recorded investment was $13,777 both before and after modification. During the year ended December 31, 2019, the terms of three construction loans were modified by providing for an extension of the maturity dates at the contract’s existing rate of interest, which is lower than the current market rate for new debt with similar risk. The outstanding recorded investment was $11,214 both before and after modification. The effect of these modifications on the allowance for loan losses was not significant. Five construction loans, totaling $19,987 as of December 31, 2020, identified as troubled debt restructurings subsequently defaulted. The effect of the defaults on the allowance for loan losses was not significant due to collateral coverage.

The terms of certain other loans have been modified during 2020 and 2019 that did not meet the definition of a troubled debt restructuring. These other loans that were modified were not considered significant.

Forbearance Loans

As a response to the COVID-19 pandemic, the Company has offered forbearance under the CARES Act to customers facing COVID-19-related financial difficulties. The CARES Act created a forbearance program for impacted borrowers and imposed a temporary 60-day moratorium on foreclosures and foreclosure-related evictions related to federally backed mortgage loans, which include loans secured by a first or subordinate lien on residential one- to-four family real property that have been purchased by Fannie Mae or Freddie Mac, are insured by HUD or are insured or guaranteed by other listed agencies. Borrowers of such federally backed mortgage loans experiencing a financial hardship as a result of COVID-19 may request forbearance, regardless of delinquency status, for up to 360 days. Subsequently, the federal agencies as well as the state of California announced extensions of their moratoria on single-family foreclosures and evictions and Federal Housing Administration-insured loans, with the latest extensions through June 30, 2021.

Certain provisions of the CARES Act encourage financial institutions to practice prudent efforts to work with borrowers impacted by COVID-19. Under these provisions, a modification deemed to be COVID-19-related would not be considered a troubled debt restructuring if the loan were not more than 30 days past due as of December 31, 2019 and the deferral was executed between March 1, 2020 and the earlier of 60 days after the date of termination of the COVID-19 national emergency or December 31, 2020. The banking regulators issued similar guidance, which also clarified that a COVID-19-related modification should not be considered a troubled debt restructuring if the borrower was current on payments at the time the underlying loan modification program was implemented and if the modification is considered to be short-term.

In this context, the Company implemented a COVID-19 forbearance program that generally provided for principal and interest forbearance for 120 days to residential borrowers with extensions available to qualified borrowers available for up to a maximum deferral period of twelve months, and these loans were not considered troubled debt restructurings. Under the forbearance program, interest continues to accrue at the note rate. At the end of the forbearance period, the borrower’s accrued but unpaid interest will be added to their outstanding principal balance while keeping the principal and interest payment at the amount determined in

accordance with the terms of the note, thus extending the loan’s maturity date. The terms of commercial loan forbearances are reviewed and determined on a case-by-case basis, and these loans were not considered troubled debt restructurings. Loans modified under the CARES program during the year ended December 31, 2020 totaled $132,830. As of December 31, 2020, the amount of loans that remain in payment deferral totaled $15,785. Total accrued interest receivables on these loans were $146.

Foreclosure Proceedings

At December 31, 2020 and 2019, the recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process totaled $5,320 and $1,643, respectively.

Credit Quality

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis includes homogeneous loans, such as residential real estate and other consumer loans, and non-homogeneous loans, such as commercial lines of credit, construction and commercial real estate loans. This analysis is performed at least quarterly. The Company uses the following definitions for risk ratings:

Pass: Loans are of satisfactory quality.

Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Company’s credit position at some future date.

Substandard: Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, based on currently existing facts, conditions and values, highly questionable and improbable.

At December 31, 2020 and 2019, the risk rating of loans by class of loans was as follows:


			Special
December 31, 2020	Pass		Mention		Substandard		Doubtful		Total
Residential real estate:
Residential first mortgage	$	1,995,945	$	—	$	19,995	$	94	$	2,016,034
Residential second mortgage		16,806		—		686		—		17,492
Commercial real estate:
Retail		13,599		1,572		1,029		—		16,200
Multifamily		55,772		14,238		9,199		—		79,209
Offices		12,014		1,623		13,424		—		27,061
Hotels/SROs		9,115		17,984		40,536		—		67,635
Industrial		5,867		—		7,319		—		13,186
Other		43,193		7,732		5,742		—		56,667
Construction		152,577		14,234		32,850		6,920		206,581
Commercial lines of credit:
Private banking		124		2,285		—		—		2,409
C&I lending		3,573		—		689		—		4,262
Other consumer		7		—		—		—		7
Total	$	2,308,592	$	59,668	$	131,469	$	7,014	$	2,506,743


			Special
December 31, 2019	Pass		Mention		Substandard		Doubtful		Total
Residential real estate:
Residential first mortgage	$	2,438,024	$	—	$	14,077	$	455	$	2,452,556
Residential second mortgage		24,100		—		210		—		24,310
Commercial real estate:
Retail		4,195		834		1,100		—		6,129
Multifamily		56,164		7,150		1,559		—		64,873
Offices		24,484		645		2,919		—		28,048
Hotels/SROs		60,074		18,189		3,507		—		81,770
Industrial		5,894		8,256		—		—		14,150
Other		37,693		920		6,498		—		45,111
Construction		156,339		7,008		15,029		—		178,376
Commercial lines of credit:
Private banking		10,669		1,245		—		—		11,914
C&I lending		4,013		—		1,976		—		5,989
Other consumer		34		—		—		—		34
Total	$	2,821,683	$	44,247	$	46,875	$	455	$	2,913,260

During the year ended December 31, 2019 and 2018, the Bank sold pools of residential real estate mortgages for $173,382 and $475,646, respectively, to third-party investors. The transactions resulted in full de-recognition of the mortgages (i.e. transferred assets) from the consolidated balance sheets and recognition of gain on sale of portfolio loans of $5,970 and $16,433 for the year ended December 31, 2019 and 2018, respectively. After the sales, the Bank’s only continuing involvement in the transferred assets is to act as servicer or subservicer of the mortgages.

During the year ended December 31, 2020, the Bank negotiated the repurchases of pools of Advantage Loan Program loans with a total outstanding principal balance of $69,638. The Company recognized a loss of $271 in other non-interest expense on these repurchases for the year ended December 31, 2020. For more information on the repurchases of mortgage loans, refer to Note 19—Commitments and Contingencies.

During the year ended December 31, 2020, nonaccrual residential real estate loans were transferred from held for investment to held for sale since the Bank decided to sell the loans. On the date of transfer, the amortized cost exceeded the fair value of the loans

due to credit deterioration. The Bank recorded a charge-off of $3,486 to the allowance for loan losses, which established a new aggregate cost basis for the loans of $19,375 on the date of transfer.

Leasehold Improvements and Equipment, net

12 Months Ended

Dec. 31, 2020

Leasehold Improvements and Equipment, net

Leasehold Improvements and Equipment, net

Note 5—Leasehold Improvements and Equipment, net

Leasehold improvements and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are determined using the straight-line method. Leasehold improvements and equipment at December 31, 2020 and 2019 are as follows:


	Estimated
	Useful
	Life
	(in years)	2020		2019
Leasehold improvements	*	$	11,259	$	10,920
Furniture and equipment	3 ‑ 7		14,361		13,981
Total			25,620		24,901
Less: accumulated depreciation and amortization			(17,108)		(15,703)
Leasehold improvements and equipment, net		$	8,512	$	9,198

* Amortized over the shorter of the lease term or estimated useful life

The amount charged to occupancy and equipment in the consolidated statements of operations for depreciation and amortization was $1,608, $1,621 and $1,399 for the year ended December 31, 2020, 2019 and 2018, respectively.

Mortgage Servicing Rights, net

12 Months Ended

Dec. 31, 2020

Mortgage Servicing Rights, net

Mortgage Servicing Rights, net

Note 6—Mortgage Servicing Rights, net

The Bank records servicing assets from the sale of residential real estate mortgage loans to the secondary market for which servicing has been retained. Residential real estate mortgage loans serviced for others are not included in the consolidated balance sheets. The principal balance of these loans at December 31, 2020 and 2019 are as follows:


	2020		2019
Residential real estate mortgage loan portfolios serviced for:
FNMA	$	171,553	$	130,425
FHLB		64,661		86,778
Private investors		429,816		656,035
Total	$	666,030	$	873,238

Custodial escrow balances maintained with these serviced loans were $6,051 and $7,688 at December 31, 2020 and 2019, respectively.

Activity for mortgage servicing rights and the related valuation allowance are as follows:


	2020		2019		2018
Mortgage servicing rights:
Beginning of year	$	10,845	$	10,733	$	6,706
Additions		713		2,964		6,052
Amortization		(3,705)		(2,852)		(2,025)
End of year		7,853		10,845		10,733
Valuation allowance at beginning of year		1,080		100		210
Additions (recoveries)		1,085		980		(110)
Valuation allowance at end of year		2,165		1,080		100
Mortgage servicing rights, net	$	5,688	$	9,765	$	10,633

Servicing fee income, net of amortization of servicing rights and changes in the valuation allowance, was $(1,324), $238 and $1,381 for the year ended December 31, 2020, 2019 and 2018, respectively.

The fair value of mortgage servicing rights was $5,841 and $10,271 at December 31, 2020 and 2019, respectively. The fair value of mortgage servicing rights is highly sensitive to changes in underlying assumptions. Changes in prepayment speed assumptions have the most significant impact on the estimate of the fair value of mortgage servicing rights. The fair value at December 31, 2020 was determined using discount rates ranging from 9.5% to 12.0%, prepayment speeds with a weighted average of 22.5%, (depending on the stratification of the specific right), a weighted average life of the mortgage servicing right of 43 months and a weighted average default rate of 0.2%. The fair value at December 31, 2019 was determined using discount rates ranging from 9.5% to 12.0%, prepayment speeds with a weighted average of 20.1%, (depending on the stratification of the specific right), a weighted average life of the mortgage servicing right of 52 months and a weighted average default rate of 0.2%.

Impairment is determined by stratifying the mortgage servicing rights into groupings based on predominant risk characteristics, such as interest rate, loan type and investor type. At December 31, 2020 and 2019, the carrying amount of certain individual groupings exceeded their fair value, resulting in write-downs to fair value. Refer to Note 15-Fair Values of Financial Instruments.

- Definition

The entire disclosure for a transferor's continuing involvement in financial assets that it has transferred in a securitization or asset-backed financing arrangement, the nature of any restrictions on assets reported by an entity in its statement of financial position that relate to a transferred financial asset (including the carrying amounts of such assets), how servicing assets and servicing liabilities are reported, and (for securitization or asset-backed financing arrangements accounted for as sales) when a transferor has continuing involvement with the transferred financial assets and transfers of financial assets accounted for as secured borrowings, how the transfer of financial assets affects an entity's financial position, financial performance, and cash flows.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Deposits

12 Months Ended

Dec. 31, 2020

Deposits

Deposits

Note 7—Deposits

Time deposits, included in interest-bearing deposits, were $1,646,523 and $1,154,076 at December 31, 2020 and 2019, respectively. Time deposits included brokered deposits of $42,751 and $25,000 at December 31, 2020 and 2019, respectively.

Time deposits that meet or exceed the FDIC insurance limit of $250 were $487,340 and $283,457 at December 31, 2020 and 2019, respectively.

At December 31, 2020, the scheduled maturities of time deposits, including brokered deposits, were as follows:


2021	$	1,258,983
2022		297,971
2023		69,162
2024		9,126
2025		11,281
Total	$	1,646,523

FHLB Borrowings

12 Months Ended

Dec. 31, 2020

FHLB Borrowings

FHLB Borrowings

Note 8—FHLB Borrowings

FHLB borrowings at December 31, 2020 and 2019 consist of the following:


	2020		Interest Rates	2019		Interest Rates
Long-term fixed rate advances	$	318,000	0.43% -1.96 %	$	229,000	1.07% - 1.96%

FHLB Advances

The long-term fixed rate advances have maturity dates ranging from July 2021 to February 2030. Interest on these advances is payable monthly, and each advance is payable at its maturity date and may contain a prepayment penalty if paid before maturity. At December 31, 2020, advances totaling $307,000 were callable by the FHLB as follows: $100,000 in February 2021; $67,000 in September 2021; $90,000 in October 2021; and $50,000 in May 2024. At December 31, 2020, the Bank had additional borrowing capacity of $120,797 from the FHLB.

The contractual annual maturities of FHLB advances at December 31, 2020 are as follows:


2021	$	11,000
2022		—
2023		—
2024		—
2025		—
Thereafter		307,000
	$	318,000

FHLB Overdraft Line of Credit

The Bank has established an overdraft line of credit agreement with the FHLB providing maximum borrowings of $50,000. The average amount outstanding during the year ended December 31, 2020 and 2019 was $18 and $2,008, respectively. At December 31, 2020 and 2019, there were no outstanding borrowings under this agreement. Borrowings accrue interest based on a variable rate based on the FHLB’s overnight cost of funds rate, which was 0.46% and 1.99% at December 31, 2020 and 2019, respectively. The agreement has a one-year term and terminates in October 2021.

The FHLB advances and the overdraft line of credit are collateralized by pledged securities and loans. Refer to Note 3—Investment Securities for further information on securities pledged and Note 4—Loans for further information on loans pledged.

Other Borrowings

The Bank had available unsecured credit lines with other banks totaling $100,000 and $70,000 at December 31, 2020 and 2019 , respectively. There were no borrowings under these unsecured credit lines during the year ended December 31, 2020 or 2019.

Subordinated Notes, net

12 Months Ended

Dec. 31, 2020

Subordinated Notes, net

Subordinated Notes, net

Note 9—Subordinated Notes, net

The subordinated notes (the "Notes") were as follows:


	December 31,
	2020		2019
7.0% fixed to floating rate subordinated notes	$	65,000	$	65,000
Unamortized note premium		411		474
Unamortized debt issuance costs		(70)		(295)
Total	$	65,341	$	65,179

The Notes bear interest at 7% per annum, payable semi-annually on April 15 and October 15 in arrears, through April 2021 after which the Notes will have a variable interest rate of the three-month LIBOR rate plus a margin of 5.82%. Premiums and debt issuance costs are amortized over the contractual term of the Notes into interest expense using the effective interest method. Interest expense on these Notes was $4,713, $4,701 and $4,689 for the year ended December 31, 2020, 2019 and 2018, respectively. The Notes mature in April 2026.

On or after April 14, 2021, the Company may redeem the Notes, in whole or in part, at an amount equal to 100% of the outstanding principal amount being redeemed plus accrued interest, in a principal amount with integral multiples of $1. The Notes are not redeemable by the Company prior to April 14, 2021 except in the event that (i) the Notes no longer qualify as Tier 2 Capital, (ii) the interest on the Notes is determined by law to be not deductible for Federal Income Tax reporting or (iii) the Company is considered an investment company pursuant to the Investment Company Act of 1940. The Notes are not subject to redemption by the noteholder.

The Notes are unsecured obligations and are subordinated in right of payment to all existing and future indebtedness, deposits and other liabilities of the Company’s current and future subsidiaries, including the Bank’s deposits as well as the Company’s

subsidiaries’ liabilities to general creditors and liabilities arising during the ordinary course of business. The Notes may be included in Tier 2 capital for the Company under current regulatory guidelines and interpretations. As long as the Notes are outstanding, the Company is permitted to pay dividends if prior to such dividends, the Bank is considered well capitalized, as defined by regulatory guidelines.

The Company currently may not issue new debt without the prior approval of the FRB.

Stock Repurchase Program

12 Months Ended

Dec. 31, 2020

Stock Repurchase Program

Stock Repurchase Program

Note 10-Stock Repurchase Program

In late 2018, the board of directors approved the repurchase of up to $50,000 of the Company’s outstanding shares of common stock. The stock repurchase program permits the Company to purchase shares of its common stock from time to time in the open market or in privately negotiated transactions. The program does not have an expiration date. The Company received regulatory approval of its stock repurchase program and publicly announced the program in January 2019. Under this program, the Company is not obligated to repurchase shares of its common stock. The repurchased shares will be canceled and returned to authorized but unissued status.

During the year ended December 31, 2020, the Company repurchased and cancelled 10,912 shares of its common stock for $82, including commissions and fees (average repurchase price of $7.57 per share). During the year ended December 31, 2019, the Company repurchased and cancelled 3,134,806 shares of its common stock for $30,349, including commissions and fees (average repurchase price of $9.68 per share). Such repurchases of common stock were funded through cash generated from operations. As of December 31, 2020, the Company had $19,568 of common stock purchases remaining that may be made under the program. The Company currently may not repurchase any common stock without the approval of the FRB.

In March 2020, the Company suspended the stock repurchase program for at least the near term in connection with the issues giving rise to the internal review of the Advantage Loan Program (the "Internal Review"), which has been led by outside legal counsel under the direction of a special committee of independent directors (the "Special Committee"). The primary focus of the Internal Review has involved the origination of residential real estate loans under the Advantage Loan Program and related matters. Refer to Note 19─Commitments and Contingencies for further information regarding the Internal Review.

Shareholders' Equity

12 Months Ended

Dec. 31, 2020

Shareholders' Equity

Shareholders' Equity

Note 11—Shareholders’ Equity

Capital Stock

The Company’s authorized capital stock consists of 10,000,000 shares of preferred stock and 500,000,000 shares of no par common stock.

No Par Common Stock

Holders of common stock are entitled to one vote per share on all matters submitted to shareholders and entitled to dividends at the sole direction of the board of directors. Dividends declared per common share were $0.01, $0.04 and $0.04, and dividends paid on common stock were $499, $2,044 and $2,119, for the year ended December 31, 2020, 2019 and 2018, respectively. The holders have no preemptive, conversion or subscription rights, and there is no redemption or sinking fund provisions with respect to such shares. The common stock is subordinate to the series preferred stock as described below with respect to dividend rights or rights upon liquidation, winding up and dissolution of the Company.

Preferred Stock

The board of directors is authorized to issue preferred stock from time to time in one or more series, with such designations and such relative voting, dividend, liquidation and other rights, preferences and limitations as may be adopted by the board of directors. No shares of preferred stock are currently issued or outstanding.

Stock-based Compensation

12 Months Ended

Dec. 31, 2020

Stock-based Compensation

Stock-based Compensation

Note 12—Stock-based Compensation

The board of directors established a 2017 Omnibus Equity Incentive Plan (the “2017 Plan”), which was approved by the shareholders. The 2017 Plan provides for the grant of up to 4,237,100 shares of common stock for stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards for issuance to employees, consultants and board of directors of the Company. The stock-based awards are issued at no less than the market price on the date the awards are granted.

The board of directors established the 2020 Omnibus Equity Incentive Plan (the "2020 Plan"), which was approved by the shareholders in December 2020. The 2020 Plan provides for the grant of up to 3,979,661 shares of common stock for stock options, stock appreciation rights, restricted stock, restricted stock units, performance units and performance shares for issuance to employees, consultants and board of directors of the Company. The stock-based awards are issued at no less than the market price on the date the awards are granted. No grants under the 2020 Plan have been issued during the year ended December 31, 2020. Due to the adoption of the 2020 Plan, no further grants will be issued under the 2017 Plan.

Stock Options

Stock option awards are granted with an exercise price equal to the market price of the Company’s common stock on the date of grant. For stock option awards granted in 2020, the awards generally vest ratably over three years (one-third per year) after the date of grant while stock option awards granted prior to 2020 vests generally in installments of 50% in each of the third and fourth year after the date of grant. All stock option awards have a maximum term of ten years.

The board of directors approved the issuance of options to purchase 67,361, 84,889 and 92,625 shares of common stock to certain key employees which are accounted for as equity awards during the year ended December 31, 2020, 2019 and 2018, respectively.

On June 5, 2020, the Company granted its Chief Executive Officer ("CEO") options to purchase 300,000 shares of common stock with an exercise price of $4.00 per share. The stock options vest one-third on January 1, 2021, one-third on the first anniversary of the date of grant and one-third on January 1, 2022. The stock options vest immediately upon the CEO's termination due to death or disability and upon a change in control event, as defined in the CEO's employment agreement. In the event of termination other than for cause, the CEO's then vested stock options will remain exercisable for three years following termination, provided that the CEO remains in compliance with certain terms contained in his employment agreement.

The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option pricing model that uses the assumptions noted below. Estimating the grant date fair values for employee stock options requires management to make assumptions regarding expected volatility of the value of those underlying shares, the risk-free rate over the expected life of the stock options and the date on which share-based payments will be settled. Expected volatilities are based on a weighted average of the Company's historic volatility and an implied volatility for a group of industry-relevant bank holding companies as of the measurement date. The expected term of options granted is calculated using the simplified method (the midpoint between the end of the vesting period and the end of the maximum term). The risk-free rate for the expected term of the option is based upon U.S. Treasury yield curve in effect at the time of grant. Expected dividend yield represents what the Company anticipates will be declared during the expected term of the options.

The weighted average grant-date fair value of options issued in 2020, 2019 and 2018 was $1.29, $3.20 and $4.56, respectively. The grant-date fair value of each stock option award was estimated using the Black-Scholes option pricing model that uses the assumptions set forth in the following table:


	Year Ended December 31,
	2020			2019			2018
Risk-free interest rate		0.49	%		2.66	%		2.80	%
Expected term (in years)		5.61			6.75			6.75
Expected stock price volatility		33.91	%		26.26	%		23.70	%
Dividend yield		0.10	%		0.40	%		0.29	%

A summary of the Company's stock option activity as of and for the year ended December 31, 2020 is as follows:


				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
	Number	Exercise		Contractual	Intrinsic
	of Shares	Price		Term	Value
				(Years)
Outstanding at January 1, 2020	142,477	$	12.29	8.60		—
Granted	367,361		4.57
Exercised	—		—
Forfeited/expired	(131,956)		9.93
Outstanding at December 31, 2020	377,882	$	5.61	9.09	$	—

The Company recorded stock-based compensation expense associated with stock options of $200, $137 and $82 for the year ended December 31, 2020, 2019 and 2018, respectively. At December 31, 2020, there was $237 of total unrecognized compensation cost related to nonvested stock options granted under the 2017 Plan. The unrecognized compensation cost related to nonvested stock options is expected to be recognized over a weighted-average period of 1.15 years. No options are exercisable at December 31, 2020.

Restricted Stock Awards

Restricted stock awards are issued to certain key employees and non-employee directors. The board of directors approved the issuance of 151,874 restricted stock awards to certain key employees during 2020 and 71,144 restricted stock awards to certain key employees and 10,460 restricted stock awards to non-employee directors during 2019. The restricted stock awards issued during 2020 vest ratably over three years (one-third per year). The restricted stock awards issued during 2019 vest in installments of 50% in each of the third and fourth year after the date of grant for key employee awards and vest on the first anniversary of the grant date for non-employee director awards. The value of a restricted stock award is based on the market value of the Company's common stock at the date of grant reduced by the present value of dividends per share expected to be paid during the period the shares are not vested. Upon a change in control, as defined in the 2017 Plan, the outstanding restricted stock awards will immediately vest.

A summary of the restricted stock awards activity as of and for the year ended December 31, 2020 periods indicated is as follows:


		Weighted Average
	Number	Grant Date
	of Shares	Fair Value
Nonvested at January 1, 2020	100,096	$	11.02
Granted	151,874		6.91
Vested	(10,460)		9.52
Forfeited	(103,574)		9.12
Nonvested at December 31, 2020	137,936	$	7.90

The fair value of the award is recorded as compensation expense on a straight-line basis over the vesting period. The Company recorded stock-based compensation expense associated with restricted stock awards of $134, $360 and $215 for the year ended December 31, 2020, 2019 and 2018, respectively. At December 31, 2020, there was $686 of total unrecognized compensation cost related to the nonvested stock granted under the 2017 Plan. The cost is expected to be recognized over a weighted-average period of 2.16 years. The total fair value of shares vested during the year ended December 31, 2020 and 2019 was $100 and $214, respectively.

Income (Loss) Per Share

12 Months Ended

Dec. 31, 2020

Income (Loss) Per Share

Income (Loss) Per Share

Note 13—Income (Loss) Per Share

Basic income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted income per common share further includes any common shares available to be issued upon the exercise of outstanding stock options and restricted stock awards if such inclusions would be dilutive. The Company

determines the potentially dilutive common shares using the treasury stock method. In periods of a net loss, basic and diluted per share information are the same. The following table presents the computation of income (loss) per share, basic and diluted:



	Year Ended December 31,
	2020		2019		2018
Numerator:
Net income (loss)	$	(12,967)	$	29,248	$	63,468

Denominator:
Weighted average common shares outstanding, basic		49,840,882		51,115,986		52,963,308
Weighted average effect of potentially dilutive common shares:
Stock options		—		—		—
Restricted stock		—		11,893		2,259
Weighted average common shares outstanding, diluted		49,840,882		51,127,879		52,965,567

Income (loss) per share:
Basic	$	(0.26)	$	0.57	$	1.20
Diluted	$	(0.26)	$	0.57	$	1.20

The weighted average effect of certain stock options and nonvested restricted stock that were excluded from the computation of weighted average diluted shares outstanding, as inclusion would be anti-dilutive, are summarized as follows:


	Year Ended December 31,
	2020	2019	2018
Stock options	359,234	167,255	92,625
Restricted stock	166,621	28,676	—
Total	525,855	195,931	92,625

Employee Benefit Plans

12 Months Ended

Dec. 31, 2020

Employee Benefit Plans

Employee Benefit Plans

Note 14—Employee Benefit Plans

Defined Contribution Retirement Plan

The Bank maintains a defined contribution plan under which it makes quarterly matching contributions in an amount equal to 100% of the lesser of the first 3% of the amount the employee contributed or deferred or 3% of the employee's base salary during such quarter. The employee must have been employed by the Bank on the date the matching contribution was made in order to have received it. In addition , the Bank also makes a contribution of up to 1% of the amount deferred or contributed, based on a tiered scale of its return on assets for the prior year. The matching contributions were made only up to the amount of the employee's deferrals or contributions for the plan. The Bank also has the discretion to make additional contributions. The Bank's contributions to the plan were $256, $758 and $773 for the year ended December 31, 2020, 2019 and 2018, respectively.

Executive Incentive Retirement Plan Agreement

The Bank entered into individual executive incentive retirement plan agreements with six employees. These agreements provided for payments, if payable in accordance with their respective terms and in accordance with applicable law, upon a separation from service or a "change of control" (as defined in such agreements ) if the individual has met specified vesting requirements. Each of these agreements provided for death benefits in the event of death in active service to the Bank. In 2020, an agreement for a former employee was forfeited in connection with the individual's termination of service. Under the terms of the remaining agreements, each of the employees was credited an additional amount to such employees' book-entry incentive award account under the applicable agreement in 2020 based on a monthly crediting formula. The employee may have made an election to receive payments under the employee’s agreement as a lump sum or as an installment. The aggregate liability accrued for potential payments under these agreements was $3,016 and $3,157 at December 31, 2020 and 2019, respectively. Periodic expense consisted of the Bank’s contribution which was made ratably over the build up period until retirement, adjusted for annual interest cost. The aggregate expense, net of forfeitures, for such agreements was $(141), $290 and $273 for the years ended December 31, 2020, 2019 and 2018, respectively.

Spilt Dollar Life Insurance Agreement

The Bank has entered into split dollar life insurance agreements with respect to its controlling shareholder and former CEO of the Bank. Pursuant to the agreements with the Bank, a portion of the death benefits arising from life insurance policies owned by the Bank would be paid to beneficiaries designated by the controlling shareholder. The estimated present value of the cost to the Company of providing these death benefits and the associated accrued liability by the Company was $4,347 and $4,340 at December 31, 2020 and 2019, respectively. Payments of $31 and $28 were made to the controlling shareholder and former CEO during 2019 and 2018, respectively, in accordance with the split dollar life insurance agreements.

- Definition

The entire disclosure for retirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
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-Name Accounting Standards Codification
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+ Details

Fair Values of Financial Instruments

12 Months Ended

Dec. 31, 2020

Fair Values of Financial Instruments

Fair Values of Financial Instruments

Note 15—Fair Values of Financial Instruments

Financial instruments include assets carried at fair value, as well as certain assets and liabilities carried at cost or amortized cost but disclosed at fair value in these consolidated financial statements. Fair value is defined as the exit price, the price that would be received for an asset or paid to transfer a liability in the most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date under current market conditions. The inputs to valuation techniques used to measure fair value are prioritized into a three-level hierarchy. The hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The following methods and significant assumptions are used to estimate fair value:

Investment Securities

The fair values for investment securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar investment securities (Level 2). For investment securities where quoted prices or market prices of similar investment securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). Discounted cash flows are calculated using spread to LIBOR curves that are updated to incorporate loss severities, volatility, credit spread and optionality. During times when trading is more liquid,

broker quotes are used (if available) to validate the analysis. Rating agency and industry research reports as well as defaults and deferrals on individual investment securities are reviewed and incorporated into the calculations.

Impaired Loans

The fair value of collateral-dependent impaired loans with specific allocations of the allowance for loan losses is generally based on recent real estate appraisals. These appraisals may utilize a single valuation approach, such as comparable sales or the income approach, or a combination of both. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

Appraisals for collateral-dependent impaired loans are performed by certified general appraisers whose qualifications and licenses have been reviewed and verified by us. Once received, an appraisal compliance review is completed in accordance with regulatory guidelines.

Mortgage Servicing Rights

Fair value of mortgage servicing rights is initially determined at the individual grouping level based on an internal valuation model that calculates the present value of estimated future net servicing income. On a quarterly basis, mortgage servicing rights are evaluated for impairment based upon third-party valuations obtained. As disclosed in Note 6—Mortgage Servicing Rights, net, the valuation model utilizes interest rate, prepayment speed and default rate assumptions that market participants would use in estimating future net servicing income (Level 3).

Assets Measured at Fair Value on a Recurring Basis

The table below presents the assets measured at fair value on a recurring basis categorized by the level of inputs used in the valuation of each asset at December 31, 2020 and 2019:


			Fair Value Measurements at
			December 31, 2020
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Financial Assets
Available-for-sale debt securities:
U.S. Treasury & Agency securities	$	138,997	$	40,192	$	98,805	$	—
Mortgage-backed securities		33,814		—		33,814		—
Collateralized mortgage obligations		126,596		—		126,596		—
Collateralized debt obligations		187		—		—		187
Equity securities		5,118		5,118		—		—


			Fair Value Measurements at
			December 31, 2019
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Financial Assets
Available-for-sale debt securities:
U.S. Treasury securities	$	122,803	$	122,803	$	—	$	—
Mortgage-backed securities		23,104		—		23,104		—
Collateralized mortgage obligations		1,183		—		1,183		—
Collateralized debt obligations		199		—		—		199
Equity securities		5,009		5,009		—		—

The table below presents a reconciliation for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2020 and 2019:


	Fair Value Measurements Using Significant
	Unobservable Inputs (Level 3)
	Collateralized Debt Obligations
	2020		2019
Balance of recurring Level 3 assets at beginning of period	$	199	$	297
Total gains or losses (realized/unrealized):
Included in income-realized		—		—
Included in other comprehensive income (loss)		(10)		(6)
Principal maturities/settlements		(2)		(92)
Sales		—		—
Transfers in and/or out of Level 3		—		—
Balance of recurring Level 3 assets at end of period	$	187	$	199

Unrealized losses on Level 3 investments for collateralized debt obligations were $27 and $17 at December 31, 2020 and 2019, respectively. In addition to the amounts included in income as presented in the table above, interest income recorded on collateralized debt obligations was $7 and $13 for the year ended December 31, 2020 and 2019, respectively.

The fair value of the collateralized debt obligations is obtained from third-party pricing information. It is determined by calculating discounted cash flows using LIBOR curves plus spreads that adjust for credit risk and illiquidity. The Company also performs an internal analysis that considers the structure and term of the collateralized debt obligations and the financial condition of the underlying issuers to corroborate the information used from the independent third party.

Assets Measured at Fair Value on a Non-Recurring Basis

From time to time, the Bank may be required to measure certain other assets at fair value on a nonrecurring basis in accordance with U.S. GAAP. These adjustments to fair value usually result from the application of lower of cost or fair value accounting or write-downs of individual assets. For assets measured at fair value on a nonrecurring basis that were recorded in the consolidated balance sheet at December 31, 2020 and 2019, the following table provides the level of valuation assumptions used to determine each adjustment and the related carrying value:


	Fair Value Measurements at December 31, 2020
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
	Fair		Assets		Inputs		Inputs
	Value		(Level 1)		(Level 2)		(Level 3)
Impaired loans:
Commercial real estate	$	8,240	$	—	$	—	$	8,240
Construction		5,015		—		—		5,015
Mortgage loans held for sale		19,375		—		19,375		—
Mortgage servicing rights		5,175		—		—		5,175

Fair Value Measurements at December 31, 2019

Quoted Prices in

Significant

Active Markets

Other

Significant

for Identical

Observable

Unobservable

Assets

Inputs

Fair Value

(Level 1)

(Level 2)

(Level 3)

Mortgage servicing rights

7,949

—

7,949

As discussed previously, the fair values of collateral-dependent impaired loans carried at fair value are determined by third-party appraisals. Management adjusts these appraised values based on the age of the appraisal and the type of the property. The following table presents quantitative information about Level 3 fair value measurements at December 31, 2020 and 2019:


	Quantitative Information about Level 3 Fair Value Measurements at December 31, 2020
					Range
	Fair Value		Valuation Technique	Unobservable Inputs	(Weighted Average) ⁽¹⁾
Impaired loans:
Commercial real estate	$	8,240	Sales comparison approach/Income capitalization approach	Adjustments for differences between the comparable sales and income data for similar loans and collateral underlying such loans	N/A (36%)
Construction	$	5,015	Hybrid of sales comparison and income capitalization approaches	Adjustments for differences between the comparable sales and income data for similar loans and collateral underlying such loans	N/A (15%)
Mortgage servicing rights	$	5,175	Discounted cash flow	Discount rate	9.5% -12.0%
					(11.6)%
				Prepayment speed	10.5% -37.0%
					(23.7)%
				Default rate	0.1% -0.2%
					(0.2)%

(1)	The range and weighted average for an asset category consisting of a single investment represents the significant unobservable input used in the fair value of the investment.


	Quantitative Information about Level 3 Fair Value Measurements at December 31, 2019
					Range
	Fair Value		Valuation Technique	Unobservable Inputs	(Weighted Average) ⁽¹⁾
Mortgage servicing rights	$	7,949	Discounted cash flow	Discount rate	9.5% - 12.0% (11.9)%
				Prepayment speed	7.2% - 47.1% (21.3)%
				Default rate	0.1% - 0.3% (0.2)%

(1)	The range and weighted average for an asset category consisting of a single investment represents the significant unobservable input used in the fair value of the investment.

Fair Value of Financial Instruments

The carrying amounts and estimated fair values of financial instruments not carried at fair value at December 31, 2020 and 2019, are as follows:


	Fair Value Measurements at December 31, 2020
	Carrying		Fair
	Amount		Value		Level 1		Level 2		Level 3
Financial Assets
Cash and due from banks	$	998,497	$	998,497	$	998,497	$	—	$	—
Interest-bearing time deposits with other banks		7,021		7,021		7,021		—		—
Mortgage loans held for sale		2,909		3,052		—		3,052		—
Loans, net		2,434,356		2,521,874		—		—		2,521,874

Financial Liabilities
Time deposits		1,646,523		1,658,020		—		1,658,020		—
Federal Home Loan Bank borrowings		318,000		328,150		—		328,150		—
Subordinated notes, net		65,341		65,753		—		65,753		—


	Fair Value Measurements at December 31, 2019
	Carrying		Fair
	Amount		Value		Level 1		Level 2		Level 3
Financial Assets
Cash and due from banks	$	77,819	$	77,819	$	77,819	$	—	$	—
Interest-bearing time deposits with other banks		1,025		1,025		1,025		—		—
Mortgage loans held for sale		1,337		1,368		—		1,368		—
Loans, net		2,891,530		2,978,846		—		—		2,978,846
Financial Liabilities
Time deposits		1,154,076		1,161,490		—		1,161,490		—
Federal Home Loan Bank borrowings		229,000		227,333		—		227,333		—
Subordinated notes, net		65,179		65,650		—		65,650		—

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Income Taxes

12 Months Ended

Dec. 31, 2020

Income Taxes

Income Taxes

Note 16—Income Taxes

The components of the income tax (benefit) expense are as follows:


	Year Ended December 31,
	2020		2019		2018
Current:
Federal	$	4,489	$	15,341	$	16,435
State		1,908		6,354		7,979
Total current expense		6,397		21,695		24,414
Deferred:
Federal		(8,373)		(3,995)		478
State		(3,933)		(2,057)		212
Total deferred (benefit) expense		(12,306)		(6,052)		690
Total income tax (benefit) expense	$	(5,909)	$	15,643	$	25,104

The reconciliation of the U.S. federal statutory tax rate to the Company's effective tax rate is as follows:


	2020			2019			2018
U.S. federal statutory rate		21.0	%		21.1	%		21.0	%
Effect of:
State taxes, net of federal benefit		8.5	%		4.0	%		7.1	%
Non-deductible items		—	%		9.5	%		—	%
Income on cash surrender value of bank-owned life insurance		0.6	%		(0.2)	%		(0.2)	%
Other, net		1.2	%		0.4	%		0.4	%
Effective tax rate		31.3	%		34.8	%		28.3	%

The components of deferred tax assets and liabilities at December 31, 2020 and 2019 comprised the following:


	December 31,
	2020		2019
Deferred tax assets:
Allowance for loan losses	$	20,185	$	6,144
Contingent losses		—		2,834
Mortgage repurchase liability		2,705		2,217
Mark-to-market adjustments on mortgage loans held for sale		41		9
Supplemental retirement benefit plan		841		895
Deferred loan fee income		158		268
State franchise tax		503		1,455
Compensation plans		531		729
Operating lease liabilities		5,715		5,631
Other		1,258		633
Total deferred tax assets		31,937		20,815
Deferred tax liabilities:
FHLB stock dividends		(120)		(122)
Mortgage servicing rights		(1,586)		(2,768)
Operating lease right-of-use asset		(5,363)		(5,305)
Other		(542)		(525)
Total deferred tax liabilities		(7,611)		(8,720)
Deferred tax asset, net	$	24,326	$	12,095

The Company incurred a capital loss of $1,815 during the year ended December 31, 2020 which it cannot utilize on its 2020 tax return. The loss can be carried forward for five years and utilized against capital gains during the carryforward period. The capital loss will expire if unused at December 31, 2025.

Realization of deferred tax assets is dependent upon the generation of future taxable income. A valuation allowance is provided when it is more likely than not that some portion of the deferred tax asset will not be realized. Management evaluated the deferred tax assets for recoverability by considering negative and positive evidence. Based on the weight of all available evidence, the Company believes it is more likely than not that the deferred tax asset at December 31, 2020 will be realized through the future reversals of existing taxable temporary differences and projected future taxable income.

The Company is subject to U.S. federal income tax as well as income taxes of the state of New York and California. The Company is not subject to examination by the Internal Revenue Service for the years before 2017.

There were no unrecognized tax benefits at December 31, 2020, and the Company does not expect the total amount of unrecognized tax benefits to significantly increase in the next twelve months.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Related Party Transactions

12 Months Ended

Dec. 31, 2020

Related Party Transactions

Related Party Transactions

Note 17—Related Party Transactions

From time to time, the Company makes charitable contributions to a foundation for which certain members of the boards of directors of the Company and Bank, and who are also related to the Company’s controlling shareholders, serve as trustees. The Company paid $375, $900 and $900 to the foundation during the year ended December 31, 2020, 2019 and 2018 , respectively.

The Bank provides monthly data processing and programming services to entities controlled by the Company’s controlling shareholders. In July 2020, the Bank terminated such data processing agreement, effective as of November 2020. Aggregate fees received by the Bank for such services amounted to $79, $105 and $105 during the year ended December 31, 2020, 2019 and 2018, respectively.

The Company paid fees for transportation, totaling $12 during the year ended December 31, 2018, to an aviation company controlled by the Company's controlling shareholders.

Related party leases are disclosed in Note 18—Operating Leases.

Operating Leases

12 Months Ended

Dec. 31, 2020

Operating Leases

Operating Leases

Note 18—Operating Leases

The Company has adopted ASU No. 2016-02, Leases (ASC 842) as of January 1, 2019. ASC 842 requires a lessee to recognize the following for all leases, except short-term leases, at the commencement date: (1) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. The Company adopted ASC 842 using the optional transition method. Therefore, the 2018 comparative financial information has not been restated and continues to be reported under ASC 840, Leases.

The Company's operating leases are included in operating lease right-of-use assets and operating lease liabilities in the consolidated balance sheets at December 31, 2020 and 2019. The lessors' respective rates implicit in these operating leases and subsequent operating leases are generally not available and were not determinable from the terms of the lease. Therefore, the Company uses its incremental borrowing rate in determining the present value of the future lease payments when measuring the operating lease liabilities. The incremental borrowing rates are not observable, and therefore the rates are estimated primarily using observable borrowing rates on the Company's FHLB advances. The FHLB borrowing rates are generally for over-collateralized advances with varying lengths of maturities. Therefore, the risk-free U.S. government bond rate and high-credit quality unsecured corporate bond rates are also considered in estimating the incremental borrowing rates. The Company's incremental borrowing rates are developed considering its monthly payment amounts and the initial terms of its leases.

The Company leases its corporate headquarters and branch offices through noncancelable operating lease contracts. Such noncancelable operating lease contracts have remaining terms ranging from 2021 to 2030 and generally have options to extend for one or two five-year periods. Beginning in 2019, the lease term may include options to extend the lease when it is reasonably certain that the option will be exercised based on the facts and circumstances at lease commencement. The lease agreements, most often, provide for rental payments that increase over the lease term based on a fixed percentage or based on a specified consumer price index. Any changes in the consumer price index after the lease commencement date are considered variable lease payments and recorded in the period when incurred. Additionally, the Company, in most cases, is required to pay insurance costs, real estate taxes and other operating expenses such as common area maintenance.

The Company historically has leased certain storage and office space from entities owned by the Company’s controlling shareholders. The leases have been terminated as of December 31, 2020. Amounts paid under such leases totaled $203, $236 and $241 for the year ended December 31, 2020, 2019 and 2018, respectively. The Company also subleases certain office space to entities owned by the Company’s controlling shareholders. Amounts received under such subleases totaled $277, $274 and $269 for the year ended December 31, 2020, 2019 and 2018, respectively.

Rent expense was $4,401 for the year ended December 31, 2018. The components of lease expense, which are recorded in noninterest expense – occupancy and equipment, in the consolidated statements of operations for the year ended December 31, 2020 and 2019 were as follows:


	Year Ended December 31,
	2020		2019
Operating lease cost	$	4,554	$	4,507
Variable lease cost		959		1,235
Total	$	5,513	$	5,742

Maturities of lease liabilities, including reconciliation to the lease liabilities, based on required contractual payments, were as follows:


Year Ended December 31,
2021	$	4,186
2022		3,421
2023		3,180
2024		3,119
2025		2,884
Thereafter		5,942
Total lease payments		22,732
Less: future interest costs⁽¹⁾		(2,235)
Present value of lease liabilities	$	20,497

(1)	Computed using the estimated interest rate for each lease

Other information related to the lease liabilities as of and for the year ended December 31, 2020 and 2019 was as follows:


	Year Ended December 31,
Other Information	2020			2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	4,478		$	4,307
Weighted average remaining lease term		6.60	years		6.83	years
Weighted average discount rate		3.16	%		3.54	%

Commitments and Contingencies

12 Months Ended

Dec. 31, 2020

Commitments and Contingencies

Commitments and Contingencies

Note 19—Commitments and Contingencies

Financial Instruments with Off-Balance Sheet Risk

The Bank is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit, which are not reflected in the consolidated financial statements.

Unfunded Commitments to Extend Credit

A commitment to extend credit, such as a loan commitment, credit line and overdraft protection, is a legally binding agreement to lend funds to a customer, usually at a stated interest rate and for a specific purpose. Such commitments have fixed expiration dates and generally require a fee. The extension of a commitment gives rise to credit risk. The actual liquidity requirements or credit risk that the Bank will experience is expected to be lower than the contractual amount of commitments to extend credit because a significant portion of those commitments are expected to expire without being drawn upon. Certain commitments are subject to loan agreements containing covenants regarding the financial performance of the customer that must be met before the Bank is required to fund the commitment. The Bank uses the same credit policies in making commitments to extend credit as it does in making loans.

The commitments outstanding to make loans include primarily residential real estate loans that are made for a period of 90 days or less. At December 31, 2020, outstanding commitments to make loans consisted of fixed rate loans of $12,292 with interest rates ranging from 2.50% to 4.375% and maturities ranging from 10 to 30 years and variable rate loans of $28,039 with varying interest rates (ranging from 3.125% to 4.625% at December 31, 2020) and maturities ranging from 25 to 30 years.

Unused Lines of Credit

The Bank also issues unused lines of credit to meet customer financing needs. At December 31, 2020, the unused lines of credit include residential second mortgages of $19,145, construction loans of $120,716, commercial lines of credit of $762 and consumer loans of $42. These unused lines of credit consisted of fixed rate loans of $43 with interest rates ranging from 5.50% to 18.00% and maturities ranging from 2 to 3 months and variable rate loans of $140,622 with varying interest rates (ranging from 3.25% to 7.75%) and maturities ranging from 1 month to 15 years.

Standby Letters of Credit

Standby letters of credit are issued on behalf of customers in connection with construction contracts between the customers and third parties. Under standby letters of credit, the Bank assures that the third parties will receive specified funds if customers fail to meet their contractual obligations. The credit risk to the Bank arises from its obligation to make payment in the event of a customer’s contractual default. The maximum amount of potential future payments guaranteed by the Bank is limited to the contractual amount of these letters. Collateral may be obtained at exercise of the commitment. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers.

The following is a summary of the total amount of unfunded commitments to extend credit and standby letters of credit outstanding at December 31, 2020 and 2019:


	2020		2019
Commitments to make loans	$	40,331	$	76,927
Unused lines of credit		140,665		220,553
Standby letters of credit		24		24

Legal Proceedings

The Company and its subsidiaries may be subject to legal actions and claims arising from contracts or other matters from time to time in the ordinary course of business. Management is not aware of any pending or threatened legal proceedings, except as described below, that are considered other than routine legal proceedings. The Company believes that the ultimate disposition or resolution of its routine legal proceedings, in the aggregate, are immaterial to its financial position, results of operations or liquidity.

The Bank is currently under formal investigation by the OCC and continues to be subject to a publicly available formal agreement with the OCC, dated June 18, 2019 (the “OCC Agreement”), relating primarily to certain aspects of its Bank Secrecy Act/Anti-Money Laundering (“BSA/AML”) compliance program as well as the Bank’s credit administration. The OCC Agreement generally requires that the Bank enhance its policies and procedures to ensure compliance with BSA/AML laws and regulations and ensure effective controls over residential loan underwriting. Specifically, the OCC Agreement requires the Bank to: (i) establish a compliance committee to monitor and oversee the Bank’s compliance with the provisions of OCC Agreement; (ii) develop a revised customer due diligence and enhanced due diligence program; (iii) develop a revised suspicious activity monitoring program; (iv) engage an independent, third-party consultant to review and provide a written report on the Bank’s suspicious activity monitoring; (v) develop revised policies and procedures to ensure effective BSA/AML model risk management for the Bank’s automated suspicious activity monitoring system, which must be validated by a qualified, independent third party; (vi) ensure that the Bank’s BSA Department maintains sufficient personnel; and (vii) develop revised policies and procedures to ensure effective controls over loan underwriting. In addition to these requirements, while the OCC Agreement remains in effect, the Bank is subject to certain restrictions on expansion activities, such as growth through acquisition or branching to supplement organic growth of the Bank. Further, any failure to comply with the requirements of the OCC Agreement could result in further enforcement actions, the imposition of material restrictions on the activities of the Bank, or the assessment of fines or penalties. The Bank established a Compliance Committee to monitor and assure compliance with the OCC Agreement, oversee the completion of an independent review of account and transaction activity to be conducted by a third-party vendor and engage a third party to conduct a model validation for its BSA/AML monitoring software.

The Bank is fully cooperating with the OCC investigation and implementing the items necessary to achieve compliance with the obligations in the OCC Agreement. A finding by the OCC that the Bank failed to comply with the OCC Agreement or adverse findings in the OCC investigation could result in additional regulatory scrutiny, constraints on the Bank’s business, or other formal enforcement action. Any of those events could have a material adverse effect on our future operations, financial condition, growth, or other aspects of our business. The Bank has incurred significant costs in its efforts to comply with the OCC Agreement and respond to the OCC investigation, which are reflected in the Company’s results of operations for the year ended December 31, 2020 and 2019.

The Bank also has received grand jury subpoenas from the U.S. Department of Justice (the “DOJ”) beginning in 2020 requesting the production of documents and information in connection with an investigation that appears to be focused on the Bank’s residential lending practices and related issues. The Bank is fully cooperating with this ongoing investigation. Adverse findings in the DOJ investigation could result in material losses due to damages, penalties, costs, and/or expenses imposed on the Company, which could have a material adverse effect on our future operations, financial condition, growth, or other aspects of our business. The Bank has and expects to continue to incur significant costs in its efforts to comply with the DOJ investigation in 2021.

In addition, the Company, certain of its current and former officers and directors and other parties were named as defendants in a shareholder class action captioned Oklahoma Police Pension and Retirement System v. Sterling Bancorp, Inc., et al., Case No. 5:20-cv-10490-JEL-EAS, filed on February 26, 2020 in the U.S. District Court for the Eastern District of Michigan. The plaintiffs filed an amended complaint on July 2, 2020, seeking damages and reimbursement of fees and expenses. This action alleges violations of the federal securities laws, primarily with respect to disclosures concerning the Bank’s residential lending practices that were made in the Company’s registration statement and prospectus for its initial public offering, in subsequent press releases, in periodic and other filings with the SEC and during earnings calls. On September 22, 2020, the Company filed with the court a motion to dismiss the amended complaint, and each of the Company and the plaintiff has submitted briefs in support of their respective positions. Subsequent to December 31, 2020, the Company, each individual defendant and the plaintiff reached an agreement in principle to settle the securities class action lawsuit. Refer to Note 22 – Subsequent Events for further discussion.

On December 9, 2019, the Company announced it had voluntarily suspended its Advantage Loan Program in connection with the Internal Review. The primary focus of the Internal Review, which has been led by outside legal counsel under the direction of the Special Committee, has involved the origination of residential real estate loans under the Advantage Loan Program and related matters. Results from the Special Committee's Internal Review have indicated that certain employees engaged in misconduct in connection with the origination of a significant number of such loans, including with respect to verification of income, the amount of income reported for borrowers, reliance on third parties, and related documentation. As a result, the Company permanently discontinued the Advantage Loan Program. While the Internal Review is substantially complete, the Company expects it to remain open during the pendency of the government investigations discussed herein, and it is possible additional work will be required in connection with the Internal Review.

The Company determined that, in the latter part of the fourth quarter of 2019, it became probable that a loss may be incurred with respect to the above mentioned pending investigations and litigations. Accordingly, at December 31, 2019, the Company established a liability of $25,000 for contingent losses based on additional information obtained during the course of the Internal Review and significant judgments by management. During the fourth quarter of 2020, the Company increased the liability for contingent losses by $2,500. At December 31, 2020, the Company has a liability of $27,500 for contingent losses. The outcome of the pending investigations and litigation is uncertain. There can be no assurance (i) that the Company will not incur material losses due to damages, penalties, costs and/or expenses as a result of such investigations and litigation, (ii) that the accrual for contingent losses will be sufficient to cover such losses, or (iii) that such losses will not materially exceed such accrual and have a material impact on the Company’s business, financial condition or results of operations.

In December 2020, the Company concluded that an insurance recovery related to the contingent loss liability recorded for the class action lawsuit is probable. Therefore, a loss recovery receivable of $12,500 has been recorded, in the amount of the total losses previously recorded at December 31, 2020. The loss recovery has been recorded in non-interest expense in the statements of operations, which is where the contingent losses were previously recorded in the year ended December 31, 2019. The amount of the corresponding loss recovery receivable reflects the amount of the agreement in principle to settle the class action lawsuit that would be paid by the Company's insurance carriers.

In addition, on July 28, 2020, the Company received a demand letter from two law firms representing a purported shareholder of the Company alleging facts and claims substantially the same as many of the alleged facts and claims in the class action lawsuit. The demand letter requested that the board of directors take action to (1) recover damages the Company has purportedly sustained as a result of alleged breaches of fiduciary duties by certain of its officers and directors; (2) recover for the benefit of the Company the amounts by which certain of its officers and directors purportedly were unjustly enriched; and (3) correct alleged deficiencies in the Company's internal controls. The demand letter stated that, if the board of directors had not taken the actions demanded within 90 days after the receipt of the letter, or in the event the board of directors refused to take the actions demanded, the purported shareholder would commence a shareholder derivative action on behalf of the Company seeking appropriate relief. The board of directors established a demand review committee to evaluate the matters raised in the demand letter and to determine the actions, if any, that should be taken by the Company with respect to those matters. The Company responded to the demand letter advising the purported shareholder of the appointment of the demand review committee. The demand review committee's investigation is ongoing; accordingly, no actions have been taken by the board of directors. Further, no legal action has yet to be brought by the purported shareholder. There can be no assurance as to whether any litigation will be commenced by or against the Company with respect to the claims set forth in the demand letter or that, if any such litigation is commenced, it will not have a material impact on our financial condition or results of operations.

Establishment of Mortgage Repurchase Liability

During the period 2015 through 2019, the Company sold portfolio loans originated under the Advantage Loan Program to private investors in the secondary market. The Company also sells conventional residential real estate loans (which excludes Advantage Loan Program loans) in the secondary market primarily to Fannie Mae on an ongoing basis. In connection with these loans sold, the Company makes customary representations and warranties about various characteristics of each loan. The Company may be required pursuant to the terms of the applicable mortgage loan purchase and sale agreements to repurchase any previously sold loan or indemnify (make whole) the investor for which the representation or warranty of the Company proves to be inaccurate, incomplete or misleading. In the event of a repurchase, the Company is typically required to pay the unpaid principal balance, the proportionate premium received when selling the loans and certain expenses. Before 2020, any repurchases due to a breach of any such representations and warranties were de minimis.

In 2019, in connection with the above mentioned investigations stemming from the Advantage Loan Program, the Bank recorded a mortgage repurchase liability of $7,823, primarily related to probable losses on the previously sold Advantage Loan Program loan portfolio. The Company determined that these losses became probable in the latter part of the fourth quarter of 2019, taking into account the results of the Internal Review. In 2020, based on further analysis, the Company increased the mortgage repurchase liability by $2,527. The Bank applied $651 against the liability during 2020. The Bank's mortgage repurchase liability was $9,699 and $7,823 at December 31, 2020 and 2019, respectively. The repurchase liability is included in accrued expenses and other liabilities in the consolidated balance sheets. The unpaid principal balance of residential real estate loans sold that were subject to potential repurchase obligations for breach of representations and warranties totaled $562,139 and $759,568 at December 31, 2020

and 2019, respectively, including Advantage Loan Program loans totaling $429,816 and $670,243 at December 31, 2020 and 2019, respectively.

The mortgage repurchase liability reflects management's estimate of losses based on a combination of factors. The Company's estimation process requires management to make subjective and complex judgements about matters that are inherently uncertain, such as future repurchase demand expectations, economic factors and findings from the Internal Review. The actual repurchase losses could vary significantly from the recorded mortgage repurchase liability, depending on the outcome of various factors, including those previously discussed.

In May 2020, the Company negotiated the repurchases of two pools of Advantage Loan Program loans with a total outstanding unpaid principal balance of $38,704. These loans were previously sold to third-party investors with servicing retained and were evaluated and considered to be performing at the acquisition date. In connection with these repurchases, the Company recognized a loss of $136 related to a fair value discount in other non-interest expense and a disposition of $428 of mortgage servicing rights.

To avoid the uncertainty of audits and inquiries by third-party investors in the Advantage Loan Program, beginning at the end of the second quarter of 2020, the Company commenced making offers to each of those investors to repurchase 100% of the previously sold Advantage Loan Program loans.

For the remainder of 2020, certain third-party investors accepted the above mentioned offer, from which the Company repurchased pools of Advantage Loan Program loans previously sold with a total outstanding unpaid principal balance of $30,934. These loans were previously sold to such third-party investors with servicing retained and were evaluated and considered to be performing at the acquisition date. In connection with these repurchases, the Company recognized a loss of $135 related to fair value discount in other non-interest expense, and a disposition of $361 of mortgage servicing rights, and charged a loss of $651 against the mortgage repurchase liability.

Regulatory Capital Requirements

12 Months Ended

Dec. 31, 2020

Regulatory Capital Requirements

Regulatory Capital Requirements

Note 20—Regulatory Capital Requirements

The Bank is subject to the capital adequacy requirements of the OCC. The Company, as a thrift holding company, is subject to the capital adequacy requirements of the Federal Reserve. Capital adequacy guidelines and prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weightings and other factors, and the regulators in their discretion can require the Company to lower classifications in certain cases. Prompt corrective action provisions are not applicable to thrift holding companies. Failure to meet minimum capital requirements can initiate regulatory action that could have a direct material effect on the consolidated financial statements.

Prompt corrective action regulations provide five classifications, including well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized, although these terms are not used to represent overall financial condition.

Under the Basel III capital rules, the Company and the Bank must hold a capital conservation buffer ("CCB") over the adequately capitalized risk-based capital ratios. At present, in order to avoid the imposition of restrictions on capital distributions and discretionary bonus payments, the Company is required to maintain a CCB of at least 2.50%. The net unrealized gain or loss on investment securities is not included in regulatory capital. Banking organizations are required to maintain a minimum total capital ratio of 10.5%, a minimum Tier 1 capital ratio of 8.5% and a minimum common equity Tier 1 capital ratio of 7.0% (in each case accounting for the required CCB). Management believes that at December 31, 2020, the Company and the Bank meet all regulatory capital requirements to which they are subject.

At December 31, 2020 and 2019, the Bank exceeded all capital requirements to be categorized as well capitalized, and the Company exceeded applicable capital adequacy requirements as presented below. The Company's consolidated and the Bank’s actual

and minimum required capital amounts and ratios, with such regulatory minimums not including the CCB as discussed above, at December 31, 2020 and 2019 are as follows:


					For Capital
					Adequacy				To be Well
	Actual				Purposes				Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
December 31, 2020
Total adjusted capital to risk-weighted assets
Consolidated	$	407,733	22.58	%	$	144,466	8.00	%		N/A	N/A
Bank		386,237	21.56			143,339	8.00			179,174	10.00	%
Tier 1 (core) capital to risk-weighted assets
Consolidated		319,204	17.68			108,350	6.00			N/A	N/A
Bank		363,224	20.27			107,504	6.00			143,339	8.00
Common Equity Tier 1 (CET1)
Consolidated		319,204	17.68			81,262	4.50			N/A	N/A
Bank		363,224	20.27			80,628	4.50			116,463	6.50
Tier 1 (core) capital to adjusted tangible assets
Consolidated		319,204	8.08			158,067	4.00			N/A	N/A
Bank		363,224	9.20			157,954	4.00			197,442	5.00


					For Capital
					Adequacy				To be Well
	Actual				Purposes				Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
December 31, 2019
Total adjusted capital to risk-weighted assets
Consolidated	$	419,327	21.49	%	$	156,081	8.00	%		N/A	N/A
Bank		346,985	17.82			155,809	8.00		$	194,761	10.00	%
Tier 1 (core) capital to risk-weighted assets
Consolidated		332,418	17.04			117,061	6.00			N/A	N/A
Bank		325,255	16.70			116,857	6.00			155,809	8.00
Common Equity Tier 1 (CET1)
Consolidated		332,418	17.04			87,796	4.50			N/A	N/A
Bank		325,255	16.70			87,643	4.50			126,595	6.50
Tier 1 (core) capital to adjusted tangible assets
Consolidated		332,418	10.11			131,471	4.00			N/A	N/A
Bank		325,255	9.90			131,469	4.00			164,337	5.00

Dividend Restrictions

As noted above, banking regulations require the Bank to maintain certain capital levels and may limit the dividends paid by the bank to the holding company or by the holding company to its shareholders. The Company’s principal source of funds for dividend payments is dividends received from the Bank, and banking regulations limit the dividends that may be paid. Approval by regulatory authorities is required if (i)the total capital distributions for the applicable calendar year exceed the sum of the Bank's net income for that year to date plus the Bank's retained net income for the preceding two years or (ii) the Bank would not be at least adequately capitalized following the distribution.

The Qualified Thrift Lender (“QTL”) test requires that a minimum of 65% of assets be maintained in qualified thrift investments, including mortgage loans, housing- and real estate- related finance and other specified areas. If the QTL test is not met, limits are placed on growth, branching, new investments, FHLB advances and dividends, or the Bank must convert to a commercial bank charter. Management believes that the QTL test has been met. Also, pursuant to the terms of the subordinated note agreements, the Company may pay dividends if it is well capitalized as defined by regulatory guidelines.

The Bank is currently required to obtain the prior approval of the OCC in order to pay dividends to the Company due to the existence of a formal agreement with the OCC. Refer to Note 19 - Commitments and Contingencies. In addition, the Company currently is required to obtain the prior approval of the FRB in order to pay dividends to the Company’s shareholders.

- Definition

The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union.

+ References + Details

Condensed Financial Information of Sterling Bancorp, Inc. (Parent Only)

12 Months Ended

Dec. 31, 2020

Condensed Financial Information of Sterling Bancorp, Inc. (Parent Only)

Condensed Financial Information of Sterling Bancorp, Inc. (Parent Only)

Note 21— Condensed Financial Information of Sterling Bancorp, Inc. (Parent Only)

Financial statements of Sterling Bancorp, Inc. (“Parent”) are shown below. The Parent has no significant operating activities.

CONDENSED BALANCE SHEETS


	December 31,
	2020		2019
ASSETS
Cash held at Bank	$	20,952	$	79,714
Investment in subsidiaries		363,611		325,451
Other assets		13,914		3,625
Total assets	$	398,477	$	408,790
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Subordinated notes, net	$	65,341	$	65,179
Other liabilities		13,545		10,997
Total liabilities		78,886		76,176
Total shareholders’ equity		319,591		332,614
Total liabilities and shareholders’ equity	$	398,477	$	408,790

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)


	Year Ended December 31,
	2020		2019		2018
Expenses:
Interest expense	$	4,713	$	4,700	$	4,689
Provision (recovery) for contingent losses, net		(10,000)		10,000		—
Other		6,135		803		961
Total expenses		848		15,503		5,650
Loss before income tax and equity in subsidiaries income (loss)		(848)		(15,503)		(5,650)
Income tax benefit		246		4,496		1,186
Loss before equity in subsidiaries income (loss)		(602)		(11,007)		(4,464)
Equity in subsidiaries income (loss) income		(12,365)		40,255		67,932
Net income (loss) income	$	(12,967)	$	29,248	$	63,468
Other comprehensive income
Equity in other comprehensive income of subsidiaries		191		205		113
Total comprehensive income (loss) income	$	(12,776)	$	29,453	$	63,581

CONDENSED STATEMENTS OF CASH FLOWS


	Year Ended December 31,
	2020		2019		2018
Cash flows from operating activities
Net (loss) income	$	(12,967)	$	29,248	$	63,468
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Equity in subsidiaries loss (income)		12,365		(40,255)		(67,932)
Other		162		150		140
Changes in operating assets and liabilities:
Change in other assets		(289)		(3,353)		175
Change in other liabilities		(7,452)		10,000		—
Net cash used in operating activities		(8,181)		(4,210)		(4,149)
Cash flows from investing activities
Capital contributed to subsidiary (Bank)		(50,000)		—		—
Dividends received from subsidiaries		—		19,002		6,119
Net cash (used in) provided by investing activities		(50,000)		19,002		6,119
Cash flows from financing activities
Repurchase of shares of common stock		(82)		(30,349)		—
Dividends paid to shareholders		(499)		(2,044)		(2,119)
Net cash used in financing activities		(581)		(32,393)		(2,119)
Net decrease in cash		(58,762)		(17,601)		(149)
Cash held at Bank, beginning of year		79,714		97,315		97,464
Cash held at Bank, end of year	$	20,952	$	79,714	$	97,315
Supplemental cash flows information:
Cash paid for:
Interest	$	4,550	$	4,550	$	4,550

Dividends

During 2020, the Parent made a capital contribution to the Bank of $50,000. The Parent received cash dividends from its subsidiaries of $19,002 and $6,119 during the year ended December 31, 2019 and 2018, respectively.

Subsequent Events

12 Months Ended

Dec. 31, 2020

Subsequent Events

Subsequent Events

Note 22—Subsequent Events

Defined Contribution Retirement Plan

The Bank has amended the defined contribution retirement plan effective as of January 1, 2021 to, among other things, increase the employer matching contributions to 100% of the amount contributed or deferred by the participant up to 6%, which will be immediately vested. In addition, beginning with employer matching contributions with respect to the 2021 plan year, the employer matching contributions under the defined contribution retirement plan will be made in the form of common stock of the Company to be held in a unitized stock fund.

Executive Incentive Retirement Plan Agreements

The board of directors acted to terminate the remaining executive incentive retirement plan agreements, as discussed in Note 14 above, effective January 1, 2021, which would eliminate any further crediting to an individual’s book-entry incentive award account, but would allow for interest crediting in accordance with these remaining individuals’ agreements.

Legal Proceedings

In February 2021, the Company reached an agreement in principle to settle the securities class action lawsuit disclosed in Note 19 - Commitments and Contingencies above. The agreement in principle provides for a single cash payment in exchange for the release of all of the defendants from all alleged claims therein and remains subject to final documentation, court approval and other conditions. The full amount of the settlement of $12,500 would be covered by the Company’s applicable insurance policies. In the event a final settlement is not executed, court approval is not received, or the settlement is not finalized for any other reason, the Company intends to vigorously defend this action.

In the first quarter of 2021, the Company learned of a formal investigation recently initiated by the SEC that is related to the Advantage Loan Program. The Company expects to receive document requests from the SEC and is fully cooperating with this investigation. Adverse findings in the SEC investigation could result in material losses due to penalties, disgorgement, costs and/or expenses imposed on the Company, which could have a material adverse effect on the Company's future operations, financial condition, growth or other aspects of its business. The Company expects to incur significant costs in its efforts to comply with the SEC investigation in 2021.

Branch Purchase and Assumption Agreement

On March 19, 2021, the Bank entered into an agreement with First Federal Savings & Loan Association of Port Angeles, a Washington state chartered bank, to sell the Bank’s Bellevue, Washington branch office, subject to receipt of applicable regulatory approvals and other customary closing conditions. The transfer includes all deposit accounts located at the branch, with a total current approximate balance of $77.7 million. The sale includes all branch premises and equipment, and the agreement provides that the buyer intends to offer employment to all associated staff.

Repurchases of Mortgage Loans

In March 2021, an investor accepted the Company’s offer to repurchase a pool of Advantage Loan Program loans with an outstanding unpaid principal balance of $88,758. These loans were previously sold to such third-party investors with servicing retained and were considered to be performing at the acquisition date.

Summary of Significant Accounting Policies (Policies)	12 Months Ended
Summary of Significant Accounting Policies (Policies)	Dec. 31, 2020
Summary of Significant Accounting Policies
Principles of Consolidation	Principles of Consolidation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“ U.S. GAAP”). The consolidated financial statements include the results of the Company and its wholly-owned subsidiaries. On October 14, 2020, QCM, LLC, doing business as Quantum Capital Management, a wholly-owned subsidiary of Quantum Fund, LLC and an indirect wholly-owned subsidiary of the Bank entered into an Asset Purchase Agreement to sell substantially all of its assets, which consisted primarily of client advisory agreements for aggregate consideration of $250. The transaction closed on December 21, 2020. The Company recorded a gain on sale of $189 in 2020 that is recorded in other income within non-interest income in the consolidated statements of operations. The operations of Quantum Capital Management were not significant for all periods presented. All significant intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates	Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Due to the inherent uncertainty involved in making estimates, actual results reported in the future periods may be based upon amounts that could differ from those estimates.
Fair Value Measurements	Fair Value Measurements The Bank utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine its fair value disclosures. The determination of fair values of financial instruments often requires the use of estimates. In cases where quoted market values in an active market are not readily available, the Bank uses present value techniques and other valuation methods, as disclosed in Note 15—Fair Values of Financial Instruments, to estimate the fair value of its financial instruments. These valuation methods require considerable judgment, and the resulting estimates of fair value can be significantly affected by the assumptions made and methods used. Debt securities available for sale and equity securities with readily determinable fair values are recorded at fair value on a recurring basis. Additionally, from time to time, the Bank may be required to record other assets and liabilities on a nonrecurring basis, such as impaired loans, other real estate owned, nonmarketable equity securities and certain other assets and liabilities. These nonrecurring fair value adjustments generally involve write-downs of individual assets or application of lower of amortized cost or fair value accounting.
Cash and Due from Banks	Cash and Due from Banks For the purposes of the accompanying consolidated statements of cash flows, cash includes cash and time deposits and other deposits held with other banks with original maturities of three months or less. Cash on hand or on deposit with the Federal Reserve was required to meet regulatory reserve and clearing requirements through March 26, 2020. After this date, the Federal Reserve eliminated such reserve and clearing requirements. Required cash on hand or on deposit with the Federal Reserve Bank was $23,969 at December 31, 2019. The Company presents the cash flows from customer loans, deposit transactions and short-term borrowings on a net basis in its consolidated statements of cash flows.
Interest-bearing Deposits with Other Banks	Interest-bearing Deposits with Other Banks Interest-bearing deposits with other banks, consisting of certificates of deposit, have maturities greater than three months and are carried at cost. Each certificate of deposit is below the FDIC insurance limit of $250. Interest income is recorded when earned.
Concentration of Credit Risk	Concentration of Credit Risk The loan portfolio consists primarily of residential real estate loans, which are collateralized by real estate. At December 31, 2020 and 2019, residential real estate loans accounted for 81% and 85%, respectively, of the loan portfolio. In addition, most of these residential loans and other commercial loans have been made to individuals and businesses in the state of California, which are dependent on the area economy for their livelihoods and servicing of their loan obligation. At December 31, 2020 and 2019, approximately 87% and 89%, respectively, of the loan portfolio was originated to customers in California. Starting December 9, 2019, the Bank suspended its Advantage Loan Program and announced that it permanently discontinued this program on March 6, 2020. Loans originated under this Program comprised a significant component of the Bank’s total loan originations. Advantage Loan Program loans (including nonaccrual residential real estate loans held for sale of $19,375 at December 31, 2020) totaled $1,515,248 and $1,942,657, or 74% and 78%, of the residential loan portfolio, at December 31, 2020 and 2019, respectively.
Risks and Uncertainties - COVID-19	Risks and Uncertainties – COVID-19 The coronavirus disease 2019 (“COVID-19”) pandemic, which was declared a national emergency in the United States in March 2020, continues to create extensive disruptions to United States and global economic conditions and financial markets and to businesses and the lives of individuals throughout the world. Federal and state governments have taken, and continue to take, unprecedented actions to contain the spread of the disease, including quarantines, travel bans, shelter-in-place orders, closures of businesses and schools, fiscal stimulus, and legislation designed to deliver monetary aid and other relief for businesses and individuals impacted by the pandemic. The Company’s primary market areas of California, the greater Seattle market, and New York City became part of several epicenters of the COVID-19 pandemic. Banking and financial services have been designated essential businesses, and the Bank’s operations are continuing, subject to certain modifications to business practices imposed to safeguard the health and wellness of the Bank’s customers and employees and to comply with applicable government directives. The COVID-19 pandemic, and related efforts to contain it, have caused significant disruptions in the functioning of the financial markets, resulted in an unprecedented slowdown in economic activity and a related increase in unemployment, and have increased economic and market uncertainty and volatility. In particular, COVID-19 has disrupted our normal course of providing services to our clients and adversely impacted our clients and could impair their ability to fulfill their obligations to the Bank. During the year ended December 31, 2020, the Bank experienced an increase in delinquent and nonaccrual loans, primarily in residential real estate loans, commercial real estate loans related to single-room occupancy hotels (“SROs”) and construction loans. A much higher provision for loan losses was recorded during 2020 reflecting, in part, the impact of the COVID-19 pandemic. The COVID-19 pandemic and the related adverse local and national economic consequences could have a material adverse effect on the Company’s business, financial condition, liquidity, results of operations, risk-weighted assets and regulatory capital. Currently, significant uncertainties exist concerning the magnitude of the impact and duration of the COVID-19 pandemic.
Investment Securities	Investment Securities Investment securities includes debt securities and equity securities. Debt Securities Debt securities are classified as either available for sale or held to maturity. Management determines the classification of the debt securities when they are purchased. Debt securities available for sale are stated at fair value, with unrealized gains and losses excluded from income and shown as a separate component of shareholders’ equity in accumulated other comprehensive income (loss), net of tax. Held to maturity securities are carried at amortized cost when management has the positive intent and ability to hold them to maturity. The amortized cost of debt securities classified as held to maturity or available for sale is adjusted for amortization of premiums (noncallable) and accretion of discounts over the contractual life of the investment security using the effective interest method or, in the case of asset-backed securities, over the estimated life of the investment security using the effective yield method. Interest income includes amortization or accretion of purchase premium or discount. Gains and losses on sales are recorded on the settlement date and determined using the specific identification method. Management evaluates debt securities for other-than-temporary impairment at least on a quarterly basis and more frequently when economic or market conditions warrant such an evaluation. In determining other-than-temporary impairment for debt securities, management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the Company has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. The assessment of whether a decline is other-than-temporary involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time. A charge is recognized against income for all or a portion of the impairment if the loss is determined to be other than temporary. If the Bank intends to sell the debt security or it is more likely than not that the Bank will be required to sell the debt security prior to the recovery of its amortized cost basis, the debt security is written down to fair value, and the full amount of any impairment charge is recorded as a loss in the consolidated statements of income. If the Bank does not intend to sell the debt security and it is more likely than not that the Bank will not be required to sell the debt security prior to recovery of its amortized cost basis, only the current period credit loss of any impairment of a debt security is recognized in the consolidated statements of income, with the remaining impairment recorded in other comprehensive income (loss). Equity Securities Equity securities with readily determinable fair values are stated at fair value with unrealized and realized gains and losses reported in income. Those equity securities without readily determinable fair values are recorded at cost, less any impairments, adjusted for subsequent observable price changes in orderly transactions for an identical or similar investment of the same issuer. Any changes in the carrying value of the equity investments are recognized in income. Management performs a qualitative assessment each reporting period to identify impairment of equity securities without readily determinable fair values. When a qualitative assessment indicates that an impairment exists, management determines the fair value of the investment and if the fair value is less than the investment's carrying value, an impairment charge is recorded in income equal to the difference between the fair value and the carrying amount of the investment.
Mortgage Loans Held for Sale	Mortgage Loans Held for Sale Residential real estate loans originated or purchased and intended for sale in the secondary market are carried at the lower of amortized cost or fair value on an individual loan basis as determined by outstanding commitments from investors. Net unrealized losses, if any, are recorded as a valuation allowance and charged to noninterest income in the consolidated statements of operations. Residential real estate loans originated as held for investment are periodically sold in order to manage liquidity, interest rate or concentration risk. Loans that are transferred into loans held for sale from loans held for investment, due to a change in intent, are recorded at the lower of amortized cost or fair value. Any changes in fair value attributable to credit deterioration are charged against the allowance for loan losses at the time of transfer. When loans originally classified as held for sale or as held for investment are reclassified due to a change in intent or ability to hold, cash flows associated with the loans are classified in the consolidated statements of cash flows by operating or investing activities, as appropriate, in accordance with the initial classification of the loans. Residential real estate loans held for sale are generally sold with servicing rights retained. Upon the sale of an originated loan, the mortgage servicing right asset is established and recorded at its estimated fair value, and a corresponding gain is recognized in gain on sale of mortgage loans held for sale or gain on sale of portfolio loans. Gains and losses on sales of residential real estate loans are based on the difference between the selling price and the carrying value of the related loans sold.
Loans	Loans Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at the principal balance outstanding, net of unearned income, including unamortized loan fees and costs on originated loans, and allowances for loan losses. Loan origination fees, net of certain direct loan origination costs, are deferred and amortized over the contractual lives of the respective loans as a yield adjustment using the effective interest method. Other credit-related fees are recognized as fee income, as a component of noninterest income. Interest income on loans is accrued as earned using the interest method over the term of the loan. The accrual of interest income is discontinued at the time the loan is 90 days past due or earlier if conditions warrant (i.e. nonaccrual loan). In all cases, loans are placed on nonaccrual status at an earlier date if collection of principal or interest is considered doubtful. When a loan is placed on nonaccrual status, interest accrued and unpaid during prior periods is reversed. Any payments received on nonaccrual loans are applied to interest income on a cash basis if the loan is considered well secured. Otherwise, all payments received are applied first to outstanding loan principal amounts and then to the recovery of the charged off loan amounts. Any excess is treated as a recovery of interest and fees. Loans are returned to accrual status after all principal and interest amounts contractually due are made and future payments are reasonably assured. A loan is considered impaired when, based on current information and events, it is probable that Bank will be unable to collect all amounts due according to the contractual terms of the loan agreement. Loans that have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings, as defined below, and classified as impaired. Factors considered by management in determining if a loan is impaired include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Commercial real estate loans, construction loans and commercial lines of credit are individually evaluated for impairment. If a loan is impaired, a portion of the allowance for loan losses is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral or operations of collateral. Large groups of homogeneous loans, such as other consumer and residential real estate loans, are collectively evaluated for impairment and accordingly, are not separately identified for impairment disclosures.
Troubled Debt Restructurings	Troubled Debt Restructurings The Bank periodically grants concessions to its customers in an attempt to protect as much of its investment as possible and minimize risk of loss. Loans that have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings. To determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed as part of the credit underwriting process. Troubled debt restructurings are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a troubled debt restructuring is considered a collateral dependent loan, the loan is reported, net, at the fair value of the collateral. For loans that are considered troubled debt restructurings that subsequently go into default, the Bank determines the amount of the allowance for loan losses in accordance with the accounting policy for the allowance for loan losses on loans individually identified as impaired.
Allowance for Loan Losses	Allowance for Loan Losses The allowance for loan losses is a valuation allowance for probable incurred credit losses, increased or decreased by the provision for loan losses and decreased by charge offs less recoveries. Loan losses are charged against the allowance for loan losses when a loan is considered partially or fully uncollectible, or has such little value that continuance as an asset is not warranted. Subsequent recoveries, if any, are credited to the allowance for loan losses. Management estimates the allowance for loan losses balance using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations, estimated collateral values, economic conditions and other factors. Allocations of the allowance for loan losses may be made for specific loans, but the entire allowance for loan losses is available for any loan that, in management’s judgment, should be charged off. The allowance for loan losses consists of specific and general components. The specific component relates to loans that are individually classified as impaired. The general component covers all other loans and is based on historical loss experience adjusted for general economic conditions and other qualitative factors by portfolio segment. The historical loss experience is determined by portfolio segment, discussed below, and is based on the actual loss history experienced over the most recent three-year period. This actual loss experience is supplemented with economic and other factors based on the risks present for each portfolio segment. These economic and other risk factors include consideration of the following: levels of and trends in delinquencies and impaired loans; levels of and trends in charge offs and recoveries; trends in portfolio volume; effects of any changes in underwriting standards; other changes in lending policies, procedures and practices; experience, ability and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations. The following portfolio segments have been identified: A)Residential Real Estate—The degree of risk in residential real estate lending depends primarily on the loan amount in relation to collateral value, the interest rate and the borrower’s ability to repay in an orderly fashion. Economic trends determined by unemployment rates and other key economic indicators are closely correlated to the credit quality of these loans. Weak economic trends indicate that the borrowers’ capacity to repay their obligations may be deteriorating. The classes in the residential real estate portfolio segment consist of residential first mortgages and residential second mortgages. B)Commercial Real Estate—Adverse economic developments or an overbuilt market impact commercial real estate projects and may result in troubled loans. Trends in vacancy rates of commercial properties impact the credit quality of these loans. High vacancy rates reduce operating revenues and the ability for the properties to produce sufficient cash flow to service debt obligations. The segmentation classes in the commercial real estate portfolio consist of retail, multifamily, offices, hotels/ SROs, industrial and other. C)Construction Loans—The construction loan portfolio is comprised of loans to builders and developers primarily for residential, commercial and mixed-use development. In addition to general commercial real estate risks, construction loans have additional risk of cost overruns, market deterioration during construction, lack of permanent financing and no operating history. There is no further segmentation of the construction portfolio segment into classes. D)Commercial Lines of Credit—The commercial lines of credit portfolio is comprised of loans to businesses such as sole proprietorships, partnerships, limited liability companies and corporations for the daily operating needs of the business. The risk characteristics of these loans vary based on the borrowers’ business and industry as repayment is typically dependent on cash flows generated from the underlying business. These loans may be secured by real estate or other assets or may be unsecured. The segmentation classes in the commercial lines of credit portfolio consist of private banking loans and commercial & industrial (“C&I”) lending. E)Other Consumer—The consumer loan portfolio currently consists only of overdraft protection lines with no further segmentation into classes. Economic trends determined by unemployment rates and other key economic indicators are closely correlated to the credit quality of these loans. Weak economic trends indicate the borrowers’ capacity to repay their obligations may be deteriorating.
Mortgage Servicing Rights, net	Mortgage Servicing Rights, net Servicing assets (i.e. mortgage servicing rights) are recognized separately when residential real estate loans are sold with servicing rights retained by the Bank. Mortgage servicing rights are initially recorded at fair value, which is determined based on an internal valuation model that calculates the present value of estimated future net servicing income. The servicing assets are subsequently measured using the amortization method which requires servicing assets to be amortized into non-interest income in the consolidated statements of income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans. Servicing fee income is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal, or a fixed amount per loan, and are recognized as income when earned. The Bank also records late fees and ancillary fees related to loan servicing which were not material for the periods presented. On a quarterly basis, servicing assets are evaluated for impairment based upon the fair value of the mortgage servicing rights as compared to their carrying amount. Impairment is determined by stratifying rights into groupings based on predominant risk characteristics, such as interest rate, loan type and investor type. If the carrying amount of an individual grouping exceeds fair value, impairment is recorded on that grouping so that the servicing asset is carried at fair value. Impairment is recognized through a valuation allowance for an individual grouping. If it is later determined that all or a portion of the impairment no longer exists for a particular grouping, a reduction of the valuation allowance may be recorded as an increase to income. The fair values of servicing assets are subject to significant fluctuations due to changes in estimated and actual prepayment speeds and default rates and losses.
Transfers of Financial Assets	Transfers of Financial Assets Transfers of financial assets are accounted for as sales when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.
FHLB Stock	FHLB Stock The Bank is a member of the FHLB system. Members are required to own a certain amount of stock based on the level of FHLB borrowings and other factors and may invest additional amounts. The FHLB stock is carried at cost, classified as a restricted security and periodically evaluated for impairment based on ultimate recovery of par value. The FHLB stock does not have a readily determinable fair value and no quoted market value as the ownership is restricted to member institutions. Also, the FHLB stock is pledged as collateral on FHLB borrowings. Cash and stock dividends are reported as income in interest and dividends on investment securities and restricted stock in the consolidated statements of operations. Cash dividends received amounted to $847, $1,219 and $1,149 for the year ended December 31, 2020, 2019 and 2018, respectively.
Cash Surrender Value of Bank-Owned Life Insurance	Cash Surrender Value of Bank-Owned Life Insurance The Bank has purchased life insurance policies on certain officers and employees; in addition, the Bank still owns policies on retired and former employees. Cash surrender value of bank-owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement.
Long-Lived Assets	Long-Lived Assets Long-lived assets, such as leasehold improvements and equipment, and definite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require long-lived assets or asset groups to be tested for possible impairment, the Company compares the undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment charge is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques, such as discounted cash flow models and third-party independent appraisals. Definite-lived intangible assets, consisting of customer-related intangibles, are amortized on a straight-line basis over their estimated useful lives of ten years. Amortization expense related to the customer-related intangibles was $450 for the year ended December 31, 2019 and 2018.
Mortgage Repurchase Liability	Mortgage Repurchase Liability In connection with portfolio loans sold in the secondary market, the Company makes customary representations and warranties about certain characteristics of each loan. The Company establishes a liability which may result from breaches in such representations and warranties. The repurchase liability reflects management’s estimate of such losses based on a combination of factors. The Company’s estimation process requires management to make subjective and complex judgments about matters that are inherently uncertain, such as expectations of future repurchase demands, economic factors, and findings from the Internal Review discussed in Note 19 - Commitments and Contingencies. The actual loss on repurchases could vary significantly from the recorded repurchase liability, depending on the outcome of various factors.
Legal Contingencies and Litigation Accruals	Legal Contingencies and Litigation Accruals The Company is involved in several material legal proceedings, as disclosed in Note 19—Commitments and Contingencies. On a quarterly basis, management assesses potential losses in relation to these and other pending or threatened legal matters. If a loss is considered probable and the amount can be reasonably estimated, the Company recognizes an expense for the estimated loss. Estimates of any such loss are subjective in nature and require the evaluation of numerous facts and assumptions as to future events, including the application of legal precedent that may be conflicting. To the extent these estimates are more or less than the actual liability resulting from the resolution of these matters, the Company’s net income (loss) will be increased or decreased accordingly. If the differences are material, the Company’s consolidated financial statements could be materially impacted.
Revenue from Contracts with Customers	Revenue from Contracts with Customers In accordance with ASC 606, Revenue from Contracts with Customers, the Company recognizes revenue when control of promised goods or services is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those goods or services as performance obligations are satisfied. The majority of the Company's revenues are from interest income and other sources, including loans and investment securities, as well as fees related to mortgage servicing activities, which are not within the scope of ASC 606 and are instead subject to other accounting guidance. The Company's services that are within the scope of ASC 606 are recorded within non-interest income, which includes investment management and advisory fees, service charges on deposit accounts, interchange income and other service charges and fees. Descriptions of these activities that are within the scope of ASC 606, which are presented in the consolidated statements of operations as components of non-interest income, are as follows: Service charges on deposit accounts: The Bank earns fees from its deposit customers for transaction-based, account maintenance and overdraft services. Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Bank fulfills the customer's request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Bank satisfies the performance obligations. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on deposit accounts are withdrawn from the customer's account balance. Investment management and advisory fees: The Bank enters into contracts with certain customers to provide asset management services that will continue indefinitely unless terminated in writing by either party to the contract. The Bank receives a quarterly management fee, payable in advance, based on the customer's assets held under management at the beginning of the period. These fees are earned over time as the Bank provides the contracted services and are assessed based on a tiered rate applied to the market value of assets held under management. The Bank does not earn performance-based incentives. Interchange fees: The Bank earns interchange fees from debit cardholder transactions conducted through the MasterCard payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder. Such interchange activity is shown on a net basis through non-interest income, other income. Other service charges and fees: Other charges and fees includes revenue generated from wire transfers, lockboxes and bank issuance of checks. Such fees are recognized at the point in time the customer requests the service and the service is rendered.
Stock-based Compensation	Stock-based Compensation Compensation cost is recognized for stock options and restricted stock awards issued to employees and non-employee members of the Company's board of directors, based on the fair value of these awards at the date of grant. The fair value of stock options is estimated using a Black-Scholes option pricing model, and the fair value of restricted stock awards is based on the market price of the Company's common stock at the date of grant reduced by the present value of dividends per share expected to be paid during the period the shares are not vested. Compensation cost is recorded over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recorded on a straight-line basis over the requisite service period of the entire award. The Company's accounting policy is to record forfeitures in the period that they occur.
Comprehensive Income	Comprehensive Income Comprehensive income consists of net income and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized gains and losses on debt securities available for sale, net of income taxes, which is also recognized as a separate component of shareholders’ equity. The Company releases the income tax effects on unrealized gains and losses on debt securities available for sale that are reported in other comprehensive income (loss) on a security-by-security basis when debt securities are sold.
Loan Commitments and Related Financial Instruments	Loan Commitments and Related Financial Instruments Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded.
Assets Held under Administration and Investment Management and Advisory Fees	Assets Held under Administration and Investment Management and Advisory Fees The Company does not include assets held in fiduciary or agency capacities in the consolidated balance sheets, as such assets held under administration are not assets of the Company. Fees from asset management activities are recorded on an accrual basis over the period in which the service is provided. Fees, as set forth in the underlying customer contract, are a function of the market value of assets administrated and managed. Effective December 21, 2020, the Bank no longer offers asset management services.
Income Taxes	Income Taxes Income taxes are provided for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period the change occurs. Deferred tax assets are reduced, through a valuation allowance, if necessary, by the amount of such benefits that are not expected to be realized based on current available evidence. A tax position is recognized as a benefit only if it is more likely than not that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the more likely than not test, no tax benefit is recorded. The Company recognizes interest and/or penalties related to income tax matters in income tax expense.
Income (Loss) per Share, Basic and Diluted	Income (Loss) per Share, Basic and Diluted Basic income (loss) per share represents net income (loss) divided by the weighted average number of common shares outstanding during the period. In periods of income, diluted income per share represents net income divided by the weighted average number of common shares outstanding during the period, plus the effect of outstanding potential dilutive common shares. In periods of a loss, basic and diluted per share information are the same.
Recently Issued Accounting Guidance Not Yet Adopted	Recently Issued Accounting Guidance Not Yet Adopted In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which is intended to improve financial reporting by requiring recording of credit losses on loans and other financial instruments on a more timely basis. The guidance will replace the current incurred loss accounting model with an expected loss approach and requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The guidance requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, which clarifies the scope of the credit losses standard and addresses issues related to accrued interest receivable balances and recoveries, among other things. In May 2019, the FASB issued ASU No. 2019-05, Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief. The amendments provide entities with an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis, upon adoption of Topic 326. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates . This update deferred the effective dates of Topic 326 to January 1, 2023 for certain entities including smaller reporting companies (as defined by the U.S. Securities and Exchange Commission(the “SEC”)). The Company, as a smaller reporting company as of the relevant measuring period, qualified for this extension. At this time, the Company has formed a cross-functional implementation team consisting of individuals from credit, finance and information systems. The implementation team has been working with a software vendor to assist in implementing required changes to credit loss estimation models and processes. The historical data set for model development has been finalized, and the credit loss estimation models are in the process of being developed and tested. The Company expects to recognize a cumulative effect adjustment to the opening balance of retained earnings as of the beginning of the first reporting period in which ASU No. 2016-13 is effective. The Company has not yet determined the magnitude of any such one-time adjustment or of the overall impact of ASU No. 2016-13 on its consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The relief provided by this guidance is elective and applies to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. The guidance provides that changes in contract terms that are made to effect the reference rate reform transition are considered related to the replacement of a reference rate if they are not the result of a business decision that is separate from or in addition to changes to the terms of a contract to effect that transition. If certain criteria are met, entities can elect to not apply certain modification accounting requirements to contracts affected by reference rate reform. The Company’s primary contracts that reference LIBOR are its loan contracts, purchase and sale agreements for investment securities transactions, customer deposit agreements and borrowing agreements with the FHLB. The Company has not yet determined an alternative rate to LIBOR at this time. The optional amendments in ASU No. 2020-04 are effective for all entities as of March 12, 2020 through December 31, 2022. The Company may take advantage of the LIBOR transition relief allowed under this ASU in the future. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848), Scope. The amendments in this guidance refine the scope of Topic 848 and clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting also apply to derivative instruments that use an interest rate for margining, discounting or contract price alignment that is modified as a result of reference rate reform (commonly referred to as the discounting transition). ASU No. 2021-01 expands the scope of Topic 848 to also include certain derivative instruments that do not reference LIBOR or a reference rate that is expected to be discontinued, but that are being modified as a result of the discounting transition. Currently, the Company does not use derivative instruments and does not anticipate taking advantage of the LIBOR transition relief allowed under this ASU.

Investment Securities (Tables)

12 Months Ended

Dec. 31, 2020

Investment Securities

Schedule of amortized cost and fair value of debt securities available for sale


	December 31, 2020
	Amortized		Gross Unrealized				Fair
	Cost		Gain		Loss		Value
Available for sale:
U.S. Treasury & Agency securities	$	138,742	$	255	$	—	$	138,997
Mortgage-backed securities		33,743		72		(1)		33,814
Collateralized mortgage obligations		126,359		628		(391)		126,596
Collateralized debt obligations		214		—		(27)		187
Total	$	299,058	$	955	$	(419)	$	299,594


	December 31, 2019
	Amortized		Gross Unrealized				Fair
	Cost		Gain		Loss		Value
Available for sale:
U.S. Treasury securities	$	122,634	$	170	$	(1)	$	122,803
Mortgage-backed securities		23,028		76		—		23,104
Collateralized mortgage obligations		1,138		45		—		1,183
Collateralized debt obligations		216		—		(17)		199
Total	$	147,016	$	291	$	(18)	$	147,289

Schedule of information pertaining to sales of debt securities available for sale


	2020		2019		2018
Proceeds	$	99,971	$	2,914	$	14,964

Gross realized gains	$	337	$	6	$	89
Gross realized losses		(158)		—		(3)
Total net realized gains	$	179	$	6	$	86

Schedule of amortized cost and fair value of debt securities available for sale, shown by contractual maturity


	Amortized		Fair
	Cost		Value
U.S. Treasury & Agency securities
Due less than one year	$	64,974	$	65,205
Due after one year through five years		73,768		73,792
Mortgage-backed securities		33,743		33,814
Collateralized mortgage obligations		126,359		126,596
Collateralized debt obligations		214		187
Total	$	299,058	$	299,594

Schedule of debt securities available for sale, at fair value, continuous unrealized losses position


	December 31, 2020
	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
Mortgage-backed securities	$	5,694	$	(1)	$	—	$	—	$	5,694	$	(1)
Collateralized mortgage obligations		75,740		(391)		—		—		75,740		(391)
Collateralized debt obligations		—		—		187		(27)		187		(27)
Total	$	81,434	$	(392)	$	187	$	(27)	$	81,621	$	(419)


	December 31, 2019
	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
U.S. Treasury securities	$	5,011	$	(1)	$	—	$	—	$	5,011	$	(1)
Collateralized debt obligations		—		—		199		(17)		199		(17)
Total	$	5,011	$	(1)	$	199	$	(17)	$	5,210	$	(18)

Schedule of equity securities with readily determinable fair values


	Year Ended
	December 31,
	2020		2019		2018
Net gains (losses) recorded during the period on equity securities	$	108	$	114	$	(87)
Less: net gains (losses) recorded during the period on equity securities sold during the period		—		—		—
Unrealized gains (losses) recorded during the period on equity securities held at the reporting date	$	108	$	114	$	(87)

Loans (Tables)

12 Months Ended

Dec. 31, 2020

Loans

Schedule of major categories of loans


	December 31,
	2020		2019
Residential real estate	$	2,033,526	$	2,476,866
Commercial real estate		259,958		240,081
Construction		206,581		178,376
Commercial lines of credit		6,671		17,903
Other consumer		7		34
Total loans		2,506,743		2,913,260
Less: allowance for loan losses		(72,387)		(21,730)
Loans, net	$	2,434,356	$	2,891,530

Schedule of activity in allowance for loan losses and recorded investment by portfolio segment

The following table presents the activity in the allowance for loan losses by portfolio segment for the year ended December 31, 2020, 2019 and 2018:


							Commercial
	Residential		Commercial				Lines of		Other
December 31, 2020	Real Estate		Real Estate		Construction		Credit		Consumer		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	12,336	$	5,243	$	3,822	$	328	$	1	$	—	$	21,730
Provision (recovery) for loan losses		23,604		16,634		14,866		(237)		(2)		—		54,865
Charge offs		(3,594)		—		(707)		—		—		—		(4,301)
Recoveries		20		65		7		—		1		—		93
Total ending balance	$	32,366	$	21,942	$	17,988	$	91	$	—	$	—	$	72,387

							Commercial
	Residential		Commercial				Lines of		Other
December 31, 2019	Real Estate		Real Estate		Construction		Credit		Consumer		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	13,826	$	2,573	$	3,273	$	1,058	$	1	$	1,119	$	21,850
Provision (recovery) for loan losses		(1,511)		2,509		542		(554)		—		(1,119)		(133)
Charge offs		—		—		—		(176)		—		—		(176)
Recoveries		21		161		7		—		—		—		189
Total ending balance	$	12,336	$	5,243	$	3,822	$	328	$	1	$	—	$	21,730

							Commercial
	Residential		Commercial				Lines of		Other
December 31, 2018	Real Estate		Real Estate		Construction		Credit		Consumer		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	12,279	$	2,040	$	2,218	$	469	$	1	$	1,450	$	18,457
Provision (recovery) for loan losses		1,533		398		1,040		589		—		(331)		3,229
Charge offs		(4)		—		—		—		—		—		(4)
Recoveries		18		135		15		—		—		—		168
Total ending balance	$	13,826	$	2,573	$	3,273	$	1,058	$	1	$	1,119	$	21,850

The following tables present the balance in the allowance for loan losses and the recorded investment by portfolio segment and based on impairment evaluation method as of December 31, 2020 and 2019:


							Commercial
	Residential		Commercial				Lines of		Other
December 31, 2020	Real Estate		Real Estate		Construction		Credit		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	41	$	287	$	1,905	$	4	$	—	$	—	$	2,237
Collectively evaluated for impairment		32,325		21,655		16,083		87		—		—		70,150
Total ending allowance balance	$	32,366	$	21,942	$	17,988	$	91	$	—	$	—	$	72,387
Loans:
Loans individually evaluated for impairment	$	208	$	20,974	$	48,871	$	3,981	$	—	$	—	$	74,034
Loans collectively evaluated for impairment		2,033,318		238,984		157,710		2,690		7		—		2,432,709
Total ending loans balance	$	2,033,526	$	259,958	$	206,581	$	6,671	$	7	$	—	$	2,506,743


							Commercial
	Residential		Commercial				Lines of		Other
December 31, 2019	Real Estate		Real Estate		Construction		Credit		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	43	$	—	$	—	$	5	$	—	$	—	$	48
Collectively evaluated for impairment		12,293		5,243		3,822		323		1		—		21,682
Total ending allowance balance	$	12,336	$	5,243	$	3,822	$	328	$	1	$	—	$	21,730
Loans:
Loans individually evaluated for impairment	$	215	$	1,100	$	17,112	$	1,377	$	—	$	—	$	19,804
Loans collectively evaluated for impairment		2,476,651		238,981		161,264		16,526		34		—		2,893,456
Total ending loans balance	$	2,476,866	$	240,081	$	178,376	$	17,903	$	34	$	—	$	2,913,260

Schedule of information related to impaired loans by class of loans


	At December 31, 2020						Year Ended December 31, 2020
	Unpaid						Average		Interest		Cash Basis
	Principal		Recorded		Allowance for		Recorded		Income		Interest
	Balance		Investment		Loan Losses		Investment		Recognized		Recognized
With no related allowance for loan losses recorded:
Residential real estate, first mortgage	$	116	$	94	$	—	$	96	$	—	$	—
Commercial real estate:
Retail		1,247		1,029		—		1,065		58		48
Multifamily		—		—		—		—		—		—
Offices		—		—		—		—		—		—
Hotels/SROs		11,428		11,419		—		5,221		—		—
Construction		42,669		41,951		—		29,395		964		744
Commercial lines of credit:
Private banking		—		—		—		1,505		42		35
C&I lending		3,857		3,857		—		1,184		—		—
Subtotal		59,317		58,350		—		38,466		1,064		827
With an allowance for loan losses recorded:
Residential real estate, first mortgage		114		114		41		116		5		4
Commercial real estate:
Hotels/SROs		8,645		8,526		287		3,858		—		—
Construction		6,920		6,920		1,905		6,189		255		226
Commercial lines of credit, private banking		124		124		4		128		7		6
Subtotal		15,803		15,684		2,237		10,291		267		236
Total	$	75,120	$	74,034	$	2,237	$	48,757	$	1,331	$	1,063


	At December 31, 2019						Year Ended December 31, 2019
	Unpaid						Average		Interest		Cash Basis
	Principal		Recorded		Allowance for		Recorded		Income		Interest
	Balance		Investment		Loan Losses		Investment		Recognized		Recognized
With no related allowance for loan losses recorded:
Residential real estate, first mortgage	$	125	$	98	$	—	$	104	$	—	$	—
Commercial real estate:
Retail		1,308		1,100		—		1,136		60		55
Multifamily		—		—		—		449		12		12
Offices		—		—		—		378		25		25
Construction		17,156		17,112		—		6,682		582		575
Commercial lines of credit:
Private banking		1,245		1,245		—		—		—		—
C&I lending		—		—		—		67		5		5
Subtotal		19,834		19,555		—		8,816		684		672
With an allowance for loan losses recorded:
Residential real estate, first mortgage		116		117		43		118		5		5
Commercial lines of credit, private banking		132		132		5		136		7		7
Subtotal		248		249		48		254		12		12
Total	$	20,082	$	19,804	$	48	$	9,070	$	696	$	684


	At December 31, 2018						Year Ended December 31, 2018
	Unpaid						Average		Interest		Cash Basis
	Principal		Recorded		Allowance for		Recorded		Income		Interest
	Balance		Investment		Loan Losses		Investment		Recognized		Recognized
With no related allowance for loan losses recorded:
Construction	$	4,751	$	4,751	$	—	$	3,563	$	301	$	230
Commercial real estate:
Retail		1,370		1,174		—		1,210		64		58
Multifamily		1,088		1,083		—		812		37		33
Subtotal		7,209		7,008		—		5,585		402		321
With an allowance for loan losses recorded:
Residential real estate, first mortgage		254		228		46		148		5		4
Construction		2,661		2,661		78		1,996		163		144
Commercial real estate, offices		1,530		1,522		30		1,538		88		80
Commercial lines of credit:
Private banking		316		316		95		330		19		16
C&I lending		100		100		100		75		5		4
Subtotal		4,861		4,827		349		4,087		280		248
Total	$	12,070	$	11,835	$	349	$	9,672	$	682	$	569

Schedule of recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans and aging of the recorded investment in past due loans

The following tables present the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans as of December 31, 2020 and 2019:


	At December 31,
	2020				2019
			Loans Past				Loans Past
			Due Over 90				Due Over 90
			Days Still				Days Still
	Nonaccrual		Accruing		Nonaccrual		Accruing
Residential real estate:
Residential first mortgage	$	20,043	$	46	$	14,482	$	50
Residential second mortgage		686		—		210		—
Commercial real estate:
Retail		20		—		40		—
Hotels/SROs		19,945		—		—		—
Construction		41,873		—		—		—
Commercial lines of credit
Private banking		2,285		—		—		—
C&I lending		1,572		—		—		—
Total	$	86,424	$	46	$	14,732	$	50

The following tables present the aging of the recorded investment in past due loans as of December 31, 2020 and 2019 by class of loans:


	30 ‑ 59		60 ‑ 89		Greater than
	Days		Days		89 Days		Total		Loans Not
December 31, 2020	Past Due		Past Due		Past Due		Past Due		Past Due		Total
Residential real estate:
Residential first mortgage	$	37,819	$	14,524	$	20,089	$	72,432	$	1,943,602	$	2,016,034
Residential second mortgage		362		134		686		1,182		16,310		17,492
Commercial real estate:
Retail		1,010		—		20		1,030		15,170		16,200
Multifamily		3,835		—		—		3,835		75,374		79,209
Offices		—		—		—		—		27,061		27,061
Hotels/SROs		—		—		19,945		19,945		47,690		67,635
Industrial		—		—		—		—		13,186		13,186
Other		—		—		—		—		56,667		56,667
Construction		8,593		2,514		41,873		52,980		153,601		206,581
Commercial lines of credit:
Private banking		—		—		2,285		2,285		124		2,409
C&I lending		—		—		1,572		1,572		2,690		4,262
Other consumer		—		—		—		—		7		7
Total	$	51,619	$	17,172	$	86,470	$	155,261	$	2,351,482	$	2,506,743


	30 ‑ 59		60 ‑ 89		Greater than
	Days		Days		89 Days		Total		Loans Not
December 31, 2019	Past Due		Past Due		Past Due		Past Due		Past Due		Total
Residential real estate:
Residential first mortgage	$	36,112	$	5,112	$	14,532	$	55,756	$	2,396,800	$	2,452,556
Residential second mortgage		97		295		210		602		23,708		24,310
Commercial real estate:
Retail		—		—		40		40		6,089		6,129
Multifamily		—		—		—		—		64,873		64,873
Offices		—		—		—		—		28,048		28,048
Hotels/SROs		5,605		—		—		5,605		76,165		81,770
Industrial		—		—		—		—		14,150		14,150
Other		—		—		—		—		45,111		45,111
Construction		15,008		—		—		15,008		163,368		178,376
Commercial lines of credit:
Private banking		—		—		—		—		11,914		11,914
C&I lending		1,249		—		—		1,249		4,740		5,989
Other consumer		—		—		—		—		34		34
Total	$	58,071	$	5,407	$	14,782	$	78,260	$	2,835,000	$	2,913,260

Schedule of troubled debt restructurings


	At December 31,
	2020				2019
	Recorded		Allowance for		Recorded		Allowance for
	Investment		Loan Losses		Investment		Loan Losses
Residential real estate, first mortgage	$	209	$	41	$	215	$	43
Commercial real estate, retail		1,029		—		1,110		—
Construction		26,985		1,906		12,261		—
Commercial lines of credit, private banking		124		4		132		5
Total	$	28,347	$	1,951	$	13,718	$	48

Schedule of risk rating of loans by class of loans


			Special
December 31, 2020	Pass		Mention		Substandard		Doubtful		Total
Residential real estate:
Residential first mortgage	$	1,995,945	$	—	$	19,995	$	94	$	2,016,034
Residential second mortgage		16,806		—		686		—		17,492
Commercial real estate:
Retail		13,599		1,572		1,029		—		16,200
Multifamily		55,772		14,238		9,199		—		79,209
Offices		12,014		1,623		13,424		—		27,061
Hotels/SROs		9,115		17,984		40,536		—		67,635
Industrial		5,867		—		7,319		—		13,186
Other		43,193		7,732		5,742		—		56,667
Construction		152,577		14,234		32,850		6,920		206,581
Commercial lines of credit:
Private banking		124		2,285		—		—		2,409
C&I lending		3,573		—		689		—		4,262
Other consumer		7		—		—		—		7
Total	$	2,308,592	$	59,668	$	131,469	$	7,014	$	2,506,743


			Special
December 31, 2019	Pass		Mention		Substandard		Doubtful		Total
Residential real estate:
Residential first mortgage	$	2,438,024	$	—	$	14,077	$	455	$	2,452,556
Residential second mortgage		24,100		—		210		—		24,310
Commercial real estate:
Retail		4,195		834		1,100		—		6,129
Multifamily		56,164		7,150		1,559		—		64,873
Offices		24,484		645		2,919		—		28,048
Hotels/SROs		60,074		18,189		3,507		—		81,770
Industrial		5,894		8,256		—		—		14,150
Other		37,693		920		6,498		—		45,111
Construction		156,339		7,008		15,029		—		178,376
Commercial lines of credit:
Private banking		10,669		1,245		—		—		11,914
C&I lending		4,013		—		1,976		—		5,989
Other consumer		34		—		—		—		34
Total	$	2,821,683	$	44,247	$	46,875	$	455	$	2,913,260

Leasehold Improvements and Equipment, net (Tables)

12 Months Ended

Dec. 31, 2020

Leasehold Improvements and Equipment, net

Schedule of leasehold improvements and equipment, net


	Estimated
	Useful
	Life
	(in years)	2020		2019
Leasehold improvements	*	$	11,259	$	10,920
Furniture and equipment	3 ‑ 7		14,361		13,981
Total			25,620		24,901
Less: accumulated depreciation and amortization			(17,108)		(15,703)
Leasehold improvements and equipment, net		$	8,512	$	9,198

* Amortized over the shorter of the lease term or estimated useful life

Mortgage Servicing Rights, net (Tables)

12 Months Ended

Dec. 31, 2020

Mortgage Servicing Rights, net

Schedule of principal balance of mortgage loans serviced for others


	2020		2019
Residential real estate mortgage loan portfolios serviced for:
FNMA	$	171,553	$	130,425
FHLB		64,661		86,778
Private investors		429,816		656,035
Total	$	666,030	$	873,238

Schedule of activity for mortgage servicing rights and related valuation allowance


	2020		2019		2018
Mortgage servicing rights:
Beginning of year	$	10,845	$	10,733	$	6,706
Additions		713		2,964		6,052
Amortization		(3,705)		(2,852)		(2,025)
End of year		7,853		10,845		10,733
Valuation allowance at beginning of year		1,080		100		210
Additions (recoveries)		1,085		980		(110)
Valuation allowance at end of year		2,165		1,080		100
Mortgage servicing rights, net	$	5,688	$	9,765	$	10,633

Deposits (Tables)

12 Months Ended

Dec. 31, 2020

Deposits

Schedule of maturities of time deposits, including brokered deposits

At December 31, 2020, the scheduled maturities of time deposits, including brokered deposits, were as follows:


2021	$	1,258,983
2022		297,971
2023		69,162
2024		9,126
2025		11,281
Total	$	1,646,523

FHLB Borrowings (Tables)

12 Months Ended

Dec. 31, 2020

FHLB Borrowings

Schedule of FHLB borrowings


	2020		Interest Rates	2019		Interest Rates
Long-term fixed rate advances	$	318,000	0.43% -1.96 %	$	229,000	1.07% - 1.96%

Schedule of contractual annual maturities of FHLB advances

The contractual annual maturities of FHLB advances at December 31, 2020 are as follows:


2021	$	11,000
2022		—
2023		—
2024		—
2025		—
Thereafter		307,000
	$	318,000

Subordinated Notes, net (Tables)

12 Months Ended

Dec. 31, 2020

Subordinated Notes, net

Schedule of subordinated notes


	December 31,
	2020		2019
7.0% fixed to floating rate subordinated notes	$	65,000	$	65,000
Unamortized note premium		411		474
Unamortized debt issuance costs		(70)		(295)
Total	$	65,341	$	65,179

Stock-based Compensation (Tables)

12 Months Ended

Dec. 31, 2020

Stock-based Compensation

Schedule of assumptions used to estimate grant date fair value of stock option awards using Black-Scholes option pricing model


	Year Ended December 31,
	2020			2019			2018
Risk-free interest rate		0.49	%		2.66	%		2.80	%
Expected term (in years)		5.61			6.75			6.75
Expected stock price volatility		33.91	%		26.26	%		23.70	%
Dividend yield		0.10	%		0.40	%		0.29	%

Summary of the Company's stock option activity


				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
	Number	Exercise		Contractual	Intrinsic
	of Shares	Price		Term	Value
				(Years)
Outstanding at January 1, 2020	142,477	$	12.29	8.60		—
Granted	367,361		4.57
Exercised	—		—
Forfeited/expired	(131,956)		9.93
Outstanding at December 31, 2020	377,882	$	5.61	9.09	$	—

Summary of the Company's restricted stock awards activity


		Weighted Average
	Number	Grant Date
	of Shares	Fair Value
Nonvested at January 1, 2020	100,096	$	11.02
Granted	151,874		6.91
Vested	(10,460)		9.52
Forfeited	(103,574)		9.12
Nonvested at December 31, 2020	137,936	$	7.90

Income (Loss) Per Share (Tables)

12 Months Ended

Dec. 31, 2020

Income (Loss) Per Share

Schedule of computation of income (loss) per share, basic and diluted



	Year Ended December 31,
	2020		2019		2018
Numerator:
Net income (loss)	$	(12,967)	$	29,248	$	63,468

Denominator:
Weighted average common shares outstanding, basic		49,840,882		51,115,986		52,963,308
Weighted average effect of potentially dilutive common shares:
Stock options		—		—		—
Restricted stock		—		11,893		2,259
Weighted average common shares outstanding, diluted		49,840,882		51,127,879		52,965,567

Income (loss) per share:
Basic	$	(0.26)	$	0.57	$	1.20
Diluted	$	(0.26)	$	0.57	$	1.20

Schedule of anti-dilutive shares that were excluded from the computation of weighted average diluted shares outstanding


	Year Ended December 31,
	2020	2019	2018
Stock options	359,234	167,255	92,625
Restricted stock	166,621	28,676	—
Total	525,855	195,931	92,625

Fair Values of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2020

Fair Values of Financial Instruments

Schedule of assets measured at fair value on a recurring basis categorized by level of inputs


			Fair Value Measurements at
			December 31, 2020
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Financial Assets
Available-for-sale debt securities:
U.S. Treasury & Agency securities	$	138,997	$	40,192	$	98,805	$	—
Mortgage-backed securities		33,814		—		33,814		—
Collateralized mortgage obligations		126,596		—		126,596		—
Collateralized debt obligations		187		—		—		187
Equity securities		5,118		5,118		—		—


			Fair Value Measurements at
			December 31, 2019
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Financial Assets
Available-for-sale debt securities:
U.S. Treasury securities	$	122,803	$	122,803	$	—	$	—
Mortgage-backed securities		23,104		—		23,104		—
Collateralized mortgage obligations		1,183		—		1,183		—
Collateralized debt obligations		199		—		—		199
Equity securities		5,009		5,009		—		—

Summary of reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs


	Fair Value Measurements Using Significant
	Unobservable Inputs (Level 3)
	Collateralized Debt Obligations
	2020		2019
Balance of recurring Level 3 assets at beginning of period	$	199	$	297
Total gains or losses (realized/unrealized):
Included in income-realized		—		—
Included in other comprehensive income (loss)		(10)		(6)
Principal maturities/settlements		(2)		(92)
Sales		—		—
Transfers in and/or out of Level 3		—		—
Balance of recurring Level 3 assets at end of period	$	187	$	199

Schedule of assets measured at fair value on a nonrecurring basis categorized by level of inputs


	Fair Value Measurements at December 31, 2020
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
	Fair		Assets		Inputs		Inputs
	Value		(Level 1)		(Level 2)		(Level 3)
Impaired loans:
Commercial real estate	$	8,240	$	—	$	—	$	8,240
Construction		5,015		—		—		5,015
Mortgage loans held for sale		19,375		—		19,375		—
Mortgage servicing rights		5,175		—		—		5,175

Fair Value Measurements at December 31, 2019

Quoted Prices in

Significant

Active Markets

Other

Significant

for Identical

Observable

Unobservable

Assets

Inputs

Fair Value

(Level 1)

(Level 2)

(Level 3)

Mortgage servicing rights

7,949

—

7,949

Schedule of quantitative information about nonrecurring Level 3 fair value measurements


	Quantitative Information about Level 3 Fair Value Measurements at December 31, 2020
					Range
	Fair Value		Valuation Technique	Unobservable Inputs	(Weighted Average) ⁽¹⁾
Impaired loans:
Commercial real estate	$	8,240	Sales comparison approach/Income capitalization approach	Adjustments for differences between the comparable sales and income data for similar loans and collateral underlying such loans	N/A (36%)
Construction	$	5,015	Hybrid of sales comparison and income capitalization approaches	Adjustments for differences between the comparable sales and income data for similar loans and collateral underlying such loans	N/A (15%)
Mortgage servicing rights	$	5,175	Discounted cash flow	Discount rate	9.5% -12.0%
					(11.6)%
				Prepayment speed	10.5% -37.0%
					(23.7)%
				Default rate	0.1% -0.2%
					(0.2)%

(1)	The range and weighted average for an asset category consisting of a single investment represents the significant unobservable input used in the fair value of the investment.


	Quantitative Information about Level 3 Fair Value Measurements at December 31, 2019
					Range
	Fair Value		Valuation Technique	Unobservable Inputs	(Weighted Average) ⁽¹⁾
Mortgage servicing rights	$	7,949	Discounted cash flow	Discount rate	9.5% - 12.0% (11.9)%
				Prepayment speed	7.2% - 47.1% (21.3)%
				Default rate	0.1% - 0.3% (0.2)%

(1)	The range and weighted average for an asset category consisting of a single investment represents the significant unobservable input used in the fair value of the investment.

Schedule of carrying amounts and estimated fair values of financial instruments not carried at fair value


	Fair Value Measurements at December 31, 2020
	Carrying		Fair
	Amount		Value		Level 1		Level 2		Level 3
Financial Assets
Cash and due from banks	$	998,497	$	998,497	$	998,497	$	—	$	—
Interest-bearing time deposits with other banks		7,021		7,021		7,021		—		—
Mortgage loans held for sale		2,909		3,052		—		3,052		—
Loans, net		2,434,356		2,521,874		—		—		2,521,874

Financial Liabilities
Time deposits		1,646,523		1,658,020		—		1,658,020		—
Federal Home Loan Bank borrowings		318,000		328,150		—		328,150		—
Subordinated notes, net		65,341		65,753		—		65,753		—


	Fair Value Measurements at December 31, 2019
	Carrying		Fair
	Amount		Value		Level 1		Level 2		Level 3
Financial Assets
Cash and due from banks	$	77,819	$	77,819	$	77,819	$	—	$	—
Interest-bearing time deposits with other banks		1,025		1,025		1,025		—		—
Mortgage loans held for sale		1,337		1,368		—		1,368		—
Loans, net		2,891,530		2,978,846		—		—		2,978,846
Financial Liabilities
Time deposits		1,154,076		1,161,490		—		1,161,490		—
Federal Home Loan Bank borrowings		229,000		227,333		—		227,333		—
Subordinated notes, net		65,179		65,650		—		65,650		—

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Taxes

Schedule of components of the income tax (benefit) expense


	Year Ended December 31,
	2020		2019		2018
Current:
Federal	$	4,489	$	15,341	$	16,435
State		1,908		6,354		7,979
Total current expense		6,397		21,695		24,414
Deferred:
Federal		(8,373)		(3,995)		478
State		(3,933)		(2,057)		212
Total deferred (benefit) expense		(12,306)		(6,052)		690
Total income tax (benefit) expense	$	(5,909)	$	15,643	$	25,104

Schedule of reconciliation of the U.S. federal statutory tax rate to Company's effective tax rate


	2020			2019			2018
U.S. federal statutory rate		21.0	%		21.1	%		21.0	%
Effect of:
State taxes, net of federal benefit		8.5	%		4.0	%		7.1	%
Non-deductible items		—	%		9.5	%		—	%
Income on cash surrender value of bank-owned life insurance		0.6	%		(0.2)	%		(0.2)	%
Other, net		1.2	%		0.4	%		0.4	%
Effective tax rate		31.3	%		34.8	%		28.3	%

Schedule of components of deferred tax assets and liabilities


	December 31,
	2020		2019
Deferred tax assets:
Allowance for loan losses	$	20,185	$	6,144
Contingent losses		—		2,834
Mortgage repurchase liability		2,705		2,217
Mark-to-market adjustments on mortgage loans held for sale		41		9
Supplemental retirement benefit plan		841		895
Deferred loan fee income		158		268
State franchise tax		503		1,455
Compensation plans		531		729
Operating lease liabilities		5,715		5,631
Other		1,258		633
Total deferred tax assets		31,937		20,815
Deferred tax liabilities:
FHLB stock dividends		(120)		(122)
Mortgage servicing rights		(1,586)		(2,768)
Operating lease right-of-use asset		(5,363)		(5,305)
Other		(542)		(525)
Total deferred tax liabilities		(7,611)		(8,720)
Deferred tax asset, net	$	24,326	$	12,095

Operating Leases (Tables)

12 Months Ended

Dec. 31, 2020

Operating Leases

Schedule of Operating lease expense information


	Year Ended December 31,
	2020		2019
Operating lease cost	$	4,554	$	4,507
Variable lease cost		959		1,235
Total	$	5,513	$	5,742

Schedule of Maturity of lease liabilities


Year Ended December 31,
2021	$	4,186
2022		3,421
2023		3,180
2024		3,119
2025		2,884
Thereafter		5,942
Total lease payments		22,732
Less: future interest costs⁽¹⁾		(2,235)
Present value of lease liabilities	$	20,497

(1)	Computed using the estimated interest rate for each lease

Schedule of Other information


	Year Ended December 31,
Other Information	2020			2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	4,478		$	4,307
Weighted average remaining lease term		6.60	years		6.83	years
Weighted average discount rate		3.16	%		3.54	%

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2020

Commitments and Contingencies

Summary of total amount of unfunded commitments to extend credit and standby letters of credit outstanding


	2020		2019
Commitments to make loans	$	40,331	$	76,927
Unused lines of credit		140,665		220,553
Standby letters of credit		24		24

Regulatory Capital Requirements (Tables)

12 Months Ended

Dec. 31, 2020

Regulatory Capital Requirements

Schedule of actual and minimum required capital amounts and ratios


					For Capital
					Adequacy				To be Well
	Actual				Purposes				Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
December 31, 2020
Total adjusted capital to risk-weighted assets
Consolidated	$	407,733	22.58	%	$	144,466	8.00	%		N/A	N/A
Bank		386,237	21.56			143,339	8.00			179,174	10.00	%
Tier 1 (core) capital to risk-weighted assets
Consolidated		319,204	17.68			108,350	6.00			N/A	N/A
Bank		363,224	20.27			107,504	6.00			143,339	8.00
Common Equity Tier 1 (CET1)
Consolidated		319,204	17.68			81,262	4.50			N/A	N/A
Bank		363,224	20.27			80,628	4.50			116,463	6.50
Tier 1 (core) capital to adjusted tangible assets
Consolidated		319,204	8.08			158,067	4.00			N/A	N/A
Bank		363,224	9.20			157,954	4.00			197,442	5.00


					For Capital
					Adequacy				To be Well
	Actual				Purposes				Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
December 31, 2019
Total adjusted capital to risk-weighted assets
Consolidated	$	419,327	21.49	%	$	156,081	8.00	%		N/A	N/A
Bank		346,985	17.82			155,809	8.00		$	194,761	10.00	%
Tier 1 (core) capital to risk-weighted assets
Consolidated		332,418	17.04			117,061	6.00			N/A	N/A
Bank		325,255	16.70			116,857	6.00			155,809	8.00
Common Equity Tier 1 (CET1)
Consolidated		332,418	17.04			87,796	4.50			N/A	N/A
Bank		325,255	16.70			87,643	4.50			126,595	6.50
Tier 1 (core) capital to adjusted tangible assets
Consolidated		332,418	10.11			131,471	4.00			N/A	N/A
Bank		325,255	9.90			131,469	4.00			164,337	5.00

Condensed Financial Information of Sterling Bancorp, Inc. (Parent Only) (Tables)

12 Months Ended

Dec. 31, 2020

Condensed Financial Information of Sterling Bancorp, Inc. (Parent Only)

Schedule of Financial statements of Sterling Bancorp, Inc

CONDENSED BALANCE SHEETS


	December 31,
	2020		2019
ASSETS
Cash held at Bank	$	20,952	$	79,714
Investment in subsidiaries		363,611		325,451
Other assets		13,914		3,625
Total assets	$	398,477	$	408,790
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Subordinated notes, net	$	65,341	$	65,179
Other liabilities		13,545		10,997
Total liabilities		78,886		76,176
Total shareholders’ equity		319,591		332,614
Total liabilities and shareholders’ equity	$	398,477	$	408,790

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)


	Year Ended December 31,
	2020		2019		2018
Expenses:
Interest expense	$	4,713	$	4,700	$	4,689
Provision (recovery) for contingent losses, net		(10,000)		10,000		—
Other		6,135		803		961
Total expenses		848		15,503		5,650
Loss before income tax and equity in subsidiaries income (loss)		(848)		(15,503)		(5,650)
Income tax benefit		246		4,496		1,186
Loss before equity in subsidiaries income (loss)		(602)		(11,007)		(4,464)
Equity in subsidiaries income (loss) income		(12,365)		40,255		67,932
Net income (loss) income	$	(12,967)	$	29,248	$	63,468
Other comprehensive income
Equity in other comprehensive income of subsidiaries		191		205		113
Total comprehensive income (loss) income	$	(12,776)	$	29,453	$	63,581

CONDENSED STATEMENTS OF CASH FLOWS


	Year Ended December 31,
	2020		2019		2018
Cash flows from operating activities
Net (loss) income	$	(12,967)	$	29,248	$	63,468
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Equity in subsidiaries loss (income)		12,365		(40,255)		(67,932)
Other		162		150		140
Changes in operating assets and liabilities:
Change in other assets		(289)		(3,353)		175
Change in other liabilities		(7,452)		10,000		—
Net cash used in operating activities		(8,181)		(4,210)		(4,149)
Cash flows from investing activities
Capital contributed to subsidiary (Bank)		(50,000)		—		—
Dividends received from subsidiaries		—		19,002		6,119
Net cash (used in) provided by investing activities		(50,000)		19,002		6,119
Cash flows from financing activities
Repurchase of shares of common stock		(82)		(30,349)		—
Dividends paid to shareholders		(499)		(2,044)		(2,119)
Net cash used in financing activities		(581)		(32,393)		(2,119)
Net decrease in cash		(58,762)		(17,601)		(149)
Cash held at Bank, beginning of year		79,714		97,315		97,464
Cash held at Bank, end of year	$	20,952	$	79,714	$	97,315
Supplemental cash flows information:
Cash paid for:
Interest	$	4,550	$	4,550	$	4,550

Nature of Operations and Basis of Presentation (Details)	12 Months Ended
	Dec. 31, 2020 segment item
Nature of Operations and Basis of Presentation
Number of branches	30
Number of reportable segments \| segment	1
San Francisco and Los Angeles, California
Nature of Operations and Basis of Presentation
Number of branches	26

Summary of Significant Accounting Policies - Principles of Consolidation (Details) - Quantum Capital Management - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Oct. 14, 2020
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Aggregate consideration		$ 250
Gain on sale	$ 189

Summary of Significant Accounting Policies - Cash and Due from Banks (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Summary of Significant Accounting Policies
Cash on hand or deposit held to meet regulatory reserve	$ 23,969

Summary of Significant Accounting Policies - Concentration of Credit Risk (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Concentration of Credit Risk
Loans Receivable	$ 2,506,743	$ 2,913,260
Deferred Tax Assets, Mark-to-Market Adjustments on Mortgage Loans Held for Sale	41	9
Residential real estate
Concentration of Credit Risk
Loans Receivable	$ 2,033,526	$ 2,476,866
Loans receivables \| Residential real estate
Concentration of Credit Risk
Concentration of credit risk	81.00%	85.00%
California \| Loans receivables
Concentration of Credit Risk
Concentration of credit risk	87.00%	89.00%
Advantage loan program \| Loans receivables \| Residential real estate
Concentration of Credit Risk
Concentration of credit risk	74.00%	78.00%
Loans Receivable	$ 1,515,248	$ 1,942,657
Mortgage loans held for sale	$ 19,375

Summary of Significant Accounting Policies - Federal Home Loan Bank Stock (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Summary of Significant Accounting Policies
Cash dividends received on investment securities	$ 847	$ 1,219	$ 1,149

Summary of Significant Accounting Policies - Long-Lived Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets
Amortization expense		$ 450	$ 450
Customer-related intangibles
Finite-Lived Intangible Assets
Estimated useful life	10 years
Amortization expense	$ 450	$ 450	$ 450

Investment Securities - Amortized Cost and Fair Value Corresponding Gross Unrealized Gains and Losses (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Available for sale:
Available for sale, Amortized Cost	$ 299,058	$ 147,016
Available for sale, Gross Unrealized Gain	955	291
Available for sale, Gross Unrealized Loss	(419)	(18)
Investment securities available for sale, at fair value	$ 299,594	$ 147,289
Threshold percentage of total shareholders' equity above which securities of any single issuer exceed	10.00%	10.00%
Sales of investment securities	$ 99,971	$ 2,914	$ 14,964
Gross realized gains	337	6	89
Gross realized losses	(158)		(3)
Securities pledged as collateral on FHLB borrowings	630,197	933,747
Total net realized gains	179	6	86
Income tax expense on net realized gains	50	1	$ 18
Collateralized mortgage obligations \| US Government Corporations and Agencies Securities
Available for sale:
Investment securities available for sale, at fair value	816	1,183
Debt securities
Available for sale:
Securities pledged as collateral on FHLB borrowings	73,792
U.S. Treasury securities
Available for sale:
Available for sale, Amortized Cost		122,634
Available for sale, Gross Unrealized Gain		170
Available for sale, Gross Unrealized Loss		(1)
Investment securities available for sale, at fair value		122,803
U.S. Treasury & Agency securities
Available for sale:
Available for sale, Amortized Cost	138,742
Available for sale, Gross Unrealized Gain	255
Investment securities available for sale, at fair value	138,997
Mortgage-backed securities
Available for sale:
Available for sale, Amortized Cost	33,743	23,028
Available for sale, Gross Unrealized Gain	72	76
Available for sale, Gross Unrealized Loss	(1)
Investment securities available for sale, at fair value	33,814	23,104
Collateralized mortgage obligations
Available for sale:
Available for sale, Amortized Cost	126,359	1,138
Available for sale, Gross Unrealized Gain	628	45
Available for sale, Gross Unrealized Loss	(391)
Investment securities available for sale, at fair value	126,596	1,183
Collateralized debt obligations
Available for sale:
Available for sale, Amortized Cost	214	216
Available for sale, Gross Unrealized Loss	(27)	(17)
Investment securities available for sale, at fair value	$ 187	$ 199

Investment Securities - Amortized Cost and Fair Value By Contractual Maturity (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Available for sale, Amortized Cost
Available for sale, Amortized Cost	$ 299,058	$ 147,016
Available for sale, Fair Value
Available for sale, Fair Value	299,594	147,289
U.S. Treasury & Agency securities
Available for sale, Amortized Cost
Due less than one year	64,974
Due after one year through five years	73,768
Available for sale, Amortized Cost	138,742
Available for sale, Fair Value
Due less than one year	65,205
Due after one year through five years	73,792
Available for sale, Fair Value	138,997
U.S. Treasury securities
Available for sale, Amortized Cost
Available for sale, Amortized Cost		122,634
Available for sale, Fair Value
Available for sale, Fair Value		122,803
Mortgage-backed securities
Available for sale, Amortized Cost
Available for sale, Amortized Cost	33,743	23,028
Available for sale, Fair Value
Available for sale, Fair Value	33,814	23,104
Collateralized mortgage obligations
Available for sale, Amortized Cost
Available for sale, Amortized Cost	126,359	1,138
Available for sale, Fair Value
Available for sale, Fair Value	126,596	1,183
Collateralized debt obligations
Available for sale, Amortized Cost
Available for sale, Amortized Cost	214	216
Available for sale, Fair Value
Available for sale, Fair Value	$ 187	$ 199

Investment Securities - Aggregated by Major Security Type and Length of Time in a Continuous Unrealized Loss Position (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($) security	Dec. 31, 2019 USD ($)
Fair Value
Less than 12 Months, Fair value	$ 81,434	$ 5,011
12 Months or More, Fair Value	187	199
Available for sale, Continuous unrealized loss position, Fair Value	81,621	5,210
Unrealized Losses
Less than 12 Months, Unrealized Losses	(392)	(1)
12 Months or More, Unrealized Losses	(27)	(17)
Available for sale, Continuous unrealized loss position, Unrealized Losses	$ (419)	(18)
Number of debt securities in portfolio \| security	23
Number of debt securities in an unrealized loss position \| security	8
U.S. Treasury securities
Fair Value
Less than 12 Months, Fair value	$ 5,694	5,011
Available for sale, Continuous unrealized loss position, Fair Value	5,694	5,011
Unrealized Losses
Less than 12 Months, Unrealized Losses	(1)	(1)
Available for sale, Continuous unrealized loss position, Unrealized Losses	(1)	(1)
Collateralized mortgage obligations
Fair Value
Less than 12 Months, Fair value	75,740
Available for sale, Continuous unrealized loss position, Fair Value	75,740
Unrealized Losses
Less than 12 Months, Unrealized Losses	(391)
Available for sale, Continuous unrealized loss position, Unrealized Losses	(391)
Collateralized debt obligations
Fair Value
12 Months or More, Fair Value	187	199
Available for sale, Continuous unrealized loss position, Fair Value	187	199
Unrealized Losses
12 Months or More, Unrealized Losses	(27)	(17)
Available for sale, Continuous unrealized loss position, Unrealized Losses	$ (27)	$ (17)

Investment Securities - Equity Securities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Equity Securities
Fair value of equity securities	$ 5,364	$ 5,255
Equity securities with readily determinable fair values	5,118	5,009
Equity securities with readily determinable fair values
Net gains (losses) recorded during the period on equity securities	108	114	$ (87)
Unrealized gains (losses) recorded during the period on equity securities held at the reporting date	108	114	$ (87)
Level 3
Equity Securities
Investment in equity securities without readily determinable fair value	$ 246	$ 246

Loans - Major Categories of Loans (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Major categories of loans
Total Loans	$ 2,506,743	$ 2,913,260
Less: allowance for loan losses	(72,387)	(21,730)	$ (21,850)	$ (18,457)
Loans, net	2,434,356	2,891,530
Carrying value of loans pledged as collateral on FHLB borrowings	630,197	933,747
Residential real estate
Major categories of loans
Total Loans	2,033,526	2,476,866
Less: allowance for loan losses	(32,366)	(12,336)	(13,826)	(12,279)
Loans, net	562,139	759,568
Commercial real estate
Major categories of loans
Total Loans	259,958	240,081
Less: allowance for loan losses	(21,942)	(5,243)	(2,573)	(2,040)
Construction
Major categories of loans
Total Loans	206,581	178,376
Less: allowance for loan losses	(17,988)	(3,822)	(3,273)	(2,218)
Commercial lines of credit
Major categories of loans
Total Loans	6,671	17,903
Less: allowance for loan losses	(91)	(328)	(1,058)	(469)
Other consumer
Major categories of loans
Total Loans	$ 7	34
Less: allowance for loan losses		$ (1)	$ (1)	$ (1)

Loans - Activity in the Allowance For Loan Losses by Portfolio Segment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Allowance for loan losses
Beginning balance	$ 21,730	$ 21,850	$ 18,457
Provision (recovery) for loan losses	54,865	(133)	3,229
Charge offs	(4,301)	(176)	(4)
Recoveries	93	189	168
Total ending balance	72,387	21,730	21,850
Residential real estate
Allowance for loan losses
Beginning balance	12,336	13,826	12,279
Provision (recovery) for loan losses	23,604	(1,511)	1,533
Charge offs	(3,594)		(4)
Recoveries	20	21	18
Total ending balance	32,366	12,336	13,826
Commercial real estate
Allowance for loan losses
Beginning balance	5,243	2,573	2,040
Provision (recovery) for loan losses	16,634	2,509	398
Recoveries	65	161	135
Total ending balance	21,942	5,243	2,573
Construction
Allowance for loan losses
Beginning balance	3,822	3,273	2,218
Provision (recovery) for loan losses	14,866	542	1,040
Charge offs	(707)
Recoveries	7	7	15
Total ending balance	17,988	3,822	3,273
Commercial lines of credit
Allowance for loan losses
Beginning balance	328	1,058	469
Provision (recovery) for loan losses	(237)	(554)	589
Charge offs		(176)
Total ending balance	91	328	1,058
Other consumer
Allowance for loan losses
Beginning balance	1	1	1
Provision (recovery) for loan losses	(2)
Recoveries	$ 1
Total ending balance		1	1
Unallocated
Allowance for loan losses
Beginning balance		1,119	1,450
Provision (recovery) for loan losses		$ (1,119)	(331)
Total ending balance			$ 1,119

Loans - Activity in the Allowance For Loan Losses by Portfolio Segment And Based On Impairment Method (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$ 2,237	$ 48
Collectively evaluated for impairment	70,150	21,682
Total ending allowance balance	72,387	21,730	$ 21,850	$ 18,457
Loans:
Loans individually evaluated for impairment	74,034	19,804
Loans collectively evaluated for impairment	2,432,709	2,893,456
Total Loans	2,506,743	2,913,260
Residential real estate
Ending allowance balance attributable to loans:
Individually evaluated for impairment	41	43
Collectively evaluated for impairment	32,325	12,293
Total ending allowance balance	32,366	12,336	13,826	12,279
Loans:
Loans individually evaluated for impairment	208	215
Loans collectively evaluated for impairment	2,033,318	2,476,651
Total Loans	2,033,526	2,476,866
Commercial real estate
Ending allowance balance attributable to loans:
Individually evaluated for impairment	287
Collectively evaluated for impairment	21,655	5,243
Total ending allowance balance	21,942	5,243	2,573	2,040
Loans:
Loans individually evaluated for impairment	20,974	1,100
Loans collectively evaluated for impairment	238,984	238,981
Total Loans	259,958	240,081
Construction
Ending allowance balance attributable to loans:
Individually evaluated for impairment	1,905
Collectively evaluated for impairment	16,083	3,822
Total ending allowance balance	17,988	3,822	3,273	2,218
Loans:
Loans individually evaluated for impairment	48,871	17,112
Loans collectively evaluated for impairment	157,710	161,264
Total Loans	206,581	178,376
Commercial lines of credit
Ending allowance balance attributable to loans:
Individually evaluated for impairment	4	5
Collectively evaluated for impairment	87	323
Total ending allowance balance	91	328	1,058	469
Loans:
Loans individually evaluated for impairment	3,981	1,377
Loans collectively evaluated for impairment	2,690	16,526
Total Loans	6,671	17,903
Other consumer
Ending allowance balance attributable to loans:
Collectively evaluated for impairment		1
Total ending allowance balance		1	1	1
Loans:
Loans collectively evaluated for impairment	7	34
Total Loans	$ 7	$ 34
Unallocated
Ending allowance balance attributable to loans:
Total ending allowance balance			$ 1,119	$ 1,450

Loans - Impaired Loans by Class of Loans (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Impaired loans by class of loans
Unpaid principal balance, with no related allowance for loan losses recorded	$ 59,317	$ 19,834	$ 7,209
Unpaid principal balance, with an allowance for loan losses recorded	15,803	248	4,861
Total Unpaid Principal Balance	75,120	20,082	12,070
Recorded investment, with no related allowance for loan losses recorded	58,350	19,555	7,008
Recorded investment, with an allowance for loan losses recorded	15,684	249	4,827
Total Recorded Investment	74,034	19,804	11,835
Allowance for Loan Losses	2,237	48	349
Average recorded investment, with no related allowance for loan losses recorded	38,466	8,816	5,585
Average recorded investment, with an allowance for loan losses recorded	10,291	254	4,087
Total Average Recorded Investment	48,757	9,070	9,672
Interest Income Recognized, with no related allowance for loan losses recorded	1,064	684	402
Interest Income Recognized, with an allowance for loan losses recorded	267	12	280
Total Interest Income Recognized	1,331	696	682
Cash Basis Interest Recognized, with no related allowance for loan losses recorded	827	672	321
Cash Basis Interest Recognized, with an allowance for loan losses recorded	236	12	248
Total Cash Basis Interest Recognized	1,063	684	569
Private banking
Impaired loans by class of loans
Unpaid principal balance, with no related allowance for loan losses recorded		1,245
Recorded investment, with no related allowance for loan losses recorded		1,245
C&I lending
Impaired loans by class of loans
Average recorded investment, with no related allowance for loan losses recorded		67
Interest Income Recognized, with no related allowance for loan losses recorded		5
Cash Basis Interest Recognized, with no related allowance for loan losses recorded		5
Residential real estate \| Real estate loan, first mortgage
Impaired loans by class of loans
Unpaid principal balance, with no related allowance for loan losses recorded	116	125
Unpaid principal balance, with an allowance for loan losses recorded	114	116	254
Recorded investment, with no related allowance for loan losses recorded	94	98
Recorded investment, with an allowance for loan losses recorded	114	117	228
Allowance for Loan Losses	41	43	46
Average recorded investment, with no related allowance for loan losses recorded	96	104
Average recorded investment, with an allowance for loan losses recorded	116	118	148
Interest Income Recognized, with an allowance for loan losses recorded	5	5	5
Cash Basis Interest Recognized, with an allowance for loan losses recorded	4	5	4
Commercial real estate \| Real estate loan, Retail
Impaired loans by class of loans
Unpaid principal balance, with no related allowance for loan losses recorded	1,247	1,308	1,370
Recorded investment, with no related allowance for loan losses recorded	1,029	1,100	1,174
Average recorded investment, with no related allowance for loan losses recorded	1,065	1,136	1,210
Interest Income Recognized, with no related allowance for loan losses recorded	58	60	64
Cash Basis Interest Recognized, with no related allowance for loan losses recorded	48	55	58
Commercial real estate \| Real estate loan, Multifamily
Impaired loans by class of loans
Unpaid principal balance, with no related allowance for loan losses recorded			1,088
Recorded investment, with no related allowance for loan losses recorded			1,083
Average recorded investment, with no related allowance for loan losses recorded		449	812
Interest Income Recognized, with no related allowance for loan losses recorded		12	37
Cash Basis Interest Recognized, with no related allowance for loan losses recorded		12	33
Commercial real estate \| Real estate loan, Offices
Impaired loans by class of loans
Unpaid principal balance, with an allowance for loan losses recorded			1,530
Recorded investment, with an allowance for loan losses recorded			1,522
Allowance for Loan Losses			30
Average recorded investment, with no related allowance for loan losses recorded		378
Average recorded investment, with an allowance for loan losses recorded			1,538
Interest Income Recognized, with no related allowance for loan losses recorded		25
Interest Income Recognized, with an allowance for loan losses recorded			88
Cash Basis Interest Recognized, with no related allowance for loan losses recorded		25
Cash Basis Interest Recognized, with an allowance for loan losses recorded			80
Commercial real estate \| Hotels/SROs
Impaired loans by class of loans
Unpaid principal balance, with no related allowance for loan losses recorded	11,428
Unpaid principal balance, with an allowance for loan losses recorded	8,645
Recorded investment, with no related allowance for loan losses recorded	11,419
Recorded investment, with an allowance for loan losses recorded	8,526
Allowance for Loan Losses	287
Average recorded investment, with no related allowance for loan losses recorded	5,221
Average recorded investment, with an allowance for loan losses recorded	3,858
Construction
Impaired loans by class of loans
Unpaid principal balance, with no related allowance for loan losses recorded	42,669	17,156	4,751
Unpaid principal balance, with an allowance for loan losses recorded	6,920		2,661
Recorded investment, with no related allowance for loan losses recorded	41,951	17,112	4,751
Recorded investment, with an allowance for loan losses recorded	6,920		2,661
Allowance for Loan Losses	1,905		78
Average recorded investment, with no related allowance for loan losses recorded	29,395	6,682	3,563
Average recorded investment, with an allowance for loan losses recorded	6,189		1,996
Interest Income Recognized, with no related allowance for loan losses recorded	964	582	301
Interest Income Recognized, with an allowance for loan losses recorded	255		163
Cash Basis Interest Recognized, with no related allowance for loan losses recorded	744	575	230
Cash Basis Interest Recognized, with an allowance for loan losses recorded	226		144
Commercial lines of credit \| Private banking
Impaired loans by class of loans
Unpaid principal balance, with an allowance for loan losses recorded	124	132	316
Recorded investment, with an allowance for loan losses recorded	124	132	316
Allowance for Loan Losses	4	5	95
Average recorded investment, with no related allowance for loan losses recorded	1,505
Average recorded investment, with an allowance for loan losses recorded	128	136	330
Interest Income Recognized, with no related allowance for loan losses recorded	42
Interest Income Recognized, with an allowance for loan losses recorded	7	7	19
Cash Basis Interest Recognized, with no related allowance for loan losses recorded	35
Cash Basis Interest Recognized, with an allowance for loan losses recorded	6	$ 7	16
Commercial lines of credit \| C&I lending
Impaired loans by class of loans
Unpaid principal balance, with no related allowance for loan losses recorded	3,857
Unpaid principal balance, with an allowance for loan losses recorded			100
Recorded investment, with no related allowance for loan losses recorded	3,857
Recorded investment, with an allowance for loan losses recorded			100
Allowance for Loan Losses			100
Average recorded investment, with no related allowance for loan losses recorded	$ 1,184
Average recorded investment, with an allowance for loan losses recorded			75
Interest Income Recognized, with an allowance for loan losses recorded			5
Cash Basis Interest Recognized, with an allowance for loan losses recorded			$ 4

Loans - Investment in Nonaccrual and Loans Past Due Still Accruing by Class of Loans (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Investment in nonaccrual and loans past due still accruing by class of loans
Nonaccrual	$ 86,424	$ 14,732
Loans Past Due Over 90 Days Still Accruing	46	50
Total Past Due	155,261	78,260
Loans Not Past Due	2,351,482	2,835,000
Total Loans	2,506,743	2,913,260
30 - 59 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due	51,619	58,071
60 - 89 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due	17,172	5,407
Greater than 89 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due	86,470	14,782
Residential real estate
Investment in nonaccrual and loans past due still accruing by class of loans
Total Loans	2,033,526	2,476,866
Residential real estate \| Real estate loan, first mortgage
Investment in nonaccrual and loans past due still accruing by class of loans
Nonaccrual	20,043	14,482
Loans Past Due Over 90 Days Still Accruing	46	50
Total Past Due	72,432	55,756
Loans Not Past Due	1,943,602	2,396,800
Total Loans	2,016,034	2,452,556
Residential real estate \| Real estate loan, first mortgage \| 30 - 59 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due	37,819	36,112
Residential real estate \| Real estate loan, first mortgage \| 60 - 89 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due	14,524	5,112
Residential real estate \| Real estate loan, first mortgage \| Greater than 89 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due	20,089	14,532
Residential real estate \| Real estate loan, second mortgage
Investment in nonaccrual and loans past due still accruing by class of loans
Nonaccrual	686	210
Total Past Due	1,182	602
Loans Not Past Due	16,310	23,708
Total Loans	17,492	24,310
Residential real estate \| Real estate loan, second mortgage \| 30 - 59 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due	362	97
Residential real estate \| Real estate loan, second mortgage \| 60 - 89 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due	134	295
Residential real estate \| Real estate loan, second mortgage \| Greater than 89 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due	686	210
Commercial real estate
Investment in nonaccrual and loans past due still accruing by class of loans
Total Loans	259,958	240,081
Commercial real estate \| Real estate loan, Retail
Investment in nonaccrual and loans past due still accruing by class of loans
Nonaccrual	20	40
Total Past Due	1,030	40
Loans Not Past Due	15,170	6,089
Total Loans	16,200	6,129
Commercial real estate \| Real estate loan, Retail \| 30 - 59 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due	1,010
Commercial real estate \| Real estate loan, Retail \| Greater than 89 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due	20	40
Commercial real estate \| Real estate loan, Multifamily
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due	3,835
Loans Not Past Due	75,374	64,873
Total Loans	79,209	64,873
Commercial real estate \| Real estate loan, Multifamily \| 30 - 59 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due	3,835
Commercial real estate \| Real estate loan, Offices
Investment in nonaccrual and loans past due still accruing by class of loans
Loans Not Past Due	27,061	28,048
Total Loans	27,061	28,048
Commercial real estate \| Real estate loan, Industrial
Investment in nonaccrual and loans past due still accruing by class of loans
Loans Not Past Due	13,186	14,150
Total Loans	13,186	14,150
Commercial real estate \| Real estate loan, Other
Investment in nonaccrual and loans past due still accruing by class of loans
Loans Not Past Due	56,667	45,111
Total Loans	56,667	45,111
Commercial real estate \| Hotels/SROs
Investment in nonaccrual and loans past due still accruing by class of loans
Nonaccrual	19,945
Total Past Due	19,945	5,605
Loans Not Past Due	47,690	76,165
Total Loans	67,635	81,770
Commercial real estate \| Hotels/SROs \| 30 - 59 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due		5,605
Commercial real estate \| Hotels/SROs \| Greater than 89 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due	19,945
Construction
Investment in nonaccrual and loans past due still accruing by class of loans
Nonaccrual	41,873
Total Past Due	52,980	15,008
Loans Not Past Due	153,601	163,368
Total Loans	206,581	178,376
Construction \| 30 - 59 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due	8,593	15,008
Construction \| 60 - 89 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due	2,514
Construction \| Greater than 89 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due	41,873
Commercial lines of credit
Investment in nonaccrual and loans past due still accruing by class of loans
Total Loans	6,671	17,903
Commercial lines of credit \| Private banking
Investment in nonaccrual and loans past due still accruing by class of loans
Nonaccrual	2,285
Total Past Due	2,285
Loans Not Past Due	124	11,914
Total Loans	2,409	11,914
Commercial lines of credit \| Private banking \| Greater than 89 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due	2,285
Commercial lines of credit \| C&I lending
Investment in nonaccrual and loans past due still accruing by class of loans
Nonaccrual	1,572
Total Past Due	1,572	1,249
Loans Not Past Due	2,690	4,740
Total Loans	4,262	5,989
Commercial lines of credit \| C&I lending \| 30 - 59 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due		1,249
Commercial lines of credit \| C&I lending \| Greater than 89 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due	1,572
Other consumer
Investment in nonaccrual and loans past due still accruing by class of loans
Loans Not Past Due	7	34
Total Loans	$ 7	$ 34

Loans - Troubled Debt Restructurings (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($) loan	Dec. 31, 2019 USD ($) loan
Troubled Debt Restructurings
Loans classified as troubled debt restructurings	$ 28,347	$ 13,718
Allowance for outstanding loan losses classified as troubled debt restructurings	1,951	48
Accrued interest receivable under the CARES Act COVID-19 forbearance program	$ 146
Loans that remain in payment deferral under the CARES Act COVID-19 forbearance program	15,785
Loans amount modified under the CARES Act COVID-19 forbearance program	$ 132,830
Private banking
Troubled Debt Restructurings
Number of loans modified during the period, that were considered as TDRs \| loan	1
Real estate loan, first mortgage
Troubled Debt Restructurings
Loans classified as troubled debt restructurings	$ 209	215
Allowance for outstanding loan losses classified as troubled debt restructurings	41	43
Real estate loan, Retail
Troubled Debt Restructurings
Loans classified as troubled debt restructurings	1,029	1,110
Residential real estate
Troubled Debt Restructurings
Loans secured by residential real estate properties in the process of foreclosure	5,320	1,643
Construction
Troubled Debt Restructurings
Loans classified as troubled debt restructurings	26,985	$ 12,261
Allowance for outstanding loan losses classified as troubled debt restructurings	1,906
Value of loans subsequently defaulted	$ 19,987
Number of loans modified during the period, that were considered as TDRs \| loan	3	3
Financing Receivable, Troubled Debt Restructuring, Subsequent Default	$ 19,987
Number of TDRs subsequently defaulted \| loan	5
Construction \| Pre and Post Modification
Troubled Debt Restructurings
Loans classified as troubled debt restructurings		$ 11,214
Construction loans and private banking loan \| Pre and Post Modification
Troubled Debt Restructurings
Loans classified as troubled debt restructurings	$ 13,777
Commercial lines of credit and private banking
Troubled Debt Restructurings
Loans classified as troubled debt restructurings	124	132
Allowance for outstanding loan losses classified as troubled debt restructurings	$ 4	$ 5

Loans - Risk Rating of Loans by Class of Loans (Details) - USD ($) $ in Thousands	1 Months Ended	7 Months Ended	12 Months Ended
	May 31, 2020	Dec. 31, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Recorded investment in loans
Total		$ 2,506,743	$ 2,506,743	$ 2,913,260
Portfolio loans sold during the period				173,382	$ 475,646
Gain on sale of portfolio loans				5,970	16,433
Unpaid principal balance		2,434,356	2,434,356	2,891,530
Other Noninterest Expense			5,741	7,342	7,220
Charge offs to allowance for loan losses			4,301	176	4
Advantage Loan Program
Recorded investment in loans
Outstanding principal balance of loans repurchased	$ 38,704	30,934	69,638
Unpaid principal balance		429,816	429,816	670,243
Other Noninterest Expense	$ 136	135	271
Pass
Recorded investment in loans
Total		2,308,592	2,308,592	2,821,683
Special Mention
Recorded investment in loans
Total		59,668	59,668	44,247
Substandard
Recorded investment in loans
Total		131,469	131,469	46,875
Doubtful
Recorded investment in loans
Total		7,014	7,014	455
Residential real estate
Recorded investment in loans
Total		2,033,526	2,033,526	2,476,866
Unpaid principal balance		562,139	562,139	759,568
Charge offs to allowance for loan losses			3,594		$ 4
Residential real estate \| Real estate loan, first mortgage
Recorded investment in loans
Total		2,016,034	2,016,034	2,452,556
Residential real estate \| Real estate loan, second mortgage
Recorded investment in loans
Total		17,492	17,492	24,310
Residential real estate \| Pass \| Real estate loan, first mortgage
Recorded investment in loans
Total		1,995,945	1,995,945	2,438,024
Residential real estate \| Pass \| Real estate loan, second mortgage
Recorded investment in loans
Total		16,806	16,806	24,100
Residential real estate \| Substandard \| Real estate loan, first mortgage
Recorded investment in loans
Total		19,995	19,995	14,077
Residential real estate \| Substandard \| Real estate loan, second mortgage
Recorded investment in loans
Total		686	686	210
Residential real estate \| Doubtful \| Real estate loan, first mortgage
Recorded investment in loans
Total		94	94	455
Nonaccrual residential real estate loans
Recorded investment in loans
Unpaid principal balance		19,375	19,375
Charge offs to allowance for loan losses			3,486
Commercial real estate
Recorded investment in loans
Total		259,958	259,958	240,081
Commercial real estate \| Real estate loan, Retail
Recorded investment in loans
Total		16,200	16,200	6,129
Commercial real estate \| Real estate loan, Multifamily
Recorded investment in loans
Total		79,209	79,209	64,873
Commercial real estate \| Real estate loan, Offices
Recorded investment in loans
Total		27,061	27,061	28,048
Commercial real estate \| Real estate loan, Industrial
Recorded investment in loans
Total		13,186	13,186	14,150
Commercial real estate \| Real estate loan, Other
Recorded investment in loans
Total		56,667	56,667	45,111
Commercial real estate \| Hotels/SROs
Recorded investment in loans
Total		67,635	67,635	81,770
Commercial real estate \| Pass \| Real estate loan, Retail
Recorded investment in loans
Total		13,599	13,599	4,195
Commercial real estate \| Pass \| Real estate loan, Multifamily
Recorded investment in loans
Total		55,772	55,772	56,164
Commercial real estate \| Pass \| Real estate loan, Offices
Recorded investment in loans
Total		12,014	12,014	24,484
Commercial real estate \| Pass \| Real estate loan, Industrial
Recorded investment in loans
Total		5,867	5,867	5,894
Commercial real estate \| Pass \| Real estate loan, Other
Recorded investment in loans
Total		43,193	43,193	37,693
Commercial real estate \| Pass \| Hotels/SROs
Recorded investment in loans
Total		9,115	9,115	60,074
Commercial real estate \| Special Mention \| Real estate loan, Retail
Recorded investment in loans
Total		1,572	1,572	834
Commercial real estate \| Special Mention \| Real estate loan, Multifamily
Recorded investment in loans
Total		14,238	14,238	7,150
Commercial real estate \| Special Mention \| Real estate loan, Offices
Recorded investment in loans
Total		1,623	1,623	645
Commercial real estate \| Special Mention \| Real estate loan, Industrial
Recorded investment in loans
Total				8,256
Commercial real estate \| Special Mention \| Real estate loan, Other
Recorded investment in loans
Total		7,732	7,732	920
Commercial real estate \| Special Mention \| Hotels/SROs
Recorded investment in loans
Total		17,984	17,984	18,189
Commercial real estate \| Substandard \| Real estate loan, Retail
Recorded investment in loans
Total		1,029	1,029	1,100
Commercial real estate \| Substandard \| Real estate loan, Multifamily
Recorded investment in loans
Total		9,199	9,199	1,559
Commercial real estate \| Substandard \| Real estate loan, Offices
Recorded investment in loans
Total		13,424	13,424	2,919
Commercial real estate \| Substandard \| Real estate loan, Industrial
Recorded investment in loans
Total		7,319	7,319
Commercial real estate \| Substandard \| Real estate loan, Other
Recorded investment in loans
Total		5,742	5,742	6,498
Commercial real estate \| Substandard \| Hotels/SROs
Recorded investment in loans
Total		40,536	40,536	3,507
Construction
Recorded investment in loans
Total		206,581	206,581	178,376
Charge offs to allowance for loan losses			707
Construction \| Pass
Recorded investment in loans
Total		152,577	152,577	156,339
Construction \| Special Mention
Recorded investment in loans
Total		14,234	14,234	7,008
Construction \| Substandard
Recorded investment in loans
Total		32,850	32,850	15,029
Construction \| Doubtful
Recorded investment in loans
Total		6,920	6,920
Commercial lines of credit
Recorded investment in loans
Total		6,671	6,671	17,903
Charge offs to allowance for loan losses				176
Commercial lines of credit \| Private banking
Recorded investment in loans
Total		2,409	2,409	11,914
Commercial lines of credit \| C&I lending
Recorded investment in loans
Total		4,262	4,262	5,989
Commercial lines of credit \| Pass \| Private banking
Recorded investment in loans
Total		124	124	10,669
Commercial lines of credit \| Pass \| C&I lending
Recorded investment in loans
Total		3,573	3,573	4,013
Commercial lines of credit \| Special Mention \| Private banking
Recorded investment in loans
Total		2,285	2,285	1,245
Commercial lines of credit \| Substandard \| C&I lending
Recorded investment in loans
Total		689	689	1,976
Other consumer
Recorded investment in loans
Total		7	7	34
Other consumer \| Pass
Recorded investment in loans
Total		$ 7	$ 7	$ 34

Leasehold Improvements and Equipment, net (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Leasehold Improvements and Equipment, net
Leasehold improvements and equipment, gross	$ 25,620	$ 24,901
Less: accumulated depreciation and amortization	(17,108)	(15,703)
Leasehold improvements and equipment, net	8,512	9,198
Depreciation and amortization on leasehold improvements and equipment	1,608	1,621	$ 1,399
Leasehold improvements
Leasehold Improvements and Equipment, net
Leasehold improvements and equipment, gross	11,259	10,920
Furniture and equipment
Leasehold Improvements and Equipment, net
Leasehold improvements and equipment, gross	$ 14,361	$ 13,981
Minimum \| Furniture and equipment
Leasehold Improvements and Equipment, net
Estimated Useful Life (in years)	3
Maximum \| Furniture and equipment
Leasehold Improvements and Equipment, net
Estimated Useful Life (in years)	7

Mortgage Servicing Rights, net - Principle Balance by Category (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Mortgage Servicing Rights
Total	$ 666,030	$ 873,238
Custodial escrow balances maintained on serviced loans	6,051	7,688
FNMA
Mortgage Servicing Rights
Total	171,553	130,425
FHLB
Mortgage Servicing Rights
Total	64,661	86,778
Private investors
Mortgage Servicing Rights
Total	$ 429,816	$ 656,035

Mortgage Servicing Rights, net - Activity and Related Valuation Allowance (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Mortgage servicing rights activity
Mortgage servicing rights Beginning of year	$ 10,845	$ 10,733	$ 6,706
Additions	713	2,964	6,052
Amortization	(3,705)	(2,852)	(2,025)
Mortgage servicing rights End of year	7,853	10,845	10,733
Valuation allowance at beginning of year	1,080	100	210
Additions (recoveries)	1,085	980	(110)
Valuation allowance at end of year	2,165	1,080	100
Mortgage servicing rights, net	5,688	9,765	10,633
Servicing fee income, net of amortization of servicing rights and changes in valuation allowance	$ (1,324)	$ 238	$ 1,381

Mortgage Servicing Rights, net - Valuation techniques (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Mortgage Servicing Rights
Fair value of mortgage servicing rights	$ 5,841	$ 10,271
Weighted average default rate	0.20%
Minimum
Mortgage Servicing Rights
Discount rate range	9.50%	9.50%
Maximum
Mortgage Servicing Rights
Discount rate range	12.00%	12.00%
Weighted Average
Mortgage Servicing Rights
Prepayment speed range	22.50%	20.10%
Weighted average life of the mortgage servicing right	43 months	52 months
Weighted average default rate		0.20%

Deposits - Time deposits (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Deposits
Interest-bearing time deposits	$ 1,646,523	$ 1,154,076
Brokered time deposits	42,751	25,000
Time deposits that meet or exceed the FDIC insurance limit of $250	$ 487,340	$ 283,457

Deposits - Scheduled maturities of time deposits (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Scheduled maturities of time deposits
2021	$ 1,258,983
2022	297,971
2023	69,162
2024	9,126
2025	11,281
Total	$ 1,646,523

FHLB Borrowings (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Federal Home Loan Bank Borrowings
Long-term fixed rate advances	$ 318,000	$ 229,000
Minimum \| Long term
Federal Home Loan Bank Borrowings
FHLB interest rates (as a percent)	0.43%	1.07%
Maximum \| Long term
Federal Home Loan Bank Borrowings
FHLB interest rates (as a percent)	1.96%	1.96%

FHLB Borrowings - FHLB Advances (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Federal Home Loan Bank Borrowings
Total FHLB advances	$ 318,000
Additional borrowing capacity	120,797
Callable Option
Federal Home Loan Bank Borrowings
Total FHLB advances	307,000
Callable Option February, 2021
Federal Home Loan Bank Borrowings
Total FHLB advances	100,000
Callable Option September, 2021
Federal Home Loan Bank Borrowings
Total FHLB advances	67,000
Callable Option October, 2021
Federal Home Loan Bank Borrowings
Total FHLB advances	90,000
Callable Option May, 2024
Federal Home Loan Bank Borrowings
Total FHLB advances	$ 50,000

FHLB Borrowings - Contractual annual maturities of FHLB advances (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Contractual annual maturities of FHLB advances
2021	$ 11,000
Thereafter	307,000
Total FHLB advances	$ 318,000

FHLB Borrowings - FHLB Overdraft Line of Credit (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
FHLB Borrowings
FHLB line of credit agreement maximum borrowing limit	$ 50,000
FHLB overdraft line of credit average borrowings outstanding	18	$ 2,008
FHLB overdraft line of credit	$ 0	$ 0
FHLB overdraft line of credit (as percent)	0.46%	1.99%
FHLB, agreement term	1 year

FHLB Borrowings - Other Borrowings (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Other Borrowings
Outstanding balance	$ 0	$ 0
Other Banks
Other Borrowings
Maximum borrowing capacity	$ 100,000	$ 70,000

- Definition

The carrying value as of the balance sheet date of the current and noncurrent portions of long-term obligations drawn from a line of credit, which is a bank's commitment to make loans up to a specific amount. Examples of items that might be included in the application of this element may consist of letters of credit, standby letters of credit, and revolving credit arrangements, under which borrowings can be made up to a maximum amount as of any point in time conditional on satisfaction of specified terms before, as of and after the date of drawdowns on the line. Includes short-term obligations that would normally be classified as current liabilities but for which (a) postbalance sheet date issuance of a long term obligation to refinance the short term obligation on a long term basis, or (b) the enterprise has entered into a financing agreement that clearly permits the enterprise to refinance the short-term obligation on a long term basis and the following conditions are met (1) the agreement does not expire within 1 year and is not cancelable by the lender except for violation of an objectively determinable provision, (2) no violation exists at the BS date, and (3) the lender has entered into the financing agreement is expected to be financially capable of honoring the agreement.

+ References + Details

Subordinated Notes, net (Details) - USD ($) $ in Thousands	12 Months Ended
Subordinated Notes, net (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Subordinated Notes
Total	$ 65,341	$ 65,179
Interest expense	4,713	4,701	$ 4,689
Subordinated notes
Subordinated Notes
7.0% fixed to floating rate subordinated notes	65,000	65,000
Unamortized note premium	411	474
Unamortized debt issuance costs	(70)	(295)
Total	$ 65,341	65,179
Interest rate (as a percent)	7.00%
Interest expense	$ 4,713	$ 4,701	$ 4,689
Redemption price percentage of outstanding principal amount	100.00%
LIBOR \| Subordinated notes
Subordinated Notes
Variable interest rate on subordinate notes (in percent)	5.82%

Stock Repurchase Program (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Stock Repurchase Program
Shares repurchased and cancelled, value	$ 82	$ 30,349
Common stock
Stock Repurchase Program
Shares repurchased and canceled	10,912	3,134,806
Shares repurchased and cancelled, value	$ 82	$ 30,349
Average repurchase price (in dollars per share)	$ 7.57	$ 9.68
Common stock repurchases remaining value	$ 19,568
Maximum \| Common stock
Stock Repurchase Program
Stock repurchase program authorized amount			$ 50,000

Shareholders' Equity (Details) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($) Vote $ / shares shares	Dec. 31, 2019 USD ($) $ / shares shares	Dec. 31, 2018 USD ($) $ / shares
Shareholders' Equity
Preferred stock, shares authorized	10,000,000	10,000,000
Number of votes \| Vote	1
Dividends paid per common share (in dollars per share) \| $ / shares	$ 0.01	$ 0.04	$ 0.04
Dividends distributed \| $	$ 499	$ 2,044	$ 2,119
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock
Shareholders' Equity
Common stock, shares authorized	500,000,000	500,000,000
Common stock, par value (in dollars per share) \| $ / shares	$ 0	$ 0

Stock-based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands		12 Months Ended
	Jun. 05, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Grant Date Fair Value of Restricted Stock that Vested During the year
Vested		$ 100	$ 214
Key employee
Stock-based Compensation
Number of share instruments issued		67,361	84,889	92,625
Non-employee directors Restricted Stock Awards
Stock-based Compensation
Number of share instruments issued	300,000
Exercise price	$ 4.00
Weighted Average Exercise Price
Granted	$ 4.00
2017 Omnibus Equity Incentive Plan
Stock-based Compensation
Number of shares authorized		4,237,100
2017 Omnibus Equity Incentive Plan \| Stock options
Stock-based Compensation
Maximum term of stock awards granted		10 years
Exercise price		$ 4.57
Weighted average grant-date fair value		$ 1.29	$ 3.20	$ 4.56
Number of awards granted		367,361
Fair value assumptions used in Black-Scholes option pricing model
Risk-free interest rate		0.49%	2.66%	2.80%
Expected term (in years)		5 years 7 months 9 days	6 years 9 months	6 years 9 months
Expected stock price volatility		33.91%	26.26%	23.70%
Dividend yield		0.10%	0.40%	0.29%
Number of Shares
Outstanding at January 1, 2020		142,477
Granted		367,361
Forfeited/expired		(131,956)
Outstanding at December 31, 2020		377,882	142,477
Weighted Average Exercise Price
Outstanding at January 1, 2020		$ 12.29
Granted		4.57
Forfeited/expired		9.93
Outstanding at December 31, 2020		$ 5.61	$ 12.29
Weighted Average Remaining Contractual Term
Weighted Average Remaining Contractual Term (Years)		9 years 1 month 2 days	8 years 7 months 6 days
Stock-based compensation costs recognized		$ 200	$ 137	$ 82
Total unrecognized compensation cost - stock options		$ 237
Unrecognized compensation cost related to nonvested awards, expected to be recognized over a weighted-average period		1 year 1 month 24 days
Number of options exercisable		0
2017 Omnibus Equity Incentive Plan \| Stock options \| Awards vesting at the end of the third year
Stock-based Compensation
Percentage of awards vesting		50.00%
2017 Omnibus Equity Incentive Plan \| Stock options \| Awards vesting at the end of the fourth year
Stock-based Compensation
Percentage of awards vesting		50.00%
2017 Omnibus Equity Incentive Plan \| Restricted stock
Weighted Average Remaining Contractual Term
Stock-based compensation costs recognized		$ 134	$ 360	$ 215
Total unrecognized compensation cost - restricted stock awards		$ 686
Unrecognized compensation cost related to nonvested awards, expected to be recognized over a weighted-average period		2 years 1 month 28 days
Number of Shares
Nonvested, Opening balance		100,096
Granted		151,874
Vested		(10,460)
Forfeited		(103,574)
Nonvested, Ending balance		137,936	100,096
Weighted Average Grant Date Fair Value
Nonvested, Opening balance		$ 11.02
Granted		6.91
Vested		9.52
Forfeited		9.12
Nonvested, Ending balance		$ 7.90	$ 11.02
2017 Omnibus Equity Incentive Plan \| Restricted stock \| Key employee
Stock-based Compensation
Number of share instruments issued		151,874	71,144
2017 Omnibus Equity Incentive Plan \| Restricted stock \| Key employee \| Awards vesting at the end of the third year
Stock-based Compensation
Percentage of awards vesting		50.00%
2017 Omnibus Equity Incentive Plan \| Restricted stock \| Key employee \| Awards vesting at the end of the fourth year
Stock-based Compensation
Percentage of awards vesting		50.00%
2017 Omnibus Equity Incentive Plan \| Restricted stock \| Non-employee directors Restricted Stock Awards
Stock-based Compensation
Number of share instruments issued			10,460
2017 Omnibus Equity Incentive Plan \| Restricted stock \| Non-employee directors Restricted Stock Awards \| Awards vesting on the first anniversary of the grant date
Stock-based Compensation
Percentage of awards vesting		100.00%
2020 Omnibus Equity Incentive Plan
Stock-based Compensation
Number of shares authorized		3,979,661
Number of shares granted		0

Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Numerator:
Net income (loss)	$ (12,967)	$ 29,248	$ 63,468
Denominator:
Weighted average common shares outstanding, basic	49,840,882	51,115,986	52,963,308
Weighted average effect of potentially dilutive common shares:
Weighted average common shares outstanding, diluted	49,840,882	51,127,879	52,965,567
Income (loss) per share:
Basic (in dollars per share)	$ (0.26)	$ 0.57	$ 1.20
Diluted (in dollars per share)	$ (0.26)	$ 0.57	$ 1.20
Common stock
Income (loss) per share:
Securities excluded from the computation of weighted average diluted shares outstanding as inclusion of such items would be anti-dilutive	525,855	195,931	92,625
Common stock \| Stock options
Income (loss) per share:
Securities excluded from the computation of weighted average diluted shares outstanding as inclusion of such items would be anti-dilutive	359,234	167,255	92,625
Common stock \| Restricted stock
Weighted average effect of potentially dilutive common shares:
Incremental shares from share-based compensation		11,893	2,259
Income (loss) per share:
Securities excluded from the computation of weighted average diluted shares outstanding as inclusion of such items would be anti-dilutive	166,621	28,676

Employee Benefit Plans (Details) $ in Thousands	12 Months Ended
Employee Benefit Plans (Details) $ in Thousands	Dec. 31, 2020 USD ($) employee	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Employee Benefit Plans
Employer matching contribution, as a percent of employee's contribution	100.00%
Percentage of employee's contribution or deferred contribution that will be matched by employer	3.00%
Percentage of employee's base salary that will be matched by employer	3.00%
Maximum percentage of additional contribution in-excess of employee match	1.00%
Amount of contributions to the plan	$ 256	$ 758	$ 773
Executive Incentive Retirement Plan Agreement
Employee Benefit Plans
Number of employees \| employee	6
Retirement obligation liability	$ 3,016	3,157
Retirement benefit plan expense, net of forfeitures	(141)	290	273
Spilt Dollar Life Insurance Agreement
Employee Benefit Plans
Postretirement benefit estimated present value	$ 4,347	4,340
Retirement benefit plan, benefit payments		$ 31	$ 28

Fair Values of Financial Instruments - Assets measured at fair value on a recurring basis (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Available for sale debt securities:
Available for sale debt securities, at fair value	$ 299,594	$ 147,289
Equity securities
Equity securities	5,118	5,009
U.S. Treasury securities
Available for sale debt securities:
Available for sale debt securities, at fair value		122,803
U.S. Treasury securities \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value		122,803
U.S. Treasury securities \| Level 1 \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value		122,803
U.S. Treasury & Agency securities
Available for sale debt securities:
Available for sale debt securities, at fair value	138,997
U.S. Treasury & Agency securities \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	138,997
U.S. Treasury & Agency securities \| Level 1 \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	40,192
U.S. Treasury & Agency securities \| Level 2 \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	98,805
Mortgage-backed securities
Available for sale debt securities:
Available for sale debt securities, at fair value	33,814	23,104
Mortgage-backed securities \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	33,814
Mortgage-backed securities \| Level 2
Available for sale debt securities:
Available for sale debt securities, at fair value		23,104
Mortgage-backed securities \| Level 2 \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	33,814
Collateralized mortgage obligations
Available for sale debt securities:
Available for sale debt securities, at fair value	126,596	1,183
Collateralized mortgage obligations \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	126,596	1,183
Collateralized mortgage obligations \| Level 2 \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	126,596	1,183
Collateralized debt obligations
Available for sale debt securities:
Available for sale debt securities, at fair value	187	199
Collateralized debt obligations \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	187	199
Collateralized debt obligations \| Level 3 \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	187	199
Equity securities \| Recurring
Equity securities
Equity securities	5,118	5,009
Equity securities \| Level 1 \| Recurring
Equity securities
Equity securities	$ 5,118	$ 5,009

Fair Values of Financial Instruments - Reconciliation and income statement classification using Level 3 inputs (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Investment income
Unrealized losses on investments	$ 419	$ 18
Collateralized debt obligations
Investment income
Unrealized losses on investments	27	17
Collateralized debt obligations \| Recurring \| Level 3
Reconciliation and income statement classification of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3)
Balance of recurring Level 3 assets at beginning of period	199	297
Included in other comprehensive income (loss)	(10)	(6)
Principal maturities/settlements	(2)	(92)
Balance of recurring Level 3 assets at end of period	187	199
Investment income
Unrealized losses on investments	27	17
Interest income	$ 7	$ 13

Fair Values of Financial Instruments - Assets Measured at Fair Value on a Non Recurring Basis and Fair Value of Financial Instruments (Details) $ in Thousands	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Financial Assets
Interest-bearing time deposits with other banks	$ 7,021	$ 1,025
Nonrecurring \| Impaired loans, construction
Fair value of financial assets and liabilities
Assets measured at fair value on a non-recurring basis	5,015
Nonrecurring \| Impaired loans, construction \| Level 3
Fair value of financial assets and liabilities
Assets measured at fair value on a non-recurring basis	5,015
Nonrecurring \| Impaired loans, construction \| Level 3 \| Hybrid of sales comparison and income capitalization approaches
Fair value of financial assets and liabilities
Assets measured at fair value on a non-recurring basis	$ 5,015
Nonrecurring \| Impaired loans, construction \| Weighted Average \| Level 3 \| Hybrid of sales comparison and income capitalization approaches \| Adjustments for differences between the comparable sales and income data for similar loans and collateral underlying such loans
Fair value of financial assets and liabilities
Assets measured at fair value, measurement input	0.15
Nonrecurring \| Impaired loans, commercial real estate
Fair value of financial assets and liabilities
Assets measured at fair value on a non-recurring basis	$ 8,240
Nonrecurring \| Impaired loans, commercial real estate \| Level 3
Fair value of financial assets and liabilities
Assets measured at fair value on a non-recurring basis	8,240
Nonrecurring \| Impaired loans, commercial real estate \| Level 3 \| Sales comparison approach
Fair value of financial assets and liabilities
Assets measured at fair value on a non-recurring basis	$ 8,240
Nonrecurring \| Impaired loans, commercial real estate \| Weighted Average \| Level 3 \| Sales comparison approach \| Adjustments for differences between the comparable sales and income data for similar loans and collateral underlying such loans
Fair value of financial assets and liabilities
Assets measured at fair value, measurement input	0.36
Nonrecurring \| Mortgage loans held for sale
Fair value of financial assets and liabilities
Assets measured at fair value on a non-recurring basis	$ 19,375
Nonrecurring \| Mortgage loans held for sale \| Level 2
Fair value of financial assets and liabilities
Assets measured at fair value on a non-recurring basis	19,375
Nonrecurring \| Mortgage servicing rights
Fair value of financial assets and liabilities
Assets measured at fair value on a non-recurring basis	5,175	7,949
Nonrecurring \| Mortgage servicing rights \| Level 3
Fair value of financial assets and liabilities
Assets measured at fair value on a non-recurring basis	5,175	7,949
Nonrecurring \| Mortgage servicing rights \| Level 3 \| Discounted cash flow
Fair value of financial assets and liabilities
Assets measured at fair value on a non-recurring basis	$ 5,175	$ 7,949
Nonrecurring \| Mortgage servicing rights \| Maximum \| Level 3 \| Discounted cash flow \| Discount rate
Fair value of financial assets and liabilities
Assets measured at fair value, measurement input	0.120	0.120
Nonrecurring \| Mortgage servicing rights \| Maximum \| Level 3 \| Discounted cash flow \| Prepayment speed
Fair value of financial assets and liabilities
Assets measured at fair value, measurement input	0.370	0.471
Nonrecurring \| Mortgage servicing rights \| Maximum \| Level 3 \| Discounted cash flow \| Default rate
Fair value of financial assets and liabilities
Assets measured at fair value, measurement input	0.002	0.003
Nonrecurring \| Mortgage servicing rights \| Minimum \| Level 3 \| Discounted cash flow \| Discount rate
Fair value of financial assets and liabilities
Assets measured at fair value, measurement input	0.095	0.095
Nonrecurring \| Mortgage servicing rights \| Minimum \| Level 3 \| Discounted cash flow \| Prepayment speed
Fair value of financial assets and liabilities
Assets measured at fair value, measurement input	0.105	0.072
Nonrecurring \| Mortgage servicing rights \| Minimum \| Level 3 \| Discounted cash flow \| Default rate
Fair value of financial assets and liabilities
Assets measured at fair value, measurement input	0.001	0.001
Nonrecurring \| Mortgage servicing rights \| Weighted Average \| Level 3 \| Discounted cash flow \| Discount rate
Fair value of financial assets and liabilities
Assets measured at fair value, measurement input	0.116	0.119
Nonrecurring \| Mortgage servicing rights \| Weighted Average \| Level 3 \| Discounted cash flow \| Prepayment speed
Fair value of financial assets and liabilities
Assets measured at fair value, measurement input	0.237	0.213
Nonrecurring \| Mortgage servicing rights \| Weighted Average \| Level 3 \| Discounted cash flow \| Default rate
Fair value of financial assets and liabilities
Assets measured at fair value, measurement input	0.002	0.002
Carrying value per balance sheet
Financial Assets
Cash and due from banks	$ 998,497	$ 77,819
Interest-bearing time deposits with other banks	7,021	1,025
Mortgage loans held for sale	2,909	1,337
Loans, net	2,434,356	2,891,530
Financial Liabilities
Time deposits	1,646,523	1,154,076
Federal Home Loan Bank borrowings	318,000	229,000
Subordinated notes, net	65,341	65,179
Estimated fair value
Financial Assets
Cash and due from banks	998,497	77,819
Interest-bearing time deposits with other banks	7,021	1,025
Mortgage loans held for sale	3,052	1,368
Loans, net	2,521,874	2,978,846
Financial Liabilities
Time deposits	1,658,020	1,161,490
Federal Home Loan Bank borrowings	328,150	227,333
Subordinated notes, net	65,753	65,650
Estimated fair value \| Level 1
Financial Assets
Cash and due from banks	998,497	77,819
Interest-bearing time deposits with other banks	7,021	1,025
Estimated fair value \| Level 2
Financial Assets
Mortgage loans held for sale	3,052	1,368
Financial Liabilities
Time deposits	1,658,020	1,161,490
Federal Home Loan Bank borrowings	328,150	227,333
Subordinated notes, net	65,753	65,650
Estimated fair value \| Level 3
Financial Assets
Loans, net	$ 2,521,874	$ 2,978,846

Income Taxes - Components of income tax (benefit) expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Current:
Federal	$ 4,489	$ 15,341	$ 16,435
State	1,908	6,354	7,979
Total current expense	6,397	21,695	24,414
Deferred:
Federal	(8,373)	(3,995)	478
State	(3,933)	(2,057)	212
Total deferred (benefit) expense	(12,306)	(6,052)	690
Total income tax (benefit) expense	$ (5,909)	$ 15,643	$ 25,104

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Income Taxes - Reconciliation of income tax rate (Details)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Reconciliation of U.S. federal statutory tax rate and effective income tax rate
U.S. federal statutory rate (as a percentage)	21.00%	21.10%	21.00%
Effect of:
State taxes, net of federal benefit (as a percentage)	8.50%	4.00%	7.10%
Non-deductible items		9.50%
Income on cash surrender value of bank-owned life insurance (as a percentage)	0.60%	(0.20%)	(0.20%)
Other, net (as a percentage)	1.20%	0.40%	0.40%
Effective tax rate (as a percentage)	31.30%	34.80%	28.30%

Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Deferred tax assets:
Allowance for loan losses	$ 20,185	$ 6,144
Contingent losses		2,834
Mortgage repurchase liability	2,705	2,217
Mark-to-market adjustments on mortgage loans held for sale	41	9
Supplemental retirement benefit plan	841	895
Deferred loan fee income	158	268
State franchise tax	503	1,455
Compensation plans	531	729
Operating lease liabilities	5,715	5,631
Other	1,258	633
Total deferred tax assets	31,937	20,815
Deferred tax liabilities:
FHLB stock dividends	(120)	(122)
Mortgage servicing rights	(1,586)	(2,768)
Operating lease right-of-use asset	(5,363)	(5,305)
Other	(542)	(525)
Total deferred tax liabilities	(7,611)	(8,720)
Deferred tax asset, net	$ 24,326	$ 12,095

Income Taxes - Capital loss carryforward and unrecognized tax benefits (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Income Taxes
Capital loss carryforward	$ 1,815
Unrecognized tax benefits	$ 0

Related Party Transactions (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Board of Directors \| Charitable donation to foundation
Related party transactions
Amount of related party transaction, expense	$ 375	$ 900	$ 900
Controlling Shareholders
Related party transactions
Amount of related party transaction, expense			12
Controlling Shareholders \| Data processing and programming services provided
Related party transactions
Amount of related party transaction, revenue	$ 79	$ 105	$ 105

Operating Leases (Details) - USD ($) $ in Thousands	12 Months Ended
Operating Leases (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Operating Leases
Lessee, operating lease, existence of option to extend [true false]	true
Rent expense			$ 4,401
Components of lease expense
Operating lease cost	$ 4,554	$ 4,507
Variable lease cost	959	1,235
Total	$ 5,513	5,742
Minimum
Operating Leases
Renewal term (in years)	5 years
Maximum
Operating Leases
Renewal term (in years)	10 years
Controlling Shareholders
Operating Leases
Payments under leases	$ 203	236	241
Sublease income	$ 277	$ 274	$ 269

Operating Leases - Maturity of lease liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Maturities of lease liabilities
2021	$ 4,186
2022	3,421
2023	3,180
2024	3,119
2025	2,884
Thereafter	5,942
Total lease payments	22,732
Less: future interest costs	(2,235)
Present value of lease liabilities	$ 20,497	$ 19,868

Operating Leases - Other Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$ 4,478	$ 4,307
Weighted average remaining lease term	6 years 7 months 6 days	6 years 9 months 29 days
Weighted average discount rate	3.16%	3.54%

Commitments and Contingencies - Unfunded Commitments to Extend Credit and Standby Letters of Credit (Details) $ in Thousands		3 Months Ended	12 Months Ended
	Jul. 28, 2020 item	Dec. 31, 2020 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Commitments and Contingencies
Recovery of contingent losses			$ 12,500
Loss contingency from legal proceedings
Commitments and Contingencies
Number of law firms \| item	2
Threshold period for responding to Demand letter	90 days
Loss contingency from class action lawsuit
Commitments and Contingencies
Recovery of contingent losses			12,500
Loss contingency from Internal review of Advantage Loan Program
Commitments and Contingencies
Liability for contingent losses		$ 27,500	27,500	$ 25,000
Increase in liability for contingent losses		$ 2,500
Unfunded Commitments to Extend Credit \| Residential real estate
Commitments and Contingencies
Outstanding commitments regarding fixed rate loans			12,292
Outstanding commitments with varying interest rates			$ 28,039
Unfunded Commitments to Extend Credit \| Residential real estate \| Minimum
Commitments and Contingencies
Fixed interest rate (as a percent)		2.50%	2.50%
Maturity period			10 years
Variable interest rate (as a percentage)		3.125%	3.125%
Maturity period for variable interest loans			25 years
Unfunded Commitments to Extend Credit \| Residential real estate \| Maximum
Commitments and Contingencies
Fixed interest rate (as a percent)		4.375%	4.375%
Maturity period			30 years
Variable interest rate (as a percentage)		4.625%	4.625%
Maturity period for variable interest loans			30 years
Commitments to make loans
Commitments and Contingencies
Commitments to make loans		$ 40,331	$ 40,331	76,927
Unused lines of credit
Commitments and Contingencies
Outstanding commitments regarding fixed rate loans			43
Outstanding commitments with varying interest rates			140,622
Unused lines of credit		$ 140,665	$ 140,665	220,553
Unused lines of credit \| Minimum
Commitments and Contingencies
Fixed interest rate (as a percent)		5.50%	5.50%
Maturity period			2 months
Variable interest rate (as a percentage)		3.25%	3.25%
Maturity period for variable interest loans			1 month
Unused lines of credit \| Maximum
Commitments and Contingencies
Fixed interest rate (as a percent)		18.00%	18.00%
Maturity period			3 months
Variable interest rate (as a percentage)		7.75%	7.75%
Maturity period for variable interest loans			15 years
Unused lines of credit \| Residential real estate
Commitments and Contingencies
Unused lines of credit		$ 19,145	$ 19,145
Unused lines of credit \| Construction
Commitments and Contingencies
Unused lines of credit		120,716	120,716
Unused lines of credit \| Commercial lines of credit
Commitments and Contingencies
Unused lines of credit		762	762
Unused lines of credit \| Other consumer
Commitments and Contingencies
Unused lines of credit		42	42
Standby letters of credit
Commitments and Contingencies
Unused lines of credit		$ 24	$ 24	$ 24

Commitments and Contingencies - Advantage Loan Program Loans Sold (Details) $ in Thousands	1 Months Ended	7 Months Ended	12 Months Ended
	May 31, 2020 USD ($) item	Dec. 31, 2020 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Commitments and Contingencies
Unpaid principal balance		$ 2,434,356	$ 2,434,356	$ 2,891,530
Loss related to fair value discount recorded in other non-interest expense			5,741	7,342	$ 7,220
Advantage Loan Program
Commitments and Contingencies
Number of loan pools negotiated to be repurchased \| item	2
Unpaid principal balance		429,816	429,816	670,243
Outstanding principal balance of loans repurchased	$ 38,704	30,934	69,638
Mortgage loan repurchase liability		2,527	2,527	7,823
Loss related to fair value discount recorded in other non-interest expense	136	$ 135	$ 271
Percentage of loans offered to each of investors to repurchase		100.00%	100.00%
Loss charged against mortgage repurchase liability		$ 651	$ 651
Disposition of mortgage servicing rights	$ 428	361
Residential real estate
Commitments and Contingencies
Unpaid principal balance		562,139	562,139	759,568
Mortgage loan repurchase liability		$ 9,699	$ 9,699	$ 7,823

Regulatory Capital Requirements - Capital adequacy requirements (Details)	Dec. 31, 2020
Regulatory Capital Requirements
Capital conservation buffer (as a percent)	2.50%

Regulatory Capital Requirements - Actual and minimum required capital amounts and ratios and Dividend Restrictions (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Regulatory Capital Requirements
Required Total capital adequacy with capital conservation buffer	10.5
Required Tier 1 capital adequacy with capital conservation buffer	8.5
Required Common Equity capital adequacy with capital conservation buffer	7.0
Total adjusted capital to risk-weighted assets, Amount
Actual	$ 407,733	$ 419,327
For Capital Adequacy Purposes	$ 144,466	$ 156,081
Total adjusted capital to risk-weighted assets, Ratio
Actual	22.58	21.49
For Capital Adequacy Purposes	8.00	8.00
Tier 1 (core) capital to risk-weighted assets, Amount
Actual	$ 319,204	$ 332,418
For Capital Adequacy Purposes	$ 108,350	$ 117,061
Tier 1 (core) capital to risk-weighted assets, Ratio
Actual	17.68	17.04
For Capital Adequacy Purposes	6.00	6.00
Common Equity Tier 1 (CET1), Amount
Actual	$ 319,204	$ 332,418
For Capital Adequacy Purposes	$ 81,262	$ 87,796
Common Equity Tier 1 (CET1), Ratio
Actual	17.68	17.04
For Capital Adequacy Purposes	4.50	4.50
Tier 1 (core) capital to adjusted tangible assets, Amount
Actual	$ 319,204	$ 332,418
For Capital Adequacy Purposes	$ 158,067	$ 131,471
Tier 1 (core) capital to adjusted tangible assets, Ratio
Actual	8.08	10.11
For Capital Adequacy Purposes	4.00	4.00
Dividend Restrictions
Minimum percentage of assets be maintained as per Qualified Thrift Lender ("QTL") test	65.00%
Bank
Total adjusted capital to risk-weighted assets, Amount
Actual	$ 386,237	$ 346,985
For Capital Adequacy Purposes	143,339	155,809
To be Well Capitalized	$ 179,174	$ 194,761
Total adjusted capital to risk-weighted assets, Ratio
Actual	21.56	17.82
For Capital Adequacy Purposes	8.00	8.00
To be Well Capitalized	10.00	10.00
Tier 1 (core) capital to risk-weighted assets, Amount
Actual	$ 363,224	$ 325,255
For Capital Adequacy Purposes	107,504	116,857
To be Well Capitalized	$ 143,339	$ 155,809
Tier 1 (core) capital to risk-weighted assets, Ratio
Actual	20.27	16.70
For Capital Adequacy Purposes	6.00	6.00
To be Well Capitalized	8.00	8.00
Common Equity Tier 1 (CET1), Amount
Actual	$ 363,224	$ 325,255
For Capital Adequacy Purposes	80,628	87,643
To be Well Capitalized	$ 116,463	$ 126,595
Common Equity Tier 1 (CET1), Ratio
Actual	20.27	16.70
For Capital Adequacy Purposes	4.50	4.50
To be Well Capitalized	6.50	6.50
Tier 1 (core) capital to adjusted tangible assets, Amount
Actual	$ 363,224	$ 325,255
For Capital Adequacy Purposes	157,954	131,469
To be Well Capitalized	$ 197,442	$ 164,337
Tier 1 (core) capital to adjusted tangible assets, Ratio
Actual	9.20	9.90
For Capital Adequacy Purposes	4.00	4.00
To be Well Capitalized	5.00	5.00

Condensed Financial Information of Sterling Bancorp, Inc. (Parent Only) - CONDENSED BALANCE SHEETS (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
ASSETS
Other assets	$ 22,736	$ 2,271
Total assets	3,914,045	3,244,884
Liabilities:
Subordinated notes, net	65,341	65,179
Total liabilities	3,594,454	2,912,270
Total shareholders' equity	319,591	332,614	$ 335,057	$ 273,298
Total liabilities and shareholders' equity	3,914,045	3,244,884
Parent company \| Reportable legal entities
ASSETS
Cash held at Bank	20,952	79,714
Investment in subsidiaries	363,611	325,451
Other assets	13,914	3,625
Total assets	398,477	408,790
Liabilities:
Subordinated notes, net	65,341	65,179
Other liabilities	13,545	10,997
Total liabilities	78,886	76,176
Total shareholders' equity	319,591	332,614
Total liabilities and shareholders' equity	$ 398,477	$ 408,790

Condensed Financial Information of Sterling Bancorp, Inc. (Parent Only) - CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Expenses:
Interest expense	$ 4,713	$ 4,701	$ 4,689
Income tax benefit	5,909	(15,643)	(25,104)
Net income (loss)	(12,967)	29,248	63,468
Other comprehensive income
Comprehensive income (loss)	(12,776)	29,453	63,581
Parent company \| Reportable legal entities
Expenses:
Interest expense	4,713	4,700	4,689
Provision (recovery) for contingent losses, net	(10,000)	10,000
Other	6,135	803	961
Total expenses	848	15,503	5,650
Loss before income tax and equity in subsidiaries income (loss)	(848)	(15,503)	(5,650)
Income tax benefit	246	4,496	1,186
Loss before equity in subsidiaries income (loss)	(602)	(11,007)	(4,464)
Equity in subsidiaries (loss) income	(12,365)	40,255	67,932
Net income (loss)	(12,967)	29,248	63,468
Other comprehensive income
Equity in other comprehensive income of subsidiaries	191	205	113
Comprehensive income (loss)	$ (12,776)	$ 29,453	$ 63,581

Condensed Financial Information of Sterling Bancorp, Inc. (Parent Only) - CONDENSED STATEMENTS OF CASH FLOWS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Cash flows from operating activities
Net (loss) income	$ (12,967)	$ 29,248	$ 63,468
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Other	162	163	140
Changes in operating assets and liabilities:
Change in other assets	(8,946)	5,032	(1,245)
Net cash provided by operating activities	4,945	71,288	60,575
Cash Flows From Investing Activities
Dividends received from subsidiaries		19,002	6,119
Net cash provided by (used in) investing activities	223,788	7,643	(208,652)
Cash Flows From Financing Activities
Repurchases of shares of common stock	(82)	(30,349)
Dividend paid to shareholders	(499)	(2,044)	(2,119)
Net cash provided by (used in) financing activities	691,945	(53,638)	160,456
Net change in cash and due from banks	920,678	25,293	12,379
Cash and due from banks at beginning of period	77,819	52,526	40,147
Cash and due from banks at end of period	998,497	77,819	52,526
Cash paid for:
Interest	48,270	38,196	34,792
Parent company \| Reportable legal entities
Cash flows from operating activities
Net (loss) income	(12,967)	29,248	63,468
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Equity in subsidiaries loss (income)	12,365	(40,255)	(67,932)
Other	162	150	140
Changes in operating assets and liabilities:
Change in other assets	(289)	(3,353)	175
Change in other liabilities	(7,452)	10,000
Net cash provided by operating activities	(8,181)	(4,210)	(4,149)
Cash Flows From Investing Activities
Capital contributed to subsidiary (Bank)	(50,000)
Dividends received from subsidiaries		19,002	6,119
Net cash provided by (used in) investing activities	(50,000)	19,002	6,119
Cash Flows From Financing Activities
Repurchases of shares of common stock	(82)	(30,349)
Dividend paid to shareholders	(499)	(2,044)	(2,119)
Net cash provided by (used in) financing activities	(581)	(32,393)	(2,119)
Net change in cash and due from banks	(58,762)	(17,601)	(149)
Cash and due from banks at beginning of period	79,714	97,315	97,464
Cash and due from banks at end of period	20,952	79,714	97,315
Cash paid for:
Interest	$ 4,550	$ 4,550	$ 4,550

Subsequent Events (Details) - USD ($) $ in Thousands		12 Months Ended
Subsequent Events (Details) - USD ($) $ in Thousands	Jan. 01, 2021	Dec. 31, 2020	Mar. 31, 2021	Mar. 19, 2021	Feb. 28, 2021	Dec. 31, 2019
Subsequent Events
Employer matching contribution, as a percent of employee's contribution		100.00%
Percentage of employee's contribution or deferred contribution that will be matched by employer		3.00%
Deposit accounts current approximate balance		$ 3,098,966				$ 2,495,440
Unpaid principal balance		2,434,356				2,891,530
Advantage Loan Program
Subsequent Events
Unpaid principal balance		$ 429,816				$ 670,243
Subsequent event
Subsequent Events
Employer matching contribution, as a percent of employee's contribution	100.00%
Percentage of employee's contribution or deferred contribution that will be matched by employer	6.00%
Deposit accounts current approximate balance				$ 77,700
Subsequent event \| Advantage Loan Program loans repurchased
Subsequent Events
Unpaid principal balance			$ 88,758
Subsequent event \| Loss contingency from class action lawsuit
Subsequent Events
Full amount of the settlement covered by the Company's applicable insurance policies					$ 12,500