0001104659-21-104893 | 10-Q | XBRL Viewer

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2021	Aug. 06, 2021
Document and Entity Information
Document Type	10-Q
Document Transition Report.	false
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2021
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 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	Yes
Entity Interactive Data Current	Yes
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		50,475,181
Entity Central Index Key	0001680379
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Amendment Flag	false

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Assets
Cash and due from banks	$ 774,478	$ 998,497
Interest-bearing time deposits with other banks	805	7,021
Investment securities	195,974	304,958
Mortgage loans held for sale	15,107	22,284
Loans, net of allowance for loan losses of $70,669 and $72,387	2,287,857	2,434,356
Accrued interest receivable	9,660	10,990
Mortgage servicing rights, net	3,232	5,688
Leasehold improvements and equipment, net	9,423	8,512
Operating lease right-of-use assets	19,817	19,232
Federal Home Loan Bank stock, at cost	22,950	22,950
Cash surrender value of bank-owned life insurance	32,766	32,495
Deferred tax asset, net	23,749	24,326
Other assets	21,634	22,736
Total assets	3,417,452	3,914,045
Liabilities:
Noninterest-bearing deposits	55,721	58,458
Interest-bearing deposits	2,481,198	3,040,508
Deposits held for sale	73,383
Total deposits	2,610,302	3,098,966
Federal Home Loan Bank borrowings	318,000	318,000
Subordinated notes, net	65,377	65,341
Operating lease liabilities	21,085	20,497
Accrued expenses and other liabilities	75,646	91,650
Total liabilities	3,090,410	3,594,454
Shareholders' equity:
Common stock, no par value, authorized 500,000,000 shares; issued and outstanding 50,475,181 shares at June 30, 2021 and 49,981,861 shares at December 31, 2020, respectively	82,157	80,807
Additional paid-in capital	13,796	13,544
Retained earnings	230,630	224,853
Accumulated other comprehensive income	459	387
Total shareholders' equity	327,042	319,591
Total liabilities and shareholders' equity	$ 3,417,452	$ 3,914,045

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Condensed Consolidated Balance Sheets
Allowance for loan losses	$ 70,669	$ 72,387
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, par value (in dollars per share)	$ 0	$ 0
Common stock, authorized (in shares)	500,000,000	500,000,000
Common stock, issued (in shares)	50,475,181	49,981,861
Common stock, outstanding (in shares)	50,475,181	49,981,861

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Interest income
Interest and fees on loans	$ 30,074	$ 37,501	$ 61,368	$ 77,026
Interest and dividends on investment securities and restricted stock	385	1,037	775	2,071
Other interest	227	141	490	575
Total interest income	30,686	38,679	62,633	79,672
Interest expense
Interest on deposits	5,236	9,576	11,938	19,940
Interest on Federal Home Loan Bank borrowings	847	877	1,685	1,687
Interest on subordinated notes	1,005	1,178	2,185	2,355
Total interest expense	7,088	11,631	15,808	23,982
Net interest income	23,598	27,048	46,825	55,690
Provision (recovery) for loan losses	(1,806)	4,297	(2,543)	25,150
Net interest income after provision (recovery) for loan losses	25,404	22,751	49,368	30,540
Non-interest income
Non-interest income	$ 144	$ 95	$ 303	$ 212
Revenue, Product and Service [Extensible List]	sbt:ServiceChargesAndFeesMember	sbt:ServiceChargesAndFeesMember	sbt:ServiceChargesAndFeesMember	sbt:ServiceChargesAndFeesMember
Gain (loss) on sale of investment securities		$ (34)		$ 199
Gain on sale of mortgage loans held for sale	$ 70	751	$ 468	1,020
Unrealized gains (losses) on equity securities	15	43	(75)	123
Net servicing loss	(908)	(207)	(1,338)	(1,118)
Income on cash surrender value of bank-owned life insurance	322	317	635	645
Other	88	358	191	771
Total non-interest income	(269)	1,323	184	1,852
Non-interest expense
Salaries and employee benefits	8,678	7,336	16,526	14,089
Occupancy and equipment	2,249	2,208	4,445	4,326
Professional fees	5,721	8,268	14,476	11,580
FDIC assessments	500	240	1,219	259
Data processing	440	351	786	686
Net provision (recovery) of mortgage repurchase liability	(512)	25	(665)	25
Other	2,868	1,619	4,491	3,317
Total non-interest expense	19,944	20,047	41,278	34,282
Income (loss) before income taxes	5,191	4,027	8,274	(1,890)
Income tax expense (benefit)	1,739	1,160	2,497	(727)
Net income (loss)	$ 3,452	$ 2,867	$ 5,777	$ (1,163)
Income (loss) per share, basic and diluted (in dollars per share)	$ 0.07	$ 0.06	$ 0.12	$ (0.02)
Weighted average common shares outstanding:
Basic	50,009,053	49,837,948	49,930,563	49,837,805
Diluted	50,060,775	49,841,741	49,987,253	49,837,805

Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Condensed Consolidated Statements of Comprehensive Income (Loss)
Net income (loss)	$ 3,452	$ 2,867	$ 5,777	$ (1,163)
Other comprehensive income (loss), net of tax:
Unrealized gains (losses) on investment securities, arising during the period, net of tax effect of $51, $(66), $28, and $218, respectively	131	(171)	72	560
Reclassification adjustment for (gains) losses included in net income of $-, $34, $-, and $(199), respectively, included in gain (loss) on sale of investment securities, net of tax effect of $-, $(10), $-, and $56, respectively		25		(143)
Total other comprehensive income (loss)	131	(146)	72	417
Comprehensive income (loss)	$ 3,583	$ 2,721	$ 5,849	$ (746)

- 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

Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Condensed Consolidated Statements of Comprehensive Income (Loss)
Unrealized gains on investment securities, arising during the period, tax effect	$ 51	$ (66)	$ 28	$ 218
Reclassification adjustment for gains (losses) included in net income on sale of investment securities, before tax		34		(199)
Reclassification adjustment for gains included in net income on sale of investment securities, tax effect		$ (10)		$ 56

Condensed Consolidated Statements of Changes in Shareholders' Equity - USD ($)	Common stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income	Total
Balance at beginning of the period at Dec. 31, 2019	$ 80,889,000	$ 13,210,000	$ 238,319,000	$ 196,000	$ 332,614,000
Balance at beginning of the period (in shares) at Dec. 31, 2019	49,944,473
Increase (Decrease) in Stockholders' Equity
Net income (loss)			(4,030,000)		(4,030,000)
Repurchases of shares of common stock	$ (82,000)				(82,000)
Repurchases of shares of common stock (in shares)	(10,912)
Stock-based compensation		109,000			109,000
Stock-based compensation (in shares)	134,177
Other comprehensive income (loss)				563,000	563,000
Dividends distributed ($0.01 per share)			(499,000)		(499,000)
Balance at end of the period at Mar. 31, 2020	$ 80,807,000	13,319,000	233,790,000	759,000	328,675,000
Balance at end of the period (in shares) at Mar. 31, 2020	50,067,738
Balance at beginning of the period at Dec. 31, 2019	$ 80,889,000	13,210,000	238,319,000	196,000	332,614,000
Balance at beginning of the period (in shares) at Dec. 31, 2019	49,944,473
Increase (Decrease) in Stockholders' Equity
Net income (loss)					(1,163,000)
Other comprehensive income (loss)					417,000
Balance at end of the period at Jun. 30, 2020	$ 80,807,000	13,328,000	236,657,000	613,000	331,405,000
Balance at end of the period (in shares) at Jun. 30, 2020	50,007,415
Balance at beginning of the period at Mar. 31, 2020	$ 80,807,000	13,319,000	233,790,000	759,000	328,675,000
Balance at beginning of the period (in shares) at Mar. 31, 2020	50,067,738
Increase (Decrease) in Stockholders' Equity
Net income (loss)			2,867,000		2,867,000
Stock-based compensation		9,000			9,000
Stock-based compensation (in shares)	(60,323)
Other comprehensive income (loss)				(146,000)	(146,000)
Balance at end of the period at Jun. 30, 2020	$ 80,807,000	13,328,000	236,657,000	613,000	331,405,000
Balance at end of the period (in shares) at Jun. 30, 2020	50,007,415
Balance at beginning of the period at Dec. 31, 2020	$ 80,807,000	13,544,000	224,853,000	387,000	319,591,000
Balance at beginning of the period (in shares) at Dec. 31, 2020	49,981,861
Increase (Decrease) in Stockholders' Equity
Net income (loss)			2,325,000		2,325,000
Issuance of shares of common stock for cash ($4.50 per share) (in shares)	300,000
Repurchase of restricted shares to pay employee tax liability	$ (8,536)	(46,000)			(46,000)
Stock-based compensation		105,000			105,000
Stock-based compensation (in shares)	36,082
Other comprehensive income (loss)				(59,000)	(59,000)
Balance at end of the period at Mar. 31, 2021	$ 80,807,000	13,603,000	227,178,000	328,000	321,916,000
Balance at end of the period (in shares) at Mar. 31, 2021	50,009,407
Balance at beginning of the period at Dec. 31, 2020	$ 80,807,000	13,544,000	224,853,000	387,000	319,591,000
Balance at beginning of the period (in shares) at Dec. 31, 2020	49,981,861
Increase (Decrease) in Stockholders' Equity
Net income (loss)					5,777,000
Repurchases of shares of common stock	$ (82,000)
Repurchases of shares of common stock (in shares)	(10,912)
Other comprehensive income (loss)					72,000
Balance at end of the period at Jun. 30, 2021	$ 82,157,000	13,796,000	230,630,000	459,000	327,042,000
Balance at end of the period (in shares) at Jun. 30, 2021	50,475,181
Balance at beginning of the period at Mar. 31, 2021	$ 80,807,000	13,603,000	227,178,000	328,000	321,916,000
Balance at beginning of the period (in shares) at Mar. 31, 2021	50,009,407
Increase (Decrease) in Stockholders' Equity
Net income (loss)			3,452,000		3,452,000
Issuance of shares of common stock for cash ($4.50 per share)	$ 1,350,000				1,350,000
Stock-based compensation		193,000			193,000
Stock-based compensation (in shares)	165,774
Other comprehensive income (loss)				131,000	131,000
Balance at end of the period at Jun. 30, 2021	$ 82,157,000	$ 13,796,000	$ 230,630,000	$ 459,000	$ 327,042,000
Balance at end of the period (in shares) at Jun. 30, 2021	50,475,181

Condensed Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - $ / shares	3 Months Ended
	Jun. 30, 2021	Mar. 31, 2020
Condensed Consolidated Statements of Changes in Shareholders' Equity
Dividends paid per common share (in dollars per share)		$ 0.01
Issuance of common stock	$ 4.50

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Cash Flows From Operating Activities
Net income (loss)	$ 5,777	$ (1,163)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Provision (recovery) for loan losses	(2,543)	25,150
Deferred income tax expense (benefit)	549	(8,159)
Gain on sale of investment securities		(199)
Unrealized (gains) losses on equity securities	75	(123)
Amortization (accretion), net, on investment securities	964	(127)
Depreciation and amortization on leasehold improvements and equipment	813	801
Origination, net of principal payments, mortgage loans held for sale	(7,599)	(103,713)
Proceeds from sale of mortgage loans held for sale	14,904	102,396
Gain on sale of mortgage loans held for sale	(468)	(1,020)
Net provision (recovery) of mortgage repurchase liability	(665)	25
Increase in cash surrender value of bank-owned life insurance, net of premiums	(271)	(298)
Valuation allowance adjustments and amortization of mortgage servicing rights	2,555	2,989
Stock-based compensation	298	118
Other	492	80
Change in operating assets and liabilities:
Accrued interest receivable	1,330	(146)
Other assets	2,862	2,010
Accrued expenses and other liabilities	(12,520)	(4,964)
Net cash provided by operating activities	6,553	13,657
Cash Flows From Investing Activities
Maturities of interest-bearing time deposits with other banks	6,216
Purchases of interest-bearing time deposits with other banks		(8,706)
Maturities and principal receipts of investment securities	108,045	83,231
Sales of investment securities	0	59,359
Purchases of investment securities		(246,749)
Net decrease in loans	316,804	186,902
Purchases of portfolio loans	(172,505)	(37,746)
Purchase of leasehold improvements and equipment	(1,772)	(452)
Net cash provided by investing activities	256,788	35,839
Cash Flows From Financing Activities
Net increase (decrease) in deposits	(488,664)	396,642
Proceeds from advances from Federal Home Loan Bank		100,000
Proceeds from issuance of shares of common stock	1,350
Repurchase of restricted shares to pay employee tax liability	(46)
Repurchases of shares of common stock		(82)
Dividends paid to shareholders		(499)
Net cash provided by (used in) financing activities	(487,360)	496,061
Net change in cash and due from banks	(224,019)	545,557
Cash and due from banks at beginning of period	998,497	77,819
Cash and due from banks at end of period	774,478	623,376
Cash paid:
Interest	25,432	30,589
Income taxes		838
Noncash investing and financing activities:
Right-of-use assets obtained in exchange for new operating lease liabilities	$ 2,512	$ 3,009

Nature of Operations and Basis of Presentation

6 Months Ended

Jun. 30, 2021

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. (the “Company”) is a unitary thrift holding company that was incorporated in 1989 and the parent company of 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 29 branches of which 26 branches are located in San Francisco and Los Angeles, California with the remaining branches located in New York, New York and Southfield, Michigan.

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.

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. The sale includes the transfer of all deposit accounts located at the branch, as well as the transfer of all branch premises and equipment. Subsequent to June 30, 2021, the Bank completed the sale of the branch office. Refer to Note 17—Subsequent Events for further details.

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.

Basis of Presentation

The condensed consolidated balance sheet as of June 30, 2021 and the condensed consolidated statements of operations, comprehensive income (loss), changes in shareholders’ equity and cash flows for the three and six months ended June 30, 2021 and 2020 are unaudited. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect all adjustments, in the opinion of management, of a normal recurring nature that are necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented. The financial data and other financial information disclosed in these notes to the condensed consolidated financial statements related to these periods are also unaudited. The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the year ended December 31, 2021 or for any future annual or interim period. The consolidated balance sheet at December 31, 2020 included herein was derived from the audited financial statements as of that date. The accompanying unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on March 26, 2021 (the “2020 Form 10-K”).

New Accounting Standards

6 Months Ended

Jun. 30, 2021

New Accounting Standards

New Accounting Standards

Note 2—New Accounting Standards

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, qualifies 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 cumulative adjustment or of the overall impact of ASU No. 2016-13 on its consolidated financial statements.

- Definition

The entire disclosure for change in accounting principle. Includes, but is not limited to, nature, reason, and method of adopting amendment to accounting standards or other change in accounting principle.

+ References

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+ Details

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2021

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Note 3—Summary of Significant Accounting Policies

Principles of Consolidation

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

On December 21, 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, completed the sale of substantially all of its assets, which consisted primarily of client advisory agreements for aggregate consideration of $250. The operations of Quantum Capital Management were not significant.

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

Use of Estimates

The preparation of the condensed 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 condensed 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.

Concentration of Credit Risk

The loan portfolio consists primarily of residential real estate loans, which are collateralized by real estate. At June 30, 2021 and December 31, 2020, residential real estate loans accounted for 83% and 81%, 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 June 30, 2021 and December 31, 2020, approximately 87% of the loan portfolio was originated with respect to properties or businesses located in California.

Starting December 9, 2019, the Bank suspended its Advantage Loan Program and announced on March 6, 2020 that it permanently discontinued this program. 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 $14,867 and $19,375 at June 30, 2021 and December 31, 2020, respectively) totaled $1,427,467 and $1,515,248, or 73% and 74%, of the residential loan portfolio at June 30, 2021 and December 31, 2020, respectively. Refer to Note 16– Commitments and Contingencies.

Risks and Uncertainties – COVID-19

The coronavirus disease 2019 (“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. The Company’s primary market areas of California and New York City have been hit particularly hard by the COVID-19 pandemic. Federal and state governments have taken, and continue to take, unprecedented actions to contain the spread of the disease, including vaccine distribution, 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.

During the first half of 2021, the COVID-19 pandemic continued to create and exacerbate significant risks and uncertainties for the markets that the Bank serves. As the Bank’s residential and commercial customers are facing various levels of financial stress, the Bank continues to experience an elevated level of delinquent and nonaccrual loans, primarily in residential real estate, office, lodging, retail and construction loans.

The duration and severity of the effect of the COVID-19 pandemic on economic, market and business conditions remain uncertain. The Company continues to be subject to heightened business, operational, market, credit and other risks related to the COVID-19 pandemic, which may have an adverse effect on its business, financial condition, liquidity, results of operations, risk-weighted assets and regulatory capital.

Investment Securities

6 Months Ended

Jun. 30, 2021

Investment Securities

Investment Securities

Note 4—Investment Securities

Debt Securities

The following tables summarize the amortized cost and fair value of debt securities available for sale at June 30, 2021 and December 31, 2020 and the corresponding amounts of gross unrealized gains and losses:


	June 30, 2021
	Amortized		Gross Unrealized				Fair
	Cost		Gain		Loss		Value
Available for sale:
U.S. Treasury & Agency securities	$	73,540	$	90	$	—	$	73,630
Mortgage-backed securities		29,408		91		(264)		29,235
Collateralized mortgage obligations		86,888		742		—		87,630
Collateralized debt obligations		212		—		(22)		190
Total	$	190,048	$	923	$	(286)	$	190,685


	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

Securities with a fair value of $73,630 were pledged as collateral on FHLB borrowings at June 30, 2021.

All of the Company’s mortgage-backed securities, and a majority of the Company’s collateralized mortgage obligations 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 $705 and $816 at June 30, 2021 and December 31, 2020, respectively.

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 June 30, 2021 and December 31, 2020.

For the three and six months ended June 30, 2020, the proceeds from sales of debt securities available for sale were $36,315 and $59,359, respectively. The Company recorded gross realized gains of $44 and gross realized losses of $78 during the three months ended June 30, 2020 and gross realized gains of $279 and gross realized losses of $80 during the six months ended June 30, 2020. There were no debt securities sold during the six months ended June 30, 2021.

The amortized cost and fair value of the U.S. Treasury and Agency securities at June 30, 2021 are shown by contractual maturity in the table below. Mortgage-backed securities, collateralized mortgage obligations and collateralized debt obligations are disclosed separately 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 after one year through five years	$	73,540	$	73,630
Mortgage-backed securities		29,408		29,235
Collateralized mortgage obligations		86,888		87,630
Collateralized debt obligations		212		190
Total	$	190,048	$	190,685

The following table summarizes debt securities available for sale, at fair value, with unrealized losses at June 30, 2021 and December 31, 2020 aggregated by major security type and length of time the individual securities have been in a continuous unrealized loss position:


	June 30, 2021
	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
Mortgage-backed securities	$	9,972	$	(264)	$	—	$	—	$	9,972	$	(264)
Collateralized debt obligations		—		—		190		(22)		190		(22)
Total	$	9,972	$	(264)	$	190	$	(22)	$	10,162	$	(286)


	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)

As of June 30, 2021, the debt securities portfolio consisted of 19 debt securities, with three 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 June 30, 2021, 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 $190 and $187 at June 30, 2021 and December 31, 2020, 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 $22 and $27 of the unrealized losses reported at June 30, 2021 and December 31, 2020, 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 June 30, 2021 and December 31, 2020, equity securities totaled $5,289 and $5,364, respectively, and are included in investment securities in the condensed consolidated balance sheets. Equity securities with readily determinable fair values are stated at fair value with realized and unrealized gains and losses reported in income.

At June 30, 2021 and December 31, 2020, equity securities with readily determinable fair values were $5,043 and $5,118, respectively. The following is a summary of unrealized and realized gains and losses recognized in the condensed consolidated statements of operations during the three and six months ended June 30, 2021 and 2020:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Net gains (losses) recorded during the period on equity securities	$	15	$	43	$	(75)	$	123
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	$	15	$	43	$	(75)	$	123

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 the six months ended June 30, 2021 and 2020. The investment was reported at $246 at June 30, 2021 and December 31, 2020.

Loans

6 Months Ended

Jun. 30, 2021

Loans

Loans

Note 5—Loans

Major categories of loans were as follows:


	June 30,		December 31,
	2021		2020
Residential real estate	$	1,948,892	$	2,033,526
Commercial real estate		263,278		259,958
Construction		144,385		206,581
Commercial lines of credit		1,971		6,671
Other consumer		—		7
Total loans		2,358,526		2,506,743
Less: allowance for loan losses		(70,669)		(72,387)
Loans, net	$	2,287,857	$	2,434,356

Loans totaling $521,218 and $630,197 were pledged as collateral on FHLB borrowings at June 30, 2021 and December 31, 2020, respectively.

The following tables present the activity in the allowance for loan losses by portfolio segment for the three and six months ended June 30, 2021 and 2020:


							Commercial
	Residential		Commercial				Lines of		Other
Three Months Ended June 30, 2021	Real Estate		Real Estate		Construction		Credit		Consumer		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	33,056	$	22,763	$	15,966	$	86	$	—	$	—	$	71,871
Provision (recovery) for loan losses		(579)		(287)		(912)		(28)		—		—		(1,806)
Charge offs		—		—		—		—		—		—		—
Recoveries		587		15		2		—		—		—		604
Total ending balance	$	33,064	$	22,491	$	15,056	$	58	$	—	$	—	$	70,669

							Commercial
	Residential		Commercial				Lines of		Other
Six Months Ended June 30, 2021	Real Estate		Real Estate		Construction		Credit		Consumer		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	32,366	$	21,942	$	17,988	$	91	$	—	$	—	$	72,387
Provision (recovery) for loan losses		(93)		518		(2,935)		(33)		—		—		(2,543)
Charge offs		—		—		—		—		—		—		—
Recoveries		791		31		3		—		—		—		825
Total ending balance	$	33,064	$	22,491	$	15,056	$	58	$	—	$	—	$	70,669


							Commercial
	Residential		Commercial				Lines of		Other
Three Months Ended June 30, 2020	Real Estate		Real Estate		Construction		Credit		Consumer		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	19,154	$	11,261	$	11,439	$	368	$	1	$	390	$	42,613
Provision (recovery) for loan losses		(344)		4,492		557		(18)		—		(390)		4,297
Charge offs		—		—		—		—		—		—		—
Recoveries		2		17		2		—		—		—		21
Total ending balance	$	18,812	$	15,770	$	11,998	$	350	$	1	$	—	$	46,931


							Commercial
	Residential		Commercial				Lines of		Other
Six Months Ended June 30, 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 for loan losses		6,464		10,491		8,173		22		—		—		25,150
Charge offs		—		—		—		—		—		—		—
Recoveries		12		36		3		—		—		—		51
Total ending balance	$	18,812	$	15,770	$	11,998	$	350	$	1	$	—	$	46,931

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 June 30, 2021 and December 31, 2020:


							Commercial
	Residential		Commercial				Lines of		Other
June 30, 2021	Real Estate		Real Estate		Construction		Credit		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	160	$	—	$	3,011	$	—	$	—	$	—	$	3,171
Collectively evaluated for impairment		32,904		22,491		12,045		58		—		—		67,498
Total ending allowance balance	$	33,064	$	22,491	$	15,056	$	58	$	—	$	—	$	70,669
Loans:
Loans individually evaluated for impairment	$	358	$	18,981	$	33,779	$	120	$	—	$	—	$	53,238
Loans collectively evaluated for impairment		1,948,534		244,297		110,606		1,851		—		—		2,305,288
Total ending loans balance	$	1,948,892	$	263,278	$	144,385	$	1,971	$	—	$	—	$	2,358,526


							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

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


	At June 30, 2021						At December 31, 2020
	Unpaid				Allowance		Unpaid				Allowance
	Principal		Recorded		for Loan		Principal		Recorded		for Loan
	Balance		Investment		Losses		Balance		Investment		Losses
With no related allowance for loan losses recorded:
Residential real estate, first mortgage	$	108	$	82	$	—	$	116	$	94	$	—
Commercial real estate:												—
Retail		1,239		1,010		—		1,247		1,029		—
Hotels/Single-room occupancy hotels		17,869		17,835		—		11,428		11,419		—
Other		136		136		—		—		—		—
Construction		23,327		22,422		—		42,669		41,951		—
Commercial lines of credit, private banking		120		120		—		3,857		3,857		—
Subtotal		42,799		41,605		—		59,317		58,350		—
With an allowance for loan losses recorded:
Residential real estate, first mortgage		275		276		160		114		114		41
Commercial real estate, hotels/single-room occupancy hotels		—		—		—		8,645		8,526		287
Construction		11,400		11,357		3,011		6,920		6,920		1,905
Commercial lines of credit, private banking		—		—		—		124		124		4
Subtotal		11,675		11,633		3,171		15,803		15,684		2,237
Total	$	54,474	$	53,238	$	3,171	$	75,120	$	74,034	$	2,237


	Three Months Ended June 30,
	2021						2020
	Average		Interest		Cash Basis		Average		Interest		Cash Basis
	Recorded		Income		Interest		Recorded		Income		Interest
	Investment		Recognized		Recognized		Investment		Recognized		Recognized
With no related allowance for loan losses recorded:
Residential real estate, first mortgage	$	86	$	—	$	—	$	94	$	—	$	—
Commercial real estate:
Retail		1,013		—		—		1,070		14		10
Hotels/Single-room occupancy hotels		17,926		—		—		3,502		—		—
Other		136		—		—		—		—		—
Construction		22,801		43		29		32,047		344		190
Commercial lines of credit:
Private banking		122		2		1		1,243		21		14
C&I lending		—		—		—		1,284		—		—
Subtotal		42,084		45		30		39,240		379		214
With an allowance for loan losses recorded:
Residential real estate, first mortgage		277		1		1		116		2		1
Construction		11,104		55		37		—		—		—
Commercial lines of credit, private banking		—		—		—		129		1		1
Subtotal		11,381		56		38		245		3		2
Total	$	53,465	$	101	$	68	$	39,485	$	382	$	216


	Six Months Ended June 30,
	2021						2020
	Average		Interest		Cash Basis		Average		Interest		Cash Basis
	Recorded		Income		Interest		Recorded		Income		Interest
	Investment		Recognized		Recognized		Investment		Recognized		Recognized
With no related allowance for loan losses recorded:
Residential real estate, first mortgage	$	88	$	—	$	—	$	97	$	—	$	—
Commercial real estate:
Retail		1,020		—		—		1,089		29		24
Hotels/Single-room occupancy hotels		17,914		—		—		3,502		—		—
Other		136		—		—		—		—		—
Construction		30,207		138		124		30,394		810		597
Commercial lines of credit:
Private banking		1,645		3		3		1,245		42		35
C&I lending		—		—		—		1,284		—		—
Subtotal		51,010		141		127		37,611		881		656
With an allowance for loan losses recorded:
Residential real estate, first mortgage		277		1		1		116		3		2
Construction		10,721		107		89		—		—		—
Commercial lines of credit, private banking		—		—		—		130		3		3
Subtotal		10,998		108		90		246		6		5
Total	$	62,008	$	249	$	217	$	37,857	$	887	$	661

In the tables above, 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 table 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 table presents the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans as of June 30, 2021 and December 31, 2020:


	June 30, 2021				December 31, 2020
			Loans Past				Loans Past
			Due Over				Due Over
			90 Days Still				90 Days Still
	Nonaccrual		Accruing		Nonaccrual		Accruing
Residential real estate:
Residential first mortgage	$	27,157	$	44	$	20,043	$	46
Residential second mortgage		714		—		686		—
Commercial real estate:
Retail		1,011		—		20		—
Hotels/Single-room occupancy hotels		17,945		—		19,945		—
Other		136		—
Construction		27,803		—		41,873		—
Commercial lines of credit:
Private banking		—		—		2,285		—
C&I lending		—		—		1,572		—
Total	$	74,766	$	44	$	86,424	$	46

The following tables present the aging of the recorded investment in past due loans as of June 30, 2021 and December 31, 2020 by class of loans:


					Greater
	30 - 59		60 - 89		than
	Days		Days		89 Days		Total		Loans Not
June 30, 2021	Past Due		Past Due		Past Due		Past Due		Past Due		Total
Residential real estate:
Residential first mortgage	$	33,222	$	16,802	$	27,201	$	77,225	$	1,855,556	$	1,932,781
Residential second mortgage		—		108		714		822		15,289		16,111
Commercial real estate:
Retail		—		—		1,011		1,011		14,981		15,992
Multifamily		3,661		—		—		3,661		94,381		98,042
Offices		2,769		—		—		2,769		20,773		23,542
Hotels/Single-room occupancy hotels		—		—		17,945		17,945		60,344		78,289
Industrial		—		4,000		—		4,000		1,851		5,851
Other		1,471		—		136		1,607		39,955		41,562
Construction		—		3,323		27,803		31,126		113,259		144,385
Commercial lines of credit:
Private banking		—		—		—		—		120		120
C&I lending		—		—		—		—		1,851		1,851
Total	$	41,123	$	24,233	$	74,810	$	140,166	$	2,218,360	$	2,358,526


					Greater
	30 - 59		60 - 89		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/Single-room occupancy hotels		—		—		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

The aging of the loans in the table above as of June 30, 2021 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 — Forbearance Loans for further information.

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 June 30, 2021 and December 31, 2020, 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:


	June 30, 2021				December 31, 2020
	Recorded		Allowance for		Recorded		Allowance for
	Investment		Loan Losses		Investment		Loan Losses
Residential real estate, first mortgage	$	200	$	40	$	209	$	41
Commercial real estate, retail		1,011		—		1,029		—
Construction		23,843		1,965		26,985		1,906
Commercial lines of credit, private banking		120		—		124		4
Total	$	25,174	$	2,005	$	28,347	$	1,951

During the six months ended June 30, 2021, the Bank modified the terms of two construction loans and one private banking loan with an extension of the maturity dates at the contracts’ existing rates of interest, which are presently lower than the current market rate for a new loan with similar risk. The total outstanding recorded investments were $10,863 both before and after modification. During the six months ended June 30, 2021, there were $14,183 troubled debt restructurings that had defaulted for which the payment default occurred within one year of modification. Eight loans totaling $22,234 modified as troubled debt restructurings were in default under their modified terms as of June 30, 2021.

During the six months ended June 30, 2020, the Bank modified the terms of three construction loans and one private banking loan with an extension of the maturity dates at the contracts’ existing rates of interest, which were lower than the current market rate for a new loan with similar risk. The total outstanding recorded investments were $13,777 both before and after modification. During the six months ended June 30, 2020, there was one construction loan of $5,263 identified as a troubled debt restructuring that had defaulted for which the payment default occurred within one year of modification.

The terms of certain other loans have been modified during the six months ended June 30, 2021 and 2020 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 Coronavirus Aid, Relief, and Economic Security Act (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 through June 30, 2021. On August 3, 2021, the U.S. Centers for Disease and Control issued a temporary extension of the moratoria on evictions of certain covered persons in counties with heightened levels of community transmission of COVID-19 through October 3, 2021.

Certain provisions of the CARES Act, as amended in December 2020 by the Consolidated Appropriations Act of 2021, encourage financial institutions to practice prudent efforts to work with borrowers impacted by the COVID-19 pandemic. Under these provisions, a modification deemed to be COVID-19-related would not be considered a troubled debt restructuring if the loan was 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 January 1, 2022. The banking regulators issued similar guidance, which also clarified that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief are not troubled debt restructurings.

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. Forbearance loans under the CARES program totaled $11,775 and $15,785 at June 30, 2021 and December 31, 2020, respectively. Total accrued interest receivables on these loans were $188 and $146 at June 30, 2021 and December 31, 2020, respectively.

As applications for the forbearance program continued to decrease in July 2021, the Bank terminated the forbearance program, effective July 31, 2021.

Foreclosure Proceedings

At June 30, 2021 and December 31, 2020, the recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process totaled $4,694 and $5,320, respectively. Of the loans in formal foreclosure proceedings, $4,683 and $3,209 were included in mortgage loans held for sale in the condensed consolidated balance sheets at June 30, 2021 and December 31, 2020, respectively, and were carried at the lower of amortized cost or fair value. The balance of loans are classified as held for investment and receive an allocation of the allowance for loan losses consistent with a substandard loan loss allocation rate as these loans were classified as substandard at June 30, 2021 and December 31, 2020, 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 loan. 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 June 30, 2021 and December 31, 2020, the risk rating of loans by class of loans was as follows:


			Special
June 30, 2021	Pass		Mention		Substandard		Doubtful		Total
Residential real estate:
Residential first mortgage	$	1,905,579	$	—	$	26,944	$	258	$	1,932,781
Residential second mortgage		15,397		—		714		—		16,111
Commercial real estate:
Retail		13,432		1,549		1,011		—		15,992
Multifamily		61,860		10,176		26,006		—		98,042
Offices		9,600		1,602		12,340		—		23,542
Hotels/ Single-room occupancy hotels		12,113		20,538		45,638		—		78,289
Industrial		5,851		—		—		—		5,851
Other		30,107		5,868		5,587		—		41,562
Construction		81,593		25,477		29,444		7,871		144,385
Commercial lines of credit:
Private banking		120		—		—		—		120
C&I lending		1,824		27		—		—		1,851
Total	$	2,137,476	$	65,237	$	147,684	$	8,129	$	2,358,526


			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/ Single-room occupancy hotels		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

During the three and six months ended June 30, 2021, the Bank repurchased pools of Advantage Loan Program loans with a total outstanding principal balance of $79,818 and $167,762, respectively. During the three and six months ended June 30, 2020, the Bank repurchased pools of Advantage Loan Program loans with a total outstanding principal balance of $38,704. The repurchased Advantage Loan Program loans are recorded in loans held for investment. Any loss on the repurchase of the Advantage Loan Program loans is charged against the mortgage repurchase liability. The disposition of the mortgage servicing rights related to servicing the respective loans (as mortgage servicing of these loans was retained at the time of sale) is recorded in net servicing loss in non-interest income in the condensed consolidated statements of operations. The Advantage Loan Program loans that have been repurchased and included in the loan portfolio had an outstanding principal balance of $205,505 and $57,039 at June 30, 2021 and December 31, 2020, respectively. For more information on the repurchases of mortgage loans, refer to Note 16—Commitments and Contingencies.

Mortgage Servicing Rights, net

6 Months Ended

Jun. 30, 2021

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 condensed consolidated balance sheets. The principal balance of these loans at June 30, 2021 and December 31, 2020 are as follows:


	June 30,		December 31,
	2021		2020
Residential real estate mortgage loan portfolios serviced for:
FNMA	$	143,354	$	171,553
FHLB		47,712		64,661
Private investors		190,097		429,816
Total	$	381,163	$	666,030

Custodial escrow balances maintained with these serviced loans were $2,509 and $6,051 at June 30, 2021 and December 31, 2020, respectively.

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


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Mortgage servicing rights:
Beginning of period	$	5,855	$	10,302	$	7,853	$	10,845
Additions		25		383		99		490
Amortization		(1,680)		(1,116)		(3,752)		(1,766)
End of period		4,200		9,569		4,200		9,569

Valuation allowance at beginning of period		1,229		2,326		2,165		1,080
Additions (recoveries)		(261)		(23)		(1,197)		1,223
Valuation allowance at end of period		968		2,303		968		2,303

Mortgage servicing rights, net	$	3,232	$	7,266	$	3,232	$	7,266

Servicing fee income, net of amortization of servicing rights and changes in the valuation allowance, was $(908) and $(207) for the three months ended June 30, 2021 and 2020, respectively, and $(1,338) and $(1,118) for the six months ended June 30, 2021 and 2020, respectively.

The fair value of mortgage servicing rights was $3,404 and $5,841 at June 30, 2021 and December 31, 2020, 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 June 30, 2021 was determined using discount rates ranging from 9.5% to 12.0%, prepayment speeds with a weighted average of 19.7% (depending on the stratification of the specific right), a weighted average life of the mortgage servicing right of 49 months and a weighted average default rate of 0.2%.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%.

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 June 30, 2021 and December 31, 2020, the carrying amount of certain individual groupings exceeded their fair values, resulting in write-downs to fair value. Refer to Note 13—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
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 30
-Section 50
-Paragraph 1A
-Subparagraph (c)(3)
-URI http://asc.fasb.org/extlink&oid=109249958&loc=SL6224234-111729

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 30
-Section 50
-Paragraph 1A
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=109249958&loc=SL6224234-111729

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 20
-Section 50
-Paragraph 3
-Subparagraph (b)(2)(ii)
-URI http://asc.fasb.org/extlink&oid=121570589&loc=d3e107207-111719

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 20
-Section 50
-Paragraph 3
-Subparagraph (cc)
-URI http://asc.fasb.org/extlink&oid=121570589&loc=d3e107207-111719

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 50
-Section 50
-Paragraph 2
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=116651436&loc=d3e122596-111746

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 50
-Section 50
-Paragraph 3
-Subparagraph (a)(5)
-URI http://asc.fasb.org/extlink&oid=116651436&loc=d3e122625-111746

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 20
-Section 50
-Paragraph 4D
-Subparagraph (c)(3)
-URI http://asc.fasb.org/extlink&oid=121570589&loc=SL51823488-111719

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 20
-Section 50
-Paragraph 3
-Subparagraph (b)(2)(i)
-URI http://asc.fasb.org/extlink&oid=121570589&loc=d3e107207-111719

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 50
-Section 50
-Paragraph 4
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=116651436&loc=d3e122739-111746

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 20
-Section 50
-Paragraph 3
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=121570589&loc=d3e107207-111719

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 30
-Section 50
-Paragraph 7
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+ Details

Deposits

6 Months Ended

Jun. 30, 2021

Deposits

Deposits

Note 7—Deposits

Time deposits, included in interest-bearing deposits, were $1,191,895 and $1,646,523 at June 30, 2021 and December 31, 2020, respectively. Time deposits included brokered deposits of $35,000 and $42,751 at June 30, 2021 and December 31, 2020, respectively.

Time deposits that meet or exceed the FDIC insurance limit of $250 were $333,192 and $487,340 at June 30, 2021 and December 31, 2020, respectively.

FHLB Borrowings

6 Months Ended

Jun. 30, 2021

FHLB Borrowings

FHLB Borrowings

Note 8—FHLB Borrowings

FHLB borrowings at June 30, 2021 and December 31, 2020 consist of the following:


	June 30,			December 31,
	2021		Interest Rates	2020		Interest Rates
Long-term fixed rate advances	$	318,000	0.43%-1.96%	$	318,000	0.43%-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 June 30, 2021, advances totaling $307,000 were callable by the FHLB as follows: $100,000 in August 2021; $67,000 in September 2021; $90,000 in October 2021; and $50,000 in May 2024. At June 30, 2021, the Bank had additional borrowing capacity of $53,238 from the FHLB.

FHLB Overdraft Line of Credit and Letter of Credit

The Bank has established an overdraft line of credit agreement with the FHLB providing maximum borrowings of $50,000. The overdraft line of credit has not been drawn upon in 2021. The average amount outstanding during the six months ended June 30, 2020 was $3 . Borrowings accrue interest based on a variable rate based on the FHLB’s overnight cost of funds rate, which was 0.43% and 0.46% at June 30, 2021 and December 31, 2020, respectively. At June 30, 2021 and December 31, 2020, there were no outstanding borrowings under this agreement. The agreement has a one-year term and terminates in October 2021.

The Bank also has a $7,500 standby letter of credit with the FHLB to provide credit support for certain of its obligations related to its commitment to repurchase certain pools of Advantage Loan Program loans. This letter of credit has a 16-month term and expires in July 2022. There were no borrowings outstanding on this standby letter of credit during the six months ended June 30, 2021.

The FHLB advances, the overdraft line of credit and letter of credit are collateralized by pledged securities and loans. Refer to Note 4—Investment Securities for further information on securities pledged and Note 5—Loans for further information on loans pledged.

Other Borrowings

The Bank had available unsecured credit lines with other banks totaling $80,000 and $100,000 at June 30, 2021 and December 31, 2020, respectively. There were no borrowings under these credit lines during the six months ended June 30, 2021 and 2020.

Subordinated Notes, net

6 Months Ended

Jun. 30, 2021

Subordinated Notes, net

Subordinated Notes, net

Note 9—Subordinated Notes, net

The subordinated notes (the “Notes”) were as follows:


	June 30,		December 31,
	2021		2020
Subordinated notes (principal amount)	$	65,000	$	65,000
Unamortized note premium		377		411
Unamortized debt issuance costs		—		(70)
Total	$	65,377	$	65,341

The Notes bore interest at 7% per annum, payable semi-annually on April 15 and October 15 in arrears, through April 2021, after which the Notes have a variable interest rate of the three-month LIBOR rate plus a margin of 5.82%. The interest rate was 6.0% and 7.0% at June 30, 2021 and December 31, 2020, respectively. 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 $1,005 and $1,178 for the three months ended June 30, 2021 and 2020, respectively, and $2,185 and 2,355 for the six months ended June 30, 2021 and 2020, 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. There have been no redemptions of the Notes. The Notes are not subject to redemption by the noteholders.

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.

Shareholders' Equity

6 Months Ended

Jun. 30, 2021

Shareholders' Equity

Shareholders' Equity

Note 10— Shareholders’ Equity

Issuance of Shares of Common Stock

In May 2021, the Company issued and sold 300,000 unregistered shares of common stock to its chief executive officer pursuant to the terms of a stock purchase agreement entered into at the time of the chief executive officer’s employment for cash consideration of $1,350 or $4.50 per share, the fair market value on date of sale.

Stock Repurchase Program

The board of directors previously 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. 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.

In March 2020, the Company suspended the stock repurchase program for at least the near term in connection with the issues related to the Advantage Loan Program. Refer to Note 16─Commitments and Contingencies for further information regarding the internal review of the Advantage Loan Program (the “Internal Review”). The Company currently may not repurchase any common stock without the approval of the FRB.

During the six months ended June 30, 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). Such repurchases of common stock were funded through cash generated from operations.

As of June 30, 2021, the Company had $19,568 of common stock purchases remaining that may be made under the program.

Stock-based Compensation

6 Months Ended

Jun. 30, 2021

Stock-based Compensation

Stock-based Compensation

Note 11—Stock-based Compensation

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 the 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.

Previously, the board of directors had established a 2017 Omnibus Equity Incentive Plan (the “2017 Plan”) which was approved by the shareholders. The 2017 Plan initially provided 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 were issued at no less than the market price on the date the awards are granted. 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. Starting in 2020, stock option awards vest ratably over three years (one-third per year) after the date of grant, while stock option awards granted prior to 2020 generally vest 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 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.

A summary of the Company’s stock option activity as of and for the six months ended June 30, 2021 is as follows:


				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
	Number	Exercise		Contractual	Intrinsic
	of Shares	Price		Term	Value
				(Years)
Outstanding at January 1, 2021	377,882	$	5.61	9.09	$	—
Granted	—		—
Exercised	—		—
Forfeited/expired	(10,115)		12.62
Outstanding at June 30, 2021	367,767	$	5.41	8.13	$	165

Exercisable at June 30, 2021	226,550	$	4.98	8.22	$	110

The Company recorded stock-based compensation expense associated with stock options of $46 and $29 for the three months ended June 30, 2021 and 2020, respectively, and $103 and $55 for the six months ended June 30, 2021 and 2020, respectively. At June 30, 2021, there was $101 of total unrecognized compensation cost related to nonvested stock options. The unrecognized compensation cost related to nonvested stock options is expected to be recognized over a weighted-average period of 0.83 years.

Restricted Stock Awards

During the six months ended June 30, 2021, the Company awarded 45,000 shares of restricted stock to non-employee independent directors and awarded 182,702 shares of restricted stock to certain key employees. The restricted stock awards generally vest ratably over three years (one-third per year) after the date of grant. Upon a change in control, as defined in the Plan, the outstanding restricted stock awards will immediately vest. The value of a restricted stock award is based on the market value of the Company’s common stock at the date of grant.

A summary of the Company’s restricted stock awards activity for the six months ended June 30, 2021 is as follows:


		Weighted Average
	Number	Grant Date Fair
	of Shares	Value

Nonvested at January 1, 2021	137,936	$	7.90
Granted	227,702		4.97
Vested	(31,906)		7.67
Forfeited	(25,846)		6.25
Nonvested at June 30, 2021	307,886	$	5.89

During the six months ended June 30, 2021, the Company withheld 8,536 shares of common stock representing a portion of the restricted stock awards that vested during the period in order to satisfy certain related employee tax withholding liabilities of $46 associated with vesting. These withheld shares are treated the same as repurchased shares for accounting purposes.

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 $147 and $(20) for the three months ended June 30, 2021 and 2020, respectively, and $195 and $63 for the six months ended June 30, 2021 and 2020, respectively. At June 30, 2021, there was $1,460 of total unrecognized compensation cost related to the nonvested restricted stock. The unrecognized compensation cost is expected to be recognized over a weighted-average period of 1.94 years. The total fair value of restricted shares that vested during the six months ended June 30, 2021 was $173.

Income (Loss) Per Share

6 Months Ended

Jun. 30, 2021

Income (Loss) Per Share

Income (Loss) Per Share

Note 12—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 (loss) 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. In periods of a net loss, basic and diluted per share information are the same. The Company determines the potentially dilutive common shares using the treasury stock method. The following table presents the computation of income (loss) per share, basic and diluted:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Numerator:
Net income (loss)	$	3,452	$	2,867	$	5,777	$	(1,163)

Denominator:
Weighted average common shares outstanding, basic		50,009,053		49,837,948		49,930,563		49,837,805
Weighted average effect of potentially dilutive common shares:
Stock options		41,055		—		45,423		—
Restricted stock		10,667		3,793		11,267		—
Weighted average common shares outstanding, diluted		50,060,775		49,841,741		49,987,253		49,837,805

Income (loss) per share, basic and diluted	$	0.07	$	0.06	$	0.12	$	(0.02)

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 of such items would be anti-dilutive, are summarized as follows:


	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2021	2020	2021	2020
Stock options	67,767	460,068	71,325	330,617
Restricted stock	241,732	163,490	153,190	198,882
Total	309,499	623,558	224,515	529,499

Fair Values of Financial Instruments

6 Months Ended

Jun. 30, 2021

Fair Values of Financial Instruments

Fair Values of Financial Instruments

Note 13—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 condensed 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.

Mortgage Loans Held for Sale

Mortgage loans held for sale are carried at lower of amortized cost or fair value. Mortgage loans held for sale may be carried at fair value on a nonrecurring basis when fair value is less than cost. The fair value is based on outstanding commitments from investors or quoted prices for loans with similar characteristics (Level 2).

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 June 30, 2021 and December 31, 2020:


			Fair Value Measurements at
			June 30, 2021
			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	$	73,630	$	—	$	73,630	$	—
Mortgage-backed securities		29,235		—		29,235		—
Collateralized mortgage obligations		87,630		—		87,630		—
Collateralized debt obligations		190		—		—		190
Equity securities		5,043		5,043		—		—


			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		—		—

The table below presents a reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the six months ended June 30, 2021 and 2020:


	Fair Value Measurements Using Significant
	Unobservable Inputs (Level 3)
	Collateralized Debt Obligations
	June 30, 2021		June 30, 2020
Balance of recurring Level 3 assets at beginning of period	$	187	$	199
Total gains or losses (realized/unrealized):
Included in income-realized		—		—
Included in other comprehensive income (loss)		4		(14)
Principal maturities/settlements		(1)		(1)
Sales		—		—
Transfers in and/or out of Level 3		—		—
Balance of recurring Level 3 assets at end of period	$	190	$	184

Unrealized losses on Level 3 investments for collateralized debt obligations was $22 and $27 at June 30, 2021 and December 31, 2020, respectively. In addition to the amounts included in income as presented in the table above, interest income recorded on collateralized debt obligations was $3 and $4 for the six months ended June 30, 2021 and 2020, 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 condensed consolidated balance sheet at June 30, 2021 and December 31, 2020, the following table provides the level of valuation assumptions used to determine each adjustment and the related carrying value:


	Fair Value Measurements at June 30, 2021
			Quoted Prices in		Significant
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
Impaired loans:
Residential real estate	$	43	$	—	$	—	$	43
Construction		5,906		—		—		5,906
Mortgage servicing rights		2,438		—		—		2,438


	Fair Value Measurements at December 31, 2020
			Quoted Prices in		Significant
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Fair 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

As discussed above, 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 tables present quantitative information about Level 3 fair value measurements at June 30, 2021 and December 31, 2020:


	Quantitative Information about Level 3 Fair Value Measurements at June 30, 2021
					Range
	Fair Value		Valuation Technique	Unobservable Inputs	(Weighted Average) ⁽¹⁾
Impaired loans:
Residential real estate	$	43	Sales comparison approach	Adjustments for differences between the comparable sales	N/A (15%)
Construction	$	5,906	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	$	2,438	Discounted cash flow	Discount rate	9.5% - 12.0% (11.3)%
				Prepayment speed	11.6% - 38.8% (22.2)%
				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, 2020
			Valuation		Range
	Fair Value		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.

Fair Value of Financial Instruments

The carrying amounts and estimated fair values of financial instruments not carried at fair value at June 30, 2021 and December 31, 2020, are as follows:


	Fair Value Measurements at June 30, 2021
	Carrying		Fair
	Amount		Value		Level 1		Level 2		Level 3
Financial Assets
Cash and due from banks	$	774,478	$	774,478	$	774,478	$	—	$	—
Interest-bearing time deposits with other banks		805		810		—		810		—
Mortgage loans held for sale		15,107		15,613		—		15,613		—
Loans, net⁽¹⁾		2,280,659		2,401,320		—		—		2,401,320

Financial Liabilities
Time deposits⁽²⁾		1,191,895		1,196,803		—		1,196,803		—
Federal Home Loan Bank borrowings		318,000		321,930		—		321,930		—
Subordinated notes, net		65,377		65,431		—		65,431		—

(1)	Excludes impaired loans measured at fair value on a nonrecurring basis at June 30, 2021.

(2)	Includes time deposits held for sale with a carrying value of $20,678 and a fair value of $20,799 (Level 2).


	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		—

- 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

Regulatory Capital Requirements

6 Months Ended

Jun. 30, 2021

Regulatory Capital Requirements

Regulatory Capital Requirements

Note 14—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 our business, financial condition and results of operations.

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 June 30, 2021, the Company and the Bank meet all regulatory capital requirements to which they are subject.

At June 30, 2021 and December 31, 2020, 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 June 30, 2021 and December 31, 2020 are as follows:


					For Capital				To be Well
	Actual				Adequacy Purposes				Capitalized
	Amount		Ratio		Amount		Ratio		Amount	Ratio
June 30, 2021
Total adjusted capital to risk-weighted assets
Consolidated	$	399,367	24.61	%	$	129,837	8.00	%	N/A	N/A
Bank		393,962	24.50			128,624	8.00		160,780	10.00	%
Tier 1 (core) capital to risk-weighted assets
Consolidated		326,081	20.09			97,378	6.00		N/A	N/A
Bank		373,241	23.21			96,468	6.00		128,624	8.00
Common Equity Tier 1 (CET1)
Consolidated		326,081	20.09			73,033	4.50		N/A	N/A
Bank		373,241	23.21			72,351	4.50		104,507	6.50
Tier 1 (core) capital to adjusted tangible assets
Consolidated		326,081	9.16			142,369	4.00		N/A	N/A
Bank		373,241	10.53			141,766	4.00		177,207	5.00


					For Capital				To be Well
	Actual				Adequacy 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

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 16—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

Related Party Transactions

6 Months Ended

Jun. 30, 2021

Related Party Transactions

Related Party Transactions

Note 15—Related Party Transactions

From time to time, the Company had made 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 $150 and $375 to the foundation during the three and six months ended June 30, 2020, respectively. The Company ceased making charitable contributions beginning in the second quarter of 2020.

In May 2021, the Company issued and sold unregistered shares of common stock to its Chief Executive Officer in exchange for cash consideration. Refer to Note 10—Shareholders’ Equity.

The Bank had provided monthly data processing and programming services to entities controlled by the Company’s controlling shareholders. Aggregate fees received for such services amounted to $23 and $50 during the three and six months ended June 30, 2020, respectively. The Bank terminated such data processing agreement, effective as of November 2020.

The Company historically had leased certain storage and office space from entities owned by the Company’s controlling shareholders. Amounts paid under such leases totaled $60 and $120 during the three and six months ended June 30, 2020, respectively. The Company terminated such leases as of December 31, 2020.

The Company subleases certain office space to entities owned by the Company’s controlling shareholders. Amounts received under such subleases totaled $97 and $69 during the three months ended June 30, 2021 and 2020, respectively, and $192 and $138 during the six months ended June 30, 2021 and 2020, respectively.

Commitments and Contingencies

6 Months Ended

Jun. 30, 2021

Commitments and Contingencies

Commitments and Contingencies

Note 16—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 condensed 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 June 30, 2021, outstanding commitments to make loans consisted of fixed rate loans of $264 with interest rates ranging from 2.5% to 2.625% and maturities of 15 years and variable rate loans of $9,150 with varying interest rates (ranging from 3.375% to 3.875% at June 30, 2021) and maturities ranging from 15 years to 30 years.

Unused Lines of Credit

The Bank also issues unused lines of credit to meet customer financing needs. At June 30, 2021, the unused lines of credit include residential second mortgages of $14,081 and construction loans of $66,491, totaling $80,572. These unused lines of credit are associated with variable rate commitments with interest rates ranging from 3.25% to 7.50% and maturities ranging from 1 month to 14 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 June 30, 2021 and December 31, 2020:


	June 30,		December 31,
	2021		2020
Commitments to make loans	$	9,414	$	40,331
Unused lines of credit		80,572		140,665
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 and expects to continue to incur 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 three and six months ended June 30, 2021 and 2020.

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 Advantage Loan Program and related issues, including residential lending practices and public disclosures about that program. During 2021, the DOJ charged by criminal information the former managing director of residential lending of the Bank and two other former loan officers with conspiracy to commit bank and wire fraud in connection with the Advantage Loan Program, and each individual has pled guilty to that charge. The criminal information and plea agreement with respect to the former managing director of residential lending asserts that the individual acted with the knowledge and encouragement of certain former members of senior management. 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 the first quarter of 2021, the Company learned of a formal investigation recently initiated by the SEC. This investigation appears to be focused on accounting, financial reporting and disclosure matters, as well as the Company’s internal controls, related to the Advantage Loan Program. The Company has received document and information 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.

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. In February 2021, the Company, each individual defendant and the plaintiff reached an agreement in principle to settle the securities class action lawsuit. On April 19, 2021, the plaintiff, the Company and each of the other defendants entered into the final settlement agreement and submitted it to the court. Preliminary approval was granted by the court on April 28, 2021, and a final approval hearing is scheduled to be held before the court on September 16, 2021. The final agreement provides for a single $12,500 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. This $12,500 liability has been accrued for as of June 30, 2021 and December 31, 2020. The full amount of the settlement will be paid by the Company’s insurance carriers under applicable insurance policies and has been recorded as a receivable in other assets in the condensed consolidated balance sheet. In the event final court approval is not received, or the settlement is not finalized for any other reason, the Company intends to vigorously defend this action.

The Company maintained a liability of $27,500 for contingent losses at June 30, 2021 and December 31, 2020. 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 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 requests 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 states that, if the board of directors has not taken the actions demanded within 90 days after the receipt of the letter, or in the event the board of directors refuses 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 additional actions with respect to this matter have been taken by the board of directors. Further, legal action has not yet been brought by the purported shareholder. Nevertheless, expenses related to the evaluation by the demand review committee have been significant. There can be no assurance as to whether any litigation will be commenced by or against the Company with respect to the demand letter or that, if any such litigation is commenced, the Company will not incur material losses due to damages, penalties, costs and/or expenses as a result of such litigation or that any such losses will not have a material impact on the Company’s financial condition or results of operations.

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.

As of June 30, 2021 and December 31, 2020, the Bank maintained a mortgage repurchase liability in connection with the above mentioned investigations stemming from the Advantage Loan Program totaling $4,292 and $9,699, respectively, which is included in accrued expenses and other liabilities in the condensed 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 $303,747 and $562,139 at June 30, 2021 and December 31, 2020, respectively, including Advantage Loan Program loans totaling $190,097 and $429,816 at June 30, 2021 and December 31, 2020, 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.

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.

In March 2021, the Company repurchased a pool of Advantage Loan Program loans with an outstanding principal balance of $87,944 from a third-party investor. These loans were previously sold to such third-party investor with servicing retained and were considered to be performing at the repurchase date. In connection with this repurchase during the first quarter of 2021, the Company recognized a disposition of $1,255 mortgage servicing rights and charged a loss of $2,917 against the mortgage repurchase liability. In addition, the Company entered into another agreement with the same investor to repurchase an additional pool prior to July 22, 2023, with the specific timing for the repurchase at the discretion of the investor. The aggregate principal balance of the loans in this pool at June 30, 2021 was $35,124.

In June 2021, the Company repurchased a pool of Advantage Loan Program loans with an outstanding principal balance of $79,818 from another third-party investor. These loans were previously sold to such third-party investor with servicing retained and were considered to be performing at the repurchase date. In connection with this repurchase during the second quarter of 2021, the Company recognized a disposition of $1,054 mortgage servicing rights and charged a loss of $1,825 against the mortgage repurchase liability. In addition, the Company entered into another agreement with the same investor to repurchase additional pools prior to various dates in 2023, with the specific timing for the repurchases at the discretion of the investor. The aggregate principal balance of the loans in these pools at June 30, 2021 was $58,714.

Activity in the mortgage repurchase liability was as follows:


	Six Months Ended June 30,
	2021		2020
Balance, beginning of period	$	9,699	$	7,823
Net provision (recovery)		(665)		25
Loss on loan repurchases		(4,742)		—
Balance, end of the period	$	4,292	$	7,848

Subsequent Events

6 Months Ended

Jun. 30, 2021

Subsequent Events

Subsequent Events

Note 17—Subsequent Events

Sale of Bellevue, Washington Branch Office

On July 23, 2021, the Bank completed the sale of the Bellevue, Washington branch office to First Federal Savings & Loan Association of Port Angeles. The sale included the transfer of customer deposit accounts of $65,437 as well as the transfer of all premises and equipment. The Company recorded a gain of $1,417 on the sale.

Repurchases of Residential Real Estate Mortgage Loans

In July 2021, the Company repurchased from a third-party investor a pool of Advantage Loan Program loans with an outstanding principal balance of $4,944. These loans were previously sold to such third-party investor with servicing retained and were considered to be performing at the acquisition date.

Letter of Credit

In July 2021, the Bank obtained an additional $4,000 irrevocable standby letter of credit from the FHLB to provide credit support for certain of its obligations related to its commitment to repurchase certain pools of Advantage Loan Program loans. This letter of credit expires in July 2024 and is collateralized by certain investment securities and loans.

Summary of Significant Accounting Policies (Policies)	6 Months Ended
Summary of Significant Accounting Policies (Policies)	Jun. 30, 2021
Summary of Significant Accounting Policies
Principles of Consolidation	Principles of Consolidation The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The condensed consolidated financial statements include the results of the Company and its wholly-owned subsidiary. On December 21, 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, completed the sale of substantially all of its assets, which consisted primarily of client advisory agreements for aggregate consideration of $250. The operations of Quantum Capital Management were not significant. All significant intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates	Use of Estimates The preparation of the condensed 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 condensed 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.
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 June 30, 2021 and December 31, 2020, residential real estate loans accounted for 83% and 81%, 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 June 30, 2021 and December 31, 2020, approximately 87% of the loan portfolio was originated with respect to properties or businesses located in California. Starting December 9, 2019, the Bank suspended its Advantage Loan Program and announced on March 6, 2020 that it permanently discontinued this program. 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 $14,867 and $19,375 at June 30, 2021 and December 31, 2020, respectively) totaled $1,427,467 and $1,515,248, or 73% and 74%, of the residential loan portfolio at June 30, 2021 and December 31, 2020, respectively. Refer to Note 16– Commitments and Contingencies.
Risks and Uncertainties - COVID-19	Risks and Uncertainties – COVID-19 The coronavirus disease 2019 (“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. The Company’s primary market areas of California and New York City have been hit particularly hard by the COVID-19 pandemic. Federal and state governments have taken, and continue to take, unprecedented actions to contain the spread of the disease, including vaccine distribution, 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. During the first half of 2021, the COVID-19 pandemic continued to create and exacerbate significant risks and uncertainties for the markets that the Bank serves. As the Bank’s residential and commercial customers are facing various levels of financial stress, the Bank continues to experience an elevated level of delinquent and nonaccrual loans, primarily in residential real estate, office, lodging, retail and construction loans. The duration and severity of the effect of the COVID-19 pandemic on economic, market and business conditions remain uncertain. The Company continues to be subject to heightened business, operational, market, credit and other risks related to the COVID-19 pandemic, which may have an adverse effect on its business, financial condition, liquidity, results of operations, risk-weighted assets and regulatory capital.

Investment Securities (Tables)

6 Months Ended

Jun. 30, 2021

Investment Securities

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


	June 30, 2021
	Amortized		Gross Unrealized				Fair
	Cost		Gain		Loss		Value
Available for sale:
U.S. Treasury & Agency securities	$	73,540	$	90	$	—	$	73,630
Mortgage-backed securities		29,408		91		(264)		29,235
Collateralized mortgage obligations		86,888		742		—		87,630
Collateralized debt obligations		212		—		(22)		190
Total	$	190,048	$	923	$	(286)	$	190,685


	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

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 after one year through five years	$	73,540	$	73,630
Mortgage-backed securities		29,408		29,235
Collateralized mortgage obligations		86,888		87,630
Collateralized debt obligations		212		190
Total	$	190,048	$	190,685

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


	June 30, 2021
	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
Mortgage-backed securities	$	9,972	$	(264)	$	—	$	—	$	9,972	$	(264)
Collateralized debt obligations		—		—		190		(22)		190		(22)
Total	$	9,972	$	(264)	$	190	$	(22)	$	10,162	$	(286)


	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)

Schedule of equity securities with readily determinable fair values


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Net gains (losses) recorded during the period on equity securities	$	15	$	43	$	(75)	$	123
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	$	15	$	43	$	(75)	$	123

Loans (Tables)

6 Months Ended

Jun. 30, 2021

Loans

Schedule of major categories of loans


	June 30,		December 31,
	2021		2020
Residential real estate	$	1,948,892	$	2,033,526
Commercial real estate		263,278		259,958
Construction		144,385		206,581
Commercial lines of credit		1,971		6,671
Other consumer		—		7
Total loans		2,358,526		2,506,743
Less: allowance for loan losses		(70,669)		(72,387)
Loans, net	$	2,287,857	$	2,434,356

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

The following tables present the activity in the allowance for loan losses by portfolio segment for the three and six months ended June 30, 2021 and 2020:


							Commercial
	Residential		Commercial				Lines of		Other
Three Months Ended June 30, 2021	Real Estate		Real Estate		Construction		Credit		Consumer		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	33,056	$	22,763	$	15,966	$	86	$	—	$	—	$	71,871
Provision (recovery) for loan losses		(579)		(287)		(912)		(28)		—		—		(1,806)
Charge offs		—		—		—		—		—		—		—
Recoveries		587		15		2		—		—		—		604
Total ending balance	$	33,064	$	22,491	$	15,056	$	58	$	—	$	—	$	70,669

							Commercial
	Residential		Commercial				Lines of		Other
Six Months Ended June 30, 2021	Real Estate		Real Estate		Construction		Credit		Consumer		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	32,366	$	21,942	$	17,988	$	91	$	—	$	—	$	72,387
Provision (recovery) for loan losses		(93)		518		(2,935)		(33)		—		—		(2,543)
Charge offs		—		—		—		—		—		—		—
Recoveries		791		31		3		—		—		—		825
Total ending balance	$	33,064	$	22,491	$	15,056	$	58	$	—	$	—	$	70,669


							Commercial
	Residential		Commercial				Lines of		Other
Three Months Ended June 30, 2020	Real Estate		Real Estate		Construction		Credit		Consumer		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	19,154	$	11,261	$	11,439	$	368	$	1	$	390	$	42,613
Provision (recovery) for loan losses		(344)		4,492		557		(18)		—		(390)		4,297
Charge offs		—		—		—		—		—		—		—
Recoveries		2		17		2		—		—		—		21
Total ending balance	$	18,812	$	15,770	$	11,998	$	350	$	1	$	—	$	46,931


							Commercial
	Residential		Commercial				Lines of		Other
Six Months Ended June 30, 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 for loan losses		6,464		10,491		8,173		22		—		—		25,150
Charge offs		—		—		—		—		—		—		—
Recoveries		12		36		3		—		—		—		51
Total ending balance	$	18,812	$	15,770	$	11,998	$	350	$	1	$	—	$	46,931


							Commercial
	Residential		Commercial				Lines of		Other
June 30, 2021	Real Estate		Real Estate		Construction		Credit		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	160	$	—	$	3,011	$	—	$	—	$	—	$	3,171
Collectively evaluated for impairment		32,904		22,491		12,045		58		—		—		67,498
Total ending allowance balance	$	33,064	$	22,491	$	15,056	$	58	$	—	$	—	$	70,669
Loans:
Loans individually evaluated for impairment	$	358	$	18,981	$	33,779	$	120	$	—	$	—	$	53,238
Loans collectively evaluated for impairment		1,948,534		244,297		110,606		1,851		—		—		2,305,288
Total ending loans balance	$	1,948,892	$	263,278	$	144,385	$	1,971	$	—	$	—	$	2,358,526


							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

Schedule of information related to impaired loans by class of loans


	At June 30, 2021						At December 31, 2020
	Unpaid				Allowance		Unpaid				Allowance
	Principal		Recorded		for Loan		Principal		Recorded		for Loan
	Balance		Investment		Losses		Balance		Investment		Losses
With no related allowance for loan losses recorded:
Residential real estate, first mortgage	$	108	$	82	$	—	$	116	$	94	$	—
Commercial real estate:												—
Retail		1,239		1,010		—		1,247		1,029		—
Hotels/Single-room occupancy hotels		17,869		17,835		—		11,428		11,419		—
Other		136		136		—		—		—		—
Construction		23,327		22,422		—		42,669		41,951		—
Commercial lines of credit, private banking		120		120		—		3,857		3,857		—
Subtotal		42,799		41,605		—		59,317		58,350		—
With an allowance for loan losses recorded:
Residential real estate, first mortgage		275		276		160		114		114		41
Commercial real estate, hotels/single-room occupancy hotels		—		—		—		8,645		8,526		287
Construction		11,400		11,357		3,011		6,920		6,920		1,905
Commercial lines of credit, private banking		—		—		—		124		124		4
Subtotal		11,675		11,633		3,171		15,803		15,684		2,237
Total	$	54,474	$	53,238	$	3,171	$	75,120	$	74,034	$	2,237


	Three Months Ended June 30,
	2021						2020
	Average		Interest		Cash Basis		Average		Interest		Cash Basis
	Recorded		Income		Interest		Recorded		Income		Interest
	Investment		Recognized		Recognized		Investment		Recognized		Recognized
With no related allowance for loan losses recorded:
Residential real estate, first mortgage	$	86	$	—	$	—	$	94	$	—	$	—
Commercial real estate:
Retail		1,013		—		—		1,070		14		10
Hotels/Single-room occupancy hotels		17,926		—		—		3,502		—		—
Other		136		—		—		—		—		—
Construction		22,801		43		29		32,047		344		190
Commercial lines of credit:
Private banking		122		2		1		1,243		21		14
C&I lending		—		—		—		1,284		—		—
Subtotal		42,084		45		30		39,240		379		214
With an allowance for loan losses recorded:
Residential real estate, first mortgage		277		1		1		116		2		1
Construction		11,104		55		37		—		—		—
Commercial lines of credit, private banking		—		—		—		129		1		1
Subtotal		11,381		56		38		245		3		2
Total	$	53,465	$	101	$	68	$	39,485	$	382	$	216


	Six Months Ended June 30,
	2021						2020
	Average		Interest		Cash Basis		Average		Interest		Cash Basis
	Recorded		Income		Interest		Recorded		Income		Interest
	Investment		Recognized		Recognized		Investment		Recognized		Recognized
With no related allowance for loan losses recorded:
Residential real estate, first mortgage	$	88	$	—	$	—	$	97	$	—	$	—
Commercial real estate:
Retail		1,020		—		—		1,089		29		24
Hotels/Single-room occupancy hotels		17,914		—		—		3,502		—		—
Other		136		—		—		—		—		—
Construction		30,207		138		124		30,394		810		597
Commercial lines of credit:
Private banking		1,645		3		3		1,245		42		35
C&I lending		—		—		—		1,284		—		—
Subtotal		51,010		141		127		37,611		881		656
With an allowance for loan losses recorded:
Residential real estate, first mortgage		277		1		1		116		3		2
Construction		10,721		107		89		—		—		—
Commercial lines of credit, private banking		—		—		—		130		3		3
Subtotal		10,998		108		90		246		6		5
Total	$	62,008	$	249	$	217	$	37,857	$	887	$	661

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 table presents the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans as of June 30, 2021 and December 31, 2020:


	June 30, 2021				December 31, 2020
			Loans Past				Loans Past
			Due Over				Due Over
			90 Days Still				90 Days Still
	Nonaccrual		Accruing		Nonaccrual		Accruing
Residential real estate:
Residential first mortgage	$	27,157	$	44	$	20,043	$	46
Residential second mortgage		714		—		686		—
Commercial real estate:
Retail		1,011		—		20		—
Hotels/Single-room occupancy hotels		17,945		—		19,945		—
Other		136		—
Construction		27,803		—		41,873		—
Commercial lines of credit:
Private banking		—		—		2,285		—
C&I lending		—		—		1,572		—
Total	$	74,766	$	44	$	86,424	$	46

The following tables present the aging of the recorded investment in past due loans as of June 30, 2021 and December 31, 2020 by class of loans:


					Greater
	30 - 59		60 - 89		than
	Days		Days		89 Days		Total		Loans Not
June 30, 2021	Past Due		Past Due		Past Due		Past Due		Past Due		Total
Residential real estate:
Residential first mortgage	$	33,222	$	16,802	$	27,201	$	77,225	$	1,855,556	$	1,932,781
Residential second mortgage		—		108		714		822		15,289		16,111
Commercial real estate:
Retail		—		—		1,011		1,011		14,981		15,992
Multifamily		3,661		—		—		3,661		94,381		98,042
Offices		2,769		—		—		2,769		20,773		23,542
Hotels/Single-room occupancy hotels		—		—		17,945		17,945		60,344		78,289
Industrial		—		4,000		—		4,000		1,851		5,851
Other		1,471		—		136		1,607		39,955		41,562
Construction		—		3,323		27,803		31,126		113,259		144,385
Commercial lines of credit:
Private banking		—		—		—		—		120		120
C&I lending		—		—		—		—		1,851		1,851
Total	$	41,123	$	24,233	$	74,810	$	140,166	$	2,218,360	$	2,358,526


					Greater
	30 - 59		60 - 89		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/Single-room occupancy hotels		—		—		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

Schedule of troubled debt restructurings


	June 30, 2021				December 31, 2020
	Recorded		Allowance for		Recorded		Allowance for
	Investment		Loan Losses		Investment		Loan Losses
Residential real estate, first mortgage	$	200	$	40	$	209	$	41
Commercial real estate, retail		1,011		—		1,029		—
Construction		23,843		1,965		26,985		1,906
Commercial lines of credit, private banking		120		—		124		4
Total	$	25,174	$	2,005	$	28,347	$	1,951

Schedule of risk rating of loans by class of loans

At June 30, 2021 and December 31, 2020, the risk rating of loans by class of loans was as follows:


			Special
June 30, 2021	Pass		Mention		Substandard		Doubtful		Total
Residential real estate:
Residential first mortgage	$	1,905,579	$	—	$	26,944	$	258	$	1,932,781
Residential second mortgage		15,397		—		714		—		16,111
Commercial real estate:
Retail		13,432		1,549		1,011		—		15,992
Multifamily		61,860		10,176		26,006		—		98,042
Offices		9,600		1,602		12,340		—		23,542
Hotels/ Single-room occupancy hotels		12,113		20,538		45,638		—		78,289
Industrial		5,851		—		—		—		5,851
Other		30,107		5,868		5,587		—		41,562
Construction		81,593		25,477		29,444		7,871		144,385
Commercial lines of credit:
Private banking		120		—		—		—		120
C&I lending		1,824		27		—		—		1,851
Total	$	2,137,476	$	65,237	$	147,684	$	8,129	$	2,358,526


			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/ Single-room occupancy hotels		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

Mortgage Servicing Rights, net (Tables)

6 Months Ended

Jun. 30, 2021

Mortgage Servicing Rights, net

Schedule of principal balance of mortgage loans serviced for others


	June 30,		December 31,
	2021		2020
Residential real estate mortgage loan portfolios serviced for:
FNMA	$	143,354	$	171,553
FHLB		47,712		64,661
Private investors		190,097		429,816
Total	$	381,163	$	666,030

Schedule of activity for mortgage servicing rights and related valuation allowance


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Mortgage servicing rights:
Beginning of period	$	5,855	$	10,302	$	7,853	$	10,845
Additions		25		383		99		490
Amortization		(1,680)		(1,116)		(3,752)		(1,766)
End of period		4,200		9,569		4,200		9,569

Valuation allowance at beginning of period		1,229		2,326		2,165		1,080
Additions (recoveries)		(261)		(23)		(1,197)		1,223
Valuation allowance at end of period		968		2,303		968		2,303

Mortgage servicing rights, net	$	3,232	$	7,266	$	3,232	$	7,266

FHLB Borrowings (Tables)

6 Months Ended

Jun. 30, 2021

FHLB Borrowings

Schedule of FHLB borrowings


	June 30,			December 31,
	2021		Interest Rates	2020		Interest Rates
Long-term fixed rate advances	$	318,000	0.43%-1.96%	$	318,000	0.43%-1.96%

Subordinated Notes, net (Tables)

6 Months Ended

Jun. 30, 2021

Subordinated Notes, net

Schedule of subordinated notes


	June 30,		December 31,
	2021		2020
Subordinated notes (principal amount)	$	65,000	$	65,000
Unamortized note premium		377		411
Unamortized debt issuance costs		—		(70)
Total	$	65,377	$	65,341

Stock-based Compensation (Tables)

6 Months Ended

Jun. 30, 2021

Stock-based Compensation

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, 2021	377,882	$	5.61	9.09	$	—
Granted	—		—
Exercised	—		—
Forfeited/expired	(10,115)		12.62
Outstanding at June 30, 2021	367,767	$	5.41	8.13	$	165

Exercisable at June 30, 2021	226,550	$	4.98	8.22	$	110

Summary of the company's restricted stock awards activity


		Weighted Average
	Number	Grant Date Fair
	of Shares	Value

Nonvested at January 1, 2021	137,936	$	7.90
Granted	227,702		4.97
Vested	(31,906)		7.67
Forfeited	(25,846)		6.25
Nonvested at June 30, 2021	307,886	$	5.89

Income (Loss) Per Share (Tables)

6 Months Ended

Jun. 30, 2021

Income (Loss) Per Share

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


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Numerator:
Net income (loss)	$	3,452	$	2,867	$	5,777	$	(1,163)

Denominator:
Weighted average common shares outstanding, basic		50,009,053		49,837,948		49,930,563		49,837,805
Weighted average effect of potentially dilutive common shares:
Stock options		41,055		—		45,423		—
Restricted stock		10,667		3,793		11,267		—
Weighted average common shares outstanding, diluted		50,060,775		49,841,741		49,987,253		49,837,805

Income (loss) per share, basic and diluted	$	0.07	$	0.06	$	0.12	$	(0.02)

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


	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2021	2020	2021	2020
Stock options	67,767	460,068	71,325	330,617
Restricted stock	241,732	163,490	153,190	198,882
Total	309,499	623,558	224,515	529,499

Fair Values of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2021

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
			June 30, 2021
			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	$	73,630	$	—	$	73,630	$	—
Mortgage-backed securities		29,235		—		29,235		—
Collateralized mortgage obligations		87,630		—		87,630		—
Collateralized debt obligations		190		—		—		190
Equity securities		5,043		5,043		—		—


			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		—		—

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
	June 30, 2021		June 30, 2020
Balance of recurring Level 3 assets at beginning of period	$	187	$	199
Total gains or losses (realized/unrealized):
Included in income-realized		—		—
Included in other comprehensive income (loss)		4		(14)
Principal maturities/settlements		(1)		(1)
Sales		—		—
Transfers in and/or out of Level 3		—		—
Balance of recurring Level 3 assets at end of period	$	190	$	184

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


	Fair Value Measurements at June 30, 2021
			Quoted Prices in		Significant
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
Impaired loans:
Residential real estate	$	43	$	—	$	—	$	43
Construction		5,906		—		—		5,906
Mortgage servicing rights		2,438		—		—		2,438


	Fair Value Measurements at December 31, 2020
			Quoted Prices in		Significant
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Fair 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

Schedule of quantitative information about nonrecurring Level 3 fair value measurements


	Quantitative Information about Level 3 Fair Value Measurements at June 30, 2021
					Range
	Fair Value		Valuation Technique	Unobservable Inputs	(Weighted Average) ⁽¹⁾
Impaired loans:
Residential real estate	$	43	Sales comparison approach	Adjustments for differences between the comparable sales	N/A (15%)
Construction	$	5,906	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	$	2,438	Discounted cash flow	Discount rate	9.5% - 12.0% (11.3)%
				Prepayment speed	11.6% - 38.8% (22.2)%
				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, 2020
			Valuation		Range
	Fair Value		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.

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


	Fair Value Measurements at June 30, 2021
	Carrying		Fair
	Amount		Value		Level 1		Level 2		Level 3
Financial Assets
Cash and due from banks	$	774,478	$	774,478	$	774,478	$	—	$	—
Interest-bearing time deposits with other banks		805		810		—		810		—
Mortgage loans held for sale		15,107		15,613		—		15,613		—
Loans, net⁽¹⁾		2,280,659		2,401,320		—		—		2,401,320

Financial Liabilities
Time deposits⁽²⁾		1,191,895		1,196,803		—		1,196,803		—
Federal Home Loan Bank borrowings		318,000		321,930		—		321,930		—
Subordinated notes, net		65,377		65,431		—		65,431		—

(1)	Excludes impaired loans measured at fair value on a nonrecurring basis at June 30, 2021.

(2)	Includes time deposits held for sale with a carrying value of $20,678 and a fair value of $20,799 (Level 2).


	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		—

Regulatory Capital Requirements (Tables)

6 Months Ended

Jun. 30, 2021

Regulatory Capital Requirements

Schedule of actual and minimum required capital amounts and ratios


					For Capital				To be Well
	Actual				Adequacy Purposes				Capitalized
	Amount		Ratio		Amount		Ratio		Amount	Ratio
June 30, 2021
Total adjusted capital to risk-weighted assets
Consolidated	$	399,367	24.61	%	$	129,837	8.00	%	N/A	N/A
Bank		393,962	24.50			128,624	8.00		160,780	10.00	%
Tier 1 (core) capital to risk-weighted assets
Consolidated		326,081	20.09			97,378	6.00		N/A	N/A
Bank		373,241	23.21			96,468	6.00		128,624	8.00
Common Equity Tier 1 (CET1)
Consolidated		326,081	20.09			73,033	4.50		N/A	N/A
Bank		373,241	23.21			72,351	4.50		104,507	6.50
Tier 1 (core) capital to adjusted tangible assets
Consolidated		326,081	9.16			142,369	4.00		N/A	N/A
Bank		373,241	10.53			141,766	4.00		177,207	5.00


					For Capital				To be Well
	Actual				Adequacy 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

Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2021

Commitments and Contingencies

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


	June 30,		December 31,
	2021		2020
Commitments to make loans	$	9,414	$	40,331
Unused lines of credit		80,572		140,665
Standby letters of credit		24		24

Schedule of activity in the mortgage repurchase liability


	Six Months Ended June 30,
	2021		2020
Balance, beginning of period	$	9,699	$	7,823
Net provision (recovery)		(665)		25
Loss on loan repurchases		(4,742)		—
Balance, end of the period	$	4,292	$	7,848

Nature of Operations and Basis of Presentation (Details)	6 Months Ended
	Jun. 30, 2021 item segment
Nature of Operations and Basis of Presentation
Number of branches	29
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 - Concentration of Credit Risk (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2021	Dec. 31, 2020	Dec. 21, 2020
Concentration of Credit Risk
Disposal Group, Including Discontinued Operation, Consideration			$ 250
Loans Receivable	$ 2,358,526	$ 2,506,743
Mortgage loans held for sale	15,107	22,284
Residential real estate
Concentration of Credit Risk
Loans Receivable	$ 1,948,892	$ 2,033,526
Residential real estate loans \| Loans receivables \| Residential real estate
Concentration of Credit Risk
Concentration of credit risk	83.00%	81.00%
California \| Loans receivables \| Residential real estate
Concentration of Credit Risk
Concentration of credit risk	87.00%	87.00%
Advantage loan program \| Loans receivables \| Residential real estate
Concentration of Credit Risk
Concentration of credit risk	73.00%	74.00%
Loans Receivable	$ 1,427,467	$ 1,515,248
Mortgage loans held for sale	$ 14,867	$ 19,375

Investment Securities - Amortized Cost and Fair Value Corresponding Gross Unrealized Gains and Losses (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended		12 Months Ended
	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Available for sale:
Available for sale, Amortized Cost		$ 190,048		$ 299,058
Available for sale, Gross Unrealized Gain		923		955
Available for sale, Gross Unrealized Loss		(286)		(419)
Investment securities available for sale, at fair value		190,685		299,594
Securities pledged as collateral on FHLB borrowings		521,218		630,197
Carrying value of debt securities held of any single issuer in excess of 10% of shareholders equity		$ 0		$ 0
Threshold percentage of total shareholders' equity above which securities of any single issuer exceed		10.00%		10.00%
Sales of investment securities	$ 36,315	$ 0	$ 59,359
Gross realized gains	44		279
Gross realized losses	$ 78		$ 80
Collateralized mortgage obligations \| US Government Corporations and Agencies Securities
Available for sale:
Investment securities available for sale, at fair value		705		$ 816
Debt securities
Available for sale:
Securities pledged as collateral on FHLB borrowings		73,630
U.S. Treasury & Agency securities
Available for sale:
Available for sale, Amortized Cost		73,540		138,742
Available for sale, Gross Unrealized Gain		90		255
Investment securities available for sale, at fair value		73,630		138,997
Mortgage-backed securities
Available for sale:
Available for sale, Amortized Cost		29,408		33,743
Available for sale, Gross Unrealized Gain		91		72
Available for sale, Gross Unrealized Loss		(264)		(1)
Investment securities available for sale, at fair value		29,235		33,814
Collateralized mortgage obligations
Available for sale:
Available for sale, Amortized Cost		86,888		126,359
Available for sale, Gross Unrealized Gain		742		628
Available for sale, Gross Unrealized Loss				(391)
Investment securities available for sale, at fair value		87,630		126,596
Collateralized debt obligations
Available for sale:
Available for sale, Amortized Cost		212		214
Available for sale, Gross Unrealized Loss		(22)		(27)
Investment securities available for sale, at fair value		$ 190		$ 187

Investment Securities - Amortized Cost and Fair Value By Contractual Maturity (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Available for sale, Amortized Cost
Available for sale, Amortized Cost	$ 190,048	$ 299,058
Available for sale, Fair Value
Available for sale, Fair Value	190,685	299,594
U.S. Treasury & Agency securities
Available for sale, Amortized Cost
Due after one year through five years	73,540
Available for sale, Amortized Cost	73,540	138,742
Available for sale, Fair Value
Due after one year through five years	73,630
Available for sale, Fair Value	73,630	138,997
Mortgage-backed securities
Available for sale, Amortized Cost
Available for sale, Amortized Cost	29,408	33,743
Available for sale, Fair Value
Available for sale, Fair Value	29,235	33,814
Collateralized mortgage obligations
Available for sale, Amortized Cost
Available for sale, Amortized Cost	86,888	126,359
Available for sale, Fair Value
Available for sale, Fair Value	87,630	126,596
Collateralized debt obligations
Available for sale, Amortized Cost
Available for sale, Amortized Cost	212	214
Available for sale, Fair Value
Available for sale, Fair Value	$ 190	$ 187

Investment Securities - Aggregated by Major Security Type and Length of Time in a Continuous Unrealized Loss Position (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2021 USD ($) security	Dec. 31, 2020 USD ($)	Jun. 30, 2020 USD ($)
Fair Value
Less than 12 Months, Fair value	$ 9,972	$ 81,434
12 Months or More, Fair Value	190	187
Available for sale, Continuous unrealized loss position, Fair Value	10,162	81,621
Unrealized Losses
Less than 12 Months, Unrealized Losses	(264)	(392)
12 Months or More, Unrealized Losses	(22)	(27)
Available for sale, Continuous unrealized loss position, Unrealized Losses	$ (286)	(419)
Number of debt securities in portfolio \| security	19
Number of debt securities in an unrealized loss position \| security	3
Mortgage-backed securities
Fair Value
Less than 12 Months, Fair value	$ 9,972	5,694
Available for sale, Continuous unrealized loss position, Fair Value	9,972	5,694
Unrealized Losses
Less than 12 Months, Unrealized Losses	(264)	(1)
Available for sale, Continuous unrealized loss position, Unrealized Losses	(264)	(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	190	187
Available for sale, Continuous unrealized loss position, Fair Value	190	187	$ 190
Unrealized Losses
12 Months or More, Unrealized Losses	(22)	(27)
Available for sale, Continuous unrealized loss position, Unrealized Losses	$ (22)	$ (27)

Investment Securities - Equity Securities (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Equity Securities
Fair value of equity securities	$ 5,289		$ 5,289		$ 5,364
Equity securities with readily determinable fair values	5,043		5,043		5,118
Equity securities with readily determinable fair values
Net gains (losses) recorded during the period on equity securities	15	$ 43	(75)	$ 123
Unrealized gains (losses) recorded during the period on equity securities held at the reporting date	15	$ 43	(75)	$ 123
Level 3
Equity Securities
Investment in equity securities without readily determinable fair value	$ 246		$ 246		$ 246

Loans - Major Categories of Loans (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Jun. 30, 2020	Apr. 01, 2020	Mar. 31, 2020	Dec. 31, 2019
Major categories of loans
Total loans	$ 2,358,526		$ 2,506,743
Less: allowance for loan losses	(70,669)	$ (71,871)	(72,387)	$ (46,931)	$ (42,613)		$ (21,730)
Loans, net	2,287,857		2,434,356
Carrying value of loans pledged as collateral on FHLB borrowings	521,218		630,197
Residential real estate
Major categories of loans
Total loans	1,948,892		2,033,526
Less: allowance for loan losses	(33,064)	(33,056)	(32,366)	(18,812)		$ (19,154)	(12,336)
Loans, net	303,747		562,139
Commercial real estate
Major categories of loans
Total loans	263,278		259,958
Less: allowance for loan losses	(22,491)	(22,763)	(21,942)	(15,770)		(11,261)	(5,243)
Construction
Major categories of loans
Total loans	144,385		206,581
Less: allowance for loan losses	(15,056)	(15,966)	(17,988)	(11,998)		(11,439)	(3,822)
Commercial lines of credit
Major categories of loans
Total loans	1,971		6,671
Less: allowance for loan losses	$ (58)	$ (86)	(91)	(350)	$ (368)		(328)
Other consumer
Major categories of loans
Total loans			$ 7
Less: allowance for loan losses				$ (1)		$ (1)	$ (1)

Loans - Activity in the Allowance For Loan Losses by Portfolio Segment (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Allowance for loan losses
Beginning balance	$ 71,871		$ 72,387	$ 21,730
Provision (recovery) for loan losses	(1,806)	$ 4,297	(2,543)	25,150
Recoveries	604	21	825	51
Total ending balance	70,669	46,931	70,669	46,931
Residential real estate
Allowance for loan losses
Beginning balance	33,056	19,154	32,366	12,336
Provision (recovery) for loan losses	(579)	(344)	(93)	6,464
Recoveries	587	2	791	12
Total ending balance	33,064	18,812	33,064	18,812
Commercial real estate
Allowance for loan losses
Beginning balance	22,763	11,261	21,942	5,243
Provision (recovery) for loan losses	(287)	4,492	518	10,491
Recoveries	15	17	31	36
Total ending balance	22,491	15,770	22,491	15,770
Construction
Allowance for loan losses
Beginning balance	15,966	11,439	17,988	3,822
Provision (recovery) for loan losses	(912)	557	(2,935)	8,173
Recoveries	2	2	3	3
Total ending balance	15,056	11,998	15,056	11,998
Commercial lines of credit
Allowance for loan losses
Beginning balance	86		91	328
Provision (recovery) for loan losses	(28)	(18)	(33)	22
Total ending balance	$ 58	350	$ 58	350
Other consumer
Allowance for loan losses
Beginning balance		1		1
Total ending balance		1		$ 1
Unallocated
Allowance for loan losses
Beginning balance		390
Provision (recovery) for loan losses		$ (390)

Loans - Activity in the Allowance For Loan Losses by Portfolio Segment And Based On Impairment Evaluation Method (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Jun. 30, 2020	Apr. 01, 2020	Mar. 31, 2020	Dec. 31, 2019
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$ 3,171		$ 2,237
Collectively evaluated for impairment	67,498		70,150
Total ending allowance balance	70,669	$ 71,871	72,387	$ 46,931	$ 42,613		$ 21,730
Loans:
Loans individually evaluated for impairment	53,238		74,034
Loans collectively evaluated for impairment	2,305,288		2,432,709
Total loans	2,358,526		2,506,743
Residential real estate
Ending allowance balance attributable to loans:
Individually evaluated for impairment	160		41
Collectively evaluated for impairment	32,904		32,325
Total ending allowance balance	33,064	33,056	32,366	18,812		$ 19,154	12,336
Loans:
Loans individually evaluated for impairment	358		208
Loans collectively evaluated for impairment	1,948,534		2,033,318
Total loans	1,948,892		2,033,526
Commercial real estate
Ending allowance balance attributable to loans:
Individually evaluated for impairment			287
Collectively evaluated for impairment	22,491		21,655
Total ending allowance balance	22,491	22,763	21,942	15,770		11,261	5,243
Loans:
Loans individually evaluated for impairment	18,981		20,974
Loans collectively evaluated for impairment	244,297		238,984
Total loans	263,278		259,958
Construction
Ending allowance balance attributable to loans:
Individually evaluated for impairment	3,011		1,905
Collectively evaluated for impairment	12,045		16,083
Total ending allowance balance	15,056	15,966	17,988	11,998		11,439	3,822
Loans:
Loans individually evaluated for impairment	33,779		48,871
Loans collectively evaluated for impairment	110,606		157,710
Total loans	144,385		206,581
Commercial lines of credit
Ending allowance balance attributable to loans:
Individually evaluated for impairment			4
Collectively evaluated for impairment	58		87
Total ending allowance balance	58	$ 86	91	350	$ 368		328
Loans:
Loans individually evaluated for impairment	120		3,981
Loans collectively evaluated for impairment	1,851		2,690
Total loans	$ 1,971		6,671
Other consumer
Ending allowance balance attributable to loans:
Total ending allowance balance				$ 1		1	$ 1
Loans:
Loans collectively evaluated for impairment			7
Total loans			$ 7
Unallocated
Ending allowance balance attributable to loans:
Total ending allowance balance						$ 390

Loans - Impaired Loans by Class of Loans (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Impaired loans by class of loans
Unpaid principal balance, with no related allowance for loan losses recorded	$ 42,799		$ 42,799		$ 59,317
Unpaid principal balance, with an allowance for loan losses recorded	11,675		11,675		15,803
Total Unpaid Principal Balance	54,474		54,474		75,120
Recorded investment, with no related allowance for loan losses recorded	41,605		41,605		58,350
Recorded investment, with an allowance for loan losses recorded	11,633		11,633		15,684
Total Recorded Investment	53,238		53,238		74,034
Allowance for Loan Losses	3,171		3,171		2,237
Average recorded investment, with no related allowance for loan losses recorded	42,084	$ 39,240	51,010	$ 37,611
Average recorded investment, with an allowance for loan losses recorded	11,381	245	10,998	246
Total Average Recorded Investment	53,465	39,485	62,008	37,857
Interest Income Recognized, with no related allowance for loan losses recorded	45	379	141	881
Interest Income Recognized, with an allowance for loan losses recorded	56	3	108	6
Total Interest Income Recognized	101	382	249	887
Cash Basis Interest Recognized, with no related allowance for loan losses recorded	30	214	127	656
Cash Basis Interest Recognized, with an allowance for loan losses recorded	38	2	90	5
Total Cash Basis Interest Recognized	68	216	217	661
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	108		108		116
Unpaid principal balance, with an allowance for loan losses recorded	275		275		114
Recorded investment, with no related allowance for loan losses recorded	82		82		94
Recorded investment, with an allowance for loan losses recorded	276		276		114
Allowance for Loan Losses	160		160		41
Average recorded investment, with no related allowance for loan losses recorded	86	94	88	97
Average recorded investment, with an allowance for loan losses recorded	277	116	277	116
Interest Income Recognized, with an allowance for loan losses recorded	1	2	1	3
Cash Basis Interest Recognized, with an allowance for loan losses recorded	1	1	1	2
Commercial real estate \| Real estate loan, Retail
Impaired loans by class of loans
Unpaid principal balance, with no related allowance for loan losses recorded	1,239		1,239		1,247
Recorded investment, with no related allowance for loan losses recorded	1,010		1,010		1,029
Average recorded investment, with no related allowance for loan losses recorded	1,013	1,070	1,020	1,089
Interest Income Recognized, with no related allowance for loan losses recorded		14		29
Cash Basis Interest Recognized, with no related allowance for loan losses recorded		10		24
Commercial real estate \| Real estate loan, Hotels/Single-room occupancy hotels
Impaired loans by class of loans
Unpaid principal balance, with no related allowance for loan losses recorded	17,869		17,869		11,428
Unpaid principal balance, with an allowance for loan losses recorded					8,645
Recorded investment, with no related allowance for loan losses recorded	17,835		17,835		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	17,926	3,502	17,914	3,502
Commercial real estate \| Real Estate Loan, Other
Impaired loans by class of loans
Unpaid principal balance, with no related allowance for loan losses recorded	136		136
Recorded investment, with no related allowance for loan losses recorded	136		136
Average recorded investment, with no related allowance for loan losses recorded	136		136
Construction
Impaired loans by class of loans
Unpaid principal balance, with no related allowance for loan losses recorded	23,327		23,327		42,669
Unpaid principal balance, with an allowance for loan losses recorded	11,400		11,400		6,920
Recorded investment, with no related allowance for loan losses recorded	22,422		22,422		41,951
Recorded investment, with an allowance for loan losses recorded	11,357		11,357		6,920
Allowance for Loan Losses	3,011		3,011		1,905
Average recorded investment, with no related allowance for loan losses recorded	22,801	32,047	30,207	30,394
Average recorded investment, with an allowance for loan losses recorded	11,104		10,721
Interest Income Recognized, with no related allowance for loan losses recorded	43	344	138	810
Interest Income Recognized, with an allowance for loan losses recorded	55		107
Cash Basis Interest Recognized, with no related allowance for loan losses recorded	29	190	124	597
Cash Basis Interest Recognized, with an allowance for loan losses recorded	37		89
Commercial lines of credit \| Private banking
Impaired loans by class of loans
Unpaid principal balance, with no related allowance for loan losses recorded	120		120		3,857
Unpaid principal balance, with an allowance for loan losses recorded					124
Recorded investment, with no related allowance for loan losses recorded	120		120		3,857
Recorded investment, with an allowance for loan losses recorded					124
Allowance for Loan Losses					$ 4
Average recorded investment, with no related allowance for loan losses recorded	122	1,243	1,645	1,245
Average recorded investment, with an allowance for loan losses recorded		129		130
Interest Income Recognized, with no related allowance for loan losses recorded	2	21	3	42
Interest Income Recognized, with an allowance for loan losses recorded		1		3
Cash Basis Interest Recognized, with no related allowance for loan losses recorded	$ 1	14	$ 3	35
Cash Basis Interest Recognized, with an allowance for loan losses recorded		1		3
Commercial lines of credit \| C&I lending
Impaired loans by class of loans
Average recorded investment, with no related allowance for loan losses recorded		$ 1,284		$ 1,284

Loans - Investment in Nonaccrual and Loans Past Due Still Accruing by Class of Loans (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Investment in nonaccrual and loans past due still accruing by class of loans
Nonaccrual	$ 74,766	$ 86,424
Loans Past Due Over 90 Days Still Accruing	44	46
Total Past Due	140,166	155,261
Loans Not Past Due	2,218,360	2,351,482
Total loans	2,358,526	2,506,743
30 - 59 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due	41,123	51,619
60 - 89 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due	24,233	17,172
Greater than 89 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due	74,810	86,470
Residential real estate
Investment in nonaccrual and loans past due still accruing by class of loans
Total loans	1,948,892	2,033,526
Residential real estate \| Real estate loan, first mortgage
Investment in nonaccrual and loans past due still accruing by class of loans
Nonaccrual	27,157	20,043
Loans Past Due Over 90 Days Still Accruing	44	46
Total Past Due	77,225	72,432
Loans Not Past Due	1,855,556	1,943,602
Total loans	1,932,781	2,016,034
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	33,222	37,819
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	16,802	14,524
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	27,201	20,089
Residential real estate \| Real estate loan, second mortgage
Investment in nonaccrual and loans past due still accruing by class of loans
Nonaccrual	714	686
Total Past Due	822	1,182
Loans Not Past Due	15,289	16,310
Total loans	16,111	17,492
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
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	108	134
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	714	686
Commercial real estate
Investment in nonaccrual and loans past due still accruing by class of loans
Total loans	263,278	259,958
Commercial real estate \| Real estate loan, Retail
Investment in nonaccrual and loans past due still accruing by class of loans
Nonaccrual	1,011	20
Total Past Due	1,011	1,030
Loans Not Past Due	14,981	15,170
Total loans	15,992	16,200
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	1,011	20
Commercial real estate \| Real estate loan, Multifamily
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due	3,661	3,835
Loans Not Past Due	94,381	75,374
Total loans	98,042	79,209
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	3,661	3,835
Commercial real estate \| Real estate loan, Offices
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due	2,769
Loans Not Past Due	20,773	27,061
Total loans	23,542	27,061
Commercial real estate \| Real estate loan, Offices \| 30 - 59 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due	2,769
Commercial real estate \| Real estate loan, Hotels/Single-room occupancy hotels
Investment in nonaccrual and loans past due still accruing by class of loans
Nonaccrual	17,945	19,945
Total Past Due	17,945	19,945
Loans Not Past Due	60,344	47,690
Total loans	78,289	67,635
Commercial real estate \| Real estate loan, Hotels/Single-room occupancy hotels \| Greater than 89 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due	17,945	19,945
Commercial real estate \| Real estate loan, Industrial
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due	4,000
Loans Not Past Due	1,851	13,186
Total loans	5,851	13,186
Commercial real estate \| Real estate loan, Industrial \| 60 - 89 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due	4,000
Commercial real estate \| Real estate loan, Other
Investment in nonaccrual and loans past due still accruing by class of loans
Nonaccrual	136
Total Past Due	1,607
Loans Not Past Due	39,955	56,667
Total loans	41,562	56,667
Commercial real estate \| Real estate loan, Other \| 30 - 59 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due	1,471
Commercial real estate \| Real estate loan, Other \| Greater than 89 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due	136
Construction
Investment in nonaccrual and loans past due still accruing by class of loans
Nonaccrual	27,803	41,873
Total Past Due	31,126	52,980
Loans Not Past Due	113,259	153,601
Total loans	144,385	206,581
Construction \| 30 - 59 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due		8,593
Construction \| 60 - 89 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total Past Due	3,323	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	27,803	41,873
Commercial lines of credit
Investment in nonaccrual and loans past due still accruing by class of loans
Total loans	1,971	6,671
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	120	124
Total loans	120	2,409
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
Loans Not Past Due	1,851	2,690
Total loans	$ 1,851	4,262
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
Total loans		$ 7

Loans - Troubled Debt Restructurings (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2021 USD ($) loan	Jun. 30, 2020 USD ($) loan	Dec. 31, 2020 USD ($)
Troubled Debt Restructurings
Loans classified as troubled debt restructurings	$ 25,174		$ 28,347
Allowance for outstanding loan losses classified as troubled debt restructurings	2,005		1,951
Value of loans subsequently defaulted	14,183
Troubled debt restructuring that defaulted within one year of modification	14,183
Accrued interest receivable under the CARES Act COVID-19 forbearance program	$ 188		$ 146
Loans that remain in payment deferral under the CARES Act COVID-19 forbearance program	11,775		15,785
Number of TDRs subsequently defaulted \| loan	8
Loans modified as TDRs that are in default	$ 22,234
Private banking
Troubled Debt Restructurings
Number of loans modified during the period, that were considered as TDRs \| loan	1	1
Real estate loan, first mortgage
Troubled Debt Restructurings
Loans classified as troubled debt restructurings	$ 200		$ 209
Allowance for outstanding loan losses classified as troubled debt restructurings	40		41
Real estate loan, Retail
Troubled Debt Restructurings
Loans classified as troubled debt restructurings	1,011		1,029
Residential real estate
Troubled Debt Restructurings
Loans secured by residential real estate properties in the process of foreclosure	4,694		5,320
Construction
Troubled Debt Restructurings
Loans classified as troubled debt restructurings	23,843		26,985
Allowance for outstanding loan losses classified as troubled debt restructurings	$ 1,965		1,906
Value of loans subsequently defaulted		$ 5,263
Number of loans modified during the period, that were considered as TDRs \| loan	2	3
Troubled debt restructuring that defaulted within one year of modification		$ 5,263
Number of TDRs subsequently defaulted \| loan		1
Construction loans and private banking loan \| Pre and Post Modification
Troubled Debt Restructurings
Loans classified as troubled debt restructurings	$ 10,863	$ 13,777
Commercial lines of credit and private banking
Troubled Debt Restructurings
Loans classified as troubled debt restructurings	120		124
Allowance for outstanding loan losses classified as troubled debt restructurings			4
Mortgage loans held for sale \| Residential real estate
Troubled Debt Restructurings
Loans secured by residential real estate properties in the process of foreclosure	$ 4,683		$ 3,209

Loans - Risk Rating of Loans by Class of Loans (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Recorded investment in loans
Total	$ 2,358,526		$ 2,358,526		$ 2,506,743
Advantage Loan Program
Recorded investment in loans
Total	205,505		205,505		57,039
Outstanding principal balance of loans repurchased	79,818	$ 38,704	167,762	$ 38,704
Pass
Recorded investment in loans
Total	2,137,476		2,137,476		2,308,592
Special Mention
Recorded investment in loans
Total	65,237		65,237		59,668
Substandard
Recorded investment in loans
Total	147,684		147,684		131,469
Doubtful
Recorded investment in loans
Total	8,129		8,129		7,014
Residential real estate
Recorded investment in loans
Total	1,948,892		1,948,892		2,033,526
Residential real estate \| Real estate loan, first mortgage
Recorded investment in loans
Total	1,932,781		1,932,781		2,016,034
Residential real estate \| Real estate loan, second mortgage
Recorded investment in loans
Total	16,111		16,111		17,492
Residential real estate \| Pass \| Real estate loan, first mortgage
Recorded investment in loans
Total	1,905,579		1,905,579		1,995,945
Residential real estate \| Pass \| Real estate loan, second mortgage
Recorded investment in loans
Total	15,397		15,397		16,806
Residential real estate \| Substandard \| Real estate loan, first mortgage
Recorded investment in loans
Total	26,944		26,944		19,995
Residential real estate \| Substandard \| Real estate loan, second mortgage
Recorded investment in loans
Total	714		714		686
Residential real estate \| Doubtful \| Real estate loan, first mortgage
Recorded investment in loans
Total	258		258		94
Commercial real estate
Recorded investment in loans
Total	263,278		263,278		259,958
Commercial real estate \| Real estate loan, Retail
Recorded investment in loans
Total	15,992		15,992		16,200
Commercial real estate \| Real estate loan, Multifamily
Recorded investment in loans
Total	98,042		98,042		79,209
Commercial real estate \| Real estate loan, Offices
Recorded investment in loans
Total	23,542		23,542		27,061
Commercial real estate \| Real estate loan, Hotels/Single-room occupancy hotels
Recorded investment in loans
Total	78,289		78,289		67,635
Commercial real estate \| Real estate loan, Industrial
Recorded investment in loans
Total	5,851		5,851		13,186
Commercial real estate \| Real estate loan, Other
Recorded investment in loans
Total	41,562		41,562		56,667
Commercial real estate \| Pass \| Real estate loan, Retail
Recorded investment in loans
Total	13,432		13,432		13,599
Commercial real estate \| Pass \| Real estate loan, Multifamily
Recorded investment in loans
Total	61,860		61,860		55,772
Commercial real estate \| Pass \| Real estate loan, Offices
Recorded investment in loans
Total	9,600		9,600		12,014
Commercial real estate \| Pass \| Real estate loan, Hotels/Single-room occupancy hotels
Recorded investment in loans
Total	12,113		12,113		9,115
Commercial real estate \| Pass \| Real estate loan, Industrial
Recorded investment in loans
Total	5,851		5,851		5,867
Commercial real estate \| Pass \| Real estate loan, Other
Recorded investment in loans
Total	30,107		30,107		43,193
Commercial real estate \| Special Mention \| Real estate loan, Retail
Recorded investment in loans
Total	1,549		1,549		1,572
Commercial real estate \| Special Mention \| Real estate loan, Multifamily
Recorded investment in loans
Total	10,176		10,176		14,238
Commercial real estate \| Special Mention \| Real estate loan, Offices
Recorded investment in loans
Total	1,602		1,602		1,623
Commercial real estate \| Special Mention \| Real estate loan, Hotels/Single-room occupancy hotels
Recorded investment in loans
Total	20,538		20,538		17,984
Commercial real estate \| Special Mention \| Real estate loan, Other
Recorded investment in loans
Total	5,868		5,868		7,732
Commercial real estate \| Substandard \| Real estate loan, Retail
Recorded investment in loans
Total	1,011		1,011		1,029
Commercial real estate \| Substandard \| Real estate loan, Multifamily
Recorded investment in loans
Total	26,006		26,006		9,199
Commercial real estate \| Substandard \| Real estate loan, Offices
Recorded investment in loans
Total	12,340		12,340		13,424
Commercial real estate \| Substandard \| Real estate loan, Hotels/Single-room occupancy hotels
Recorded investment in loans
Total	45,638		45,638		40,536
Commercial real estate \| Substandard \| Real estate loan, Industrial
Recorded investment in loans
Total					7,319
Commercial real estate \| Substandard \| Real estate loan, Other
Recorded investment in loans
Total	5,587		5,587		5,742
Construction
Recorded investment in loans
Total	144,385		144,385		206,581
Construction \| Pass
Recorded investment in loans
Total	81,593		81,593		152,577
Construction \| Special Mention
Recorded investment in loans
Total	25,477		25,477		14,234
Construction \| Substandard
Recorded investment in loans
Total	29,444		29,444		32,850
Construction \| Doubtful
Recorded investment in loans
Total	7,871		7,871		6,920
Commercial lines of credit
Recorded investment in loans
Total	1,971		1,971		6,671
Commercial lines of credit \| Private banking
Recorded investment in loans
Total	120		120		2,409
Commercial lines of credit \| C&I lending
Recorded investment in loans
Total	1,851		1,851		4,262
Commercial lines of credit \| Pass \| Private banking
Recorded investment in loans
Total	120		120		124
Commercial lines of credit \| Pass \| C&I lending
Recorded investment in loans
Total	1,824		1,824		3,573
Commercial lines of credit \| Special Mention \| Private banking
Recorded investment in loans
Total					2,285
Commercial lines of credit \| Special Mention \| C&I lending
Recorded investment in loans
Total	$ 27		$ 27
Commercial lines of credit \| Substandard \| C&I lending
Recorded investment in loans
Total					689
Other consumer
Recorded investment in loans
Total					7
Other consumer \| Pass
Recorded investment in loans
Total					$ 7

Mortgage Servicing Rights, net - Principle Balance by Category (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Mortgage Servicing Rights
Total	$ 381,163	$ 666,030
Custodial escrow balances maintained on serviced loans	2,509	6,051
FNMA
Mortgage Servicing Rights
Total	143,354	171,553
FHLB
Mortgage Servicing Rights
Total	47,712	64,661
Private investors
Mortgage Servicing Rights
Total	$ 190,097	$ 429,816

Mortgage Servicing Rights net - Activity and Related Valuation Allowance (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Mortgage servicing rights activity
Mortgage servicing rights Beginning of year	$ 5,855	$ 10,302	$ 7,853	$ 10,845
Additions	25	383	99	490
Amortization	(1,680)	(1,116)	(3,752)	(1,766)
Mortgage servicing rights End of year	4,200	9,569	4,200	9,569
Valuation allowance at beginning of year	1,229	2,326	2,165	1,080
Additions (recoveries)	(261)	(23)	(1,197)	1,223
Valuation allowance at end of year	968	2,303	968	2,303
Mortgage servicing rights, net	3,232	7,266	3,232	7,266	$ 5,688
Servicing fee income (loss), net of amortization of servicing rights and changes in valuation allowance	$ (908)	$ (207)	$ (1,338)	$ (1,118)

Mortgage Servicing Rights, net - Valuation techniques (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Mortgage Servicing Rights
Fair value of mortgage servicing rights	$ 3,404	$ 5,841
Prepayment speed range	19.70%	22.50%
Weighted average life of the mortgage servicing right	49 months	43 months
Weighted average default rate	0.20%	0.20%
Minimum
Mortgage Servicing Rights
Discount rate range	9.50%	9.50%
Maximum
Mortgage Servicing Rights
Discount rate range	12.00%	12.00%

Deposits - Time deposits (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Deposits
Interest-bearing time deposits	$ 1,191,895	$ 1,646,523
Brokered time deposits	35,000	42,751
Time deposits that meet or exceed the FDIC insurance limit of $250	$ 333,192	$ 487,340

FHLB Borrowings (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Federal Home Loan Bank Borrowings
Long-term fixed rate advances	$ 318,000	$ 318,000
Minimum \| Long term
Federal Home Loan Bank Borrowings
FHLB interest rates (as a percent)	0.43%	0.43%
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	Jun. 30, 2021 USD ($)
Federal Home Loan Bank Borrowings
Additional borrowing capacity	$ 53,238
Callable Option
Federal Home Loan Bank Borrowings
Total FHLB advances	307,000
Callable Option August, 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 - FHLB Overdraft Line of Credit and Letter of Credit (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
FHLB Overdraft Line of Credit and Letter of Credit
FHLB line of credit agreement maximum borrowing limit	$ 50,000
FHLB overdraft line of credit average borrowings outstanding	3
FHLB overdraft line of credit outstanding borrowings	$ 0	$ 0
FHLB overdraft line of credit (as percent)	0.43%	0.46%
FHLB letter of credit term	16 months
FHLB, agreement term	1 year
Standby letter of credit expiring July, 2022
FHLB Overdraft Line of Credit and Letter of Credit
FHLB overdraft line of credit outstanding borrowings	$ 0
FHLB letter of credit	$ 7,500

FHLB Borrowings - Other Borrowings (Details) - Other Banks - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020	Jun. 30, 2020
Other Borrowings
Maximum borrowing capacity	$ 80,000	$ 100,000
Outstanding balance	$ 0		$ 0

- 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	2 Months Ended	3 Months Ended		4 Months Ended	6 Months Ended		12 Months Ended
Subordinated Notes, net (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Jun. 30, 2021	Jun. 30, 2020	Apr. 30, 2021	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Subordinated Notes
Total	$ 65,377	$ 65,377			$ 65,377		$ 65,341
Interest expense		1,005	$ 1,178		2,185	$ 2,355
Subordinated notes
Subordinated Notes
Subordinated notes (principal amount)	65,000	65,000			65,000		65,000
Unamortized note premium	377	377			377		411
Unamortized debt issuance costs	0	0			0		(70)
Total	$ 65,377	65,377			$ 65,377		$ 65,341
Interest rate (as a percent)				7.00%	6.00%		7.00%
Interest expense		$ 1,005	$ 1,178		$ 2,185	$ 2,355
Redemption price percentage of outstanding principal amount					100.00%
LIBOR \| Subordinated notes
Subordinated Notes
Variable interest rate on subordinate notes (in percent)	5.82%

Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended
	May 31, 2021	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2021	Dec. 31, 2018
Stock Repurchase Program
Shares repurchased and cancelled, value			$ 82
Proceeds from Issuance of Common Stock				$ 1,350
Common stock
Stock Repurchase Program
Shares repurchased and canceled			10,912	10,912
Shares repurchased and cancelled, value			$ 82	$ 82
Average repurchase price (in dollars per share)				$ 7.57
Common stock authorized repurchase amount remaining				$ 19,568
Number of shares of stock issued and sold		300,000
Chief Executive Officer \| Common stock
Stock Repurchase Program
Number of shares of stock issued and sold	300,000
Proceeds from Issuance of Common Stock	$ 1,350
Offering price (in dollars per share)	$ 4.50
Maximum \| Common stock
Stock Repurchase Program
Stock repurchase program authorized amount					$ 50,000

Stock-based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Stock options
Stock-based Compensation
Maximum term of stock awards granted			10 years
2017 Omnibus Equity Incentive Plan
Stock-based Compensation
Number of shares authorized	4,237,100		4,237,100
Weighted Average Remaining Contractual Term
Shares withheld in order to pay employee tax liabilities on vested awards			8,536
Employee tax liability associated with restricted stock awards the vested during the period			$ 46
2017 Omnibus Equity Incentive Plan \| Stock options
Number of Shares
Outstanding at January 1, 2021			377,882
Forfeited/expired			(10,115)
Outstanding at March 31, 2021	367,767		367,767		377,882
Exercisable at March 31, 2021	226,550		226,550
Weighted Average Exercise Price
Outstanding at January 1, 2021			$ 5.61
Forfeited/expired			12.62
Outstanding at March 31, 2021	$ 5.41		5.41		$ 5.61
Exercisable at March 31, 2021ble at March 31, 2021	$ 4.98		$ 4.98
Weighted Average Remaining Contractual Term
Weighted Average Remaining Contractual Term (Years)			8 years 1 month 17 days		9 years 1 month 2 days
Weighted Average Remaining Contractual Term, Exercisable			8 years 2 months 19 days
Aggregate Intrinsic Value Exercisable	$ 110		$ 110
Aggregate Intrinsic Value	165		165
Stock-based compensation costs recognized	46	$ 29	103	$ 55
Total unrecognized compensation cost - stock options	101		$ 101
Unrecognized compensation cost related to nonvested awards, expected to be recognized over a weighted-average period			9 months 29 days
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 granted prior to 2020 \| 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 granted prior to 2020 \| Awards vesting at the end of the fourth year
Stock-based Compensation
Percentage of awards vesting			50.00%
2017 Omnibus Equity Incentive Plan \| Stock Options granted starting in 2020
Stock-based Compensation
Vesting period			3 years
2017 Omnibus Equity Incentive Plan \| Stock Options granted starting in 2020 \| Awards vesting on the first anniversary of the grant date
Stock-based Compensation
Percentage of awards vesting			33.33%
2017 Omnibus Equity Incentive Plan \| Stock Options granted starting in 2020 \| Awards vesting at the end of the second year
Stock-based Compensation
Percentage of awards vesting			33.33%
2017 Omnibus Equity Incentive Plan \| Stock Options granted starting in 2020 \| Awards vesting at the end of the third year
Stock-based Compensation
Percentage of awards vesting			33.33%
2017 Omnibus Equity Incentive Plan \| Restricted stock
Weighted Average Remaining Contractual Term
Stock-based compensation costs recognized	147	$ (20)	$ 195	$ 63
Total unrecognized compensation cost - restricted stock awards	$ 1,460		$ 1,460
Unrecognized compensation cost related to nonvested awards, expected to be recognized over a weighted-average period			1 year 11 months 8 days
Number of Shares
Nonvested, Opening balance			137,936
Granted			227,702
Vested			(31,906)
Forfeited			(25,846)
Nonvested, Ending balance	307,886		307,886		137,936
Weighted Average Grant Date Fair Value
Nonvested, Opening balance			$ 7.90
Granted			4.97
Vested			7.67
Forfeited			6.25
Nonvested, Ending balance	$ 5.89		$ 5.89		$ 7.90
Grant Date Fair Value of Restricted Stock that Vested During the year
Fair value of restricted stock awards vested			$ 173
2020 Omnibus Equity Incentive Plan
Stock-based Compensation
Number of shares authorized	3,979,661		3,979,661
2020 Omnibus Equity Incentive Plan \| Restricted stock
Stock-based Compensation
Vesting period			3 years
2020 Omnibus Equity Incentive Plan \| Restricted stock \| Awards vesting on the first anniversary of the grant date
Stock-based Compensation
Percentage of awards vesting			33.33%
2020 Omnibus Equity Incentive Plan \| Restricted stock \| Awards vesting at the end of the second year
Stock-based Compensation
Percentage of awards vesting			33.33%
2020 Omnibus Equity Incentive Plan \| Restricted stock \| Awards vesting at the end of the third year
Stock-based Compensation
Percentage of awards vesting			33.33%
2020 Omnibus Equity Incentive Plan \| Restricted stock \| Key employee
Number of Shares
Granted			182,702
2020 Omnibus Equity Incentive Plan \| Restricted stock \| Non-employee directors Restricted Stock Awards
Number of Shares
Granted			45,000

Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2021	Jun. 30, 2020
Numerator:
Net loss	$ 3,452	$ 2,325	$ 2,867	$ (4,030)	$ 5,777	$ (1,163)
Denominator:
Weighted average common shares outstanding, basic	50,009,053		49,837,948		49,930,563	49,837,805
Weighted average effect of potentially dilutive common shares:
Weighted average common shares outstanding, diluted	50,060,775		49,841,741		49,987,253	49,837,805
Income (loss) per share:
Income (loss) per share, basic and diluted (in dollars per share)	$ 0.07		$ 0.06		$ 0.12	$ (0.02)
Securities excluded from the computation of weighted average diluted shares outstanding as inclusion of such items would be anti-dilutive	309,499		623,558		224,515	529,499
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	67,767		460,068		71,325	330,617
Restricted 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	241,732		163,490		153,190	198,882
Common stock \| Stock options
Weighted average effect of potentially dilutive common shares:
Incremental shares from share-based compensation	41,055				45,423
Common stock \| Restricted stock
Weighted average effect of potentially dilutive common shares:
Incremental shares from share-based compensation	10,667		3,793		11,267

Fair Values of Financial Instruments - Assets measured at fair value on a recurring basis (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Available for sale debt securities:
Available for sale debt securities, at fair value	$ 190,685	$ 299,594
Equity securities
Equity securities	5,043	5,118
U.S. Treasury & Agency securities
Available for sale debt securities:
Available for sale debt securities, at fair value	73,630	138,997
U.S. Treasury & Agency securities \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	73,630	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	73,630	98,805
Mortgage-backed securities
Available for sale debt securities:
Available for sale debt securities, at fair value	29,235	33,814
Mortgage-backed securities \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	29,235	33,814
Mortgage-backed securities \| Level 2 \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	29,235	33,814
Collateralized mortgage obligations
Available for sale debt securities:
Available for sale debt securities, at fair value	87,630	126,596
Collateralized mortgage obligations \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	87,630	126,596
Collateralized mortgage obligations \| Level 2 \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	87,630	126,596
Collateralized debt obligations
Available for sale debt securities:
Available for sale debt securities, at fair value	190	187
Collateralized debt obligations \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	190	187
Collateralized debt obligations \| Level 3 \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	190	187
Equity securities \| Recurring
Equity securities
Equity securities	5,043	5,118
Equity securities \| Level 1 \| Recurring
Equity securities
Equity securities	$ 5,043	$ 5,118

Fair Values of Financial Instruments - Reconciliation and income statement classification using Level 3 inputs (Details) - USD ($) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Investment income
Unrealized losses on investments	$ 286		$ 419
Collateralized debt obligations
Investment income
Unrealized losses on investments	22		27
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	187	$ 199	199
Included in other comprehensive income (loss)	4	(14)
Principal maturities/settlements	(1)	(1)
Balance of recurring Level 3 assets at end of period	190	184	187
Investment income
Unrealized losses on investments	22		$ 27
Interest income	$ 3	$ 4

Fair Values of Financial Instruments - Assets Measured at Fair Value on a Non Recurring Basis and Fair Value of Financial Instruments (Details) $ in Thousands	Jun. 30, 2021 USD ($)	Dec. 31, 2020 USD ($)
Financial Assets
Interest-bearing time deposits with other banks	$ 805	$ 7,021
Nonrecurring \| Impaired loans, Residential real estate
Fair value of financial assets and liabilities
Assets measured at fair value on a non-recurring basis	43
Nonrecurring \| Impaired loans, Residential real estate \| Level 3
Fair value of financial assets and liabilities
Assets measured at fair value on a non-recurring basis	43
Nonrecurring \| Impaired loans, Residential real estate \| Level 3 \| Sales comparison approach
Fair value of financial assets and liabilities
Assets measured at fair value on a non-recurring basis	$ 43
Nonrecurring \| Impaired loans, Residential real estate \| Weighted Average \| Level 3 \| Sales comparison approach \| Adjustments for differences between the comparable sales
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/Income capitalization 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/Income capitalization 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 \| Impaired loans, Construction
Fair value of financial assets and liabilities
Assets measured at fair value on a non-recurring basis	$ 5,906	$ 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	5,906	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	$ 5,906	$ 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	0.15
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	$ 2,438	5,175
Nonrecurring \| Mortgage servicing rights \| Level 3
Fair value of financial assets and liabilities
Assets measured at fair value on a non-recurring basis	2,438	5,175
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	$ 2,438	$ 5,175
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	0.388	0.370
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	0.002
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	0.116	0.105
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	0.113	0.116
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	0.222	0.237
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	$ 774,478	$ 998,497
Interest-bearing time deposits with other banks	805	7,021
Mortgage loans held for sale	15,107	2,909
Loans, net	2,280,659	2,434,356
Financial Liabilities
Time deposits	1,191,895	1,646,523
Federal Home Loan Bank borrowings	318,000	318,000
Subordinated notes, net	65,377	65,341
Time deposits held for sale	20,678
Estimated fair value
Financial Assets
Cash and due from banks	774,478	998,497
Interest-bearing time deposits with other banks	810	7,021
Mortgage loans held for sale	15,613	3,052
Loans, net	2,401,320	2,521,874
Financial Liabilities
Time deposits	1,196,803	1,658,020
Federal Home Loan Bank borrowings	321,930	328,150
Subordinated notes, net	65,431	65,753
Time deposits held for sale	20,799
Estimated fair value \| Level 1
Financial Assets
Cash and due from banks	774,478	998,497
Interest-bearing time deposits with other banks		7,021
Estimated fair value \| Level 2
Financial Assets
Interest-bearing time deposits with other banks	810
Mortgage loans held for sale	15,613	3,052
Financial Liabilities
Time deposits	1,196,803	1,658,020
Federal Home Loan Bank borrowings	321,930	328,150
Subordinated notes, net	65,431	65,753
Estimated fair value \| Level 3
Financial Assets
Loans, net	$ 2,401,320	$ 2,521,874

Regulatory Capital Requirements - Capital adequacy requirements (Details)	Jun. 30, 2021
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	6 Months Ended
	Jun. 30, 2021 USD ($)	Dec. 31, 2020 USD ($)
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	$ 399,367	$ 407,733
For Capital Adequacy Purposes	$ 129,837	$ 144,466
Total adjusted capital to risk-weighted assets, Ratio
Actual	24.61	22.58
For Capital Adequacy Purposes	8.00	8.00
Tier 1 (core) capital to risk-weighted assets, Amount
Actual	$ 326,081	$ 319,204
For Capital Adequacy Purposes	$ 97,378	$ 108,350
Tier 1 (core) capital to risk-weighted assets, Ratio
Actual	20.09	17.68
For Capital Adequacy Purposes	6.00	6.00
Common Equity Tier 1 (CET1), Amount
Actual	$ 326,081	$ 319,204
For Capital Adequacy Purposes	$ 73,033	$ 81,262
Common Equity Tier 1 (CET1), Ratio
Actual	20.09	17.68
For Capital Adequacy Purposes	4.50	4.50
Tier 1 (core) capital to adjusted tangible assets, Amount
Actual	$ 326,081	$ 319,204
For Capital Adequacy Purposes	$ 142,369	$ 158,067
Tier 1 (core) capital to adjusted tangible assets, Ratio
Actual	9.16	8.08
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	$ 393,962	$ 386,237
For Capital Adequacy Purposes	128,624	143,339
To be Well Capitalized	$ 160,780	$ 179,174
Total adjusted capital to risk-weighted assets, Ratio
Actual	24.50	21.56
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	$ 373,241	$ 363,224
For Capital Adequacy Purposes	96,468	107,504
To be Well Capitalized	$ 128,624	$ 143,339
Tier 1 (core) capital to risk-weighted assets, Ratio
Actual	23.21	20.27
For Capital Adequacy Purposes	6.00	6.00
To be Well Capitalized	8.00	8.00
Common Equity Tier 1 (CET1), Amount
Actual	$ 373,241	$ 363,224
For Capital Adequacy Purposes	72,351	80,628
To be Well Capitalized	$ 104,507	$ 116,463
Common Equity Tier 1 (CET1), Ratio
Actual	23.21	20.27
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	$ 373,241	$ 363,224
For Capital Adequacy Purposes	141,766	157,954
To be Well Capitalized	$ 177,207	$ 197,442
Tier 1 (core) capital to adjusted tangible assets, Ratio
Actual	10.53	9.20
For Capital Adequacy Purposes	4.00	4.00
To be Well Capitalized	5.00	5.00

Related Party Transactions (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Board of Directors \| Charitable donation to foundation
Related party transactions
Amount of related party transaction, expense		$ 150		$ 375
Controlling Shareholders
Related party transactions
Payments under leases		60		120
Sublease income	$ 97	69	$ 192	138
Controlling Shareholders \| Data processing and programming services provided
Related party transactions
Amount of related party transaction, revenue		$ 23		$ 50

Commitments and Contingencies - Unfunded Commitments to Extend Credit and Standby Letters of Credit (Details) $ in Thousands		6 Months Ended
	Jul. 28, 2020 item	Jun. 30, 2021 USD ($)	Dec. 31, 2020 USD ($)
Loss contingency from legal proceedings
Commitments and Contingencies
Liability for contingent losses		$ 27,500
Loss contingency from class action lawsuit
Commitments and Contingencies
Full amount of the settlement covered by the Company's applicable insurance policies		12,500
Liability for contingent losses		12,500	$ 12,500
Demand letter from purported stockholders
Commitments and Contingencies
Number of law firms \| item	2
Threshold period for responding to Demand letter	90 days
Unfunded Commitments to Extend Credit \| Residential real estate
Commitments and Contingencies
Outstanding commitments regarding fixed rate loans		$ 264
Maturity period		15 years
Outstanding commitments with varying interest rates		$ 9,150
Unfunded Commitments to Extend Credit \| Residential real estate \| Minimum
Commitments and Contingencies
Fixed interest rate (as a percent)		2.50%
Variable interest rate (as a percentage)		3.375%
Maturity period for variable interest loans		15 years
Unfunded Commitments to Extend Credit \| Residential real estate \| Maximum
Commitments and Contingencies
Fixed interest rate (as a percent)		2.625%
Variable interest rate (as a percentage)		3.875%
Maturity period for variable interest loans		30 years
Unfunded Commitments to Extend Credit \| Residential real estate \| Maximum \| Demand letter from purported stockholders
Commitments and Contingencies
Maturity period		90 days
Commitments to make loans
Commitments and Contingencies
Commitments to make loans		$ 9,414	40,331
Unused lines of credit
Commitments and Contingencies
Unused lines of credit		$ 80,572	140,665
Unused lines of credit \| Minimum
Commitments and Contingencies
Variable interest rate (as a percentage)		3.25%
Maturity period for variable interest loans		1 month
Unused lines of credit \| Maximum
Commitments and Contingencies
Variable interest rate (as a percentage)		7.50%
Maturity period for variable interest loans		14 years
Unused lines of credit \| Residential real estate
Commitments and Contingencies
Unused lines of credit		$ 14,081
Unused lines of credit \| Construction
Commitments and Contingencies
Unused lines of credit		66,491
Standby letters of credit
Commitments and Contingencies
Unused lines of credit		$ 24	$ 24

Commitments and Contingencies - Advantage Loan Program Loans Sold (Details) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended			6 Months Ended
	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Dec. 31, 2019
Commitments and Contingencies
Unpaid principal balance	$ 2,287,857		$ 2,287,857			$ 2,287,857		$ 2,434,356
Advantage Loan Program
Commitments and Contingencies
Mortgage loan repurchase liability	4,292		4,292		$ 7,848	4,292	$ 7,848	9,699	$ 7,823
Unpaid principal balance	$ 190,097		190,097			190,097		429,816
Outstanding principal balance of loans repurchased			$ 79,818		$ 38,704	$ 167,762	$ 38,704
Percentage of loans offered to each of investors to repurchase	100.00%		100.00%			100.00%
Advantage Loan Program loans repurchased
Commitments and Contingencies
Outstanding principal balance of loans repurchased	$ 79,818	$ 87,944
Disposition of mortgage servicing rights	1,054			$ 1,255
Loss charged against mortgage repurchase liability	(1,825)			$ 2,917
Advantage Loan Program pool of loans that will be repurchased prior to July 2023
Commitments and Contingencies
Unpaid principal balance	35,124		$ 35,124			$ 35,124
Advantage Loan Program pool of loans that will be repurchased prior to various dates in 2023
Commitments and Contingencies
Unpaid principal balance	58,714		58,714			58,714
Residential real estate
Commitments and Contingencies
Mortgage loan repurchase liability	4,292		4,292			4,292		9,699
Unpaid principal balance	$ 303,747		$ 303,747			$ 303,747		$ 562,139

Commitments and Contingencies - Mortgage Repurchase Liability (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Mortgage repurchase liability:
Net provision (recovery)	$ (512)	$ 25	$ (665)	$ 25
Advantage Loan Program
Mortgage repurchase liability:
Balance, beginning of period			9,699	7,823
Net provision (recovery)			(665)	25
Loss on loan repurchases			4,742
Balance, end of the period	$ 4,292	$ 7,848	$ 4,292	$ 7,848

Subsequent Events (Details) - USD ($) $ in Thousands	Jul. 23, 2021	Jul. 31, 2021	Jun. 30, 2021	Dec. 31, 2020
Sale of business
FHLB line of credit agreement maximum borrowing limit			$ 50,000
Unpaid principal balance			$ 2,287,857	$ 2,434,356
Subsequent event \| Repurchased Residential Real Estate Mortgage Loans
Sale of business
Unpaid principal balance		$ 4,944
Subsequent event \| Standby letter of credit expiring July 2024
Sale of business
Unused lines of credit		$ 4,000
Bellevue, Washington branch office \| Subsequent event
Sale of business
Deposits transferred	$ 65,437
Gain on sale of branch transaction	$ 1,417