0001104659-22-118386 | 10-Q | XBRL Viewer

Print Document View Excel Document

Investment Securities - Equity Securities (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Equity Securities
Fair value of equity securities	$ 4,632		$ 4,632		$ 5,222
Equity securities with readily determinable fair values	4,386		4,386		4,976
Equity securities with readily determinable fair values
Net losses recorded during the period on equity securities	(184)	$ (24)	(590)	$ (99)
Unrealized losses recorded during the period on equity securities held at the reporting date	(184)	$ (24)	(590)	$ (99)
Level 3
Equity Securities
Investment in equity securities without readily determinable fair value	$ 246		$ 246		$ 246

Loans - Major Categories of Loans Held for Investment and the Allowance for Loan Losses (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Jun. 30, 2022	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Dec. 31, 2020
Major categories of loans held for investment and the allowance for loan losses
Total loans	$ 1,681,628		$ 2,012,814
Less: allowance for loan losses	(45,362)	$ (51,766)	(56,548)	$ (70,238)	$ (70,669)	$ (72,387)
Loans, net	1,636,266		1,956,266
Pledged as collateral \| FHLB borrowings.
Major categories of loans held for investment and the allowance for loan losses
Loans, net	446,153		557,410
Residential real estate
Major categories of loans held for investment and the allowance for loan losses
Total loans	1,430,472		1,704,231
Less: allowance for loan losses	(28,187)	(29,982)	(32,202)	(33,703)	(33,064)	(32,366)
Commercial real estate
Major categories of loans held for investment and the allowance for loan losses
Total loans	199,446		201,240
Less: allowance for loan losses	(10,767)	(15,035)	(12,608)	(24,582)	(22,491)	(21,942)
Construction
Major categories of loans held for investment and the allowance for loan losses
Total loans	50,320		106,759
Less: allowance for loan losses	(6,370)	(6,708)	(11,730)	(11,899)	(15,056)	(17,988)
Commercial lines of credit
Major categories of loans held for investment and the allowance for loan losses
Total loans	1,389		363
Less: allowance for loan losses	(38)	(36)	(8)	$ (54)	$ (58)	$ (91)
Other consumer
Major categories of loans held for investment and the allowance for loan losses
Total loans	$ 1		$ 221
Less: allowance for loan losses		$ (5)

Loans - Investment in Nonaccrual and Loans Past Due Still Accruing by Class of Loans (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Investment in nonaccrual and loans past due still accruing by class of loans
Nonaccrual	$ 35,843	$ 62,615
Loans Past Due Over 90 Days Still Accruing	36	39
Total	1,681,628	2,012,814
Not Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total	1,621,626	1,912,084
Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total	60,002	100,730
30 - 59 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total	20,839	34,651
60 - 89 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total	3,284	3,425
Greater than 89 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total	35,879	62,654
Residential real estate
Investment in nonaccrual and loans past due still accruing by class of loans
Total	1,430,472	1,704,231
Residential real estate \| Real estate loan, first mortgage
Investment in nonaccrual and loans past due still accruing by class of loans
Nonaccrual	35,654	45,439
Loans Past Due Over 90 Days Still Accruing	36	39
Total	1,420,128	1,690,456
Residential real estate \| Real estate loan, first mortgage \| Not Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total	1,360,315	1,617,509
Residential real estate \| Real estate loan, first mortgage \| Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total	59,813	72,947
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	20,839	24,044
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	3,284	3,425
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	35,690	45,478
Residential real estate \| Real estate loan, second mortgage
Investment in nonaccrual and loans past due still accruing by class of loans
Nonaccrual	189	236
Total	10,344	13,775
Residential real estate \| Real estate loan, second mortgage \| Not Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total	10,155	13,432
Residential real estate \| Real estate loan, second mortgage \| Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total	189	343
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		107
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	189	236
Commercial real estate
Investment in nonaccrual and loans past due still accruing by class of loans
Total	199,446	201,240
Commercial real estate \| Real estate loan, Retail
Investment in nonaccrual and loans past due still accruing by class of loans
Total	26,026	19,574
Commercial real estate \| Real estate loan, Retail \| Not Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total	26,026	19,574
Commercial real estate \| Real estate loan, Multifamily
Investment in nonaccrual and loans past due still accruing by class of loans
Total	81,723	96,960
Commercial real estate \| Real estate loan, Multifamily \| Not Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total	81,723	96,960
Commercial real estate \| Real estate loan, Office
Investment in nonaccrual and loans past due still accruing by class of loans
Total	18,216	12,382
Commercial real estate \| Real estate loan, Office \| Not Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total	18,216	12,382
Commercial real estate \| Hotels/Single-room occupancy hotels
Investment in nonaccrual and loans past due still accruing by class of loans
Nonaccrual		4,441
Total	5,240	14,221
Commercial real estate \| Hotels/Single-room occupancy hotels \| Not Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total	5,240	9,780
Commercial real estate \| Hotels/Single-room occupancy hotels \| Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total		4,441
Commercial real estate \| 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		4,441
Commercial real estate \| Real estate loan, Industrial
Investment in nonaccrual and loans past due still accruing by class of loans
Total	30,372	7,320
Commercial real estate \| Real estate loan, Industrial \| Not Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total	30,372	7,320
Commercial real estate \| Real estate loan, Other
Investment in nonaccrual and loans past due still accruing by class of loans
Total	37,869	50,783
Commercial real estate \| Real estate loan, Other \| Not Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total	37,869	50,783
Construction
Investment in nonaccrual and loans past due still accruing by class of loans
Nonaccrual		12,499
Total	50,320	106,759
Construction \| Not Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total	50,320	83,760
Construction \| Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total		22,999
Construction \| 30 - 59 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total		10,500
Construction \| Greater than 89 Days Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total		12,499
Commercial lines of credit
Investment in nonaccrual and loans past due still accruing by class of loans
Total	1,389	363
Commercial lines of credit \| Private banking
Investment in nonaccrual and loans past due still accruing by class of loans
Total	110	116
Commercial lines of credit \| Private banking \| Not Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total	110	116
Commercial lines of credit \| C&I lending
Investment in nonaccrual and loans past due still accruing by class of loans
Total	1,279	247
Commercial lines of credit \| C&I lending \| Not Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total	1,279	247
Other consumer
Investment in nonaccrual and loans past due still accruing by class of loans
Total	1	221
Other consumer \| Not Past Due
Investment in nonaccrual and loans past due still accruing by class of loans
Total	$ 1	$ 221

Investment Securities - Aggregated by Major Security Type and Length of Time in a Continuous Unrealized Loss Position (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($) security	Dec. 31, 2021 USD ($)
Fair Value
Less than 12 Months, Fair value	$ 263,982	$ 144,097
12 Months or More, Fair Value	40,632	11,345
Available for sale, Continuous unrealized loss position, Fair Value	304,614	155,442
Unrealized Losses
Less than 12 Months, Unrealized Losses	(24,353)	(1,607)
12 Months or More, Unrealized Losses	(4,335)	(359)
Available for sale, Continuous unrealized loss position, Unrealized Losses	$ (28,688)	(1,966)
Number of debt securities in portfolio \| security	35
Number of debt securities in an unrealized loss position \| security	28
U.S. Treasury and Agency securities
Fair Value
Less than 12 Months, Fair value	$ 122,428	49,865
12 Months or More, Fair Value	22,008
Available for sale, Continuous unrealized loss position, Fair Value	144,436	49,865
Unrealized Losses
Less than 12 Months, Unrealized Losses	(5,191)	(229)
12 Months or More, Unrealized Losses	(2,807)
Available for sale, Continuous unrealized loss position, Unrealized Losses	(7,998)	(229)
Mortgage-backed securities
Fair Value
Less than 12 Months, Fair value	34,553	7,878
12 Months or More, Fair Value	3,073	8,729
Available for sale, Continuous unrealized loss position, Fair Value	37,626	16,607
Unrealized Losses
Less than 12 Months, Unrealized Losses	(4,722)	(36)
12 Months or More, Unrealized Losses	(835)	(350)
Available for sale, Continuous unrealized loss position, Unrealized Losses	(5,557)	(386)
Collateralized mortgage obligations
Fair Value
Less than 12 Months, Fair value	107,001	86,354
12 Months or More, Fair Value	15,398	2,413
Available for sale, Continuous unrealized loss position, Fair Value	122,399	88,767
Unrealized Losses
Less than 12 Months, Unrealized Losses	(14,440)	(1,342)
12 Months or More, Unrealized Losses	(688)	(1)
Available for sale, Continuous unrealized loss position, Unrealized Losses	(15,128)	(1,343)
Collateralized debt obligations
Fair Value
12 Months or More, Fair Value	153	203
Available for sale, Continuous unrealized loss position, Fair Value	153	203
Unrealized Losses
12 Months or More, Unrealized Losses	(5)	(8)
Available for sale, Continuous unrealized loss position, Unrealized Losses	$ (5)	$ (8)

Fair Values of Financial Instruments - Reconciliation and income statement classification using Level 3 inputs (Details) - USD ($) $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
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)
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Asset, Gain (Loss), Statement of Other Comprehensive Income or Comprehensive Income [Extensible Enumeration]	Other Comprehensive Income (Loss), Securities, Available-for-Sale, Unrealized Holding Gain (Loss) Arising During Period, after Tax	Other Comprehensive Income (Loss), Securities, Available-for-Sale, Unrealized Holding Gain (Loss) Arising During Period, after Tax
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	$ 203	$ 187	$ 187
Included in other comprehensive income (loss)	3	7
Principal maturities/settlements	(53)	(3)
Balance of recurring Level 3 assets at end of period	153	191	203
Investment income
Unrealized losses on investments	(5)		$ (8)
Interest income	$ 5	$ 4

Loans - Activity in the Allowance For Loan Losses by Portfolio Segment And Based On Impairment Evaluation Method (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Jun. 30, 2022	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Dec. 31, 2020
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$ 12		$ 159
Collectively evaluated for impairment	45,350		56,389
Total ending allowance balance	45,362	$ 51,766	56,548	$ 70,238	$ 70,669	$ 72,387
Loans:
Loans individually evaluated for impairment	2,643		19,891
Loans collectively evaluated for impairment	1,678,985		1,992,923
Total loans	1,681,628		2,012,814
Residential real estate
Ending allowance balance attributable to loans:
Individually evaluated for impairment	12		159
Collectively evaluated for impairment	28,175		32,043
Total ending allowance balance	28,187	29,982	32,202	33,703	33,064	32,366
Loans:
Loans individually evaluated for impairment	48		350
Loans collectively evaluated for impairment	1,430,424		1,703,881
Total loans	1,430,472		1,704,231
Commercial real estate
Ending allowance balance attributable to loans:
Collectively evaluated for impairment	10,767		12,608
Total ending allowance balance	10,767	15,035	12,608	24,582	22,491	21,942
Loans:
Loans individually evaluated for impairment			4,441
Loans collectively evaluated for impairment	199,446		196,799
Total loans	199,446		201,240
Construction
Ending allowance balance attributable to loans:
Collectively evaluated for impairment	6,370		11,730
Total ending allowance balance	6,370	6,708	11,730	11,899	15,056	17,988
Loans:
Loans individually evaluated for impairment	2,485		14,984
Loans collectively evaluated for impairment	47,835		91,775
Total loans	50,320		106,759
Commercial lines of credit
Ending allowance balance attributable to loans:
Collectively evaluated for impairment	38		8
Total ending allowance balance	38	36	8	$ 54	$ 58	$ 91
Loans:
Loans individually evaluated for impairment	110		116
Loans collectively evaluated for impairment	1,279		247
Total loans	1,389		363
Other consumer
Ending allowance balance attributable to loans:
Total ending allowance balance		$ 5
Loans:
Loans collectively evaluated for impairment	1		221
Total loans	$ 1		$ 221

Loans (Tables)

9 Months Ended

Sep. 30, 2022

Loans

Schedule of major categories of loans

The major categories of loans held for sale were as follows:


	September 30,		December 31,
	2022		2021
Residential real estate	$	7,279	$	11,359
Commercial real estate		1,554		53,628
Total loans held for sale	$	8,833	$	64,987

The major categories of loans held for investment and the allowance for loan losses were as follows:


	September 30,		December 31,
	2022		2021
Residential real estate	$	1,430,472	$	1,704,231
Commercial real estate		199,446		201,240
Construction		50,320		106,759
Commercial lines of credit		1,389		363
Other consumer		1		221
Total loans		1,681,628		2,012,814
Less: allowance for loan losses		(45,362)		(56,548)
Loans, net	$	1,636,266	$	1,956,266

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 nine months ended September 30, 2022 and 2021:


							Commercial
	Residential		Commercial				Lines of		Other
Three Months Ended September 30, 2022	Real Estate		Real Estate		Construction		Credit		Consumer		Total
Allowance for loan losses:
Beginning balance	$	29,982	$	15,035	$	6,708	$	36	$	5	$	51,766
Provision (recovery) for loan losses		(1,841)		(209)		(2,304)		2		(5)		(4,357)
Charge offs		—		(4,064)		—		—		—		(4,064)
Recoveries		46		5		1,966		—		—		2,017
Total ending balance	$	28,187	$	10,767	$	6,370	$	38	$	—	$	45,362


							Commercial
	Residential		Commercial				Lines of		Other
Nine Months Ended September 30, 2022	Real Estate		Real Estate		Construction		Credit		Consumer		Total
Allowance for loan losses:
Beginning balance	$	32,202	$	12,608	$	11,730	$	8	$	—	$	56,548
Provision (recovery) for loan losses		(4,594)		2,138		(7,329)		30		—		(9,755)
Charge offs		(197)		(4,064)		—		—		—		(4,261)
Recoveries		776		85		1,969		—		—		2,830
Total ending balance	$	28,187	$	10,767	$	6,370	$	38	$	—	$	45,362


							Commercial
	Residential		Commercial				Lines of		Other
Three Months Ended September 30, 2021	Real Estate		Real Estate		Construction		Credit		Consumer		Total
Allowance for loan losses:
Beginning balance	$	33,064	$	22,491	$	15,056	$	58	$	—	$	70,669
Provision (recovery) for loan losses		109		1,486		(1,194)		(4)		—		397
Charge offs		—		—		(1,965)		—		—		(1,965)
Recoveries		530		605		2		—		—		1,137
Total ending balance	$	33,703	$	24,582	$	11,899	$	54	$	—	$	70,238


							Commercial
	Residential		Commercial				Lines of		Other
Nine Months Ended September 30, 2021	Real Estate		Real Estate		Construction		Credit		Consumer		Total
Allowance for loan losses:
Beginning balance	$	32,366	$	21,942	$	17,988	$	91	$	—	$	72,387
Provision (recovery) for loan losses		16		2,004		(4,129)		(37)		—		(2,146)
Charge offs		—		—		(1,965)		—		—		(1,965)
Recoveries		1,321		636		5		—		—		1,962
Total ending balance	$	33,703	$	24,582	$	11,899	$	54	$	—	$	70,238

The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment by impairment methodology as of September 30, 2022 and December 31, 2021:


							Commercial
	Residential		Commercial				Lines of		Other
September 30, 2022	Real Estate		Real Estate		Construction		Credit		Consumer		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	12	$	—	$	—	$	—	$	—	$	12
Collectively evaluated for impairment		28,175		10,767		6,370		38		—		45,350
Total ending allowance balance	$	28,187	$	10,767	$	6,370	$	38	$	—	$	45,362
Loans:
Loans individually evaluated for impairment	$	48	$	—	$	2,485	$	110	$	—	$	2,643
Loans collectively evaluated for impairment		1,430,424		199,446		47,835		1,279		1		1,678,985
Total ending loans balance	$	1,430,472	$	199,446	$	50,320	$	1,389	$	1	$	1,681,628


							Commercial
	Residential		Commercial				Lines of		Other
December 31, 2021	Real Estate		Real Estate		Construction		Credit		Consumer		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	159	$	—	$	—	$	—	$	—	$	159
Collectively evaluated for impairment		32,043		12,608		11,730		8		—		56,389
Total ending allowance balance	$	32,202	$	12,608	$	11,730	$	8	$	—	$	56,548
Loans:
Loans individually evaluated for impairment	$	350	$	4,441	$	14,984	$	116	$	—	$	19,891
Loans collectively evaluated for impairment		1,703,881		196,799		91,775		247		221		1,992,923
Total ending loans balance	$	1,704,231	$	201,240	$	106,759	$	363	$	221	$	2,012,814

Schedule of information related to impaired loans by class of loans


	At September 30, 2022						At December 31, 2021
	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	$	—	$	—	$	—	$	91	$	65	$	—
Commercial real estate:
Retail		229		—		—		—		—		—
Hotels/Single-room occupancy hotels		—		—		—		4,459		4,441		—
Construction		2,485		2,485		—		15,004		14,984		—
Commercial lines of credit:
Private banking		110		110		—		116		116		—
Subtotal		2,824		2,595		—		19,670		19,606		—
With an allowance for loan losses recorded:
Residential real estate:
First mortgage		82		48		12		273		285		159
Total	$	2,906	$	2,643	$	12	$	19,943	$	19,891	$	159


	Three Months Ended at September 30,
	2022						2021
	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	$	—	$	—	$	—	$	82	$	—	$	—
Commercial real estate:
Retail		—		—		—		7		—		—
Hotels/Single-room occupancy hotels		—		—		—		10,862		—		—
Office		—		—		—		2,769		—		—
Construction		5,375		40		27		18,820		40		27
Commercial lines of credit:
Private banking		111		2		1		119		2		1
Subtotal		5,486		42		28		32,659		42		28
With an allowance for loan losses recorded:
Residential real estate:
First mortgage		48		2		2		279		1		1
Construction		—		—		—		10,387		56		38
Subtotal		48		2		2		10,666		57		39
Total	$	5,534	$	44	$	30	$	43,325	$	99	$	67


	Nine Months Ended at September 30,
	2022						2021
	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	$	—	$	—
Commercial real estate:
Retail		—		—		—		765		—		—
Hotels/Single-room occupancy hotels		—		—		—		17,948		—		—
Office		—		—		—		2,768		—		—
Other		—		—		—		91		—		—
Construction		6,885		118		105		27,387		192		179
Commercial lines of credit:
Private banking		113		5		4		1,264		7		7
Subtotal		6,998		123		109		50,311		199		186
With an allowance for loan losses recorded:
Residential real estate:
First mortgage		198		3		3		280		3		3
Construction		—		—		—		9,751		181		163
Subtotal		198		3		3		10,031		184		166
Total	$	7,196	$	126	$	112	$	60,342	$	383	$	352

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, excluding nonaccrual loans held for sale, by class of loans as of September 30, 2022 and December 31, 2021:


	September 30, 2022				December 31, 2021
			Loans Past				Loans Past
			Due Over				Due Over
			90 Days Still				90 Days Still
	Nonaccrual		Accruing		Nonaccrual		Accruing
Residential real estate:
Residential first mortgage	$	35,654	$	36	$	45,439	$	39
Residential second mortgage		189		—		236		—
Commercial real estate:
Hotels/Single-room occupancy hotels		—		—		4,441		—
Construction		—		—		12,499		—
Total	$	35,843	$	36	$	62,615	$	39

The following tables present the aging of the recorded investment in past due loans as of September 30, 2022 and December 31, 2021 by class of loans:


					Greater
	30 - 59		60 - 89		than
	Days		Days		89 Days		Total		Loans Not
September 30, 2022	Past Due		Past Due		Past Due		Past Due		Past Due		Total
Residential real estate:
Residential first mortgage	$	20,839	$	3,284	$	35,690	$	59,813	$	1,360,315	$	1,420,128
Residential second mortgage		—		—		189		189		10,155		10,344
Commercial real estate:
Retail		—		—		—		—		26,026		26,026
Multifamily		—		—		—		—		81,723		81,723
Office		—		—		—		—		18,216		18,216
Hotels/ Single-room occupancy hotels		—		—		—		—		5,240		5,240
Industrial		—		—		—		—		30,372		30,372
Other		—		—		—		—		37,869		37,869
Construction		—		—		—		—		50,320		50,320
Commercial lines of credit:
Private banking		—		—		—		—		110		110
C&I lending		—		—		—		—		1,279		1,279
Other consumer		—		—		—		—		1		1
Total	$	20,839	$	3,284	$	35,879	$	60,002	$	1,621,626	$	1,681,628


					Greater
	30 - 59		60 - 89		than
	Days		Days		89 Days		Total		Loans Not
December 31, 2021	Past Due		Past Due		Past Due		Past Due		Past Due		Total
Residential real estate:
Residential first mortgage	$	24,044	$	3,425	$	45,478	$	72,947	$	1,617,509	$	1,690,456
Residential second mortgage		107		—		236		343		13,432		13,775
Commercial real estate:
Retail		—		—		—		—		19,574		19,574
Multifamily		—		—		—		—		96,960		96,960
Office		—		—		—		—		12,382		12,382
Hotels/Single-room occupancy hotels		—		—		4,441		4,441		9,780		14,221
Industrial		—		—		—		—		7,320		7,320
Other		—		—		—		—		50,783		50,783
Construction		10,500		—		12,499		22,999		83,760		106,759
Commercial lines of credit:
Private banking		—		—		—		—		116		116
C&I lending		—		—		—		—		247		247
Other consumer		—		—		—		—		221		221
Total	$	34,651	$	3,425	$	62,654	$	100,730	$	1,912,084	$	2,012,814

Schedule of risk rating of loans by class of loans

At September 30, 2022 and December 31, 2021, the risk rating of loans by class of loans was as follows:


			Special
September 30, 2022	Pass		Mention		Substandard		Doubtful		Total
Residential real estate:
Residential first mortgage	$	1,384,438	$	—	$	35,690	$	—	$	1,420,128
Residential second mortgage		10,155		—		189		—		10,344
Commercial real estate:
Retail		26,026		—		—		—		26,026
Multifamily		69,369		12,354		—		—		81,723
Office		18,216		—		—		—		18,216
Hotels/ Single-room occupancy hotels		—		3,692		1,548		—		5,240
Industrial		30,372		—		—		—		30,372
Other		22,703		15,166		—		—		37,869
Construction		37,617		4,648		8,055		—		50,320
Commercial lines of credit:
Private banking		110		—		—		—		110
C&I lending		1,279		—		—		—		1,279
Other consumer		1		—		—		—		1
Total	$	1,600,286	$	35,860	$	45,482	$	—	$	1,681,628


			Special
December 31, 2021	Pass		Mention		Substandard		Doubtful		Total
Residential real estate:
Residential first mortgage	$	1,644,974	$	—	$	45,249	$	233	$	1,690,456
Residential second mortgage		13,539		—		236		—		13,775
Commercial real estate:
Retail		18,846		728		—		—		19,574
Multifamily		75,543		8,104		13,313		—		96,960
Office		10,413		—		1,969		—		12,382
Hotels/ Single-room occupancy hotels		8,205		—		6,016		—		14,221
Industrial		7,320		—		—		—		7,320
Other		48,996		1,692		95		—		50,783
Construction		67,254		17,226		16,348		5,931		106,759
Commercial lines of credit:
Private banking		116		—		—		—		116
C&I lending		236		11		—		—		247
Other consumer		221		—		—		—		221
Total	$	1,895,663	$	27,761	$	83,226	$	6,164	$	2,012,814

Investment Securities - Amortized Cost and Fair Value Corresponding Gross Unrealized Gains and Losses (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Available for sale:
Available for sale, Amortized Cost	$ 377,188	$ 309,903
Available for sale, Gross Unrealized Gain	87	720
Available for sale, Gross Unrealized Loss	(28,688)	(1,966)
Investment securities available for sale, at fair value	348,587	308,657
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%
Collateralized mortgage obligations \| US Government Corporations and Agencies Securities
Available for sale:
Investment securities available for sale, at fair value	$ 438	$ 529
Debt securities \| Pledged as collateral \| FHLB borrowings.
Available for sale:
Investment securities available for sale, at fair value	106,049
U.S. Treasury and Agency securities
Available for sale:
Available for sale, Amortized Cost	175,433	122,291
Available for sale, Gross Unrealized Gain	27	106
Available for sale, Gross Unrealized Loss	(7,998)	(229)
Investment securities available for sale, at fair value	167,462	122,168
Mortgage-backed securities
Available for sale:
Available for sale, Amortized Cost	43,183	49,739
Available for sale, Gross Unrealized Gain		84
Available for sale, Gross Unrealized Loss	(5,557)	(386)
Investment securities available for sale, at fair value	37,626	49,437
Collateralized mortgage obligations
Available for sale:
Available for sale, Amortized Cost	158,414	137,662
Available for sale, Gross Unrealized Gain	60	530
Available for sale, Gross Unrealized Loss	(15,128)	(1,343)
Investment securities available for sale, at fair value	143,346	136,849
Collateralized debt obligations
Available for sale:
Available for sale, Amortized Cost	158	211
Available for sale, Gross Unrealized Loss	(5)	(8)
Investment securities available for sale, at fair value	$ 153	$ 203

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Condensed Consolidated Balance Sheets
Allowance for loan losses	$ 45,362	$ 56,548
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)	50,800,012	50,460,932
Common stock, outstanding (in shares)	50,800,012	50,460,932

Income Per Share

9 Months Ended

Sep. 30, 2022

Income Per Share

Income Per Share

Note 12—Income Per Share

Basic income per common share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted income per common share further includes any common shares available to be issued upon the exercise of outstanding stock options and restricted stock awards if such inclusions would be dilutive. The Company determines the potentially dilutive common shares using the treasury stock method. The following table presents the computation of income per share, basic and diluted:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Numerator:
Net income	$	1,176	$	9,557	$	4,239	$	15,334

Denominator:
Weighted average common shares outstanding, basic		50,400,412		50,167,295		50,326,951		50,010,341
Weighted average effect of potentially dilutive common shares:
Stock options		97,884		55,131		107,671		48,659
Restricted stock		74,635		40,260		88,454		20,931
Weighted average common shares outstanding, diluted		50,572,931		50,262,686		50,523,076		50,079,931

Income per share, basic and diluted	$	0.02	$	0.19	$	0.08	$	0.31

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


	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2022	2021	2022	2021
Stock options	49,545	67,767	49,897	70,139
Restricted stock	176,707	7,294	99,784	104,558
Total	226,252	75,061	149,681	174,697

Summary of Significant Accounting Policies - Concentration of Credit Risk (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Concentration of Credit Risk
Loans Receivable	$ 1,681,628	$ 2,012,814
Loans held for sale	8,833	64,987
Nonaccrual loans held for sale	3,657	18,026
Residential real estate
Concentration of Credit Risk
Loans Receivable	$ 1,430,472	1,704,231
Nonaccrual loans held for sale		$ 8,671
Residential real estate loans \| Loans receivables \| Residential real estate
Concentration of Credit Risk
Concentration of credit risk	85.00%	83.00%
California \| Loans receivables \| Residential real estate
Concentration of Credit Risk
Concentration of credit risk	83.00%	85.00%
Advantage loan program \| Loans receivables \| Residential real estate
Concentration of Credit Risk
Concentration of credit risk	65.00%	69.00%
Loans Receivable	$ 937,225	$ 1,185,458
Loans held for sale	7,279	11,359
Nonaccrual loans held for sale	$ 3,657	$ 8,671

Stock-based Compensation (Tables)

9 Months Ended

Sep. 30, 2022

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, 2022	367,767	$	5.41	8.13	$	525
Granted	—
Exercised	—
Forfeited/expired	(18,222)		9.67
Outstanding at September 30, 2022	349,545	$	5.19	7.43	$	609
Exercisable at September 30, 2022	344,506	$	5.14	7.43	$	609

Summary of the company's restricted stock awards activity


		Weighted Average
	Number	Grant Date
	of Shares	Fair Value
Nonvested at January 1, 2022	293,637	$	5.81
Granted	231,842		6.57
Vested	(104,739)		6.21
Forfeited	(22,713)		5.70
Nonvested at September 30, 2022	398,027	$	6.16

FHLB Borrowings (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Federal Home Loan Bank Borrowings
Long-term fixed-rate FHLBNY advances	$ 50,000	$ 150,000
Minimum \| Long term
Federal Home Loan Bank Borrowings
FHLB interest rates (as a percent)	1.96%	0.43%
Maximum \| Long term
Federal Home Loan Bank Borrowings
FHLB interest rates (as a percent)		1.96%

FHLB Borrowings

9 Months Ended

Sep. 30, 2022

FHLB Borrowings

FHLB Borrowings

Note 7—FHLB Borrowings

FHLB Advances

FHLB borrowings at September 30, 2022 and December 31, 2021 consist of the following:


	September 30,				December 31,
	2022		Interest Rates		2021		Interest Rates
Long-term fixed rate-advances	$	50,000	1.96	%	$	150,000	0.43% - 1.96	%

At September 30, 2022, the Company has a long-term fixed-rate advance of $50,000 with a maturity date of May 2029. The advance requires monthly interest-only payments with the principal amount due on the maturity date and may contain a prepayment penalty if paid before maturity. The advance is callable by the FHLB in May 2024.

The Company utilized its excess liquidity to repay $100,000 in long-term fixed rate advances that were called by the FHLB in May 2022. Additionally, in September 2022, the Company entered into a short-term variable-rate advance for $35,000 with a maturity date of March 2023 which was then repaid during the month. At September 30, 2022, the Company had additional borrowing capacity of $354,479 from the FHLB.

FHLB Overdraft Line of Credit and Letters of Credit

The Company has established a short-term overdraft line of credit agreement with the FHLB, which provides for maximum borrowings of $20,000. The overdraft line of credit was not used during the nine months ended September 30, 2022. At September 30, 2022 and December 31, 2021, there were no outstanding borrowings under this agreement. Borrowings accrue interest based on a variable rate based on the FHLB’s overnight cost of funds rate, which was 3.45% and 0.43% at September 30, 2022 and December 31, 2021, respectively. The overdraft line of credit has a one-year term and was automatically renewed in October 2022 on substantially the same terms through October 2023.

The Company has entered into irrevocable standby letters of credit arrangements 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. An irrevocable standby letter of credit of $7,500 had a 16-month term and expired in July 2022. An irrevocable standby letter of credit originally of $4,000 has a 36-month term and expires in July 2024. This letter was reduced to $2,000 during the second quarter of 2022; thereby, the Company has total available letters of credit of $2,000 and $11,500 at September 30, 2022 and December 31, 2021, respectively. There were no borrowings outstanding on these standby letters of credit during the nine months ended September 30, 2022 and 2021.

The long-term fixed-rate advances and the overdraft line of credit are collateralized by certain investment securities and loans. Refer to Note 3—Investment Securities for further information on securities pledged as collateral and Note 4—Loans for further information on loans pledged as collateral.

Other Borrowings

The Company had available unsecured credit lines with other banks totaling $80,000 at September 30, 2022 and December 31, 2021. There were no borrowings under these unsecured credit lines during the nine months ended September 30, 2022 and 2021.

Condensed Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands	Common stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Total
Balance at beginning of the period at Dec. 31, 2020	$ 80,807	$ 13,544	$ 224,853	$ 387	$ 319,591
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		2,325
Repurchase of restricted shares to pay employee tax liability		(46)			(46)
Repurchase of restricted shares to pay employee tax liability (in shares)	(8,536)
Stock-based compensation		105			105
Stock-based compensation (in shares)	36,082
Other comprehensive income (loss)				(59)	(59)
Balance at end of the period at Mar. 31, 2021	$ 80,807	13,603	227,178	328	321,916
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	13,544	224,853	387	319,591
Balance at beginning of the period (in shares) at Dec. 31, 2020	49,981,861
Increase (Decrease) in Stockholders' Equity
Net income (loss)					15,334
Balance at end of the period at Sep. 30, 2021	$ 82,157	13,992	240,187	229	336,565
Balance at end of the period (in shares) at Sep. 30, 2021	50,475,064
Balance at beginning of the period at Mar. 31, 2021	$ 80,807	13,603	227,178	328	321,916
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		3,452
Issuance of shares of common stock for cash ($4.50 per share)	$ 1,350				1,350
Issuance of shares of common stock for cash ($4.50 per share) (in shares)	300,000
Stock-based compensation		193			193
Stock-based compensation (in shares)	165,774
Other comprehensive income (loss)				131	131
Balance at end of the period at Jun. 30, 2021	$ 82,157	13,796	230,630	459	327,042
Balance at end of the period (in shares) at Jun. 30, 2021	50,475,181
Increase (Decrease) in Stockholders' Equity
Net income (loss)			9,557		9,557
Stock-based compensation		196			196
Stock-based compensation (in shares)	(117)
Other comprehensive income (loss)				(230)	(230)
Balance at end of the period at Sep. 30, 2021	$ 82,157	13,992	240,187	229	336,565
Balance at end of the period (in shares) at Sep. 30, 2021	50,475,064
Balance at beginning of the period at Dec. 31, 2021	$ 82,157	14,124	248,243	(897)	343,627
Balance at beginning of the period (in shares) at Dec. 31, 2021	50,460,932
Increase (Decrease) in Stockholders' Equity
Net income (loss)			5,260		5,260
Repurchase of restricted shares to pay employee tax liability		(84)			(84)
Repurchase of restricted shares to pay employee tax liability (in shares)	(13,383)
Stock-based compensation		146			146
Stock-based compensation (in shares)	49,284
Other comprehensive income (loss)				(7,543)	(7,543)
Balance at end of the period at Mar. 31, 2022	$ 82,157	14,186	253,503	(8,440)	341,406
Balance at end of the period (in shares) at Mar. 31, 2022	50,496,833
Balance at beginning of the period at Dec. 31, 2021	$ 82,157	14,124	248,243	(897)	343,627
Balance at beginning of the period (in shares) at Dec. 31, 2021	50,460,932
Increase (Decrease) in Stockholders' Equity
Net income (loss)					4,239
Balance at end of the period at Sep. 30, 2022	$ 83,295	14,560	252,482	(20,736)	329,601
Balance at end of the period (in shares) at Sep. 30, 2022	50,800,012
Balance at beginning of the period at Mar. 31, 2022	$ 82,157	14,186	253,503	(8,440)	341,406
Balance at beginning of the period (in shares) at Mar. 31, 2022	50,496,833
Increase (Decrease) in Stockholders' Equity
Net income (loss)			(2,197)		(2,197)
Repurchase of restricted shares to pay employee tax liability		(112)			(112)
Repurchases of shares of common stock (Note 10) (in shares)	(16,345)
Issuance of shares of common stock to defined contribution retirement plan	$ 1,138				1,138
Issuance of shares of common stock to defined contribution retirement plan (in shares)	160,978
Stock-based compensation		239			239
Stock-based compensation (in shares)	176,746
Other comprehensive income (loss)				(5,142)	(5,142)
Balance at end of the period at Jun. 30, 2022	$ 83,295	14,313	251,306	(13,582)	335,332
Balance at end of the period (in shares) at Jun. 30, 2022	50,818,212
Increase (Decrease) in Stockholders' Equity
Net income (loss)			1,176		1,176
Repurchase of restricted shares to pay employee tax liability		(8)			(8)
Repurchase of restricted shares to pay employee tax liability (in shares)	(1,299)
Stock-based compensation		255			255
Stock-based compensation (in shares)	(16,901)
Other comprehensive income (loss)				(7,154)	(7,154)
Balance at end of the period at Sep. 30, 2022	$ 83,295	$ 14,560	$ 252,482	$ (20,736)	$ 329,601
Balance at end of the period (in shares) at Sep. 30, 2022	50,800,012

Deposits

9 Months Ended

Sep. 30, 2022

Deposits

Deposits

Note 6—Deposits

Time deposits, included in interest-bearing deposits, were $757,576 and $891,820 at September 30, 2022 and December 31, 2021, respectively. Time deposits included brokered deposits of $20,109 at December 31, 2021. There were no brokered deposits at September 30, 2022.

Time deposits that meet or exceed the FDIC insurance limit of $250 were $222,630 and $244,868 at September 30, 2022 and December 31, 2021, respectively.

Summary of Significant Accounting Policies (Policies)	9 Months Ended
Summary of Significant Accounting Policies (Policies)	Sep. 30, 2022
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 Sterling Bancorp, Inc. and its wholly-owned subsidiaries. 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 periods. Due to the inherent uncertainty involved in making estimates, actual results reported in 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 September 30, 2022 and December 31, 2021, residential real estate loans accounted for 85% and 83%, respectively, of total gross loans. 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 September 30, 2022 and December 31, 2021, approximately 83% and 85%, respectively, of gross loans was originated with respect to properties or businesses located in the state of California. In March 2020, the Bank permanently discontinued its Advantage Loan program. Loans originated under this program comprised a significant component of the Bank’s total loan originations. Advantage Loan Program loans (including residential real estate loans held for sale of $7,279 and $11,359 at September 30, 2022 and December 31, 2021, respectively, of which $3,657 and $8,671 were on nonaccrual status as of those respective dates) totaled $937,225 and $1,185,458, or 65% and 69% of gross residential loans, at September 30, 2022 and December 31, 2021, respectively. Refer to Note 16—Commitments and Contingencies.
Employee Retention Credits Under the Cares Act	Employee Retention Credits Under the Cares Act The Company evaluated its eligibility for the employee retention credits (“ERC”) offered under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) in the third quarter of 2021 and determined it qualified for the ERC for the first three quarters of 2021. The Company qualified for the ERC because its gross receipts (which consisted of total interest income and other fees from banking activities and services) decreased more than 20% in 2021 from each of the respective quarters of 2019. The ERC was a refundable tax credit against certain employment taxes. The Company accounted for the ERC by analogy to International Accounting Standards 20 (“IAS 20”). Under IAS 20, the credit is recognized on a systematic basis over the periods in which the entity recognizes the payroll expenses for which the grant (tax credit) is intended to compensate when there is reasonable assurance that the entity will comply with any conditions attached to the grant and the grant will be received. The Company has made an accounting policy election to record the ERC benefit as a reduction to payroll expenses. During the three and nine months ended September 30, 2021, the Company recorded a benefit of $6,529 resulting in a net reduction of salaries and employee benefits expense in the condensed consolidated statements of income. The Company initially recorded a grant receivable of $6,529 and has received refunds or credits of $886, with a remaining receivable of $5,643 which is recorded in other assets in the condensed consolidated balance sheet at September 30, 2022. The Company expects to receive the balance of the refunds within the near term.
Recently Issued Accounting Guidance Not Yet Adopted	Recently Issued Accounting Guidance Not Yet Adopted In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, which eliminates the accounting guidance for troubled debt restructurings by creditors in ASC 310-40, Receivables – Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings involving borrowings that are experiencing financial difficulty. Specifically, rather than applying the troubled debt restructuring recognition and measurement guidance, creditors will evaluate all loan modifications to determine if they result in a new loan or a continuation of the existing loan. Also, losses associated with troubled debt restructurings should be incorporated in a creditor’s estimate of its allowance for credit losses. Public business entities are required to disclose current-period gross write-offs by year of origination for loan financing receivables and net investment in leases. For entities that have not yet adopted ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“2016-13”), ASU 2022-02 is effective when the entity adopts the guidance in ASU 2016-13. The Company is currently evaluating this ASU, along with its adoption of ASU 2016-13, as discussed below. In June 2016, the FASB issued ASU No. 2016-13, 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 SEC. The Company, as a smaller reporting company as of the relevant measuring period, qualified for this extension. At this time, a cross-functional implementation team consisting of individuals from accounting, finance, servicing and information systems is working with the Company’s loan system vendor and consultants, and an application to create credit loss estimation models and processes has been developed. The historical data set for model development has been finalized, and the credit loss estimation models have been developed and tested. The Company is working to finalize the assessment and documentation of processes and internal controls as well as adjustments to qualitative factors. In addition, the Company has engaged a third party to perform a model validation. The Company will run the new credit loss estimation models under the new internal controls in parallel with the current allowance for loan losses model to understand the differences in the models and assess the impact of the change. The Company expects to recognize a cumulative effect adjustment to the opening balance of retained earnings as of January 1, 2023, 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 condensed consolidated financial statements.

FHLB Borrowings (Tables)

9 Months Ended

Sep. 30, 2022

FHLB Borrowings

Schedule of FHLB borrowings

FHLB borrowings at September 30, 2022 and December 31, 2021 consist of the following:


	September 30,				December 31,
	2022		Interest Rates		2021		Interest Rates
Long-term fixed rate-advances	$	50,000	1.96	%	$	150,000	0.43% - 1.96	%

Loans - Impaired Loans by Class of Loans (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Impaired loans by class of loans
Unpaid principal balance, with no related allowance for loan losses recorded	$ 2,824		$ 2,824		$ 19,670
Total Unpaid Principal Balance	2,906		2,906		19,943
Recorded investment, with no related allowance for loan losses recorded	2,595		2,595		19,606
Total Recorded Investment	2,643		2,643		19,891
Allowance for Loan Losses	12		12		159
Average recorded investment, with no related allowance for loan losses recorded	5,486	$ 32,659	6,998	$ 50,311
Average recorded investment, with an allowance for loan losses recorded	48	10,666	198	10,031
Total Average Recorded Investment	5,534	43,325	7,196	60,342
Interest Income Recognized, with no related allowance for loan losses recorded	42	42	123	199
Interest Income Recognized, with an allowance for loan losses recorded	2	57	3	184
Total Interest Income Recognized	44	99	126	383
Cash Basis Interest Recognized, with no related allowance for loan losses recorded	28	28	109	186
Cash Basis Interest Recognized, with an allowance for loan losses recorded	2	39	3	166
Total Cash Basis Interest Recognized	30	67	112	352
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					91
Unpaid principal balance, with an allowance for loan losses recorded	82		82		273
Recorded investment, with no related allowance for loan losses recorded					65
Recorded investment, with an allowance for loan losses recorded	48		48		285
Allowance for Loan Losses	12		12		159
Average recorded investment, with no related allowance for loan losses recorded		82		88
Average recorded investment, with an allowance for loan losses recorded	48	279	198	280
Interest Income Recognized, with an allowance for loan losses recorded	2	1	3	3
Cash Basis Interest Recognized, with an allowance for loan losses recorded	2	1	3	3
Commercial real estate \| Real estate loan, Retail
Impaired loans by class of loans
Unpaid principal balance, with no related allowance for loan losses recorded	229		229
Average recorded investment, with no related allowance for loan losses recorded		7		765
Commercial real estate \| Real estate loan, Office
Impaired loans by class of loans
Average recorded investment, with no related allowance for loan losses recorded		2,769		2,768
Commercial real estate \| Hotels/Single-room occupancy hotels
Impaired loans by class of loans
Unpaid principal balance, with no related allowance for loan losses recorded					4,459
Recorded investment, with no related allowance for loan losses recorded					4,441
Average recorded investment, with no related allowance for loan losses recorded		10,862		17,948
Commercial real estate \| Real Estate Loan, Other
Impaired loans by class of loans
Average recorded investment, with no related allowance for loan losses recorded				91
Construction
Impaired loans by class of loans
Unpaid principal balance, with no related allowance for loan losses recorded	2,485		2,485		15,004
Recorded investment, with no related allowance for loan losses recorded	2,485		2,485		14,984
Average recorded investment, with no related allowance for loan losses recorded	5,375	18,820	6,885	27,387
Average recorded investment, with an allowance for loan losses recorded		10,387		9,751
Interest Income Recognized, with no related allowance for loan losses recorded	40	40	118	192
Interest Income Recognized, with an allowance for loan losses recorded		56		181
Cash Basis Interest Recognized, with no related allowance for loan losses recorded	27	27	105	179
Cash Basis Interest Recognized, with an allowance for loan losses recorded		38		163
Commercial lines of credit \| Private banking
Impaired loans by class of loans
Unpaid principal balance, with no related allowance for loan losses recorded	110		110		116
Recorded investment, with no related allowance for loan losses recorded	110		110		$ 116
Average recorded investment, with no related allowance for loan losses recorded	111	119	113	1,264
Interest Income Recognized, with no related allowance for loan losses recorded	2	2	5	7
Cash Basis Interest Recognized, with no related allowance for loan losses recorded	$ 1	$ 1	$ 4	$ 7

Commitments and Contingencies - Mortgage Repurchase Liability and Offers (Details) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended		9 Months Ended
	Sep. 30, 2022	May 31, 2022	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Commitments and Contingencies
Mortgage loan repurchase liability	$ 778		$ 778		$ 778		$ 2,954
Loss			3,521	$ 1,361	8,943	$ 5,852
Loss charged against mortgage repurchase liability	(884)
Advantage Loan Program
Commitments and Contingencies
Mortgage loan repurchase liability	$ 778		$ 778	3,225	$ 778	3,225	$ 2,954	$ 9,699	$ 7,823
Percentage of loans offered to each of investors to repurchase	100.00%		100.00%		100.00%
Loans repurchased during the period	$ 35,241	$ 30,380	$ 35,241	$ 6,067	$ 65,621	$ 173,829
Loss	1,608	695
Disposition of mortgage servicing rights	487	$ 376
Present - July 22, 2023
Commitments and Contingencies
Outstanding principal balance	$ 21,392		$ 21,392		$ 21,392

Related Party Transactions (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Controlling Shareholders
Related party transactions
Sublease income	$ 97	$ 112	$ 289

Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021
Numerator:
Net income (loss)	$ 1,176	$ (2,197)	$ 5,260	$ 9,557	$ 3,452	$ 2,325	$ 4,239	$ 15,334
Denominator:
Weighted average common shares outstanding, basic	50,400,412			50,167,295			50,326,951	50,010,341
Weighted average effect of potentially dilutive common shares:
Weighted average common shares outstanding, diluted	50,572,931			50,262,686			50,523,076	50,079,931
Income per share:
Income (loss) per share, basic	$ 0.02			$ 0.19			$ 0.08	$ 0.31
Income (loss) per share, diluted	$ 0.02			$ 0.19			$ 0.08	$ 0.31
Securities excluded from the computation of weighted average diluted shares outstanding as inclusion of such items would be anti-dilutive	226,252			75,061			149,681	174,697
Stock options
Income per share:
Securities excluded from the computation of weighted average diluted shares outstanding as inclusion of such items would be anti-dilutive	49,545			67,767			49,897	70,139
Restricted Stock
Income per share:
Securities excluded from the computation of weighted average diluted shares outstanding as inclusion of such items would be anti-dilutive	176,707			7,294			99,784	104,558
Common stock \| Stock options
Weighted average effect of potentially dilutive common shares:
Incremental shares from share-based compensation	97,884			55,131			107,671	48,659
Common stock \| Restricted Stock
Weighted average effect of potentially dilutive common shares:
Incremental shares from share-based compensation	74,635			40,260			88,454	20,931

Loans - Risk Rating of Loans by Class of Loans (Details) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended		9 Months Ended
	Sep. 30, 2022	May 31, 2022	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Recorded investment in loans
Total	$ 1,681,628		$ 1,681,628		$ 1,681,628		$ 2,012,814
Charge offs			4,064	$ 1,965	4,261	$ 1,965
Advantage Loan Program
Recorded investment in loans
Total	190,467		190,467		190,467		171,185
Loans repurchased during the period	35,241	$ 30,380	35,241	6,067	65,621	173,829
Pass
Recorded investment in loans
Total	1,600,286		1,600,286		1,600,286		1,895,663
Special Mention
Recorded investment in loans
Total	35,860		35,860		35,860		27,761
Substandard
Recorded investment in loans
Total	45,482		45,482		45,482		83,226
Doubtful
Recorded investment in loans
Total							6,164
Residential real estate
Recorded investment in loans
Total	1,430,472		1,430,472		1,430,472		1,704,231
Charge offs					197
Residential real estate \| Real estate loan, first mortgage
Recorded investment in loans
Total	1,420,128		1,420,128		1,420,128		1,690,456
Residential real estate \| Real estate loan, second mortgage
Recorded investment in loans
Total	10,344		10,344		10,344		13,775
Residential real estate \| Pass \| Real estate loan, first mortgage
Recorded investment in loans
Total	1,384,438		1,384,438		1,384,438		1,644,974
Residential real estate \| Pass \| Real estate loan, second mortgage
Recorded investment in loans
Total	10,155		10,155		10,155		13,539
Residential real estate \| Substandard \| Real estate loan, first mortgage
Recorded investment in loans
Total	35,690		35,690		35,690		45,249
Residential real estate \| Substandard \| Real estate loan, second mortgage
Recorded investment in loans
Total	189		189		189		236
Residential real estate \| Doubtful \| Real estate loan, first mortgage
Recorded investment in loans
Total							233
Commercial real estate
Recorded investment in loans
Total	199,446		199,446		199,446		201,240
Gain on sale of portfolio loans			0
Charge offs			4,064		4,064
Net cash proceeds from sale of commercial real estate loans to third party investor			17,794
Commercial real estate \| Real estate loan, Retail
Recorded investment in loans
Total	26,026		26,026		26,026		19,574
Commercial real estate \| Real estate loan, Multifamily
Recorded investment in loans
Total	81,723		81,723		81,723		96,960
Commercial real estate \| Real estate loan, Office
Recorded investment in loans
Total	18,216		18,216		18,216		12,382
Commercial real estate \| Hotels/Single-room occupancy hotels
Recorded investment in loans
Total	5,240		5,240		5,240		14,221
Commercial real estate \| Real estate loan, Industrial
Recorded investment in loans
Total	30,372		30,372		30,372		7,320
Commercial real estate \| Real estate loan, Other
Recorded investment in loans
Total	37,869		37,869		37,869		50,783
Commercial real estate \| Pass \| Real estate loan, Retail
Recorded investment in loans
Total	26,026		26,026		26,026		18,846
Commercial real estate \| Pass \| Real estate loan, Multifamily
Recorded investment in loans
Total	69,369		69,369		69,369		75,543
Commercial real estate \| Pass \| Real estate loan, Office
Recorded investment in loans
Total	18,216		18,216		18,216		10,413
Commercial real estate \| Pass \| Hotels/Single-room occupancy hotels
Recorded investment in loans
Total							8,205
Commercial real estate \| Pass \| Real estate loan, Industrial
Recorded investment in loans
Total	30,372		30,372		30,372		7,320
Commercial real estate \| Pass \| Real estate loan, Other
Recorded investment in loans
Total	22,703		22,703		22,703		48,996
Commercial real estate \| Special Mention \| Real estate loan, Retail
Recorded investment in loans
Total							728
Commercial real estate \| Special Mention \| Real estate loan, Multifamily
Recorded investment in loans
Total	12,354		12,354		12,354		8,104
Commercial real estate \| Special Mention \| Hotels/Single-room occupancy hotels
Recorded investment in loans
Total	3,692		3,692		3,692
Commercial real estate \| Special Mention \| Real estate loan, Other
Recorded investment in loans
Total	15,166		15,166		15,166		1,692
Commercial real estate \| Substandard \| Real estate loan, Multifamily
Recorded investment in loans
Total							13,313
Commercial real estate \| Substandard \| Real estate loan, Office
Recorded investment in loans
Total							1,969
Commercial real estate \| Substandard \| Hotels/Single-room occupancy hotels
Recorded investment in loans
Total	1,548		1,548		1,548		6,016
Commercial real estate \| Substandard \| Real estate loan, Other
Recorded investment in loans
Total							95
Construction
Recorded investment in loans
Total	50,320		50,320		50,320		106,759
Charge offs				$ 1,965		$ 1,965
Construction \| Pass
Recorded investment in loans
Total	37,617		37,617		37,617		67,254
Construction \| Special Mention
Recorded investment in loans
Total	4,648		4,648		4,648		17,226
Construction \| Substandard
Recorded investment in loans
Total	8,055		8,055		8,055		16,348
Construction \| Doubtful
Recorded investment in loans
Total							5,931
Commercial lines of credit
Recorded investment in loans
Total	1,389		1,389		1,389		363
Commercial lines of credit \| Private banking
Recorded investment in loans
Total	110		110		110		116
Commercial lines of credit \| C&I lending
Recorded investment in loans
Total	1,279		1,279		1,279		247
Commercial lines of credit \| Pass \| Private banking
Recorded investment in loans
Total	110		110		110		116
Commercial lines of credit \| Pass \| C&I lending
Recorded investment in loans
Total	1,279		1,279		1,279		236
Commercial lines of credit \| Special Mention \| C&I lending
Recorded investment in loans
Total							11
Other consumer
Recorded investment in loans
Total	1		1		1		221
Other consumer \| Pass
Recorded investment in loans
Total	$ 1		$ 1		$ 1		$ 221

Mortgage Servicing Rights, net - Principle Balance by Category (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Mortgage Servicing Rights
Total	$ 195,758	$ 307,783
Custodial escrow balances maintained on serviced loans	1,528	5,501
FNMA
Mortgage Servicing Rights
Total	115,446	124,764
FHLB
Mortgage Servicing Rights
Total	35,357	40,209
Private investors
Mortgage Servicing Rights
Total	$ 44,955	$ 142,810

FHLB Borrowings - Other Borrowings (Details) - Other Banks - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021	Sep. 30, 2021
Other Borrowings
Maximum borrowing capacity	$ 80,000	$ 80,000
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

Fair Values of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2022

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
			September 30, 2022
			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 and Agency securities	$	167,462	$	115,484	$	51,978	$	—
Mortgage-backed securities		37,626		—		37,626		—
Collateralized mortgage obligations		143,346		—		143,346		—
Collateralized debt obligations		153		—		—		153
Equity securities		4,386		4,386		—		—


			Fair Value Measurements at
			December 31, 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 and Agency securities	$	122,168	$	48,827	$	73,341	$	—
Mortgage-backed securities		49,437		—		49,437		—
Collateralized mortgage obligations		136,849		—		136,849		—
Collateralized debt obligations		203		—		—		203
Equity securities		4,976		4,976		—		—

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
	Nine Months Ended September 30,
	2022		2021
Balance of recurring Level 3 assets at beginning of period	$	203	$	187
Total gains or losses (realized/unrealized):
Included in income-realized		—		—
Included in other comprehensive loss		3		7
Principal maturities/settlements		(53)		(3)
Sales		—		—
Transfers in and/or out of Level 3		—		—
Balance of recurring Level 3 assets at end of period	$	153	$	191

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


	Fair Value Measurements at September 30, 2022
			Quoted Prices in		Significant
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
Commercial real estate loans held for sale	$	1,554	$	—	$	1,554	$	—
Mortgage servicing rights		311		—		—		311


	Fair Value Measurements at December 31, 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	$	86	$	—	$	—	$	86
Commercial real estate loans held for sale		53,628		—		53,628		—
Mortgage servicing rights		2,052		—		—		2,052

Schedule of quantitative information about nonrecurring Level 3 fair value measurements


	Quantitative Information about Level 3 Fair Value Measurements at September 30, 2022
					Range
	Fair Value		Valuation Technique	Unobservable Inputs	(Weighted Average)⁽¹⁾
Mortgage servicing rights	$	311	Discounted cash flow	Discount rate	9.5% - 12.0% (11.8%)
				Prepayment speed	7.5% - 22.5% (19.5%)
				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, 2021
					Range
	Fair Value		Valuation Technique	Unobservable Inputs	(Weighted Average)⁽¹⁾
Impaired loans:
Residential real estate	$	86	Sales comparison approach	Adjustments for differences between the comparable sales	N/A (15%)
Mortgage servicing rights	$	2,052	Discounted cash flow	Discount rate	9.5% - 12.0% (11.0%)
				Prepayment speed	10.5% - 37.1% (19.7%)
				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 September 30, 2022
	Carrying		Fair
	Amount		Value		Level 1		Level 2		Level 3
Financial Assets
Cash and due from banks	$	352,404	$	352,404	$	352,404	$	—	$	—
Interest-bearing time deposits with other banks		1,183		1,183		1,183		—		—
Loans held for sale ⁽¹⁾		7,279		7,719		—		7,719		—
Loans, net		1,636,266		1,676,322		—		—		1,676,322

Financial Liabilities
Time deposits		757,576		752,286		—		752,286		—
Federal Home Loan Bank borrowings		50,000		48,260		—		48,260		—
Subordinated notes, net		65,290		65,056		—		65,056		—


	Fair Value Measurements at December 31, 2021
	Carrying		Fair
	Amount		Value		Level 1		Level 2		Level 3
Financial Assets
Cash and due from banks	$	411,676	$	411,676	$	411,676	$	—	$	—
Interest-bearing time deposits with other banks		1,183		1,183		1,183		—		—
Loans held for sale		11,359		11,809		—		11,809		—
Loans, net⁽¹⁾		1,956,180		2,025,409		—		—		2,025,409

Financial Liabilities
Time deposits		891,820		894,049		—		894,049		—
Federal Home Loan Bank borrowings		150,000		152,560		—		152,560		—
Subordinated notes, net		65,343		65,073		—		65,073		—

(1)Excludes impaired loans measured at fair value on a nonrecurring basis at September 30, 2022 and December 31, 2021.

Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended		3 Months Ended	9 Months Ended
	Apr. 30, 2022	May 31, 2021	Jun. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Dec. 31, 2021	Jun. 30, 2021
Shareholders' Equity
Issuance of shares of common stock to defined contribution retirement plan			$ 1,138
Issue price per share							$ 4.50
Common stock, shares authorized					500,000,000	500,000,000
Proceeds from issuance of shares of common stock				$ 1,350
Common stock, par value (in dollars per share)					$ 0	$ 0
Common stock
Shareholders' Equity
Issuance of shares of common stock to defined contribution retirement plan (in shares)			160,978
Issuance of shares of common stock to defined contribution retirement plan			$ 1,138
Common stock \| Annual matching contribution
Shareholders' Equity
Issuance of shares of common stock to defined contribution retirement plan (in shares)	160,978
Issuance of shares of common stock to defined contribution retirement plan	$ 1,138
Issue price per share	$ 7.07
Common stock \| Chief Executive Officer
Shareholders' Equity
Issue price per share		$ 4.50
Common stock, shares authorized		300,000
Proceeds from issuance of shares of common stock		$ 1,350

Loans - Major Categories of Loans Held for Sale (Details) - USD ($) $ in Thousands	1 Months Ended
	Feb. 28, 2022	Sep. 30, 2022	Dec. 31, 2021
Major categories of loans
Total loans held for sale		$ 8,833	$ 64,987
Nonaccrual loans held for sale		3,657	18,026
Modified troubled debt restructuring		2,643	18,416
Residential real estate
Major categories of loans
Total loans held for sale		7,279	11,359
Nonaccrual loans held for sale			8,671
Nonaccrual residential real estate loans
Major categories of loans
Modified troubled debt restructuring			2,059
Commercial real estate
Major categories of loans
Total loans held for sale		1,554	53,628
Nonaccrual loans held for sale			$ 9,355
Proceeds from sale of loans held for sale	$ 49,610
Loans carrying value on date of sale	$ 49,455
Commercial real estate \| Special Mention
Major categories of loans
Total loans held for sale		$ 1,554

Investment Securities - Amortized Cost and Fair Value By Contractual Maturity (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Available for sale, Amortized Cost
Available for sale, Amortized Cost	$ 377,188	$ 309,903
Available for sale, Fair Value
Available for sale, Fair Value	348,587	308,657
U.S. Treasury and Agency securities
Available for sale, Amortized Cost
Due less than one year	24,277
Due after one year through five years	151,156
Available for sale, Amortized Cost	175,433	122,291
Available for sale, Fair Value
Due less than one year	24,125
Due after one year through five years	143,337
Available for sale, Fair Value	167,462	122,168
Mortgage-backed securities
Available for sale, Amortized Cost
Available for sale, Amortized Cost	43,183	49,739
Available for sale, Fair Value
Available for sale, Fair Value	37,626	49,437
Collateralized mortgage obligations
Available for sale, Amortized Cost
Available for sale, Amortized Cost	158,414	137,662
Available for sale, Fair Value
Available for sale, Fair Value	143,346	136,849
Collateralized debt obligations
Available for sale, Amortized Cost
Available for sale, Amortized Cost	158	211
Available for sale, Fair Value
Available for sale, Fair Value	$ 153	$ 203

Commitments and Contingencies - Mortgage Repurchase Liability Activity and Balances (Details) - USD ($) $ in Thousands	1 Months Ended	9 Months Ended
	May 31, 2022	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Commitments and Contingencies
Unpaid principal balance		$ 1,636,266		$ 1,956,266
Mortgage repurchase liability:
Balance, beginning of period		2,954
Balance, end of the period		778
Obligation to repurchase receivables sold member \| Residential real estate
Commitments and Contingencies
Unpaid principal balance		160,401		237,049
Advantage Loan Program
Mortgage repurchase liability:
Balance, beginning of period		2,954	$ 9,699
Net recovery	$ (622)	(670)	(963)
Loss on loan repurchases		1,506	5,511
Balance, end of the period		778	$ 3,225
Advantage Loan Program \| Obligation to repurchase receivables sold member \| Residential real estate
Commitments and Contingencies
Unpaid principal balance		$ 44,955		$ 142,810

Stock-based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Stock options
Stock-based Compensation
Maximum term of stock awards granted			10 years
Restricted Stock
Stock-based Compensation
Number of share instruments issued			231,842	234,996
Restricted Stock \| Key employee
Stock-based Compensation
Number of share instruments issued			186,842
Restricted Stock \| Non-employee directors Restricted Stock Awards
Stock-based Compensation
Number of share instruments issued			45,000
2017 Omnibus Equity Incentive Plan
Stock-based Compensation
Number of shares authorized	4,237,100		4,237,100
2017 Omnibus Equity Incentive Plan \| Stock options
Number of Shares
Outstanding at January 1, 2022			367,767
Forfeited/expired			(18,222)
Outstanding at September 30, 2022	349,545		349,545		367,767
Exercisable at September 30, 2022	344,506		344,506
Weighted Average Exercise Price
Outstanding at January 1, 2022			$ 5.41
Forfeited/expired			9.67
Outstanding at September 30, 2022	$ 5.19		5.19		$ 5.41
Exercisable at September 30, 2022	$ 5.14		$ 5.14
Weighted Average Remaining Contractual Term
Weighted Average Remaining Contractual Term (Years)			7 years 5 months 4 days		8 years 1 month 17 days
Weighted Average Remaining Contractual Term, Exercisable			7 years 5 months 4 days
Aggregate Intrinsic Value	$ 609		$ 609		$ 525
Aggregate Intrinsic Value Exercisable	609		609
Stock-based compensation costs recognized, net	3	$ 34	(8)	$ 137
Total unrecognized compensation cost - stock options	3		$ 3
2017 Omnibus Equity Incentive Plan \| Stock options \| Maximum
Weighted Average Remaining Contractual Term
Unrecognized compensation cost related to nonvested awards, expected to be recognized over a weighted-average period			1 year
2017 Omnibus Equity Incentive Plan \| Stock Options granted prior to 2020
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
Shares withheld in order to pay employee tax liabilities on vested awards			31,027	8,536
Stock-based compensation costs recognized	252	$ 162	$ 648	$ 357
Employee tax liability associated with restricted stock awards the vested during the period			204	46
Total unrecognized compensation cost - restricted stock awards	$ 2,017		$ 2,017
Unrecognized compensation cost related to nonvested awards, expected to be recognized over a weighted-average period			2 years 2 months 1 day
Number of Shares
Nonvested, Opening balance			293,637
Granted			231,842
Vested			(104,739)
Forfeited			(22,713)
Nonvested, Ending balance	398,027		398,027		293,637
Weighted Average Grant Date Fair Value
Nonvested, Opening balance			$ 5.81
Granted			6.57
Vested			6.21
Forfeited			5.70
Nonvested, Ending balance	$ 6.16		$ 6.16		$ 5.81
Grant Date Fair Value of Restricted Stock that Vested During the year
Fair value of restricted stock awards vested			$ 644	$ 173
2020 Omnibus Equity Incentive Plan
Stock-based Compensation
Number of shares authorized	3,979,661		3,979,661
2020 Omnibus Equity Incentive Plan \| Stock Options granted starting in 2020
Stock-based Compensation
Number of stock options granted			0	0
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
Stock-based Compensation
Number of share instruments issued				189,996
2020 Omnibus Equity Incentive Plan \| Restricted Stock \| Non-employee directors Restricted Stock Awards
Stock-based Compensation
Number of share instruments issued				45,000

Commitments and Contingencies

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies

Commitments and Contingencies

Note 16—Commitments and Contingencies

Financial Instruments with Off-Balance Sheet Risk

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the 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 Company 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 Company is required to fund the commitment. The Company 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 September 30, 2022, outstanding commitments to make loans consisted of variable-rate loans of $2,560 at varying interest rates ranging from 4.50% to 5.125% at September 30, 2022 with maturities of 30 years and fixed-rate loans of $113 at an interest rate of 4.875% with maturities of 15 years.

Unused Lines of Credit

The Company also issues unused lines of credit to meet customer financing needs. At September 30, 2022, the unused lines of credit include residential second mortgages of $10,874 and construction loans of $9,736 totaling $20,610. These unused lines of credit are associated with variable-rate commitments at interest rates ranging from 5.50% to 8.50% at September 30, 2022 with maturities ranging from one month to 23 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 Company assures that the third parties will receive specified funds if customers fail to meet their contractual obligations. The credit risk to the Company 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 Company 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 September 30, 2022 and December 31, 2021:


	September 30,		December 31,
	2022		2021
Commitments to make loans	$	2,673	$	23,610
Unused lines of credit		20,610		45,805
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.

On September 27, 2022, the Company entered into a Consent Order with the OCC, resolving the formal investigation by the OCC relating to the Bank’s former residential loan product, marketed as the Advantage Loan Program, and related matters (the “OCC Investigation”). Pursuant to the Consent Order, the Bank has paid a civil money penalty of $6,000. The civil money penalty has been applied against the previously accrued liability for contingent losses reflected on the Company’s condensed consolidated balance sheet. The Consent Order represents a full and final settlement of the OCC Investigation with respect to the Bank. Concurrent with the Consent Order, the OCC notified the Bank that the formal agreement between the Bank and the OCC entered on June 18, 2019 (the “OCC Agreement “) was terminated, which primarily related to certain aspects of the Bank’s Bank Secrecy Act/Anti-Money Laundering (“BSA/AML”) compliance program and the Bank’s credit administration.

The Bank 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 contained in the Company’s filings with the SEC. The Bank is fully cooperating with this investigation. Adverse findings in the DOJ investigation could result in material losses due to damages, restitution, penalties, 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 the business.

The Company is currently under a formal investigation 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 has fully cooperated 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 Bank has incurred and expects to continue to incur significant costs in its efforts to respond to the government investigations, which are reflected in the Company’s results of operations for the three and nine months ended September 30, 2022 and 2021. Adverse findings in any of the aforementioned government investigations could also have collateral consequences for the Company and the Bank, such as creating breaches of representation in certain third-party agreements and loss of eligibility to participate in certain government programs and programs of government sponsored entities.

In 2019, the Company commenced an internal review of the Advantage Loan Program and related matters (the “Internal Review”). The primary focus of the Internal Review, which has been led by outside legal counsel at the direction of a special committee of independent directors (the “Special Committee”), has involved the origination of residential real estate loans under the Advantage Loan Program and related matters. Results from the Special Committee’s Internal Review have indicated that certain employees engaged in misconduct in connection with the origination of a significant number of such loans, including with respect to verification of income, the amount of income reported for borrowers, reliance on third parties, and related documentation. As a result, the Company permanently discontinued the Advantage Loan Program. While the Internal Review is substantially complete, the Company expects the Internal Review to remain open during the pendency of the government investigations discussed herein, and it is possible additional work will be required in connection with the Internal Review.

At September 30, 2022 and December 31, 2021, the Company has a liability for contingent losses of $9,000 and $15,000, respectively, for the outcome of the pending investigations. 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, (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 (the “Shareholder Demand”) which was later reflected in a shareholder derivative complaint that was filed against us and certain of our current and former directors, styled Cahnman v. Allen, et al., No. 2:22-cv-10124 (E.D. Mich.), alleging that members of the Company’s board of directors breached their fiduciary duties of oversight and disclosure based on allegations concerning the Bank’s residential lending practices and disclosures concerning those 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 January 21, 2022, the Company and the purported shareholder entered into an agreement in the form of a definitive stipulation of settlement (the “Settlement”), of which the court granted final approval on September 29, 2022. Pursuant to the Settlement, the Company agreed to adopt and implement substantial corporate governance reforms (the “Corporate Governance Enhancements”), many of which were already in progress and have now been completed, and pay attorneys’ fees and expenses in the amount of $650 in exchange for the release of all defendants from all alleged claims therein. The Settlement provides customary releases of certain individuals and entities, including the current board of directors and certain former board members, and reserves for the Company’s board of directors the exclusive right to continue to evaluate and pursue claims against non-released individuals based on their conduct concerning, related to, or arising from the matters raised in the Shareholder Demand. Reimbursement of the $650 due under the Settlement was paid by the Company’s insurance carriers under applicable insurance policies during the fourth quarter of 2022.

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 loan and certain expenses. As a result, the Company may incur a loss with respect to each repurchased loan.

In 2019, in connection with the above mentioned investigations stemming from the Advantage Loan Program, the Company recorded a mortgage repurchase liability of $7,823, primarily related to probable losses on the previously sold Advantage Loan Program portfolio. The Company determined that these losses became probable in the latter part of the fourth quarter of 2019, taking into account the results of the Internal Review.

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. Since this time, certain third-party investors have accepted this offer. In May 2022, the Company repurchased a pool of Advantage Loan Program loans with a total outstanding unpaid principal balance of $30,380, which was not subject to an existing written agreement to repurchase. In connection with this repurchase, the Company recognized a loss of $695 related to a fair value discount in other non-interest expense and a disposition of $376 of mortgage servicing rights, and charged a loss of $622 against the mortgage repurchase liability. In September 2022, the Company repurchased pools of Advantage Loan Program loans with a total outstanding unpaid principal balance of $35,241. In connection with this repurchase, the Company recognized a loss of $1,608 related to a fair value discount in other non-interest expense and a disposition of $487 of mortgage servicing rights, and charged a loss of $884 against the mortgage repurchase liability. Pursuant to the existing agreements with such investors, the Company also agreed to repurchase additional pools of Advantage Loan Program loans at the predetermined repurchase prices as stated in the agreements. The Company has entered into an agreement to repurchase an additional pool of Advantage Loan Program loans with an outstanding principal balance of $21,392 at September 30, 2022, with the final decision to effect any such repurchase and the specific date of repurchase, as determined by the applicable investor. The last date on which the investor has the right to cause the repurchase of this pool of loans is July 22, 2023. Losses expected to be incurred upon the repurchase of such loans are reflected in the mortgage repurchase liability.

As of September 30, 2022 and December 31, 2021, the mortgage repurchase liability was $778 and $2,954, 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 in the event of breach of representations and warranties totaled $160,401 and $237,049 at September 30, 2022 and December 31, 2021, respectively, including Advantage Loan Program loans totaling $44,955 and $142,810 at September 30, 2022 and December 31, 2021, 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.

Activity in the mortgage repurchase liability was as follows:


	Nine Months Ended
	September 30,
	2022		2021
Balance, beginning of period	$	2,954	$	9,699
Net recovery		(670)		(963)
Loss on loan repurchases		(1,506)		(5,511)
Balance, end of the period	$	778	$	3,225

Mortgage Servicing Rights, net (Tables)

9 Months Ended

Sep. 30, 2022

Mortgage Servicing Rights, net

Schedule of principal balance of mortgage loans serviced for others


	September 30,		December 31,
	2022		2021
Residential real estate mortgage loan portfolios serviced for:
FNMA	$	115,446	$	124,764
FHLB		35,357		40,209
Private investors		44,955		142,810
Total	$	195,758	$	307,783

Schedule of activity for mortgage servicing rights and related valuation allowance


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Mortgage servicing rights:
Beginning of period	$	2,542	$	4,200	$	3,332	$	7,853
Additions		—		25		11		124
Amortization		(657)		(550)		(1,458)		(4,302)
End of period		1,885		3,675		1,885		3,675

Valuation allowance at beginning of period		89		968		610		2,165
Additions (recoveries)		(46)		(166)		(567)		(1,363)
Valuation allowance at end of period		43		802		43		802

Mortgage servicing rights, net	$	1,842	$	2,873	$	1,842	$	2,873

Fair Values of Financial Instruments - Assets Measured at Fair Value on a Nonrecurring Basis and Fair Value of Financial Instruments (Details) $ in Thousands	Sep. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
Financial Assets
Interest-bearing time deposits with other banks	$ 1,183	$ 1,183
Loans held for sale	8,833	64,987
Nonrecurring \| Residential real estate
Fair value of financial assets and liabilities
Assets measured at fair value on a nonrecurring basis		86
Nonrecurring \| Residential real estate \| Level 3
Fair value of financial assets and liabilities
Assets measured at fair value on a nonrecurring basis		86
Nonrecurring \| Residential real estate \| Level 3 \| Sales comparison approach
Fair value of financial assets and liabilities
Assets measured at fair value on a nonrecurring basis		$ 86
Nonrecurring \| 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 \| Commercial real estate loans held for sale
Fair value of financial assets and liabilities
Assets measured at fair value on a nonrecurring basis	1,554	$ 53,628
Nonrecurring \| Commercial real estate loans held for sale \| Level 2
Fair value of financial assets and liabilities
Assets measured at fair value on a nonrecurring basis	1,554	53,628
Nonrecurring \| Mortgage servicing rights
Fair value of financial assets and liabilities
Assets measured at fair value on a nonrecurring basis	311	2,052
Nonrecurring \| Mortgage servicing rights \| Level 3
Fair value of financial assets and liabilities
Assets measured at fair value on a nonrecurring basis	311	2,052
Nonrecurring \| Mortgage servicing rights \| Level 3 \| Discounted cash flow
Fair value of financial assets and liabilities
Assets measured at fair value on a nonrecurring basis	$ 311	$ 2,052
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	0.225	0.371
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	0.075	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	0.118	0.110
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	0.195	0.197
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	$ 352,404	$ 411,676
Interest-bearing time deposits with other banks	1,183	1,183
Loans held for sale	7,279	11,359
Loans, net	1,636,266	1,956,180
Financial Liabilities
Time deposits	757,576	891,820
Federal Home Loan Bank borrowings	50,000	150,000
Subordinated notes, net	65,290	65,343
Estimated fair value
Financial Assets
Cash and due from banks	352,404	411,676
Interest-bearing time deposits with other banks	1,183	1,183
Loans held for sale	7,719	11,809
Loans, net	1,676,322	2,025,409
Financial Liabilities
Time deposits	752,286	894,049
Federal Home Loan Bank borrowings	48,260	152,560
Subordinated notes, net	65,056	65,073
Estimated fair value \| Level 1
Financial Assets
Cash and due from banks	352,404	411,676
Interest-bearing time deposits with other banks	1,183	1,183
Estimated fair value \| Level 2
Financial Assets
Loans held for sale	7,719	11,809
Financial Liabilities
Time deposits	752,286	894,049
Federal Home Loan Bank borrowings	48,260	152,560
Subordinated notes, net	65,056	65,073
Estimated fair value \| Level 3
Financial Assets
Loans, net	$ 1,676,322	$ 2,025,409

Regulatory Capital Requirements

9 Months Ended

Sep. 30, 2022

Regulatory Capital Requirements

Regulatory Capital Requirements

Note 11—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. Prompt corrective action regulations provide five classifications for depository institutions like the Bank, including well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized, although these terms are not used to represent overall financial condition. 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. Failure to meet minimum capital requirements can initiate regulatory action that could have a direct material effect on the Company’s business, financial condition and results of operations.

The Bank, after consultation with the OCC, determined that a risk-weighting of 100% should be applied to its Advantage Loan Program loans under the risk weighting requirements for first-lien residential mortgage exposures set forth under the Basel III capital rules. Previously, the Company and the Bank generally applied a 50% risk weight to the Advantage Loan Program loans. The table below presents the Company’s and the Bank’s regulatory capital amounts and ratios applying the 100% risk weight as of September 30, 2022 and December 31, 2021 for the Company’s and Bank’s total adjusted capital to risk-weighted assets, Tier 1 (core) capital to risk-weighted assets and CET1 to risk weighted assets.

Under the Basel III capital rules, both the Company and the Bank must hold a capital conservation buffer (“CCB”) consisting of at least 2.5% above the minimum risk-based capital ratios, or 7.0% for common equity Tier 1 (“CET1”) capital ratio, 8.5% for Tier 1 capital ratio and 10.5% for total capital ratio, in order to avoid limitations on capital distributions and discretionary bonus payments to executive officers and similar employees.

At September 30, 2022 and December 31, 2021, the Company and the Bank had met all regulatory capital requirements to which they are subject and held capital in excess of the CCB, and the Bank’s regulatory capital ratios exceeded the requirements to be considered well capitalized for all regulatory purposes. The following tables present the Company’s consolidated and the Bank’s actual and minimum required capital amounts and ratios at September 30, 2022 and December 31, 2021, applying the 100% risk weight to Advantage Loan Program loans:


					For Capital					To be Well
	Actual				Adequacy Purposes					Capitalized
	Amount		Ratio		Amount		Ratio			Amount	Ratio
September 30, 2022
Total adjusted capital to risk-weighted assets
Consolidated	$	409,170	26.21	%	$	124,357	8.00	%		N/A	N/A
Bank		413,262	26.60			124,275	8.00		$	155,344	10.00	%
Tier 1 (core) capital to risk-weighted assets
Consolidated		350,162	22.43			93,268	6.00			N/A	N/A
Bank		393,524	25.33			93,206	6.00			124,275	8.00
Common Equity Tier 1 (CET1)
Consolidated		350,162	22.43			69,951	4.50			N/A	N/A
Bank		393,524	25.33			69,905	4.50			100,974	6.50
Tier 1 (core) capital to adjusted tangible assets (leverage ratio)
Consolidated		350,162	14.09			99,151	4.00			N/A	N/A
Bank		393,524	15.88			99,103	4.00			123,879	5.00


					For Capital					To be Well
	Actual				Adequacy Purposes					Capitalized
	Amount		Ratio		Amount		Ratio			Amount	Ratio
December 31, 2021
Total adjusted capital to risk-weighted assets
Consolidated	$	421,732	21.24	%	$	158,851	8.00	%		N/A	N/A
Bank		407,699	20.55			158,707	8.00		$	198,384	10.00	%
Tier 1 (core) capital to risk-weighted assets
Consolidated		344,247	17.34			119,138	6.00			N/A	N/A
Bank		382,509	19.28			119,030	6.00			158,707	8.00
Common Equity Tier 1 (CET1)
Consolidated		344,247	17.34			89,354	4.50			N/A	N/A
Bank		382,509	19.28			89,273	4.50			128,950	6.50
Tier 1 (core) capital to adjusted tangible assets (leverage ratio)
Consolidated		344,247	11.47			120,039	4.00			N/A	N/A
Bank		382,509	12.77			119,859	4.00			149,824	5.00

In order to provide a comparable trend analysis for the Bank’s and the Company’s risk based capital ratios applying the 100% risk weight to Advantage Loan Program loans, the tables below present the regulatory capital ratios applying the 100% risk weight at December 31 for each of the past five years. At each of the year-end dates reported, the Company and the Bank had met all minimum regulatory capital requirements and applicable capital cushions to which they are subject and held capital in excess of the CCB, and the Bank would have been considered well capitalized for all regulatory purposes. The CCB requirement was phased in beginning on January 1, 2016 at the 0.625% level and increased by 0.625% on each subsequent January 1, until the buffer was implemented in full at 2.5% on January 1, 2019. Accordingly, the CCB at December 31, 2018 and 2017 was 1.875% and 1.25%, respectively.


	Company at December 31,
	2021		2020		2019		2018		2017
Total adjusted capital to risk-weighted assets	21.24	%	16.51	%	14.58	%	14.82	%	13.49	%
Tier 1 (core) capital to risk-weighted assets	17.34	%	12.65	%	11.56	%	11.77	%	10.33	%
Common Equity Tier 1 (CET1)	17.34	%	12.65	%	11.56	%	11.77	%	10.33	%
Tier 1 (core) capital to adjusted tangible assets (leverage ratio)	11.47	%	8.08	%	10.11	%	10.42	%	9.83	%


	Bank at December 31,
	2021		2020		2019		2018		2017
Total adjusted capital to risk-weighted assets	20.55	%	15.74	%	12.08	%	11.43	%	10.06	%
Tier 1 (core) capital to risk-weighted assets	19.28	%	14.47	%	11.32	%	10.66	%	9.12	%
Common Equity Tier 1 (CET1)	19.28	%	14.47	%	11.32	%	10.66	%	9.12	%
Tier 1 (core) capital to adjusted tangible assets (leverage ratio)	12.77	%	9.20	%	9.90	%	9.44	%	8.68	%

In comparison to the above tables, the tables below present the Bank’s and the Company’s regulatory capital ratios applying the 50% risk weight to Advantage Loan Program loans at December 31 for each of the past five years, as previously reported.


	Company at December 31,
	2021		2020		2019		2018		2017
Total adjusted capital to risk-weighted assets	29.02	%	22.58	%	21.49	%	21.98	%	20.28	%
Tier 1 (core) capital to risk-weighted assets	24.08	%	17.68	%	17.04	%	17.45	%	15.53	%
Common Equity Tier 1 (CET1)	24.08	%	17.68	%	17.04	%	17.45	%	15.53	%
Tier 1 (core) capital to adjusted tangible assets (leverage ratio)	11.47	%	8.08	%	10.11	%	10.42	%	9.83	%


	Bank at December 31,
	2021		2020		2019		2018		2017
Total adjusted capital to risk-weighted assets	28.07	%	21.56	%	17.82	%	16.94	%	14.76	%
Tier 1 (core) capital to risk-weighted assets	26.79	%	20.27	%	16.70	%	15.80	%	13.71	%
Common Equity Tier 1 (CET1)	26.79	%	20.27	%	16.70	%	15.80	%	13.71	%
Tier 1 (core) capital to adjusted tangible assets (leverage ratio)	12.77	%	9.20	%	9.90	%	9.44	%	8.68	%

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.

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

Investment Securities

9 Months Ended

Sep. 30, 2022

Investment Securities

Investment Securities

Note 3—Investment Securities

Debt Securities

The following tables summarize the amortized cost and fair value of debt securities available for sale at September 30, 2022 and December 31, 2021 and the corresponding amounts of gross unrealized gains and losses:


	September 30, 2022
	Amortized		Gross Unrealized				Fair
	Cost		Gain		Loss		Value
Available for sale:
U.S. Treasury and Agency securities	$	175,433	$	27	$	(7,998)	$	167,462
Mortgage-backed securities		43,183		—		(5,557)		37,626
Collateralized mortgage obligations		158,414		60		(15,128)		143,346
Collateralized debt obligations		158		—		(5)		153
Total	$	377,188	$	87	$	(28,688)	$	348,587


	December 31, 2021
	Amortized		Gross Unrealized				Fair
	Cost		Gain		Loss		Value
Available for sale:
U.S. Treasury and Agency securities	$	122,291	$	106	$	(229)	$	122,168
Mortgage-backed securities		49,739		84		(386)		49,437
Collateralized mortgage obligations		137,662		530		(1,343)		136,849
Collateralized debt obligations		211		—		(8)		203
Total	$	309,903	$	720	$	(1,966)	$	308,657

Securities with a fair value of $106,049 were pledged as collateral on FHLB borrowings at September 30, 2022.

All of the mortgage-backed securities, and a majority of the 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 $438 and $529 at September 30, 2022 and December 31, 2021, 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 September 30, 2022 and December 31, 2021.

The amortized cost and fair value of U.S. Treasury and Agency securities at September 30, 2022 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 and Agency securities
Due less than one year	$	24,277	$	24,125
Due after one year through five years		151,156		143,337
Mortgage-backed securities		43,183		37,626
Collateralized mortgage obligations		158,414		143,346
Collateralized debt obligations		158		153
Total	$	377,188	$	348,587

The following table summarizes debt securities available for sale, at fair value, with unrealized losses at September 30, 2022 and December 31, 2021 aggregated by major security type and length of time the individual securities have been in a continuous unrealized loss position:


	September 30, 2022
	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
U.S Treasury and Agency securities	$	122,428	$	(5,191)	$	22,008	$	(2,807)	$	144,436	$	(7,998)
Mortgage-backed securities		34,553		(4,722)		3,073		(835)		37,626		(5,557)
Collateralized mortgage obligations		107,001		(14,440)		15,398		(688)		122,399		(15,128)
Collateralized debt obligations		—		—		153		(5)		153		(5)
Total	$	263,982	$	(24,353)	$	40,632	$	(4,335)	$	304,614	$	(28,688)


	December 31, 2021
	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
U.S Treasury and Agency securities	$	49,865	$	(229)	$	—	$	—	$	49,865	$	(229)
Mortgage-backed securities		7,878		(36)		8,729		(350)		16,607		(386)
Collateralized mortgage obligations		86,354		(1,342)		2,413		(1)		88,767		(1,343)
Collateralized debt obligations		—		—		203		(8)		203		(8)
Total	$	144,097	$	(1,607)	$	11,345	$	(359)	$	155,442	$	(1,966)

As of September 30, 2022, the debt securities portfolio consisted of 35 debt securities, with 28 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 September 30, 2022, 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.

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 September 30, 2022 and December 31, 2021, equity securities totaled $4,632 and $5,222, 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 non-interest income in the condensed consolidated statements of income. At September 30, 2022 and December 31, 2021, equity securities with readily determinable fair values were $4,386 and $4,976, respectively. The following is a summary of unrealized and realized gains and losses recognized in the condensed consolidated statements of income:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Net losses recorded during the period on equity securities	$	(184)	$	(24)	$	(590)	$	(99)
Less: net gains (losses) recorded during the period on equity securities sold during the period		—		—		—		—
Unrealized losses recorded during the period on equity securities held at the reporting date	$	(184)	$	(24)	$	(590)	$	(99)

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 nine months ended September 30, 2022 and 2021. The investment was reported at $246 at September 30, 2022 and December 31, 2021.

Regulatory Capital Requirements (Tables)

9 Months Ended

Sep. 30, 2022

Regulatory Capital Requirements

Schedule of minimum requirements under prompt corrective action regulations classifications


					For Capital					To be Well
	Actual				Adequacy Purposes					Capitalized
	Amount		Ratio		Amount		Ratio			Amount	Ratio
September 30, 2022
Total adjusted capital to risk-weighted assets
Consolidated	$	409,170	26.21	%	$	124,357	8.00	%		N/A	N/A
Bank		413,262	26.60			124,275	8.00		$	155,344	10.00	%
Tier 1 (core) capital to risk-weighted assets
Consolidated		350,162	22.43			93,268	6.00			N/A	N/A
Bank		393,524	25.33			93,206	6.00			124,275	8.00
Common Equity Tier 1 (CET1)
Consolidated		350,162	22.43			69,951	4.50			N/A	N/A
Bank		393,524	25.33			69,905	4.50			100,974	6.50
Tier 1 (core) capital to adjusted tangible assets (leverage ratio)
Consolidated		350,162	14.09			99,151	4.00			N/A	N/A
Bank		393,524	15.88			99,103	4.00			123,879	5.00


					For Capital					To be Well
	Actual				Adequacy Purposes					Capitalized
	Amount		Ratio		Amount		Ratio			Amount	Ratio
December 31, 2021
Total adjusted capital to risk-weighted assets
Consolidated	$	421,732	21.24	%	$	158,851	8.00	%		N/A	N/A
Bank		407,699	20.55			158,707	8.00		$	198,384	10.00	%
Tier 1 (core) capital to risk-weighted assets
Consolidated		344,247	17.34			119,138	6.00			N/A	N/A
Bank		382,509	19.28			119,030	6.00			158,707	8.00
Common Equity Tier 1 (CET1)
Consolidated		344,247	17.34			89,354	4.50			N/A	N/A
Bank		382,509	19.28			89,273	4.50			128,950	6.50
Tier 1 (core) capital to adjusted tangible assets (leverage ratio)
Consolidated		344,247	11.47			120,039	4.00			N/A	N/A
Bank		382,509	12.77			119,859	4.00			149,824	5.00

Schedule of actual and minimum required capital amounts and ratios


	Company at December 31,
	2021		2020		2019		2018		2017
Total adjusted capital to risk-weighted assets	21.24	%	16.51	%	14.58	%	14.82	%	13.49	%
Tier 1 (core) capital to risk-weighted assets	17.34	%	12.65	%	11.56	%	11.77	%	10.33	%
Common Equity Tier 1 (CET1)	17.34	%	12.65	%	11.56	%	11.77	%	10.33	%
Tier 1 (core) capital to adjusted tangible assets (leverage ratio)	11.47	%	8.08	%	10.11	%	10.42	%	9.83	%


	Bank at December 31,
	2021		2020		2019		2018		2017
Total adjusted capital to risk-weighted assets	20.55	%	15.74	%	12.08	%	11.43	%	10.06	%
Tier 1 (core) capital to risk-weighted assets	19.28	%	14.47	%	11.32	%	10.66	%	9.12	%
Common Equity Tier 1 (CET1)	19.28	%	14.47	%	11.32	%	10.66	%	9.12	%
Tier 1 (core) capital to adjusted tangible assets (leverage ratio)	12.77	%	9.20	%	9.90	%	9.44	%	8.68	%


	Company at December 31,
	2021		2020		2019		2018		2017
Total adjusted capital to risk-weighted assets	29.02	%	22.58	%	21.49	%	21.98	%	20.28	%
Tier 1 (core) capital to risk-weighted assets	24.08	%	17.68	%	17.04	%	17.45	%	15.53	%
Common Equity Tier 1 (CET1)	24.08	%	17.68	%	17.04	%	17.45	%	15.53	%
Tier 1 (core) capital to adjusted tangible assets (leverage ratio)	11.47	%	8.08	%	10.11	%	10.42	%	9.83	%


	Bank at December 31,
	2021		2020		2019		2018		2017
Total adjusted capital to risk-weighted assets	28.07	%	21.56	%	17.82	%	16.94	%	14.76	%
Tier 1 (core) capital to risk-weighted assets	26.79	%	20.27	%	16.70	%	15.80	%	13.71	%
Common Equity Tier 1 (CET1)	26.79	%	20.27	%	16.70	%	15.80	%	13.71	%
Tier 1 (core) capital to adjusted tangible assets (leverage ratio)	12.77	%	9.20	%	9.90	%	9.44	%	8.68	%

Related Party Transactions

9 Months Ended

Sep. 30, 2022

Related Party Transactions

Related Party Transactions

Note 15—Related Party Transactions

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 9 – Shareholders’ Equity.

The Company subleased certain office space to entities owned by the Company’s controlling shareholders. Amounts received under such subleases totaled $97 for the three months ended September 30, 2021, and $112 and $289 during the nine months ended September 30, 2022 and 2021, respectively. The sublease agreements ended on March 31, 2022.

Subsequent Events

9 Months Ended

Sep. 30, 2022

Subsequent Events

Subsequent Events

Note 17—Subsequent Events

During the second quarter of 2022, the Company outsourced its residential loan origination function to Promontory MortgagePath, which provides community banks with an outsourced residential lending service for mortgage loan production. In November 2022, Promontory MortgagePath advised the Company of its intent to cease conducting business. Promontory MortgagePath and the Company will continue to accept loan applications through November 30, 2022, and will use commercially reasonable efforts to evaluate and originate pending loan applications by February 28, 2023. At that time, the Company will suspend the origination of residential loans pending further evaluation of its alternatives, which may include discontinuing the origination of residential loans. However, the Company may purchase residential loans from the secondary market in the future.

Deposits - Time deposits (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Deposits
Interest-bearing time deposits	$ 757,576	$ 891,820
Brokered time deposits	0	20,109
Time deposits that meet or exceed the FDIC insurance limit of $250	$ 222,630	$ 244,868

Mortgage Servicing Rights, net - Valuation techniques (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Mortgage Servicing Rights
Fair value of mortgage servicing rights	$ 2,265	$ 2,916
Prepayment speed range	10.20%	17.60%
Weighted average life of the mortgage servicing right	77 months	52 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%

Fair Values of Financial Instruments

9 Months Ended

Sep. 30, 2022

Fair Values of Financial Instruments

Fair Values of Financial Instruments

Note 14—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.

Loans Held for Sale

Loans held for sale are carried at the lower of amortized cost or fair value. Fair value is determined 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 management. 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 5—Mortgage Servicing Rights, net, the valuation model utilizes interest rate, prepayment speed and default rate assumptions that are specific to loans serviced by the Company and 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 September 30, 2022 and December 31, 2021:


			Fair Value Measurements at
			September 30, 2022
			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 and Agency securities	$	167,462	$	115,484	$	51,978	$	—
Mortgage-backed securities		37,626		—		37,626		—
Collateralized mortgage obligations		143,346		—		143,346		—
Collateralized debt obligations		153		—		—		153
Equity securities		4,386		4,386		—		—


			Fair Value Measurements at
			December 31, 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 and Agency securities	$	122,168	$	48,827	$	73,341	$	—
Mortgage-backed securities		49,437		—		49,437		—
Collateralized mortgage obligations		136,849		—		136,849		—
Collateralized debt obligations		203		—		—		203
Equity securities		4,976		4,976		—		—

The table below presents a reconciliation for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the nine months ended September 30, 2022 and 2021:


	Fair Value Measurements Using Significant
	Unobservable Inputs (Level 3)
	Collateralized Debt Obligations
	Nine Months Ended September 30,
	2022		2021
Balance of recurring Level 3 assets at beginning of period	$	203	$	187
Total gains or losses (realized/unrealized):
Included in income-realized		—		—
Included in other comprehensive loss		3		7
Principal maturities/settlements		(53)		(3)
Sales		—		—
Transfers in and/or out of Level 3		—		—
Balance of recurring Level 3 assets at end of period	$	153	$	191

Unrealized losses on Level 3 investments for collateralized debt obligations was $5 and $8 at September 30, 2022 and December 31, 2021, respectively. In addition to the amounts included in income as presented in the table above, interest income recorded on collateralized debt obligations was $5 and $4 for the nine months ended September 30, 2022 and 2021, 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 Company 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 sheets at September 30, 2022 and December 31, 2021, the following table provides the level of valuation assumptions used to determine each adjustment and the related carrying value:


	Fair Value Measurements at September 30, 2022
			Quoted Prices in		Significant
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
Commercial real estate loans held for sale	$	1,554	$	—	$	1,554	$	—
Mortgage servicing rights		311		—		—		311


	Fair Value Measurements at December 31, 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	$	86	$	—	$	—	$	86
Commercial real estate loans held for sale		53,628		—		53,628		—
Mortgage servicing rights		2,052		—		—		2,052

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 September 30, 2022 and December 31, 2021:


	Quantitative Information about Level 3 Fair Value Measurements at September 30, 2022
					Range
	Fair Value		Valuation Technique	Unobservable Inputs	(Weighted Average)⁽¹⁾
Mortgage servicing rights	$	311	Discounted cash flow	Discount rate	9.5% - 12.0% (11.8%)
				Prepayment speed	7.5% - 22.5% (19.5%)
				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, 2021
					Range
	Fair Value		Valuation Technique	Unobservable Inputs	(Weighted Average)⁽¹⁾
Impaired loans:
Residential real estate	$	86	Sales comparison approach	Adjustments for differences between the comparable sales	N/A (15%)
Mortgage servicing rights	$	2,052	Discounted cash flow	Discount rate	9.5% - 12.0% (11.0%)
				Prepayment speed	10.5% - 37.1% (19.7%)
				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 September 30, 2022 and December 31, 2021, are as follows:


	Fair Value Measurements at September 30, 2022
	Carrying		Fair
	Amount		Value		Level 1		Level 2		Level 3
Financial Assets
Cash and due from banks	$	352,404	$	352,404	$	352,404	$	—	$	—
Interest-bearing time deposits with other banks		1,183		1,183		1,183		—		—
Loans held for sale ⁽¹⁾		7,279		7,719		—		7,719		—
Loans, net		1,636,266		1,676,322		—		—		1,676,322

Financial Liabilities
Time deposits		757,576		752,286		—		752,286		—
Federal Home Loan Bank borrowings		50,000		48,260		—		48,260		—
Subordinated notes, net		65,290		65,056		—		65,056		—


	Fair Value Measurements at December 31, 2021
	Carrying		Fair
	Amount		Value		Level 1		Level 2		Level 3
Financial Assets
Cash and due from banks	$	411,676	$	411,676	$	411,676	$	—	$	—
Interest-bearing time deposits with other banks		1,183		1,183		1,183		—		—
Loans held for sale		11,359		11,809		—		11,809		—
Loans, net⁽¹⁾		1,956,180		2,025,409		—		—		2,025,409

Financial Liabilities
Time deposits		891,820		894,049		—		894,049		—
Federal Home Loan Bank borrowings		150,000		152,560		—		152,560		—
Subordinated notes, net		65,343		65,073		—		65,073		—

(1)Excludes impaired loans measured at fair value on a nonrecurring basis at September 30, 2022 and December 31, 2021.

- 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 - Actual ratios of Company and Bank (Details) - Advantage Loan Program	Sep. 30, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Risk-weighting 100% Scenario
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Total adjusted capital to risk weighted assets, Actual, Ratio	0.2621	0.2124
Tier 1 (core) capital to risk weighted assets, Actual, Ratio	0.2243	0.1734
Common Tier 1 (CET1), Actual, Ratio	0.2243	0.1734
Tier 1 (core) capital to adjusted tangible assets (leverage ratio)	0.1409	0.1147
Bank \| Risk-weighting 100% Scenario
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Total adjusted capital to risk weighted assets, Actual, Ratio	0.2660	0.2055	0.1574	0.1208	0.1143	0.1006
Tier 1 (core) capital to risk weighted assets, Actual, Ratio	0.2533	0.1928	0.1447	0.1132	0.1066	0.0912
Common Tier 1 (CET1), Actual, Ratio	0.2533	0.1928	0.1447	0.1132	0.1066	0.0912
Tier 1 (core) capital to adjusted tangible assets (leverage ratio)	0.1588	0.1277	0.0920	0.0990	0.0944	0.0868
Bank \| Risk-weighting 50% Scenario
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Total adjusted capital to risk weighted assets, Actual, Ratio		0.2807	0.2156	0.1782	0.1694	0.1476
Tier 1 (core) capital to risk weighted assets, Actual, Ratio		0.2679	0.2027	0.1670	0.1580	0.1371
Common Tier 1 (CET1), Actual, Ratio		0.2679	0.2027	0.1670	0.1580	0.1371
Tier 1 (core) capital to adjusted tangible assets (leverage ratio)		0.1277	0.0920	0.0990	0.0944	0.0868
Company \| Risk-weighting 100% Scenario
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Total adjusted capital to risk weighted assets, Actual, Ratio		0.2124	0.1651	0.1458	0.1482	0.1349
Tier 1 (core) capital to risk weighted assets, Actual, Ratio		0.1734	0.1265	0.1156	0.1177	0.1033
Common Tier 1 (CET1), Actual, Ratio		0.1734	0.1265	0.1156	0.1177	0.1033
Tier 1 (core) capital to adjusted tangible assets (leverage ratio)		0.1147	0.0808	0.1011	0.1042	0.0983
Company \| Risk-weighting 50% Scenario
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Total adjusted capital to risk weighted assets, Actual, Ratio		0.2902	0.2258	0.2149	0.2198	0.2028
Tier 1 (core) capital to risk weighted assets, Actual, Ratio		0.2408	0.1768	0.1704	0.1745	0.1553
Common Tier 1 (CET1), Actual, Ratio		0.2408	0.1768	0.1704	0.1745	0.1553
Tier 1 (core) capital to adjusted tangible assets (leverage ratio)		0.1147	0.0808	0.1011	0.1042	0.0983

Stock-based Compensation

9 Months Ended

Sep. 30, 2022

Stock-based Compensation

Stock-based Compensation

Note 10—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 the board of directors of the Company. The stock-based awards were issued at no less than the market price on the date the awards were 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. Beginning with grants 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. No stock option awards were granted during the nine months ended September 30, 2022 and 2021.

A summary of the Company’s stock option activity as of and for the nine months ended September 30, 2022 is as follows:


				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
	Number	Exercise		Contractual	Intrinsic
	of Shares	Price		Term	Value
				(Years)
Outstanding at January 1, 2022	367,767	$	5.41	8.13	$	525
Granted	—
Exercised	—
Forfeited/expired	(18,222)		9.67
Outstanding at September 30, 2022	349,545	$	5.19	7.43	$	609
Exercisable at September 30, 2022	344,506	$	5.14	7.43	$	609

The Company recorded stock-based compensation expense associated with stock options of $3 and $34 for the three months ended September 30, 2022 and 2021, respectively, and $(8) and $137 for the nine months ended September 30, 2022 and 2021, respectively. At September 30, 2022, there was $3 of total unrecognized compensation cost related to nonvested stock options which is expected to be recognized over a weighted-average period of less than one year.

Restricted Stock Awards

Restricted stock awards are issued to independent directors and certain key employees. The restricted stock awards generally vest ratably over three years (one-third per year) after the date of grant. The value of a restricted stock award is based on the market value of the Company’s common stock at the date of grant reduced by the present value of dividends per share expected to be paid during the period the shares are not vested. Upon a change in control, as defined in the 2017 Plan and the 2020 Plan, the outstanding restricted stock awards will immediately vest.

During the nine months ended September 30, 2022, the board of directors approved the issuance of 231,842 shares of restricted stock, of which 45,000 shares were awarded to independent directors and 186,842 shares were awarded to key employees. During the nine months ended September 30, 2021, the board of directors approved the issuance of 234,996 shares of restricted stock, of which 45,000 shares were awarded to independent directors and 189,996 shares were awarded to key employees.

During the nine months ended September 30, 2022 and 2021, the Company withheld 31,027 shares and 8,536 shares, respectively, 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 $204 and $46, respectively, associated with vesting. These withheld shares are treated the same as repurchased shares for accounting purposes.

A summary of the restricted stock awards activity for the nine months ended September 30, 2022 is as follows:


		Weighted Average
	Number	Grant Date
	of Shares	Fair Value
Nonvested at January 1, 2022	293,637	$	5.81
Granted	231,842		6.57
Vested	(104,739)		6.21
Forfeited	(22,713)		5.70
Nonvested at September 30, 2022	398,027	$	6.16

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 $252 and $162 for the three months ended September 30, 2022 and 2021, respectively, and $648 and $357 for the nine months ended September 30, 2022 and 2021, respectively. At September 30, 2022, there was $2,017 of total unrecognized compensation cost related to the nonvested stock granted which is expected to be recognized over a weighted-average period of 2.17 years. The total fair value of shares vested during the nine months ended September 30, 2022 and 2021 was $644 and $173, respectively.

Loans - Troubled Debt Restructurings (Details) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Dec. 31, 2021 USD ($) loan
Troubled Debt Restructurings
Loans classified as troubled debt restructurings	$ 2,643		$ 2,643		$ 18,416
Allowance for outstanding loan losses classified as troubled debt restructurings	$ 12		$ 12		$ 39
Number of TDRs subsequently defaulted \| loan					5
Number of loans modified during the period, that were considered as TDRs	0	0	0	0
Troubled debt restructuring that defaulted within twelve months of modification	$ 0	$ 0	$ 0	$ 0
Loans modified as TDRs that are in default					$ 15,752
Residential real estate
Troubled Debt Restructurings
Loans secured by residential real estate properties in the process of foreclosure	7,266		7,266		2,780
Mortgage loans held for sale \| Residential real estate
Troubled Debt Restructurings
Loans secured by residential real estate properties in the process of foreclosure	$ 2,755		$ 2,755		$ 2,770

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Assets
Cash and due from banks	$ 352,404	$ 411,676
Interest-bearing time deposits with other banks	1,183	1,183
Investment securities	353,219	313,879
Loans held for sale	8,833	64,987
Loans, net of allowance for loan losses of $45,362 and $56,548	1,636,266	1,956,266
Accrued interest receivable	7,061	7,696
Mortgage servicing rights, net	1,842	2,722
Leasehold improvements and equipment, net	6,585	7,421
Operating lease right-of-use assets	15,467	18,184
Federal Home Loan Bank stock, at cost	20,288	22,950
Cash surrender value of bank-owned life insurance	8,448	33,033
Deferred tax asset, net	23,907	21,426
Other assets	12,401	15,407
Total assets	2,447,904	2,876,830
Liabilities
Noninterest-bearing deposits	70,063	63,760
Interest-bearing deposits	1,880,951	2,197,975
Total deposits	1,951,014	2,261,735
Federal Home Loan Bank borrowings	50,000	150,000
Subordinated notes, net	65,290	65,343
Operating lease liabilities	16,664	19,400
Accrued expenses and other liabilities	35,335	36,725
Total liabilities	2,118,303	2,533,203
Shareholders' Equity
Preferred stock, authorized 10,000,000 shares; no shares issued and outstanding
Common stock, no par value, authorized 500,000,000 shares; issued and outstanding 50,800,012 shares at September 30, 2022 and 50,460,932 shares at December 31, 2021	83,295	82,157
Additional paid-in capital	14,560	14,124
Retained earnings	252,482	248,243
Accumulated other comprehensive loss	(20,736)	(897)
Total shareholders' equity	329,601	343,627
Total liabilities and shareholders' equity	$ 2,447,904	$ 2,876,830

Mortgage Servicing Rights, net

9 Months Ended

Sep. 30, 2022

Mortgage Servicing Rights, net

Mortgage Servicing Rights, net

Note 5—Mortgage Servicing Rights, net

The Company 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 September 30, 2022 and December 31, 2021 are as follows:


	September 30,		December 31,
	2022		2021
Residential real estate mortgage loan portfolios serviced for:
FNMA	$	115,446	$	124,764
FHLB		35,357		40,209
Private investors		44,955		142,810
Total	$	195,758	$	307,783

Custodial escrow balances maintained with these serviced loans were $1,528 and $5,501 at September 30, 2022 and December 31, 2021, respectively. These balances are included in noninterest-bearing deposits in the condensed consolidated balance sheets.

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


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Mortgage servicing rights:
Beginning of period	$	2,542	$	4,200	$	3,332	$	7,853
Additions		—		25		11		124
Amortization		(657)		(550)		(1,458)		(4,302)
End of period		1,885		3,675		1,885		3,675

Valuation allowance at beginning of period		89		968		610		2,165
Additions (recoveries)		(46)		(166)		(567)		(1,363)
Valuation allowance at end of period		43		802		43		802

Mortgage servicing rights, net	$	1,842	$	2,873	$	1,842	$	2,873

Servicing fee loss, net of amortization of servicing rights and changes in the valuation allowance, was $(384) and $(31) for the three months ended September 30, 2022 and 2021, respectively, and $(118) and $(1,369) for the nine months ended September 30, 2022 and 2021, respectively.

The fair value of mortgage servicing rights was $2,265 and $2,916 at September 30, 2022 and December 31, 2021, 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 September 30, 2022 was determined using discount rates ranging from 9.5% to 12.0%, prepayment speeds with a weighted average of 10.2% (depending on the stratification of the specific right), a weighted average life of the mortgage servicing right of 77 months and a weighted average default rate of 0.2%. The fair value at December 31, 2021 was determined using discount rates ranging from 9.5% to 12.0%, prepayment speeds with a weighted average of 17.6% (depending on the stratification of the specific right), a weighted average life of the mortgage servicing right of 52 months and a weighted average default rate of 0.2%.

Impairment is determined by stratifying the mortgage servicing rights into groupings based on predominant risk characteristics, such as interest rate, loan type and investor type. At September 30, 2022 and December 31, 2021, the carrying amount of certain individual groupings exceeded their fair values, resulting in write-downs to fair value. Refer to Note 14—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 https://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 https://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 https://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 https://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 https://asc.fasb.org/extlink&oid=128311188&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 https://asc.fasb.org/extlink&oid=128311188&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 https://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 https://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 https://asc.fasb.org/extlink&oid=128311188&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 https://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
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=109249958&loc=SL34722452-111729

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 50
-Section 50
-Paragraph 3
-Subparagraph (a)(4)(ii)
-URI https://asc.fasb.org/extlink&oid=128311188&loc=d3e122625-111746

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 20
-Section 50
-Paragraph 4
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=121570589&loc=d3e107314-111719

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 50
-Section 50
-Paragraph 3
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=128311188&loc=d3e122625-111746

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 20
-Section 50
-Paragraph 4
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121570589&loc=d3e107314-111719

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-URI https://asc.fasb.org/topic&trid=2197590

Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 50
-Section 50
-Paragraph 4
-Subparagraph (a)(7)
-URI https://asc.fasb.org/extlink&oid=128311188&loc=d3e122739-111746

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 20
-Section 50
-Paragraph 4
-Subparagraph (a)(5)(ii)
-URI https://asc.fasb.org/extlink&oid=121570589&loc=d3e107314-111719

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 50
-Section 50
-Paragraph 2
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=128311188&loc=d3e122596-111746

Reference 20: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 50
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=128311188&loc=d3e122596-111746

+ Details

FHLB Borrowings - FHLB Overdraft Line of Credit and Letters of Credit (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021	Jun. 30, 2022	Sep. 30, 2021
FHLB Overdraft Line of Credit and Letters of Credit
FHLB line of credit agreement maximum borrowing limit	$ 20,000
FHLB overdraft line of credit outstanding borrowings	$ 0
FHLB overdraft line of credit (as percent)	3.45%	0.43%
FHLB letter of credit	$ 2,000	$ 11,500
Borrowings outstanding on FHLB standby letters of credit	$ 0			$ 0
FHLB, overdraft line of credit term	1 year
Standby letter of credit 1 expiring July, 2022
FHLB Overdraft Line of Credit and Letters of Credit
FHLB overdraft line of credit outstanding borrowings	$ 0			$ 0
FHLB letter of credit		$ 7,500
FHLB letter of credit term		16 months
Standby letters of credit expiring July 2024
FHLB Overdraft Line of Credit and Letters of Credit
FHLB letter of credit		$ 4,000	$ 2,000
FHLB letter of credit term		36 months

Employee Benefit Plans

9 Months Ended

Sep. 30, 2022

Employee Benefit Plans

Employee Benefit Plans

Note 13—Employee Benefit Plans

In May 2022, the Company surrendered a large split-dollar life program and a few smaller bank-owned life insurance (“BOLI”) policies related to former executives and a controlling shareholder with a cash surrender value of $24,877. The $13,142 increase in value over the duration of the ownership of the policies has moved from non-taxable income to taxable income, resulting in a $3,614 million increase in income tax expense for the nine months ended September 30, 2022. Additional taxes of $1,314 relating to this surrender are included in other expense within non-interest expense during the nine months ended September 30, 2022.

In connection with the surrender, the Company also cancelled certain deferred compensation and the split dollar life insurance agreement with its controlling shareholder which resulted in the reversal of the related liabilities of $4,514 which are included as a reduction in salaries and employee benefits expense in the condensed consolidated statement of income for the nine months ended September 30, 2022.

- Definition

The entire disclosure for retirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 55
-Paragraph 17
-URI https://asc.fasb.org/extlink&oid=123450688&loc=d3e4179-114921

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section S99
-Paragraph 2
-URI https://asc.fasb.org/extlink&oid=21916913&loc=d3e273930-122802

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (d)(i)
-URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (o)
-URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (p)
-URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 70
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=49170846&loc=d3e28014-114942

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-URI https://asc.fasb.org/topic&trid=2235017

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 60
-Section 50
-Paragraph 3
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=6414203&loc=d3e39689-114964

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (d)(iv)(03)
-URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (q)
-URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (r)(1)
-URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (d)(iii)
-URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (l)
-URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (r)(2)
-URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920

+ Details

Employee Benefit Plans (Details) - USD ($) $ in Thousands	1 Months Ended	9 Months Ended
Employee Benefit Plans (Details) - USD ($) $ in Thousands	May 31, 2022	Sep. 30, 2022
Employee Benefit Plans
Reversal of liabilities and expenses due to bank-owned life insurance surrendered		$ 4,514
Income tax expense
Employee Benefit Plans
Tax expense due to surrender of bank-owned life insurance policies		3,614
Other expense
Employee Benefit Plans
Tax expense due to surrender of bank-owned life insurance policies		$ 1,314
BOLI cash surrender value
Employee Benefit Plans
Cash surrender value	$ 24,877
Increase in value of bank-owned life insurance surrendered	$ 13,142

Regulatory Capital Requirements - Actual and minimum required capital amounts and ratios and Dividend Restrictions (Details) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2020	Dec. 31, 2019	Jan. 01, 2019	Dec. 31, 2018	Dec. 31, 2017	Jan. 01, 2016
Regulatory Capital Requirements
Capital conservation buffer (as a percent)	2.50%				2.50%	1.875%	1.25%	0.625%
Capital conservation buffer increase (as a percent)	0.625%
Risk Weighted Percentage	100.00%	100.00%
Required Common Equity capital adequacy with capital conservation buffer	0.070
Required Tier 1 capital adequacy with capital conservation buffer	0.085
Required Total capital adequacy with capital conservation buffer	0.105
Dividend Restrictions
Minimum percentage of assets be maintained as per Qualified Thrift Lender ("QTL") test	65.00%
Risk-weighting 100% Scenario \| Advantage Loan Program
Regulatory Capital Requirements
Risk Weighted Percentage	100.00%
Total adjusted capital to risk-weighted assets, Amount
Actual	$ 409,170	$ 421,732
For Capital Adequacy Purposes	$ 124,357	$ 158,851
Total adjusted capital to risk-weighted assets, Ratio
Actual	0.2621	0.2124
For Capital Adequacy Purposes	0.0800	0.0800
Tier 1 (core) capital to risk-weighted assets, Amount
Actual	$ 350,162	$ 344,247
For Capital Adequacy Purposes	$ 93,268	$ 119,138
Tier 1 (core) capital to risk-weighted assets, Ratio
Actual	0.2243	0.1734
For Capital Adequacy Purposes	0.0600	0.0600
Common Equity Tier 1 (CET1), Amount
Actual	$ 350,162	$ 344,247
For Capital Adequacy Purposes	$ 69,951	$ 89,354
Common Equity Tier 1 (CET1), Ratio
Actual	0.2243	0.1734
For Capital Adequacy Purposes	0.0450	0.0450
Tier 1 (core) capital to adjusted tangible assets, Amount
Actual	$ 350,162	$ 344,247
For Capital Adequacy Purposes	$ 99,151	$ 120,039
Tier 1 (core) capital to adjusted tangible assets, Leverage Ratio
Actual	0.1409	0.1147
For Capital Adequacy Purposes	0.0400	0.0400
Risk-weighting 50% Scenario \| Advantage Loan Program
Regulatory Capital Requirements
Risk Weighted Percentage		50.00%
Bank \| Risk-weighting 100% Scenario \| Advantage Loan Program
Total adjusted capital to risk-weighted assets, Amount
Actual	$ 413,262	$ 407,699
For Capital Adequacy Purposes	124,275	158,707
To be Well Capitalized	$ 155,344	$ 198,384
Total adjusted capital to risk-weighted assets, Ratio
Actual	0.2660	0.2055	0.1574	0.1208		0.1143	0.1006
For Capital Adequacy Purposes	0.0800	0.0800
To be Well Capitalized	0.1000	0.1000
Tier 1 (core) capital to risk-weighted assets, Amount
Actual	$ 393,524	$ 382,509
For Capital Adequacy Purposes	93,206	119,030
To be Well Capitalized	$ 124,275	$ 158,707
Tier 1 (core) capital to risk-weighted assets, Ratio
Actual	0.2533	0.1928	0.1447	0.1132		0.1066	0.0912
For Capital Adequacy Purposes	0.0600	0.0600
To be Well Capitalized	0.0800	0.0800
Common Equity Tier 1 (CET1), Amount
Actual	$ 393,524	$ 382,509
For Capital Adequacy Purposes	69,905	89,273
To be Well Capitalized	$ 100,974	$ 128,950
Common Equity Tier 1 (CET1), Ratio
Actual	0.2533	0.1928	0.1447	0.1132		0.1066	0.0912
For Capital Adequacy Purposes	0.0450	0.0450
To be Well Capitalized	0.0650	0.0650
Tier 1 (core) capital to adjusted tangible assets, Amount
Actual	$ 393,524	$ 382,509
For Capital Adequacy Purposes	99,103	119,859
To be Well Capitalized	$ 123,879	$ 149,824
Tier 1 (core) capital to adjusted tangible assets, Leverage Ratio
Actual	0.1588	0.1277	0.0920	0.0990		0.0944	0.0868
For Capital Adequacy Purposes	0.0400	0.0400
To be Well Capitalized	0.0500	0.0500
Bank \| Risk-weighting 50% Scenario \| Advantage Loan Program
Total adjusted capital to risk-weighted assets, Ratio
Actual		0.2807	0.2156	0.1782		0.1694	0.1476
Tier 1 (core) capital to risk-weighted assets, Ratio
Actual		0.2679	0.2027	0.1670		0.1580	0.1371
Common Equity Tier 1 (CET1), Ratio
Actual		0.2679	0.2027	0.1670		0.1580	0.1371
Tier 1 (core) capital to adjusted tangible assets, Leverage Ratio
Actual		0.1277	0.0920	0.0990		0.0944	0.0868

FHLB Borrowings - FHLB Advances (Details) - USD ($) $ in Thousands	1 Months Ended		9 Months Ended
	Sep. 30, 2022	May 31, 2022	Sep. 30, 2022	Dec. 31, 2021
Federal Home Loan Bank Borrowings
Long-term fixed-rate FHLBNY advances	$ 50,000		$ 50,000	$ 150,000
Additional borrowing capacity	354,479		354,479
Callable Option May, 2022
Federal Home Loan Bank Borrowings
Repayment of advance		$ 100,000
Callable Option March, 2023
Federal Home Loan Bank Borrowings
Proceeds from FHLB advances			$ 35,000
Repayment of advance	$ 35,000

Mortgage Servicing Rights net - Activity and Related Valuation Allowance (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Mortgage servicing rights activity
Mortgage servicing rights Beginning of period	$ 2,542	$ 4,200	$ 3,332	$ 7,853
Additions		25	11	124
Amortization	(657)	(550)	(1,458)	(4,302)
Mortgage servicing rights End of period	1,885	3,675	1,885	3,675
Valuation allowance at beginning of period	89	968	610	2,165
Additions (recoveries)	(46)	(166)	(567)	(1,363)
Valuation allowance at end of period	43	802	43	802
Mortgage servicing rights, net	1,842	2,873	1,842	2,873	$ 2,722
Servicing fee loss, net of amortization of servicing rights and changes in valuation allowance	$ (384)	$ (31)	$ (118)	$ (1,369)

Investment Securities (Tables)

9 Months Ended

Sep. 30, 2022

Investment Securities

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


	September 30, 2022
	Amortized		Gross Unrealized				Fair
	Cost		Gain		Loss		Value
Available for sale:
U.S. Treasury and Agency securities	$	175,433	$	27	$	(7,998)	$	167,462
Mortgage-backed securities		43,183		—		(5,557)		37,626
Collateralized mortgage obligations		158,414		60		(15,128)		143,346
Collateralized debt obligations		158		—		(5)		153
Total	$	377,188	$	87	$	(28,688)	$	348,587


	December 31, 2021
	Amortized		Gross Unrealized				Fair
	Cost		Gain		Loss		Value
Available for sale:
U.S. Treasury and Agency securities	$	122,291	$	106	$	(229)	$	122,168
Mortgage-backed securities		49,739		84		(386)		49,437
Collateralized mortgage obligations		137,662		530		(1,343)		136,849
Collateralized debt obligations		211		—		(8)		203
Total	$	309,903	$	720	$	(1,966)	$	308,657

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


	Amortized		Fair
	Cost		Value
U.S. Treasury and Agency securities
Due less than one year	$	24,277	$	24,125
Due after one year through five years		151,156		143,337
Mortgage-backed securities		43,183		37,626
Collateralized mortgage obligations		158,414		143,346
Collateralized debt obligations		158		153
Total	$	377,188	$	348,587

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


	September 30, 2022
	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
U.S Treasury and Agency securities	$	122,428	$	(5,191)	$	22,008	$	(2,807)	$	144,436	$	(7,998)
Mortgage-backed securities		34,553		(4,722)		3,073		(835)		37,626		(5,557)
Collateralized mortgage obligations		107,001		(14,440)		15,398		(688)		122,399		(15,128)
Collateralized debt obligations		—		—		153		(5)		153		(5)
Total	$	263,982	$	(24,353)	$	40,632	$	(4,335)	$	304,614	$	(28,688)


	December 31, 2021
	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
U.S Treasury and Agency securities	$	49,865	$	(229)	$	—	$	—	$	49,865	$	(229)
Mortgage-backed securities		7,878		(36)		8,729		(350)		16,607		(386)
Collateralized mortgage obligations		86,354		(1,342)		2,413		(1)		88,767		(1,343)
Collateralized debt obligations		—		—		203		(8)		203		(8)
Total	$	144,097	$	(1,607)	$	11,345	$	(359)	$	155,442	$	(1,966)

Schedule of unrealized and realized gains and losses recognized in the condensed consolidated statements of income


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Net losses recorded during the period on equity securities	$	(184)	$	(24)	$	(590)	$	(99)
Less: net gains (losses) recorded during the period on equity securities sold during the period		—		—		—		—
Unrealized losses recorded during the period on equity securities held at the reporting date	$	(184)	$	(24)	$	(590)	$	(99)

Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies

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


	September 30,		December 31,
	2022		2021
Commitments to make loans	$	2,673	$	23,610
Unused lines of credit		20,610		45,805
Standby letters of credit		24		24

Schedule of activity in the mortgage repurchase liability


	Nine Months Ended
	September 30,
	2022		2021
Balance, beginning of period	$	2,954	$	9,699
Net recovery		(670)		(963)
Loss on loan repurchases		(1,506)		(5,511)
Balance, end of the period	$	778	$	3,225

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2022	Nov. 04, 2022
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2022
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		50,800,012
Entity Central Index Key	0001680379
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Amendment Flag	false

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Interest income
Interest and fees on loans	$ 20,975	$ 27,348	$ 65,589	$ 88,716
Interest and dividends on investment securities and restricted stock	1,945	375	4,133	1,150
Other interest	1,925	253	2,931	743
Total interest income	24,845	27,976	72,653	90,609
Interest expense
Interest on deposits	3,724	3,541	8,070	15,479
Interest on Federal Home Loan Bank borrowings	253	826	919	2,511
Interest on subordinated notes	1,329	972	3,383	3,157
Total interest expense	5,306	5,339	12,372	21,147
Net interest income	19,539	22,637	60,281	69,462
Provision (recovery) for loan losses	(4,357)	397	(9,755)	(2,146)
Net interest income after provision (recovery) for loan losses	23,896	22,240	70,036	71,608
Non-interest income
Service charges and fees	$ 124	$ 120	$ 351	$ 423
Revenue, Product and Service [Extensible List]	sbt:ServiceChargesAndFeesMember	sbt:ServiceChargesAndFeesMember	sbt:ServiceChargesAndFeesMember	sbt:ServiceChargesAndFeesMember
Gain on sale of mortgage loans held for sale		$ 151	$ 200	$ 619
Unrealized losses on equity securities	$ (184)	(24)	(590)	(99)
Gain on sale of branch office		1,417		1,417
Net servicing loss	(384)	(31)	(118)	(1,369)
Income on cash surrender value of bank-owned life insurance	87	325	670	960
Other		100	586	291
Total non-interest income	(357)	2,058	1,099	2,242
Non-interest expense
Salaries and employee benefits	9,336	2,774	24,522	19,300
Occupancy and equipment	2,112	2,395	6,441	6,840
Professional fees	5,756	4,024	17,979	18,500
FDIC assessments	316	417	1,031	1,636
Data processing	725	403	2,292	1,189
Net recovery of mortgage repurchase liability	(145)	(298)	(670)	(963)
Other	3,521	1,361	8,943	5,852
Total non-interest expense	21,621	11,076	60,538	52,354
Income before income taxes	1,918	13,222	10,597	21,496
Income tax expense	742	3,665	6,358	6,162
Net income	$ 1,176	$ 9,557	$ 4,239	$ 15,334
Income (loss) per share, basic	$ 0.02	$ 0.19	$ 0.08	$ 0.31
Income (loss) per share, diluted	$ 0.02	$ 0.19	$ 0.08	$ 0.31
Weighted average common shares outstanding:
Basic	50,400,412	50,167,295	50,326,951	50,010,341
Diluted	50,572,931	50,262,686	50,523,076	50,079,931

Nature of Operations and Basis of Presentation (Details) $ in Thousands	1 Months Ended	3 Months Ended	9 Months Ended
	Jul. 31, 2021 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 item segment	Sep. 30, 2021 USD ($)
Nature of Operations and Basis of Presentation
Number of branches \| item			28
Number of reportable segments \| segment			1
Net cash paid on sale of branch office				$ 63,545
Gain on sale of branch office		$ 1,417		1,417
Bellevue, Washington branch office
Nature of Operations and Basis of Presentation
Transfer amount to customer deposits	$ 65,437
Net cash paid on sale of branch office	$ 63,545
Gain on sale of branch office		$ 1,417		$ 1,417
San Francisco and Los Angeles, California
Nature of Operations and Basis of Presentation
Number of branches \| item			26

Nature of Operations and Basis of Presentation

9 Months Ended

Sep. 30, 2022

Nature of Operations and Basis of Presentation

Nature of Operations and Basis of Presentation

Note 1—Nature of Operations and Basis of Presentation

Nature of Operations

Sterling Bancorp, Inc. (unless stated otherwise or the context otherwise requires, together with its subsidiaries, 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 28 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.

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.

In July 2021, the Company completed the sale of the Bellevue, Washington branch office to First Federal Savings & Loan Association of Port Angeles (“First Federal”), a Washington state chartered bank. The sale included the transfer of customer deposit accounts of $65,437 located at the branch, as well as the transfer of all branch premises and equipment. The transaction resulted in a net cash payment to First Federal of $63,545. The Company recorded a gain on the sale of $1,417 during the three and nine months ended September 30, 2021.

Basis of Presentation

The condensed consolidated balance sheet as of September 30, 2022, and the condensed consolidated statements of income, comprehensive income (loss), changes in shareholders’ equity and cash flows for the three and nine months ended September 30, 2022 and 2021 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 nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ended December 31, 2022 or for any future annual or interim period. The condensed consolidated balance sheet at December 31, 2021 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, 2021, as filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 31, 2022 (the “2021 Form 10-K”).

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash Flows From Operating Activities
Net income	$ 4,239	$ 15,334
Adjustments to reconcile net income to net cash provided by operating activities:
Provision (recovery) for loan losses	(9,755)	(2,146)
Deferred income taxes	5,034	1,009
Gain on sale of branch office		(1,417)
Unrealized losses on equity securities	590	99
Net amortization (acrretion) on investment securities	(342)	1,229
Depreciation and amortization on leasehold improvements and equipment	1,162	1,395
Net principal payments (originations) of loans held for sale	2,284	(9,385)
Proceeds from sale of mortgage loans held for sale	1,831	19,179
Gain on sale of loans held for sale	(200)	(619)
Net recovery of mortgage repurchase liability	(670)	(963)
Increase in cash surrender value of bank-owned life insurance, net of premiums	(292)	(404)
Valuation allowance adjustments and amortization of mortgage servicing rights	891	2,939
Stock-based compensation	640	494
Other	82	475
Change in operating assets and liabilities:
Accrued interest receivable	635	2,635
Other assets	2,214	1,588
Accrued expenses and other liabilities	(812)	4,549
Net cash provided by operating activities	7,531	35,991
Cash Flows From Investing Activities
Maturities of interest-bearing time deposits with other banks		6,216
Maturities and principal receipts of investment securities	80,551	121,958
Purchases of investment securities	(147,493)	(23,237)
Proceeds received from redemption of Federal Home Loan Bank stock	2,662
Net decrease in loans	380,865	441,787
Purchases of portfolio loans	(67,127)	(179,341)
Principal payments received on commercial real estate loans held for sale	2,529
Proceeds from the sale of commercial real estate loans originated for investment	67,584
Proceeds received from settlement of bank-owned life insurance policies	24,877
Cash paid on sale of branch office		(63,545)
Purchases of leasehold improvements and equipment	(326)	(2,321)
Net cash provided by investing activities	344,122	301,517
Cash Flows From Financing Activities
Net decrease in deposits	(310,721)	(716,897)
Proceeds from FHLB advances	35,000
Repayment of FHLB advances	(135,000)	(11,000)
Proceeds from issuance of shares of common stock		1,350
Cash paid for surrender of vested shares to satisfy employee tax liability	(204)	(46)
Net cash used in financing activities	(410,925)	(726,593)
Net change in cash and due from banks	(59,272)	(389,085)
Cash and due from banks at beginning of period	411,676	998,497
Cash and due from banks at end of period	352,404	609,412
Cash paid for:
Interest	11,872	38,156
Income taxes	1,779	11
Noncash investing and financing activities:
Right-of-use assets obtained in exchange for new operating lease liabilities		$ 3,186
Shares of common stock issued in satisfaction of Company's matching contribution in defined contribution retirement plan	$ 1,138

Loans - Activity in the Allowance For Loan Losses by Portfolio Segment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Allowance for loan losses
Beginning balance	$ 51,766	$ 70,669	$ 56,548	$ 72,387
Provision (recovery) for loan losses	(4,357)	397	(9,755)	(2,146)
Charge offs	(4,064)	(1,965)	(4,261)	(1,965)
Recoveries	2,017	1,137	2,830	1,962
Total ending balance	45,362	70,238	45,362	70,238
Residential real estate
Allowance for loan losses
Beginning balance	29,982	33,064	32,202	32,366
Provision (recovery) for loan losses	(1,841)	109	(4,594)	16
Charge offs			(197)
Recoveries	46	530	776	1,321
Total ending balance	28,187	33,703	28,187	33,703
Commercial real estate
Allowance for loan losses
Beginning balance	15,035	22,491	12,608	21,942
Provision (recovery) for loan losses	(209)	1,486	2,138	2,004
Charge offs	(4,064)		(4,064)
Recoveries	5	605	85	636
Total ending balance	10,767	24,582	10,767	24,582
Construction
Allowance for loan losses
Beginning balance	6,708	15,056	11,730	17,988
Provision (recovery) for loan losses	(2,304)	(1,194)	(7,329)	(4,129)
Charge offs		(1,965)		(1,965)
Recoveries	1,966	2	1,969	5
Total ending balance	6,370	11,899	6,370	11,899
Commercial lines of credit
Allowance for loan losses
Beginning balance	36	58	8	91
Provision (recovery) for loan losses	2	(4)	30	(37)
Total ending balance	38	$ 54	$ 38	$ 54
Other consumer
Allowance for loan losses
Beginning balance	5
Provision (recovery) for loan losses	$ (5)

Shareholders' Equity

9 Months Ended

Sep. 30, 2022

Shareholders' Equity.

Shareholders' Equity

Note 9 – Shareholders’ Equity

In April 2022, the Company issued and contributed 160,978 shares of common stock to fund the matching contribution made under the Company’s defined contribution retirement plan. The contribution amount of $1,138 was valued using the closing market price of the stock on the date contributed or $7.07 per share.

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.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-URI https://asc.fasb.org/topic&trid=2208762

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI https://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 16
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496180-112644

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(e)(1))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 40
-Section 50
-Paragraph 6
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126731327&loc=SL126733271-114008

+ Details

Summary of Significant Accounting Policies - Employee Retention Credits under CARES Act (Details) $ in Thousands	3 Months Ended			9 Months Ended	12 Months Ended
	Sep. 30, 2021 USD ($)	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($)
Summary of Significant Accounting Policies
CARES Act ERC tax credit benefit recorded	$ 6,529			$ 6,529
CARES Act ERC tax credit receivable	$ 6,529			$ 6,529
CARES Act ERC tax refunds or credits received					$ 886
CARES Act ERC tax remaining receivable					$ 5,643
Minimum
Summary of Significant Accounting Policies
Decrease in gross receipts (percentage)	0.20	0.20	0.20

Loans

9 Months Ended

Sep. 30, 2022

Loans

Loans

Note 4—Loans

Loans Held for Sale

The major categories of loans held for sale were as follows:


	September 30,		December 31,
	2022		2021
Residential real estate	$	7,279	$	11,359
Commercial real estate		1,554		53,628
Total loans held for sale	$	8,833	$	64,987

At September 30, 2022, loans held for sale includes nonaccrual residential real estate loans of $3,657. Also, a commercial real estate loan with a recorded investment of $1,554 included as held for sale has been classified in the Special Mention category. At December 31, 2021, loans held for sale includes nonaccrual loans of $18,026, consisting of residential real estate loans of $8,671 and commercial real estate loans of $9,355, of which one commercial real estate loan of $2,059 was considered a troubled debt restructuring.

In February 2022, the Company sold substantially all of its commercial real estate loans held for sale, which loans had a carrying value of $49,455 on the date of sale, to a third party for cash proceeds of $49,610.

Loans Held for Investment and Allowance for Loan Losses

The major categories of loans held for investment and the allowance for loan losses were as follows:


	September 30,		December 31,
	2022		2021
Residential real estate	$	1,430,472	$	1,704,231
Commercial real estate		199,446		201,240
Construction		50,320		106,759
Commercial lines of credit		1,389		363
Other consumer		1		221
Total loans		1,681,628		2,012,814
Less: allowance for loan losses		(45,362)		(56,548)
Loans, net	$	1,636,266	$	1,956,266

Loans totaling $446,153 and $557,410 were pledged as collateral on FHLB borrowings at September 30, 2022 and December 31, 2021, respectively.

The following tables present the activity in the allowance for loan losses by portfolio segment for the three and nine months ended September 30, 2022 and 2021:


							Commercial
	Residential		Commercial				Lines of		Other
Three Months Ended September 30, 2022	Real Estate		Real Estate		Construction		Credit		Consumer		Total
Allowance for loan losses:
Beginning balance	$	29,982	$	15,035	$	6,708	$	36	$	5	$	51,766
Provision (recovery) for loan losses		(1,841)		(209)		(2,304)		2		(5)		(4,357)
Charge offs		—		(4,064)		—		—		—		(4,064)
Recoveries		46		5		1,966		—		—		2,017
Total ending balance	$	28,187	$	10,767	$	6,370	$	38	$	—	$	45,362


							Commercial
	Residential		Commercial				Lines of		Other
Nine Months Ended September 30, 2022	Real Estate		Real Estate		Construction		Credit		Consumer		Total
Allowance for loan losses:
Beginning balance	$	32,202	$	12,608	$	11,730	$	8	$	—	$	56,548
Provision (recovery) for loan losses		(4,594)		2,138		(7,329)		30		—		(9,755)
Charge offs		(197)		(4,064)		—		—		—		(4,261)
Recoveries		776		85		1,969		—		—		2,830
Total ending balance	$	28,187	$	10,767	$	6,370	$	38	$	—	$	45,362


							Commercial
	Residential		Commercial				Lines of		Other
Three Months Ended September 30, 2021	Real Estate		Real Estate		Construction		Credit		Consumer		Total
Allowance for loan losses:
Beginning balance	$	33,064	$	22,491	$	15,056	$	58	$	—	$	70,669
Provision (recovery) for loan losses		109		1,486		(1,194)		(4)		—		397
Charge offs		—		—		(1,965)		—		—		(1,965)
Recoveries		530		605		2		—		—		1,137
Total ending balance	$	33,703	$	24,582	$	11,899	$	54	$	—	$	70,238


							Commercial
	Residential		Commercial				Lines of		Other
Nine Months Ended September 30, 2021	Real Estate		Real Estate		Construction		Credit		Consumer		Total
Allowance for loan losses:
Beginning balance	$	32,366	$	21,942	$	17,988	$	91	$	—	$	72,387
Provision (recovery) for loan losses		16		2,004		(4,129)		(37)		—		(2,146)
Charge offs		—		—		(1,965)		—		—		(1,965)
Recoveries		1,321		636		5		—		—		1,962
Total ending balance	$	33,703	$	24,582	$	11,899	$	54	$	—	$	70,238


							Commercial
	Residential		Commercial				Lines of		Other
September 30, 2022	Real Estate		Real Estate		Construction		Credit		Consumer		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	12	$	—	$	—	$	—	$	—	$	12
Collectively evaluated for impairment		28,175		10,767		6,370		38		—		45,350
Total ending allowance balance	$	28,187	$	10,767	$	6,370	$	38	$	—	$	45,362
Loans:
Loans individually evaluated for impairment	$	48	$	—	$	2,485	$	110	$	—	$	2,643
Loans collectively evaluated for impairment		1,430,424		199,446		47,835		1,279		1		1,678,985
Total ending loans balance	$	1,430,472	$	199,446	$	50,320	$	1,389	$	1	$	1,681,628


							Commercial
	Residential		Commercial				Lines of		Other
December 31, 2021	Real Estate		Real Estate		Construction		Credit		Consumer		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	159	$	—	$	—	$	—	$	—	$	159
Collectively evaluated for impairment		32,043		12,608		11,730		8		—		56,389
Total ending allowance balance	$	32,202	$	12,608	$	11,730	$	8	$	—	$	56,548
Loans:
Loans individually evaluated for impairment	$	350	$	4,441	$	14,984	$	116	$	—	$	19,891
Loans collectively evaluated for impairment		1,703,881		196,799		91,775		247		221		1,992,923
Total ending loans balance	$	1,704,231	$	201,240	$	106,759	$	363	$	221	$	2,012,814

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


	At September 30, 2022						At December 31, 2021
	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	$	—	$	—	$	—	$	91	$	65	$	—
Commercial real estate:
Retail		229		—		—		—		—		—
Hotels/Single-room occupancy hotels		—		—		—		4,459		4,441		—
Construction		2,485		2,485		—		15,004		14,984		—
Commercial lines of credit:
Private banking		110		110		—		116		116		—
Subtotal		2,824		2,595		—		19,670		19,606		—
With an allowance for loan losses recorded:
Residential real estate:
First mortgage		82		48		12		273		285		159
Total	$	2,906	$	2,643	$	12	$	19,943	$	19,891	$	159


	Three Months Ended at September 30,
	2022						2021
	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	$	—	$	—	$	—	$	82	$	—	$	—
Commercial real estate:
Retail		—		—		—		7		—		—
Hotels/Single-room occupancy hotels		—		—		—		10,862		—		—
Office		—		—		—		2,769		—		—
Construction		5,375		40		27		18,820		40		27
Commercial lines of credit:
Private banking		111		2		1		119		2		1
Subtotal		5,486		42		28		32,659		42		28
With an allowance for loan losses recorded:
Residential real estate:
First mortgage		48		2		2		279		1		1
Construction		—		—		—		10,387		56		38
Subtotal		48		2		2		10,666		57		39
Total	$	5,534	$	44	$	30	$	43,325	$	99	$	67


	Nine Months Ended at September 30,
	2022						2021
	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	$	—	$	—
Commercial real estate:
Retail		—		—		—		765		—		—
Hotels/Single-room occupancy hotels		—		—		—		17,948		—		—
Office		—		—		—		2,768		—		—
Other		—		—		—		91		—		—
Construction		6,885		118		105		27,387		192		179
Commercial lines of credit:
Private banking		113		5		4		1,264		7		7
Subtotal		6,998		123		109		50,311		199		186
With an allowance for loan losses recorded:
Residential real estate:
First mortgage		198		3		3		280		3		3
Construction		—		—		—		9,751		181		163
Subtotal		198		3		3		10,031		184		166
Total	$	7,196	$	126	$	112	$	60,342	$	383	$	352

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.


	September 30, 2022				December 31, 2021
			Loans Past				Loans Past
			Due Over				Due Over
			90 Days Still				90 Days Still
	Nonaccrual		Accruing		Nonaccrual		Accruing
Residential real estate:
Residential first mortgage	$	35,654	$	36	$	45,439	$	39
Residential second mortgage		189		—		236		—
Commercial real estate:
Hotels/Single-room occupancy hotels		—		—		4,441		—
Construction		—		—		12,499		—
Total	$	35,843	$	36	$	62,615	$	39

The following tables present the aging of the recorded investment in past due loans as of September 30, 2022 and December 31, 2021 by class of loans:


					Greater
	30 - 59		60 - 89		than
	Days		Days		89 Days		Total		Loans Not
September 30, 2022	Past Due		Past Due		Past Due		Past Due		Past Due		Total
Residential real estate:
Residential first mortgage	$	20,839	$	3,284	$	35,690	$	59,813	$	1,360,315	$	1,420,128
Residential second mortgage		—		—		189		189		10,155		10,344
Commercial real estate:
Retail		—		—		—		—		26,026		26,026
Multifamily		—		—		—		—		81,723		81,723
Office		—		—		—		—		18,216		18,216
Hotels/ Single-room occupancy hotels		—		—		—		—		5,240		5,240
Industrial		—		—		—		—		30,372		30,372
Other		—		—		—		—		37,869		37,869
Construction		—		—		—		—		50,320		50,320
Commercial lines of credit:
Private banking		—		—		—		—		110		110
C&I lending		—		—		—		—		1,279		1,279
Other consumer		—		—		—		—		1		1
Total	$	20,839	$	3,284	$	35,879	$	60,002	$	1,621,626	$	1,681,628


					Greater
	30 - 59		60 - 89		than
	Days		Days		89 Days		Total		Loans Not
December 31, 2021	Past Due		Past Due		Past Due		Past Due		Past Due		Total
Residential real estate:
Residential first mortgage	$	24,044	$	3,425	$	45,478	$	72,947	$	1,617,509	$	1,690,456
Residential second mortgage		107		—		236		343		13,432		13,775
Commercial real estate:
Retail		—		—		—		—		19,574		19,574
Multifamily		—		—		—		—		96,960		96,960
Office		—		—		—		—		12,382		12,382
Hotels/Single-room occupancy hotels		—		—		4,441		4,441		9,780		14,221
Industrial		—		—		—		—		7,320		7,320
Other		—		—		—		—		50,783		50,783
Construction		10,500		—		12,499		22,999		83,760		106,759
Commercial lines of credit:
Private banking		—		—		—		—		116		116
C&I lending		—		—		—		—		247		247
Other consumer		—		—		—		—		221		221
Total	$	34,651	$	3,425	$	62,654	$	100,730	$	1,912,084	$	2,012,814

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

As of September 30, 2022 and December 31, 2021, the Company has a recorded investment in troubled debt restructurings (“TDR”) of $2,643 and $18,416, respectively. The Company has allocated a specific allowance for loan losses for these loans of $12 as of September 30, 2022 and has allocated $39 of specific allowance for loan loss for these loans as of December 31, 2021. There are no commitments to lend additional amounts.

There were no loans modified as TDRs during the three or nine months ended September 30, 2022 or 2021.

There were no TDRs for which there was a payment default within twelve months following the modification during the three or nine months ended September 30, 2022 or 2021. At September 30, 2022, there were no loans in default. At December 31, 2021, five loans totaling $15,752 were in default.

The terms of certain other loans have been modified during the three and nine months ended September 30, 2022 that did not meet the definition of a TDR. These other loans that were modified were not considered significant.

Foreclosure Proceedings

At September 30, 2022 and December 31, 2021, the recorded investment of residential mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process totaled $7,266 and $2,780, respectively. Of the loans in formal foreclosure proceedings, $2,755 and $2,770 were included in loans held for sale in the condensed consolidated balance sheets at September 30, 2022 and December 31, 2021, respectively, and were carried at the lower of amortized cost or fair value. The balance of loans is classified as held for investment and receives an allocation of the allowance for loan losses consistent with a substandard loan loss allocation rate as these loans were classified as substandard at September 30, 2022 and December 31, 2021, 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 September 30, 2022 and December 31, 2021, the risk rating of loans by class of loans was as follows:


			Special
September 30, 2022	Pass		Mention		Substandard		Doubtful		Total
Residential real estate:
Residential first mortgage	$	1,384,438	$	—	$	35,690	$	—	$	1,420,128
Residential second mortgage		10,155		—		189		—		10,344
Commercial real estate:
Retail		26,026		—		—		—		26,026
Multifamily		69,369		12,354		—		—		81,723
Office		18,216		—		—		—		18,216
Hotels/ Single-room occupancy hotels		—		3,692		1,548		—		5,240
Industrial		30,372		—		—		—		30,372
Other		22,703		15,166		—		—		37,869
Construction		37,617		4,648		8,055		—		50,320
Commercial lines of credit:
Private banking		110		—		—		—		110
C&I lending		1,279		—		—		—		1,279
Other consumer		1		—		—		—		1
Total	$	1,600,286	$	35,860	$	45,482	$	—	$	1,681,628


			Special
December 31, 2021	Pass		Mention		Substandard		Doubtful		Total
Residential real estate:
Residential first mortgage	$	1,644,974	$	—	$	45,249	$	233	$	1,690,456
Residential second mortgage		13,539		—		236		—		13,775
Commercial real estate:
Retail		18,846		728		—		—		19,574
Multifamily		75,543		8,104		13,313		—		96,960
Office		10,413		—		1,969		—		12,382
Hotels/ Single-room occupancy hotels		8,205		—		6,016		—		14,221
Industrial		7,320		—		—		—		7,320
Other		48,996		1,692		95		—		50,783
Construction		67,254		17,226		16,348		5,931		106,759
Commercial lines of credit:
Private banking		116		—		—		—		116
C&I lending		236		11		—		—		247
Other consumer		221		—		—		—		221
Total	$	1,895,663	$	27,761	$	83,226	$	6,164	$	2,012,814

During the three and nine months ended September 30, 2022, the Company repurchased a pool of Advantage Loan Program loans with a total outstanding principal balance of $35,241 and $65,621. During the three and nine months ended September 30, 2021, the Company repurchased pools of Advantage Loan Program loans with a total outstanding principal balance of $6,067 and $173,829, respectively. The Advantage Loan Program loans that have been repurchased and included in the loan portfolio have an outstanding principal balance of $190,467 and $171,185 at September 30, 2022 and December 31, 2021, respectively. For more information on the repurchases of Advantage Loan Program loans, refer to Note 16—Commitments and Contingencies.

During the three months ended September 30, 2022, the Company charged off $4,064 of its recorded investment in certain higher risk commercial real estate loans held in its portfolio. These commercial real estate loans were then sold to a third-party investor for net cash proceeds of $17,794. No gain or loss was recorded on the sale of the commercial real estate loans.

Condensed Consolidated Statements of Changes in Shareholders' Equity (Parenthetical)	Jun. 30, 2021 $ / shares
Condensed Consolidated Statements of Changes in Shareholders' Equity
Issue price per share	$ 4.50

Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Condensed Consolidated Statements of Comprehensive Income (Loss)
Unrealized gains (losses) on investment securities, arising during the period, tax effect	$ (2,632)	$ (89)	$ (7,515)	$ (61)

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2022

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Note 2— 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 Sterling Bancorp, Inc. and its wholly-owned subsidiaries.

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 periods. Due to the inherent uncertainty involved in making estimates, actual results reported in 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 September 30, 2022 and December 31, 2021, residential real estate loans accounted for 85% and 83%, respectively, of total gross loans. 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 September 30, 2022 and December 31, 2021, approximately 83% and 85%, respectively, of gross loans was originated with respect to properties or businesses located in the state of California.

In March 2020, the Bank permanently discontinued its Advantage Loan program. Loans originated under this program comprised a significant component of the Bank’s total loan originations. Advantage Loan Program loans (including residential real estate loans held for sale of $7,279 and $11,359 at September 30, 2022 and December 31, 2021, respectively, of which $3,657 and $8,671 were on nonaccrual status as of those respective dates) totaled $937,225 and $1,185,458, or 65% and 69% of gross residential loans, at September 30, 2022 and December 31, 2021, respectively. Refer to Note 16—Commitments and Contingencies.

Employee Retention Credits Under the Cares Act

The Company evaluated its eligibility for the employee retention credits (“ERC”) offered under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) in the third quarter of 2021 and determined it qualified for the ERC for the first three quarters of 2021. The Company qualified for the ERC because its gross receipts (which consisted of total interest income and other fees from banking activities and services) decreased more than 20% in 2021 from each of the respective quarters of 2019. The ERC was a refundable tax credit against certain employment taxes.

The Company accounted for the ERC by analogy to International Accounting Standards 20 (“IAS 20”). Under IAS 20, the credit is recognized on a systematic basis over the periods in which the entity recognizes the payroll expenses for which the grant (tax credit) is intended to compensate when there is reasonable assurance that the entity will comply with any conditions attached to the grant and the grant will be received. The Company has made an accounting policy election to record the ERC benefit as a reduction to payroll expenses.

During the three and nine months ended September 30, 2021, the Company recorded a benefit of $6,529 resulting in a net reduction of salaries and employee benefits expense in the condensed consolidated statements of income. The Company initially recorded a grant receivable of $6,529 and has received refunds or credits of $886, with a remaining receivable of $5,643 which is recorded in other assets in the condensed consolidated balance sheet at September 30, 2022. The Company expects to receive the balance of the refunds within the near term.

Recently Issued Accounting Guidance Not Yet Adopted

In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, which eliminates the accounting guidance for troubled debt restructurings by creditors in ASC 310-40, Receivables – Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings involving borrowings that are experiencing financial difficulty. Specifically, rather than applying the troubled debt restructuring recognition and measurement guidance, creditors will evaluate all loan modifications to determine if they result in a new loan or a continuation of the existing loan. Also, losses associated with troubled debt restructurings should be incorporated in a creditor’s estimate of its allowance for credit losses. Public business entities are required to disclose current-period gross write-offs by year of origination for loan financing receivables and net investment in leases. For entities that have not yet adopted ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“2016-13”), ASU 2022-02 is effective when the entity adopts the guidance in ASU 2016-13. The Company is currently evaluating this ASU, along with its adoption of ASU 2016-13, as discussed below.

In June 2016, the FASB issued ASU No. 2016-13, 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 SEC. The Company, as a smaller reporting company as of the relevant measuring period, qualified for this extension.

At this time, a cross-functional implementation team consisting of individuals from accounting, finance, servicing and information systems is working with the Company’s loan system vendor and consultants, and an application to create credit loss estimation models and processes has been developed. The historical data set for model development has been finalized, and the credit loss estimation models have been developed and tested. The Company is working to finalize the assessment and documentation of processes and internal controls as well as adjustments to qualitative factors. In addition, the Company has engaged a third party to perform a model validation. The Company will run the new credit loss estimation models under the new internal controls in parallel with the current allowance for loan losses model to understand the differences in the models and assess the impact of the change. The Company expects to recognize a cumulative effect adjustment to the opening balance of retained earnings as of January 1, 2023, 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 condensed consolidated financial statements.

Subordinated Notes, net

9 Months Ended

Sep. 30, 2022

Subordinated Notes, net

Subordinated Notes, net

Note 8—Subordinated Notes, net

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


	September 30,		December 31,
	2022		2021
Subordinated notes	$	65,000	$	65,000
Unamortized note premium		290		343
Total	$	65,290	$	65,343

The Notes bore interest at 7.0% 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 8.33% and 5.94% at September 30, 2022 and December 31, 2021, respectively. Note premium costs are amortized over the contractual term of the Notes into interest expense using the effective interest method. Interest expense on these Notes was $1,329 and $972 for the three months ended September 30, 2022 and 2021, respectively, and $3,383 and $3,157 for the nine months ended September 30, 2022 and 2021, respectively. The Notes mature in April 2026.

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 Company’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.

Subordinated Notes, net (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
Subordinated Notes, net (Details) - USD ($) $ in Thousands	Apr. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Subordinated Notes
Total		$ 65,290		$ 65,290		$ 65,343
Interest expense		1,329	$ 972	3,383	$ 3,157
Subordinated notes
Subordinated Notes
Subordinated notes		65,000		65,000		65,000
Unamortized note premium		290		290		343
Total		65,290		$ 65,290		$ 65,343
Interest rate (as a percent)	7.00%			8.33%		5.94%
Interest expense		$ 1,329	$ 972	$ 3,383
Redemption price percentage of outstanding principal amount				100.00%
Integral multiple				$ 1
LIBOR \| Subordinated notes
Subordinated Notes
Variable interest rate on subordinate notes (in percent)	5.82%
Interest expense					$ 3,157

Fair Values of Financial Instruments - Assets measured at fair value on a recurring basis (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Available for sale debt securities:
Available for sale debt securities, at fair value	$ 348,587	$ 308,657
Equity securities
Equity securities	4,386	4,976
U.S. Treasury and Agency securities
Available for sale debt securities:
Available for sale debt securities, at fair value	167,462	122,168
U.S. Treasury and Agency securities \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	167,462	122,168
U.S. Treasury and Agency securities \| Level 1 \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	115,484	48,827
U.S. Treasury and Agency securities \| Level 2 \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	51,978	73,341
Mortgage-backed securities
Available for sale debt securities:
Available for sale debt securities, at fair value	37,626	49,437
Mortgage-backed securities \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	37,626	49,437
Mortgage-backed securities \| Level 2 \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	37,626	49,437
Collateralized mortgage obligations
Available for sale debt securities:
Available for sale debt securities, at fair value	143,346	136,849
Collateralized mortgage obligations \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	143,346	136,849
Collateralized mortgage obligations \| Level 2 \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	143,346	136,849
Collateralized debt obligations
Available for sale debt securities:
Available for sale debt securities, at fair value	153	203
Collateralized debt obligations \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	153	203
Collateralized debt obligations \| Level 3 \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	153	203
Equity securities \| Recurring
Equity securities
Equity securities	4,386	4,976
Equity securities \| Level 1 \| Recurring
Equity securities
Equity securities	$ 4,386	$ 4,976

Subordinated Notes, net (Tables)

9 Months Ended

Sep. 30, 2022

Subordinated Notes, net

Schedule of subordinated notes


	September 30,		December 31,
	2022		2021
Subordinated notes	$	65,000	$	65,000
Unamortized note premium		290		343
Total	$	65,290	$	65,343

Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Condensed Consolidated Statements of Comprehensive Income (Loss)
Net income	$ 1,176	$ 9,557	$ 4,239	$ 15,334
Other comprehensive loss, net of tax:
Unrealized losses on investment securities, arising during the period, net of tax effect of $(2,632), $(89), $(7,515) and $(61), respectively	(7,154)	(230)	(19,839)	(158)
Comprehensive income (loss)	$ (5,978)	$ 9,327	$ (15,600)	$ 15,176

- Definition

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

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(22))
-URI https://asc.fasb.org/extlink&oid=120399700&loc=SL114874048-224260

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 4
-URI https://asc.fasb.org/extlink&oid=124431687&loc=d3e22595-107794

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(18))
-URI https://asc.fasb.org/extlink&oid=120400993&loc=SL114874131-224263

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 40
-Section 65
-Paragraph 1
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=126732423&loc=SL123482106-238011

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 50
-Paragraph 6
-URI https://asc.fasb.org/extlink&oid=124431353&loc=SL124452729-227067

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(5))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(20))
-URI https://asc.fasb.org/extlink&oid=126953954&loc=SL114868664-224227

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 230
-SubTopic 10
-Section 45
-Paragraph 28
-URI https://asc.fasb.org/extlink&oid=126954810&loc=d3e3602-108585

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (b)(2)
-URI https://asc.fasb.org/extlink&oid=124431687&loc=d3e22499-107794

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iv))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442526-122756

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iii)(A))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442526-122756

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(i))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(i))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442526-122756

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 9
-URI https://asc.fasb.org/extlink&oid=124431687&loc=d3e22663-107794

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iv))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 17: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(ii))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442526-122756

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 28
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=123596393&loc=d3e14064-108612

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 3
-URI https://asc.fasb.org/extlink&oid=124431687&loc=d3e22583-107794

Reference 20: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 60B
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126958026&loc=SL5780133-109256

Reference 22: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 323
-SubTopic 10
-Section 50
-Paragraph 3
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=114001798&loc=d3e33918-111571

Reference 23: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 8
-URI https://asc.fasb.org/extlink&oid=124431687&loc=d3e22658-107794

Reference 24: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1A
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126968391&loc=SL7669619-108580

Reference 25: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599

Reference 26: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=124431687&loc=d3e22694-107794

Reference 27: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=124431687&loc=d3e22694-107794

Reference 28: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 7
-URI https://asc.fasb.org/extlink&oid=109222650&loc=SL51721683-107760

Reference 29: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1B
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126968391&loc=SL7669625-108580

Reference 30: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 31: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(5))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442526-122756

Reference 32: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(B))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 33: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(A))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 34: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8906-108599

Reference 35: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

+ Details

Commitments and Contingencies - Unfunded Commitments and Litigation (Details) - USD ($) $ in Thousands			9 Months Ended
	Sep. 27, 2022	Jan. 21, 2022	Sep. 30, 2022	Dec. 31, 2021
Commitments and Contingencies
OCC civil money penalty	$ 6,000
Loss contingency from Internal review of Advantage Loan Program
Commitments and Contingencies
Liability for contingent losses			$ 9,000	$ 15,000
Demand letter from purported stockholders
Commitments and Contingencies
Plaintiff attorney's fee and expenses		$ 650
Insurance reimbursement receivable		$ 650
Unfunded Commitments to Extend Credit \| Residential real estate
Commitments and Contingencies
Outstanding commitments with varying interest rates			$ 2,560
Maturity period for variable interest loans			30 years
Outstanding commitments with fixed interest rates			$ 113
Fixed interest rate (as a percentage)			4.875%
Maturity period for Fixed interest loans			15 years
Unfunded Commitments to Extend Credit \| Residential real estate \| Minimum
Commitments and Contingencies
Variable interest rate (as a percentage)			4.50%
Unfunded Commitments to Extend Credit \| Residential real estate \| Maximum
Commitments and Contingencies
Variable interest rate (as a percentage)			5.125%
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			$ 2,673	23,610
Unused lines of credit
Commitments and Contingencies
Unused lines of credit			$ 20,610	45,805
Unused lines of credit \| Minimum
Commitments and Contingencies
Variable interest rate (as a percentage)			5.50%
Maturity period for variable interest loans			1 month
Unused lines of credit \| Maximum
Commitments and Contingencies
Variable interest rate (as a percentage)			8.50%
Maturity period for variable interest loans			23 years
Unused lines of credit \| Residential real estate
Commitments and Contingencies
Unused lines of credit			$ 10,874
Unused lines of credit \| Construction
Commitments and Contingencies
Unused lines of credit			9,736
Standby letters of credit
Commitments and Contingencies
Unused lines of credit			$ 24	$ 24

Income Per Share (Tables)

9 Months Ended

Sep. 30, 2022

Income Per Share

Schedule of computation of income per share, basic and diluted


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Numerator:
Net income	$	1,176	$	9,557	$	4,239	$	15,334

Denominator:
Weighted average common shares outstanding, basic		50,400,412		50,167,295		50,326,951		50,010,341
Weighted average effect of potentially dilutive common shares:
Stock options		97,884		55,131		107,671		48,659
Restricted stock		74,635		40,260		88,454		20,931
Weighted average common shares outstanding, diluted		50,572,931		50,262,686		50,523,076		50,079,931

Income per share, basic and diluted	$	0.02	$	0.19	$	0.08	$	0.31

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


	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2022	2021	2022	2021
Stock options	49,545	67,767	49,897	70,139
Restricted stock	176,707	7,294	99,784	104,558
Total	226,252	75,061	149,681	174,697