0001104659-23-033182 | 10-K | XBRL Viewer

December 31,

Commitments to make loans

Unused lines of credit

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Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Dec. 31, 2022	Feb. 28, 2023	Jun. 30, 2022
Document and Entity Information
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2022
Document Transition Report	false
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 Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Entity Public Float			$ 89.3
Entity Common Stock, Shares Outstanding		50,834,602
Entity Central Index Key	0001680379
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Amendment Flag	false
Auditor Name	Crowe LLP
Auditor Firm ID	173
Auditor Location	Cleveland, Ohio

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Assets
Cash and due from banks	$ 379,798	$ 411,676
Interest-bearing time deposits with other banks	934	1,183
Investment securities	348,200	313,879
Loans held for sale	7,725	64,987
Loans and leases receivable, net amount	1,613,385	1,956,266
Accrued interest receivable	7,829	7,696
Mortgage servicing rights, net	1,794	2,722
Leasehold improvements and equipment, net	6,301	7,421
Operating lease right-of-use assets	14,800	18,184
Federal Home Loan Bank stock, at cost	20,288	22,950
Company-owned life insurance	8,501	33,033
Deferred tax asset, net	23,704	21,426
Other assets	11,476	15,407
Total assets	2,444,735	2,876,830
Liabilities:
Noninterest-bearing deposits	53,041	63,760
Interest-bearing deposits	1,900,996	2,197,975
Total deposits	1,954,037	2,261,735
Federal Home Loan Bank borrowings	50,000	150,000
Subordinated notes, net	65,271	65,343
Operating lease liabilities	15,990	19,400
Accrued expenses and other liabilities	46,810	36,725
Total liabilities	2,132,108	2,533,203
Commitments and contingencies (Note 19)
Shareholders' equity:
Preferred stock, authorized 10,000,000 shares; no shares issued and outstanding
Common stock, no par value, authorized 500,000,000 shares; issued and outstanding 50,795,871 shares and 50,460,932 shares at December 31, 2022 and 2021, respectively	83,295	82,157
Additional paid-in capital	14,808	14,124
Retained earnings	234,049	248,243
Accumulated other comprehensive loss	(19,525)	(897)
Total shareholders' equity	312,627	343,627
Total liabilities and shareholders' equity	$ 2,444,735	$ 2,876,830

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Consolidated Balance Sheets
Allowance for loan losses	$ 45,464	$ 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)	50,795,871	50,460,932
Common stock, outstanding (in shares)	50,795,871	50,460,932

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Interest income
Interest and fees on loans	$ 87,375	$ 113,822	$ 146,702
Interest and dividends on investment securities and restricted stock	6,426	1,794	3,618
Other interest	6,131	925	1,043
Total interest income	99,932	116,541	151,363
Interest expense
Interest on deposits	14,992	18,116	37,482
Interest on Federal Home Loan Bank borrowings	1,169	3,118	3,403
Interest on subordinated notes	4,969	4,127	4,713
Total interest expense	21,130	25,361	45,598
Net interest income	78,802	91,180	105,765
Provision (recovery) for loan losses	(9,934)	(8,265)	54,865
Net interest income after provision (recovery) for loan losses	88,736	99,445	50,900
Non-interest income
Service charges and fees	$ 435	$ 509	$ 426
Revenue, Product and Service [Extensible List]	sbt:ServiceChargesAndFeesMember	sbt:ServiceChargesAndFeesMember	sbt:ServiceChargesAndFeesMember
Gain on sale of investment securities	$ 32		$ 179
Gain on sale of mortgage loans held for sale	143	$ 634	2,050
Unrealized gains (loss) on equity securities	(580)	(142)	108
Gain on sale of branch office		1,417
Net servicing loss	(20)	(1,208)	(1,324)
Income earned on company-owned life insurance	751	1,286	1,160
Other	586	3,310	1,737
Total non-interest income	1,347	5,806	4,336
Non-interest expense
Salaries and employee benefits	33,507	28,220	30,655
Occupancy and equipment	8,657	9,108	8,788
Professional fees	23,908	24,709	32,646
FDIC assessments	1,146	2,029	1,768
Data processing	3,058	1,900	1,458
Net provision (recovery) of mortgage repurchase liability	(639)	(1,234)	2,527
Provision (recovery) of contingent losses, net	18,239		(10,000)
Other	9,772	7,486	6,270
Total non-interest expense	97,648	72,218	74,112
Income (loss) before income taxes	(7,565)	33,033	(18,876)
Income tax expense (benefit)	6,629	9,643	(5,909)
Net income (loss)	$ (14,194)	$ 23,390	$ (12,967)
Basic (in dollar per shares)	$ (0.28)	$ 0.47	$ (0.26)
Diluted (in dollar per shares)	$ (0.28)	$ 0.47	$ (0.26)
Weighted average common shares outstanding:
Basic	50,346,198	50,049,902	49,840,882
Diluted	50,346,198	50,139,310	49,840,882

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Consolidated Statements of Comprehensive Income (Loss)
Net income (loss)	$ (14,194)	$ 23,390	$ (12,967)
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on investment securities, arising during the year, net of tax effect of $(7,048), $(499) and $129, respectively	(18,605)	(1,284)	320
Reclassification adjustment for gains included in net income (loss) of $32, $- and $179, respectively, included in gain on sale of investment securities, net of tax effect of $9, $-and $50, respectively	(23)		(129)
Total other comprehensive income (loss)	(18,628)	(1,284)	191
Comprehensive income (loss)	$ (32,822)	$ 22,106	$ (12,776)

- Definition

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

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+ Details

Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Consolidated Statements of Comprehensive Income (Loss)
Unrealized gain (loss) on investment securities, arising during the period, tax effect	$ (7,048)	$ (499)	$ 129
Reclassification adjustment for (gains) losses included in net income on sale of investment securities, before tax	32	0	179
Reclassification adjustment for gains (losses) included in net income on sale of investment securities, tax effect	$ 9	$ 0	$ 50

Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands	Common stock, voting Common stock	Common stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Total
Balance at beginning of the period at Dec. 31, 2019	$ 80,889		$ 13,210	$ 238,319	$ 196	$ 332,614
Balance at beginning of the period (in shares) at Dec. 31, 2019	49,944,473
Increase (Decrease) in Stockholders' Equity
Net income (loss)				(12,967)		(12,967)
Repurchases of shares of common stock	$ (82)	$ (82)				(82)
Repurchases of shares of common stock (in shares)	(10,912)	(10,912)
Stock-based compensation			334			334
Stock-based compensation (in shares)	48,300
Other comprehensive income (loss)					191	191
Dividends distributed ($0.01 per share)				(499)		(499)
Balance at end of the period at Dec. 31, 2020	$ 80,807		13,544	224,853	387	319,591
Balance at end of the period (in shares) at Dec. 31, 2020	49,981,861
Increase (Decrease) in Stockholders' Equity
Net income (loss)				23,390		23,390
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
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			626			626
Stock-based compensation (in shares)	187,607
Other comprehensive income (loss)					(1,284)	(1,284)
Balance at end of the period at Dec. 31, 2021	$ 82,157		14,124	248,243	(897)	343,627
Balance at end of the period (in shares) at Dec. 31, 2021	50,460,932
Increase (Decrease) in Stockholders' Equity
Net income (loss)				(14,194)		(14,194)
Repurchase of restricted shares to pay employee tax liability			(216)			(216)
Repurchase of restricted shares to pay employee tax liability (in shares)	(32,929)
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			900			900
Stock-based compensation (in shares)	206,890
Other comprehensive income (loss)					(18,628)	(18,628)
Balance at end of the period at Dec. 31, 2022	$ 83,295		$ 14,808	$ 234,049	$ (19,525)	$ 312,627
Balance at end of the period (in shares) at Dec. 31, 2022	50,795,871

Consolidated Statements of Changes in Shareholders' Equity (Parenthetical)	12 Months Ended
	Dec. 31, 2021 $ / shares
Consolidated Statements of Changes in Shareholders' Equity
Issuance of common stock	$ 4.50

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Cash Flows From Operating Activities
Net income (loss)	$ (14,194)	$ 23,390	$ (12,967)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Provision (recovery) for loan losses	(9,934)	(8,265)	54,865
Deferred income taxes	4,779	3,400	(12,305)
Gain on sale of branch office		(1,417)
Gain on sale of investment securities	(32)		(179)
Unrealized (gain) loss on equity securities	580	142	(108)
Net amortization (accretion) on investment securities	(841)	2,380	598
Depreciation and amortization on leasehold improvements and equipment	1,541	1,754	1,608
Originations, net of principal payments, of loans held for sale	(3,641)	(9,995)	(174,700)
Proceeds from sale of mortgage loans held for sale	8,798	21,168	174,066
Gain on sale of loans held for sale	(143)	(634)	(2,050)
Net provision (recovery) of mortgage repurchase liability	(639)	(1,234)	2,527
Provision for contingent losses	18,239		2,500
Recovery of contingent losses			(12,500)
Increase in cash surrender value of company-owned life insurance, net of premiums	(345)	(538)	(578)
Valuation allowance adjustments and amortization of mortgage servicing rights	939	3,102	4,790
Stock-based compensation	900	626	334
Other	70	468	162
Change in operating assets and liabilities:
Accrued interest receivable	(133)	3,294	2,728
Other assets	4,887	14,718	(8,946)
Accrued expenses and other liabilities	(8,493)	(21,613)	(11,199)
Net cash provided by operating activities	2,338	30,746	8,646
Cash Flows From Investing Activities
Maturities of interest-bearing time deposits with other banks	934	6,336	2,710
Purchases of interest-bearing time deposits with other banks	(685)	(498)	(8,706)
Maturities and principal receipts of investment securities	87,748	136,989	144,203
Proceeds from sale of investment securities	6,999		99,971
Purchases of investment securities	(154,460)	(150,216)	(396,634)
Proceeds received from redemption of Federal Home Loan Bank stock	2,662
Net decrease in loans	433,903	603,916	452,631
Purchases of portfolio loans	(97,974)	(179,341)	(69,465)
Principal payments received on commercial real estate loans held for sale	2,531
Proceeds from the sale of commercial real estate loans originated for investment	67,584
Proceeds received from settlement of company-owned life insurance policies	24,877
Cash paid on sale of branch office		(63,545)
Purchases of leasehold improvements and equipment	(421)	(1,171)	(922)
Net cash provided by investing activities	373,698	352,470	223,788
Cash Flows From Financing Activities
Net increase (decrease) in deposits	(307,698)	(803,341)	599,825
Proceeds from advances from Federal Home Loan Bank	35,000		100,000
Repayments of advances from Federal Home Loan Bank	(135,000)	(168,000)	(11,000)
Proceeds from issuance of shares of common stock		1,350
Cash paid for surrender of vested shares to satisfy employee tax liability	(216)	(46)
Repurchase of shares of common stock			(82)
Dividends paid to shareholders			(499)
Net cash provided by (used in) financing activities	(407,914)	(970,037)	688,244
Net change in cash and due from banks	(31,878)	(586,821)	920,678
Cash and due from banks, beginning of year	411,676	998,497	77,819
Cash and due from banks, end of year	379,798	411,676	998,497
Cash paid for:
Interest	19,835	50,751	48,270
Income taxes	2,279	37	13,906
Noncash investing and financing activities:
Transfers of residential and commercial real estate loans to loans held for sale		53,628	19,375
Transfers of residential real estate loans from loans held for sale			399
Right-of-use assets obtained in exchange for new operating lease liabilities	212	$ 3,883	$ 4,405
Shares of common stock issued in satisfaction of matching contribution in defined contribution retirement plan	$ 1,138

Nature of Operations

12 Months Ended

Dec. 31, 2022

Nature of Operations

Nature of Operations

Note 1—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. It also engages in mortgage banking activities and, as such, acquires, sells and services residential mortgage loans. 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 year ended December 31, 2021.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2022

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Note 2—Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements include the results of 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 consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Due to the inherent uncertainty involved in making estimates, actual results reported in the future periods may be based upon amounts that could differ from those estimates.

Fair Value Measurements

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

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

Consolidated Statements of Cash Flows

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

Cash flows related to loans are classified within operating and investing activities in the consolidated statements of cash flows based on their initial classification of the loan.

Cash and Due from Banks

Cash and due from banks includes cash, certificates of deposit and other deposits held with other banks with original maturities of three months or less.

Interest-bearing Time Deposits with Other Banks

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

Concentration of Credit Risk

The loan portfolio consists primarily of residential real estate loans, which are collateralized by real estate. At December 31, 2022 and 2021, residential real estate loans accounted for 84% 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 December 31, 2022 and 2021, approximately 81% and 85%, respectively, of gross loans was originated with respect to properties or businesses located in the state of California.

In December 2019, the Company terminated a loan product consisting of one-, three-, five- or seven-year adjustable-rate mortgages that required a down payment of at least 35% (also referred to herein as “Advantage Loan Program loans”) which continues to be the largest portion of our gross residential loans. An internal review of the Advantage Loan Program 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. Refer to Note 19—Commitments and Contingencies.

Advantage Loan Program loans (including residential real estate loans held for sale of $6,181 and $11,359 at December 31, 2022 and 2021, of which $1,942 and $8,671 were on nonaccrual status as of those respective dates) totaled $880,373 and $1,185,458, or 63% and 69% of gross residential loans, at December 31, 2022 and 2021, respectively.

Employee Retention Credits Under the CARES Act

In the third quarter of 2021, the Company evaluated its eligibility for the employee retention credits (“ERC”) offered under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) 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 ERC was equal to 70% of qualified wages paid to employees (including employer qualified health plan expenses) and was capped at $10,000 of qualified wages for each employee, such that the maximum ERC that can be claimed was $7,000 per employee for each of the first three quarters in 2021. As a result of the Company averaging 500 or fewer full-time employees in 2019, all wages paid to employees were eligible for the ERC (rather than just wages paid to employees not providing services). The Company has amended and filed certain payroll tax filings to apply for a refund for each of the first three quarters of 2021.

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 year ended December 31, 2021, the Company recorded a benefit of $6,529 resulting in a net reduction of salaries and employee benefits expense in the consolidated statements of operations. The Company initially recorded a grant receivable of $6,529 and has received refunds or credits of $886 during the year ended December 31, 2022. The Company has a grant receivable of $5,643 and $6,529 which is recorded in other assets in the consolidated balance sheets at December 31, 2022 and 2021, respectively. The Company expects to receive the balance of the refunds in 2023.

Investment Securities

Investment securities includes debt securities and equity securities.

Debt Securities

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

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

Interest income includes amortization or accretion of purchase premium or discount. Gains and losses realized on the sales of available for sale investment securities are recorded on the settlement date and determined using the specific identification method. Held to maturity investment securities are stated at amortized cost and may have a realized gain or loss if the investment security is retired or redeemed before the original maturity date.

Accrued interest receivable related to available for sale and held to maturity investment securities are recorded separately from the amortized cost basis of investment securities in the consolidated balance sheets.

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

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

Equity Securities

Equity securities with readily determinable fair values are stated at fair value with unrealized and realized gains and losses reported in income. Those equity securities without readily determinable fair values are recorded at cost less any impairments, adjusted for subsequent observable price changes in orderly transactions for an identical or similar investment of the same issuer. Any changes in the carrying value of the equity investments are recognized in income.

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

Loans Held for Sale

The Company originates certain loans intended for sale in the secondary market. Loans held for sale are carried at the lower of amortized cost or fair value on an individual loan basis. The fair value of loans held for sale are primarily determined based on quoted prices for similar loans in active markets or outstanding commitments from third-party investors. Net unrealized losses, if any, are recorded as a valuation allowance and charged to non-interest income in the consolidated statements of operations.

Performing residential real estate loans that are held for sale are generally sold with servicing rights retained. The carrying value of mortgage loans sold is reduced by the amount allocated to the servicing right. On the sale of an originated loan, the servicing right is recorded at its estimated fair value. Gains and losses on sales of mortgage loans are based on the difference between the selling price and the carrying value of the related loan sold and are recorded as a component of non-interest income.

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

Loans

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

Interest income on loans is accrued as earned using the interest method over the term of the loan. The accrual of interest income is discontinued at the time the loan is 90 days past due or earlier if conditions warrant and placed on nonaccrual status. In all cases, loans are placed on nonaccrual status at an earlier date if collection of principal or interest is considered doubtful. All interest accrued and not received for loans placed on nonaccrual status is reversed against interest income. Any payments received on nonaccrual loans are applied to interest income on a cash basis if the loan is considered well secured. Otherwise, all payments received are applied first to outstanding loan principal amounts and then to the recovery of the charged off loan amounts. Any excess is treated as a recovery of interest and fees. Loans are returned to accrual status after all principal and interest amounts contractually due are made and future payments are reasonably assured. Accrued interest receivable related to loans is recorded separately from the amortized cost basis of loans on the consolidated balance sheets.

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

Factors considered by management in determining if a loan is impaired include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed.

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

Troubled Debt Restructurings

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

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

Allowance for Loan Losses

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

The allowance for loan losses consists of specific and general components. The specific component relates to loans that are individually classified as impaired. The general component covers all other loans and is based on historical loss experience adjusted for general economic conditions and other qualitative factors by portfolio segment. The historical loss experience is determined by portfolio segment, discussed below, and is based on the actual loss history experienced over the most recent three-year period. Significant judgment is used to assign each qualitative factor a level of risk, which is translated into additional basis points added to the historical loss rates. These economic and other risk factors include consideration of the following: levels of and trends in delinquencies and classified loans; trends in loan growth; effects of any changes in underwriting standards; other changes in lending policies, procedures and practices; experience, ability and depth of lending management and other relevant staff; national and local economic trends and conditions as indicated by unemployment rates, consumer confidence and household income; industry conditions such as property values and vacancy risk; and effects of changes in credit concentrations.

The following portfolio segments have been identified:

Residential Real Estate—The degree of risk in residential real estate lending depends primarily on the loan amount in relation to collateral value, the interest rate and the borrower’s ability to repay in an orderly fashion. Economic trends determined by unemployment rates and other key economic indicators are closely correlated to the credit quality of these loans. Weak economic trends indicate that the borrowers’ capacity to repay their obligations may be deteriorating. The classes in the residential real estate portfolio segment consist of residential first mortgages and residential second mortgages.

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

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

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

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

Mortgage Servicing Rights, net

Servicing assets (mortgage servicing rights) are recognized separately when residential real estate loans are sold with servicing rights retained by the Company. Mortgage servicing rights are initially recorded at fair value, which is determined based on an internal valuation model that calculates the present value of estimated future net servicing income. The servicing assets are subsequently measured using the amortization method which requires servicing assets to be amortized into non-interest income in the consolidated statements of operations in proportion to, and over the period of, the estimated future net servicing income of the underlying loans.

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

Servicing fee income is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal, or a fixed amount per loan, and are recorded as income when earned. The amortization of mortgage servicing rights is netted against loan servicing income. Servicing fees totaled $905, $1,841 and $3,373 for the year ended December 31, 2022, 2021 and 2020, respectively. Late fees and ancillary fees related to loan servicing were not material for the periods presented.

Transfers of Financial Assets

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

FHLB Stock

The Bank is a member of the FHLB system. Members are required to own a certain amount of FHLB stock based on the level of FHLB borrowings and other factors and may invest additional amounts. The FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of its par value. The FHLB stock does not have a readily determinable fair value and no quoted market value as the ownership is restricted to member institutions. Also, the FHLB stock is pledged as collateral on FHLB borrowings. Cash and stock dividends on FHLB stock are reported as income in interest and dividends on investment securities and restricted stock in the consolidated statements of operations. Cash dividends received amounted to $433, $609 and $847 for the year ended December 31, 2022, 2021 and 2020, respectively.

Company-Owned Life Insurance

The Company has purchased life insurance policies on certain officers and employees. In addition, the Company still owns policies on retired and former employees. These policies are recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. Income from these policies and changes in the cash surrender value of the life insurance policies are recorded in non-interest income in the consolidated statements of operations and are generally not subject to income taxes.

During the year ended December 31, 2022, the Company surrendered certain life insurance policies related to former executives and a controlling shareholder. Refer to Note 14—Employee Benefit Plans.

Long-Lived Assets

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

Mortgage Repurchase Liability

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

A loss incurred on the repurchase of the Advantage Loan Program loans is charged against the mortgage repurchase liability, except when the unpaid principal balance of the loan is greater than its fair value on the date of repurchase. The amount in excess of fair value is recorded as a loss on repurchase in other non-interest expense. The disposition of the mortgage servicing rights related to servicing the respective loans (as mortgage servicing of these loans was retained at the time of sale) is recorded in net servicing loss in non-interest income in the consolidated statements of operations. The Advantage Loan Program loans that have been repurchased are then included in loans held for investment. The mortgage repurchase liability is included in accrued expenses and other liabilities.

Legal Contingencies and Litigation Accruals

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

Revenue from Contracts with Customers

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

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

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

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

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

Stock-based Compensation

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

Compensation cost is recorded over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recorded on a straight-line basis over the requisite service period of the entire award. Forfeitures are recorded in the period in which they occur.

Comprehensive Income

Comprehensive income consists of net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized gains and losses on debt securities available for sale, net of income taxes, which is also recognized as a separate component of shareholders’ equity. The Company releases the income tax effects on unrealized gains and losses on debt securities available for sale that are reported in other comprehensive income (loss) on a security-by-security basis when debt securities are sold.

Loan Commitments and Related Financial Instruments

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

Income Taxes

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

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

Income (Loss) per Share, Basic and Diluted

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

Recently Issued Accounting Guidance

In December 2022, the FASB issued Accounting Standards Update (“ASU”) No. 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 which extends the expiration date of Topic 848 from December 31, 2022 to December 31, 2024. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, and amended by ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope; provides for relief, that is elective and applies to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. In March 2021, the United Kingdom Financial Conduct Authority announced that the intended cessation date of LIBOR in the United States would be June 30, 2023. The guidance provides that changes in contract terms that are made to effect the reference rate reform transition are considered related to the replacement of a reference rate if they are not the result of a business decision that is separate from or in addition to changes to the terms of a contract to effect that transition. If certain criteria are met, entities can elect to not apply certain modification accounting requirements to contracts affected by reference rate reform through December 31, 2024.

The Company’s primary contracts that reference LIBOR are its loan contracts and its outstanding subordinated notes. Pursuant to federal legislation as well as the New York State legislation, upon the cessation of the publication of the three-month LIBOR rate, the subordinated notes will bear interest at a rate based on the Secured Overnight Financing Rate (“SOFR”) and the LIBOR-based loans will also bear interest at a rate based on SOFR. The Company will take advantage of the LIBOR transition relief allowed under ASU No. 2020-04 to not apply modification accounting requirements to these contracts affected by reference rate reform beginning in the second quarter of 2023 and in future periods through December 31, 2024, as necessary.

In March 2022, FASB issued 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 should 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 adopted the provisions of ASU No. 2022-01 on January 1, 2023, along with its adoption of ASU 2016-13, as discussed below.

In June 2016, the FASB issued ASU No. 2016-13 (and issued subsequent ASUs on Topic 326), which significantly changes estimates for credit losses related to financial assets measured at amortized cost, including loan receivables and other contracts, such as off-balance sheet credit exposure, specifically, loan commitments and standby letters of credit, financial guarantees, and other similar instruments. The guidance replaced the current incurred loss accounting model with an expected loss model, which is referred to as the current expected credit loss (“CECL”) model. The CECL model 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. Additionally, Topic 326 require credit losses on available for sale debt securities to be presented as an allowance rather than as a write-down. 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 entity’s portfolio. The Company, as a smaller reporting company as of the relevant measuring period, qualified for an extension of the adoption of ASU No. 2016-13 (and all subsequent ASUs on Topic 326) to January 1, 2023.

The Company adopted ASU 2016-13 on January 1, 2023 using the modified retrospective approach. The Company has developed new expected credit loss estimation models and engaged a third party to complete the model validation. As allowed by Topic 326, the Company elected to generally maintain pools of loans accounted for under ASC 310-30. The loan portfolio was pooled into segments with similar characteristics and risk profiles for which the probability of default/loss given default methodology is then applied. The Company will utilize a 24-month economic forecast. The Company also made an accounting policy election not to measure an allowance for credit losses on accrued interest receivable and to present accrued interest receivable separately from the related financial asset on the consolidated balance sheet.

Management is finalizing the qualitative component of the CECL calculation and remediating findings from the model validation. Management is determining the impact on the Company’s financial condition, results of operations, liquidity and regulatory capital ratios. While the Company does not expect that the adoption of this guidance will result in a material cumulative-effect adjustment to retained earnings, net of income taxes, upon adoption, the ultimate impact may change as we finalize our implementation controls and processes.

Also, the Company did not record an allowance related to its available for sale debt securities at the date of adoption since credit losses do not exist in its investment portfolio.

Investment Securities

12 Months Ended

Dec. 31, 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 December 31, 2022 and 2021 and the corresponding amounts of gross unrealized gains and losses:


	December 31, 2022
	Amortized		Gross Unrealized				Fair
	Cost		Gain		Loss		Value
Available for sale:
U.S. Treasury and Agency securities	$	175,878	$	17	$	(7,458)	$	168,437
Mortgage-backed securities		41,388		—		(4,655)		36,733
Collateralized mortgage obligations		153,066		4		(14,829)		138,241
Collateralized debt obligations		157		—		(10)		147
Total	$	370,489	$	21	$	(26,952)	$	343,558


	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 $106,697 were pledged as collateral on the FHLB borrowings at December 31, 2022.

Accrued interest receivable related to investment securities were $930 and $410 at December 31, 2022 and 2021, respectively, and is recorded separately from the amortized cost basis of the investment securities on the consolidated balance sheets.

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 $353 and $529 at December 31, 2022 and 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 December 31, 2022 and 2021.

Information pertaining to sales of debt securities available for sale for the year ended December 31, 2022, 2021 and 2020 is as follows:


	Year Ended December 31,
	2022		2021		2020
Proceeds from the sale of investment securities	$	6,999	$	—	$	99,971

Gross realized gains	$	33	$	—	$	337
Gross realized losses		(1)		—		(158)
Total net realized gains	$	32	$	—	$	179

The income tax expense related to the net realized gains was $9 and $50 for the year ended December 31, 2022 and 2020, respectively.

The amortized cost and fair value of U.S. Treasury and Agency securities at December 31, 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	$	47,482	$	47,314
Due after one year through five years		128,396		121,123
Mortgage-backed securities		41,388		36,733
Collateralized mortgage obligations		153,066		138,241
Collateralized debt obligations		157		147
Total	$	370,489	$	343,558

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


	December 31, 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	$	100,815	$	(2,839)	$	44,605	$	(4,619)	$	145,420	$	(7,458)
Mortgage-backed securities		5,792		(139)		30,941		(4,516)		36,733		(4,655)
Collateralized mortgage obligations		69,088		(3,169)		64,715		(11,660)		133,803		(14,829)
Collateralized debt obligations		—		—		147		(10)		147		(10)
Total	$	175,695	$	(6,147)	$	140,408	$	(20,805)	$	316,103	$	(26,952)


	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 December 31, 2022, the debt securities portfolio consisted of 33 debt securities, with 30 debt securities in an unrealized loss position. For debt securities in an unrealized loss position, management has both the intent and ability to hold these investments until the recovery of the decline. The fair value is expected to increase as these securities approach their maturity date or repricing date or if market yields for such investments decline. Accordingly, as of December 31, 2022, the unrealized losses on investment securities were attributable to non-credit related factors, including changes in market value due to rising interest rates and other market changes. The Company does not consider these securities to be other-than-temporarily impaired at December 31, 2022. 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 December 31, 2022 and 2021, equity securities totaled $4,642 and $5,222, respectively, and are included in investment securities in the 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 statements of operations. At December 31, 2022 and 2021, equity securities with readily determinable fair values were $4,396 and $4,976, respectively. The following is a summary of unrealized and realized gains and losses recognized in the consolidated statements of operations:


	Year Ended
	December 31,
	2022		2021		2020
Net gains (losses) recorded during the year on equity securities	$	(580)	$	(142)	$	108
Less: net gains (losses) recorded during the year on equity securities sold during the period		—		—		—
Unrealized gains (losses) recorded during the year on equity securities held at the reporting date	$	(580)	$	(142)	$	108

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 2022 and 2021. The investment was reported at $246 at December 31, 2022 and 2021.

Loans

12 Months Ended

Dec. 31, 2022

Loans

Loans

Note 4—Loans

Loans Held for Sale

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


	December 31,
	2022		2021
Residential real estate	$	6,181	$	11,359
Commercial real estate		1,544		53,628
Total loans held for sale	$	7,725	$	64,987

At December 31, 2022, loans held for sale includes nonaccrual residential real estate loans of $1,942. 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.

During the year ended December 31, 2021, commercial real estate loans with a carrying value of $61,549 were reclassified as loans held for sale from loans held for investment due to management’s change in intent and decision to sell the loans. On the date of transfer, the amortized cost exceeded the fair value of the loans due to credit deterioration. The Company recorded a charge-off of $7,921 to the allowance for loan losses, which established a new aggregate cost basis for the loans of $53,628 on the date of transfer. 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:


	December 31,
	2022		2021
Residential real estate	$	1,391,276	$	1,704,231
Commercial real estate		221,669		201,240
Construction		44,503		106,759
Commercial lines of credit		1,396		363
Other consumer		5		221
Total loans		1,658,849		2,012,814
Less: allowance for loan losses		(45,464)		(56,548)
Loans, net	$	1,613,385	$	1,956,266

Accrued interest receivable related to total gross loans, including loans held for sale, was $6,894 and $7,282 as of December 31, 2022 and 2021, respectively, and is recorded separately from the amortized cost basis of the loans on the consolidated balance sheets.

Loans totaling $389,830 and $557,410 were pledged as collateral on the FHLB borrowings at December 31, 2022 and 2021, respectively.

In October 2022, the Company acquired a pool of residential mortgage loans with an unpaid principal balance of $31,307 for a total purchase price of $30,847 from a third party investor. These loans were considered performing loans at the time of purchase.

During the year ended December 31, 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.

During the year ended December 31, 2022 and 2021, the Company repurchased pools of Advantage Loan Program loans with a total outstanding principal balance of $65,621 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 $179,828 and $171,185 at December 31, 2022 and 2021, respectively. For more information on the repurchases of Advantage Loan Program loans, refer to Note 19—Commitments and Contingencies.

The following tables present the activity in the allowance for loan losses by portfolio segment for the year ended December 31, 2022, 2021 and 2020:


							Commercial
	Residential		Commercial				Lines of		Other
December 31, 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		(5,105)		3,060		(7,919)		30		—		(9,934)
Charge offs		(197)		(4,064)		—		—		—		(4,261)
Recoveries		1,051		90		1,970		—		—		3,111
Total ending balance	$	27,951	$	11,694	$	5,781	$	38	$	—	$	45,464

							Commercial
	Residential		Commercial				Lines of		Other
December 31, 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		(1,578)		(2,052)		(4,552)		(83)		—		(8,265)
Charge offs		—		(7,921)		(1,965)		—		—		(9,886)
Recoveries		1,414		639		259		—		—		2,312
Total ending balance	$	32,202	$	12,608	$	11,730	$	8	$	—	$	56,548

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

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 December 31, 2022 and 2021:


							Commercial
	Residential		Commercial				Lines of		Other
December 31, 2022	Real Estate		Real Estate		Construction		Credit		Consumer		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	11	$	—	$	—	$	—	$	—	$	11
Collectively evaluated for impairment		27,940		11,694		5,781		38		—		45,453
Total ending allowance balance	$	27,951	$	11,694	$	5,781	$	38	$	—	$	45,464
Loans:
Loans individually evaluated for impairment	$	45	$	—	$	2,485	$	107	$	—	$	2,637
Loans collectively evaluated for impairment		1,391,231		221,669		42,018		1,289		5		1,656,212
Total ending loans balance	$	1,391,276	$	221,669	$	44,503	$	1,396	$	5	$	1,658,849


							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 December 31, 2022						Year Ended December 31, 2022
	Unpaid						Average		Interest		Cash Basis
	Principal		Recorded		Allowance for		Recorded		Income		Interest
	Balance		Investment		Loan Losses		Investment		Recognized		Recognized
With no related allowance for loan losses recorded:
Commercial real estate:
Retail	$	227	$	—	$	—	$	—	$	—	$	—
Construction		2,485		2,485		—		6,004		166		149
Commercial lines of credit:
Private banking		107		107		—		112		6		5
Subtotal		2,819		2,592		—		6,116		172		154
With an allowance for loan losses recorded:
Residential real estate, first mortgage		79		45		11		169		4		4
Total	$	2,898	$	2,637	$	11	$	6,285	$	176	$	158


	At December 31, 2021						Year Ended December 31, 2021
	Unpaid						Average		Interest		Cash Basis
	Principal		Recorded		Allowance for		Recorded		Income		Interest
	Balance		Investment		Loan Losses		Investment		Recognized		Recognized
With no related allowance for loan losses recorded:
Residential real estate, first mortgage	$	91	$	65	$	—	$	79	$	—	$	—
Commercial real estate:
Retail		—		—		—		612		—		—
Hotels/Single-room occupancy hotels		4,459		4,441		—		14,370		—		—
Office		—		—		—		1,846		—		—
Other		—		—		—		68		—		—
Construction		15,004		14,984		—		30,239		231		218
Commercial lines of credit:
Private banking		116		116		—		1,034		8		8
Subtotal		19,670		19,606		—		48,248		239		226
With an allowance for loan losses recorded:
Residential real estate, first mortgage		273		285		159		281		3		3
Construction		—		—		—		2,541		219		200
Subtotal		273		285		159		2,822		222		203
Total	$	19,943	$	19,891	$	159	$	51,070	$	461	$	429


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

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

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

The following table presents the recorded investment in nonaccrual and loans past due over 90 days still on accrual, excluding nonaccrual loans held for sale, by class of loans as of December 31, 2022 and 2021:


	At December 31,
	2022				2021
			Loans Past				Loans Past
			Due Over 90				Due Over 90
	Nonaccrual		Days Still		Nonaccrual		Days Still
	Loans		Accruing		Loans		Accruing
Residential real estate:
Residential first mortgage	$	33,501	$	35	$	45,439	$	39
Residential second mortgage		189		—		236		—
Commercial real estate:
Hotels/Single-room occupancy hotels		—		—		4,441		—
Construction		—		—		12,499		—
Total	$	33,690	$	35	$	62,615	$	39

As of December 31, 2022, there were nonaccrual loans of $33,690 of which an allowance for loan losses of $5,160 has been allocated with respect to these loans. The estimated fair value of the collateral securing these loans exceeded their carrying amount, or the loans were previously charged down to realizable collateral values. Accordingly, no specific valuation allowance was considered necessary.

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


	30 ‑ 59		60 ‑ 89		Greater than
	Days		Days		89 Days		Total		Loans Not
December 31, 2022	Past Due		Past Due		Past Due		Past Due		Past Due		Total
Residential real estate:
Residential first mortgage	$	17,881	$	5,337	$	33,536	$	56,754	$	1,324,545	$	1,381,299
Residential second mortgage		99		—		189		288		9,689		9,977
Commercial real estate:
Retail		—		—		—		—		28,971		28,971
Multifamily		—		—		—		—		81,444		81,444
Office		—		—		—		—		39,610		39,610
Hotels/Single-room occupancy hotels		—		—		—		—		5,208		5,208
Industrial		—		—		—		—		30,242		30,242
Other		—		—		—		—		36,194		36,194
Construction		—		—		—		—		44,503		44,503
Commercial lines of credit:
Private banking		—		—		—		—		107		107
C&I lending		—		—		—		—		1,289		1,289
Other consumer		—		—		—		—		5		5
Total	$	17,980	$	5,337	$	33,725	$	57,042	$	1,601,807	$	1,658,849


	30 ‑ 59		60 ‑ 89		Greater 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 interest, and nonaccrual loans.

Troubled Debt Restructurings

At December 31, 2022 and 2021, the balance of outstanding loans identified as troubled debt restructurings, along with the allocated portion of the allowance for loan losses with respect to these loans, was as follows:


	At December 31,
	2022				2021
	Recorded		Allowance for		Recorded		Allowance for
	Investment		Loan Losses		Investment		Loan Losses
Residential real estate, first mortgage	$	45	$	11	$	181	$	39
Commercial real estate:
Hotels/Single-room occupancy hotels		—		—		4,441		—
Construction		2,485		—		13,678		—
Commercial lines of credit, private banking		107		—		116		—
Total	$	2,637	$	11	$	18,416	$	39

During the year ended December 31, 2022, there were no loans modified as troubled debt restructurings. At December 31, 2022, there were no troubled debt restructurings in default.

During the year ended December 31, 2021, there were no loans that defaulted for which the default occurred within one year of modification. At December 31, 2021, there were five loans totaling $15,752 in default that had been modified as troubled debt restructurings.

The terms of certain other loans have been modified during 2022 and 2021 that did not meet the definition of a troubled debt restructuring. These other loans that were modified were not considered significant.

Forbearance Loans

The CARES Act created a forbearance program for impacted borrowers and imposed a temporary 60-day moratorium on foreclosures and foreclosure-related evictions related to federally backed mortgage loans, which included loans secured by a first or subordinate lien on residential one-to-four family real property that have been purchased by Fannie Mae or Freddie Mac, are insured by the Department of Housing and Urban Development or are insured or guaranteed by other listed agencies. The federal agencies extended these programs on multiple occasions into late 2021, but they have since expired. The California legislature responded by enacting some statewide eviction protections which are in some cases supplemented by local ordinances, while the New York legislature extended the state’s eviction moratorium through January 2022.

The Company had offered forbearance under the CARES Act to customers facing COVID-19-related financial difficulties that generally provided for principal and interest forbearance for 120 days to residential borrowers with extensions available to qualified borrowers available for up to a maximum deferral period of twelve months, and these loans were not considered troubled debt restructurings. Under the forbearance program, interest continued to accrue at the note rate. At the end of the forbearance period, the borrower’s accrued but unpaid interest was added to their outstanding principal balance while keeping the principal and interest payment at the amount determined in accordance with the terms of the note, thus extending the loan’s maturity date. The terms of commercial loan forbearances were reviewed and determined on a case-by-case basis, and these loans were not considered troubled debt restructurings. The Company terminated the forbearance program, effective July 31, 2021. There were no loans outstanding under the COVID-19 forbearance program at December 31, 2022.

Foreclosure Proceedings

At December 31, 2022 and 2021, the recorded investment of residential mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process totaled $5,711 and $2,780, respectively. Of the loans in formal foreclosure proceedings, $603 and $2,770 were included in loans held for sale in the consolidated balance sheets at December 31, 2022 and 2021, respectively, and were carried at the lower of amortized cost or fair value. The balance of loans are classified as held for investment and receive an allocation of the allowance for loan losses consistent with a substandard loan loss allocation rate as these loans were classified as substandard.

Credit Quality Indicators

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


			Special
December 31, 2022	Pass		Mention		Substandard		Doubtful		Total
Residential real estate:
Residential first mortgage	$	1,347,763	$	—	$	33,536	$	—	$	1,381,299
Residential second mortgage		9,788		—		189		—		9,977
Commercial real estate:
Retail		28,971		—		—		—		28,971
Multifamily		67,361		14,083		—		—		81,444
Office		39,610		—		—		—		39,610
Hotels/Single-room occupancy hotels		—		3,669		1,539		—		5,208
Industrial		30,242		—		—		—		30,242
Other		21,036		15,158		—		—		36,194
Construction		31,369		4,650		8,484		—		44,503
Commercial lines of credit:
Private banking		107		—		—		—		107
C&I lending		1,289		—		—		—		1,289
Other consumer		5		—		—		—		5
Total	$	1,577,541	$	37,560	$	43,748	$	—	$	1,658,849


			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

Leasehold Improvements and Equipment, net

12 Months Ended

Dec. 31, 2022

Leasehold Improvements and Equipment, net

Leasehold Improvements and Equipment, net

Note 5—Leasehold Improvements and Equipment, net

Leasehold improvements and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are determined using the straight-line method. Leasehold improvements and equipment at December 31, 2022 and 2021 are as follows:


	Estimated
	Useful
	Life	December 31,
	(in years)	2022		2021
Leasehold improvements	*	$	11,592	$	11,527
Furniture and equipment	3 ‑ 7		11,959		14,568
Total			23,551		26,095
Less: accumulated depreciation and amortization			(17,250)		(18,674)
Leasehold improvements and equipment, net		$	6,301	$	7,421

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

The amount charged to occupancy and equipment in the consolidated statements of operations for depreciation and amortization was $1,541, $1,754 and $1,608 for the year ended December 31, 2022, 2021 and 2020, respectively.

Mortgage Servicing Rights, net

12 Months Ended

Dec. 31, 2022

Mortgage Servicing Rights, net

Mortgage Servicing Rights, net

Note 6—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 consolidated balance sheets. The principal balance of these loans at December 31, 2022 and 2021 are as follows:


	December 31,
	2022		2021
Residential real estate mortgage loan portfolios serviced for:
FNMA	$	113,704	$	124,764
FHLB		34,282		40,209
Private investors		43,274		142,810
Total	$	191,260	$	307,783

Custodial escrow balances maintained with these serviced loans were $380 and $5,501 at December 31, 2022 and 2021, respectively. These balances are included in noninterest-bearing deposits in the consolidated balance sheets.

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


	Year Ended December 31,
	2022		2021		2020
Mortgage servicing rights:
Beginning of year	$	3,332	$	7,853	$	10,845
Additions		11		136		713
Disposals (Note 19)		(863)		(2,381)		(789)
Amortization		(640)		(2,276)		(2,916)
End of year		1,840		3,332		7,853
Valuation allowance:
Beginning of year		610		2,165		1,080
Additions (recoveries)		(564)		(1,555)		1,085
End of year		46		610		2,165
Mortgage servicing rights, net	$	1,794	$	2,722	$	5,688

Servicing loss, net of amortization of servicing rights and changes in the valuation allowance, was $(20), $(1,208) and $(1,324) for the year ended December 31, 2022, 2021 and 2020, respectively.

The fair value of mortgage servicing rights was $2,154 and $2,916 at December 31, 2022 and 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 December 31, 2022 was determined using discount rates ranging from 10.0% to 12.5%, 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 December 31, 2022 and 2021, the carrying amount of certain individual groupings exceeded their fair value, resulting in write-downs to fair value. Refer to Note 15—Fair Values of Financial Instruments.

- Definition

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

+ References

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

Deposits

12 Months Ended

Dec. 31, 2022

Deposits

Deposits

Note 7—Deposits

Time deposits, included in interest-bearing deposits, were $861,733 and $891,820 at December 31, 2022 and 2021, respectively. Time deposits included brokered deposits of $20,109 at December 31, 2021.

Time deposits that meet or exceed the FDIC insurance limit of $250 were $243,861 and $244,868 at December 31, 2022 and 2021, respectively.

At December 31, 2022, the scheduled maturities of time deposits for the next five years were as follows:


2023	$	444,911
2024		399,589
2025		13,421
2026		2,403
2027		1,409

FHLB Borrowings

12 Months Ended

Dec. 31, 2022

FHLB Borrowings

FHLB Borrowings

Note 8—FHLB Borrowings

FHLB Advances

FHLB advances at December 31, 2022 and 2021 consist of the following:


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

At December 31, 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.

In September 2022, the Company entered into a short-term variable-rate advance of $35,000 with a maturity date of March 2023. This short-term variable-rate advance was repaid in September 2022. Additionally, the Company repaid $100,000 in long-term fixed rate advances that were called in May 2022. In the fourth quarter of 2021, the Company repaid $157,000 in long-term fixed rate advances, before their maturity date without incurring a prepayment penalty.

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 through October 2023. The overdraft line of credit was not used during the year ended December 31, 2022. The average amount outstanding on the overdraft line of credit during the year ended December 31, 2021 was $7. Borrowings accrue interest at a variable-rate based on the FHLB’s overnight cost of funds rate, which was 4.74% and 0.43% at December 31, 2022 and 2021, respectively. At December 31, 2022 and 2021, there were no outstanding borrowings under this agreement. The overdraft line of credit is issued for a one-year term and automatically extends for an additional one-year term unless terminated in advance of the renewal by the Company. Upon renewal of the credit agreement in October 2021, the Company’s borrowing capacity was reduced from $50,000 to its current borrowing capacity of $20,000.

In 2021, the Company entered into irrevocable standby letters of credit arrangements with the FHLB totaling $11,500 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 of $4,000 has a 36-month term and expires in July 2024. This letter of credit 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 December 31, 2022 and 2021, respectively. There were no borrowings outstanding on these standby letters of credit during the year ended December 31, 2022 and 2021.

The long-term fixed-rate advance and the overdraft line of credit are collateralized by certain investment securities and loans. Based on this collateral and holdings of FHLB stock, the Company had additional borrowing capacity with the FHLB of $332,309 at December 31, 2022. Refer to Note 3—Investment Securities for further information on securities pledged and Note 4—Loans for further information on loans pledged.

Other Borrowings

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

Subordinated Notes, net

12 Months Ended

Dec. 31, 2022

Subordinated Notes, net

Subordinated Notes, net

Note 9—Subordinated Notes, net

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


	December 31,
	2022		2021
Subordinated notes	$	65,000	$	65,000
Unamortized note premium		271		343
Total	$	65,271	$	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 9.90% and 5.94% at December 31, 2022 and 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 $4,969, $4,127 and $4,713 for the year ended December 31, 2022, 2021 and 2020, 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 Bank’s deposits as well as the Company’s subsidiaries’ liabilities to general creditors and liabilities arising during the ordinary course of business. The Notes may be included in Tier 2 capital for the Company under current regulatory guidelines and interpretations. As long as the Notes are outstanding, the Company is permitted to pay dividends if prior to such dividends, the Bank is considered well capitalized, as defined by regulatory guidelines.

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

Shareholders' Equity

12 Months Ended

Dec. 31, 2022

Shareholders' Equity.

Shareholders' Equity

Note 10— Shareholders’ Equity

Capital Stock

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

Preferred Stock

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

No Par Common Stock

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

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 the stock purchase agreement and employment 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 the date of sale.

Stock Repurchase Program

The board of directors previously approved the repurchase of up to $50,000 of the Company’s outstanding shares of common stock. The stock repurchase program permits the Company to purchase shares of its common stock from time to time in the open market or in privately negotiated transactions. The program does not have an expiration date. Under this program, the Company is not obligated to repurchase shares of its common stock. The repurchased shares will be canceled and returned to authorized but unissued status. As of December 31, 2022, the Company had $19,568 of common stock purchases remaining that may be made under the program. In March 2020, the Company suspended the stock repurchase program.

During the year ended December 31, 2020, the Company repurchased and cancelled 10,912 shares of its common stock for $82, including commissions and fees (average repurchase price of $7.57 per share). Such repurchases of common stock were funded through cash generated from operations.

- 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

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+ Details

Stock-based Compensation

12 Months Ended

Dec. 31, 2022

Stock-based Compensation

Stock-based Compensation

Note 11—Stock-based Compensation

The board of directors established the 2020 Omnibus Equity Incentive Plan (the “2020 Plan”), which was approved by the shareholders in December 2020. The 2020 Plan provides for the grant of up to 3,979,661 shares of common stock for stock options, stock appreciation rights, restricted stock, restricted stock units, performance units and performance shares for issuance to employees, consultants and the board of directors of the Company, of which 3,495,696 shares were available for future grants. 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.

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

In June 2020, the Company granted its Chief Executive Officer options to purchase 300,000 shares of common stock with an exercise price of $4.00 per share. The stock options vested one-third on January 1, 2021, one-third on the first anniversary of the date of grant and one-third on January 1, 2022. In the event of termination other than for cause, the Chief Executive Officer’s then vested stock options will remain exercisable for three years following termination, provided that the Chief Executive Officer remains in compliance with certain terms contained in his employment agreement.

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

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


	Year Ended
	December 31, 2020
Risk-free interest rate		0.49	%
Expected term (in years)		5.61
Expected stock price volatility		33.91	%
Dividend yield		0.10	%

A summary of the Company’s stock option activity as of and for the year ended December 31, 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 December 31, 2022	349,545	$	5.19	7.17	$	627
Exercisable at December 31, 2022	344,506	$	5.14	7.18	$	627

The Company recorded stock-based compensation expense associated with stock options of $(6), $173 and $200 for the year ended December 31, 2022, 2021 and 2020, respectively. At December 31, 2022, there was $1 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 2020 Plan, the outstanding restricted stock awards will immediately vest.

During the year ended December 31, 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 with a weighted average grant-date fair value of $5.75 and 186,842 shares were awarded to key employees with a weighted average grant-date fair value of $6.77. During the year ended December 31, 2021, the board of directors approved the issuance of 252,123 shares of restricted stock, of which 45,000 shares were awarded to independent directors with a weighted average grant-date fair value of $4.71 and 207,123 shares were awarded to key employees with a weighted average grant-date fair value of $5.05. During the year ended December 31, 2020, the board of directors approved the issuance of 151,874 shares of restricted stock to certain key employees with a weighted average grant-date fair value of $6.91.

During the year ended December 31, 2022 and 2021, the Company withheld 32,929 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 $216 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 as of and for the year ended December 31, 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	(110,402)		6.14
Forfeited	(24,952)		5.79
Nonvested at December 31, 2022	390,125	$	6.17

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 $906, $453 and $134 for the year ended December 31, 2022, 2021 and 2020, respectively. At December 31, 2022, there was $1,568 of total unrecognized compensation cost related to the nonvested stock granted which is expected to be recognized over a weighted-average period of 1.99 years. The total fair value of shares vested during the year ended December 31, 2022 and 2021 was $673 and $249, respectively.

Regulatory Capital Requirements

12 Months Ended

Dec. 31, 2022

Regulatory Capital Requirements

Regulatory Capital Requirements

Note 12—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 exposure 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. 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 December 31, 2022 and 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 consolidated Company’s and the Bank’s actual and minimum required capital amounts and ratios at December 31, 2022 and 2021, applying the 100% risk weight to Advantage Loan Program loans:


					For Capital
					Adequacy				To be Well
	Actual				Purposes				Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
December 31, 2022
Total adjusted capital to risk-weighted assets
Consolidated	$	390,591	25.64	%	$	121,888	8.00	%		N/A	N/A
Bank		425,159	27.93			121,795	8.00		$	152,244	10.00	%
Tier 1 (core) capital to risk-weighted assets
Consolidated		332,068	21.79			91,416	6.00			N/A	N/A
Bank		405,803	26.65			91,346	6.00			121,795	8.00
Common Equity Tier 1 (CET1)
Consolidated		332,068	21.79			68,562	4.50			N/A	N/A
Bank		405,803	26.65			68,510	4.50			98,959	6.50
Tier 1 (core) capital to adjusted tangible assets (leverage ratio)
Consolidated		332,068	13.54			98,073	4.00			N/A	N/A
Bank		405,803	16.56			98,032	4.00			122,540	5.00


					For Capital
					Adequacy				To be Well
	Actual				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

The federal banking agencies rules provide for an optional simplified measure of capital adequacy for qualifying community banking organizations (that is, the community bank leverage ratio (the “CBLR”) framework), as provided by the Economic Growth, Regulatory Relief and Consumer Protection Act of 2018. The CBLR framework is designed to reduce the burden of the requirements for calculating and reporting risk-based capital ratios for qualifying community banking organizations that opt into the framework. In order to qualify for the CBLR framework, a community banking organization must have (i) a Tier 1 leverage ratio of greater than 9.0%, (ii) less than $10 billion in total consolidated assets, and (iii) limited amounts of off-balance-sheet exposure and trading assets and liabilities. A qualifying community banking organization that opts into the CBLR framework and meets all requirements under the framework will be considered to have met the well capitalized ratio requirements under prompt corrective action regulations and will not be required to report or calculate risk-based capital. Failure to meet the qualifying criteria within the grace period or maintain a leverage ratio of 8.0% or greater requires the institution to comply with the generally applicable capital requirements. The Company and the Bank have determined it is a qualifying community bank organization and has elected to opt into the CBLR framework, effective as of January 1, 2023.

By opting into the CBLR framework, the Company and the Bank will not be required to meet minimum standards under the risk-based capital rules. Instead, maintaining a Tier 1 leverage ratio of greater than 9.0% will be considered to have satisfied the risk-based and leverage capital requirements in the regulatory agencies’ generally applicable capital rules and to have met the well capitalized ratio requirements.

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 holding 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 19—Commitments and Contingencies. In addition, the Company currently is required to obtain the prior approval of the FRB in order to pay dividends to the Company’s shareholders.

- Definition

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

+ References + Details

Income (Loss) Per Share

12 Months Ended

Dec. 31, 2022

Income (Loss) Per Share

Income (Loss) Per Share

Note 13—Income (Loss) Per Share

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


	Year Ended December 31,
	2022		2021		2020
Numerator:
Net income (loss)	$	(14,194)	$	23,390	$	(12,967)

Denominator:
Weighted average common shares outstanding, basic		50,346,198		50,049,902		49,840,882
Weighted average effect of potentially dilutive common shares:
Stock options		—		55,060		—
Restricted stock		—		34,348		—
Weighted average common shares outstanding, diluted		50,346,198		50,139,310		49,840,882

Income (loss) per share:
Basic	$	(0.28)	$	0.47	$	(0.26)
Diluted	$	(0.28)	$	0.47	$	(0.26)

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


	Year Ended December 31,
	2022	2021	2020
Stock options	349,808	69,546	359,234
Restricted stock	372,395	78,418	166,621
Total	722,203	147,964	525,855

Employee Benefit Plans

12 Months Ended

Dec. 31, 2022

Employee Benefit Plans

Employee Benefit Plans

Note 14—Employee Benefit Plans

Defined Contribution Retirement Plan

The Company maintains a defined contribution plan under which, prior to 2021, it made quarterly matching contributions in an amount equal to 100% of the lesser of the first 3% of the employee’s contribution or 3% of the employee’s base salary during such quarter. The employee must have been employed by the Company on the date the matching contribution was made in order to have received it. In addition, the Company also could make a contribution of up to 1% of the amount deferred or contributed, based on a tiered scale of its return on assets for the prior year. The matching contributions were made only up to the amount of the employee’s deferrals or contributions to the plan. The Company also has the discretion to make additional contributions.

In 2021, the Company amended the defined contribution plan to provide for an annual matching contribution in an amount equal to 100% of the employee’s contribution up to 6% of the employee’s eligible compensation and also provides that such matching contribution may be made in shares of the Company’s common stock. In this case, an employee’s 401(k) plan account would hold interests in a unitized stock fund instead of a direct interest in the shares of common stock. The employee is not required to be employed by the Company on the date the matching contribution is made in order to receive it.

The Company’s plan expense was $1,463, $935 and $256 for the year ended December 31, 2022, 2021 and 2020, respectively.

Executive Incentive Retirement Plan Agreement

The Bank entered into individual executive incentive retirement plan agreements with certain employees. These agreements provided for payments, if payable in accordance with their respective terms and in accordance with applicable law, upon a separation from service or a change of control (as defined in such agreements) if the individual has met specified vesting requirements. Each of these agreements also provided for death benefits in the event of death in active service to the Bank. During the year ended December 31, 2022 and 2021, there were forfeitures and payments to individuals due to their separation from service. At December 31, 2022, a liability remains for one individual.

The aggregate liability accrued for potential payments under these agreements was $359 and $983 at December 31, 2022 and 2021, respectively. Periodic expense consisted of the Company’s contribution which was made ratably over the build-up period until retirement, adjusted for annual interest cost. The aggregate expense, net of forfeitures, for such agreements was $(405), $(470) and $(141) for the year ended December 31, 2022, 2021 and 2020, respectively.

Split-Dollar Life Insurance Agreement and Company-owned Life Insurance

The Bank entered into a split-dollar life insurance agreement with respect to its controlling shareholder and former Chief Executive Officer of the Bank. Pursuant to the agreement with the Bank, a portion of the death benefits arising from life insurance policies owned by the Company would be paid to beneficiaries designated by the controlling shareholder. The Bank cancelled the split-dollar life insurance agreement in 2022 and surrendered the related split-dollar life insurance policy as well as certain company-owned life insurance policies related to former executives with an aggregate cash surrender value of $24,877. This resulted in a payout in such amount to the Company. Upon the surrender of the policies, the remaining accrued liability of $4,109 was reversed and included as a reduction in salaries and employee benefits expense in the consolidated statement of operations for the year ended December 31, 2022. The estimated present value of the cost of providing these death benefits and the associated accrued liability was $4,216 at December 31, 2021.

The increase in the cash surrender value of $13,142 during the duration of ownership of these policies was previously considered tax-exempt income and became taxable income upon the surrender of the policies. The Company recorded income taxes of $3,614 and additional tax of $1,314, which is included in other expense within non-interest expense, upon the surrender of the policies during the year ended December 31, 2022.

- Definition

The entire disclosure for retirement benefits.

+ References

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-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

Fair Values of Financial Instruments

12 Months Ended

Dec. 31, 2022

Fair Values of Financial Instruments

Fair Values of Financial Instruments

Note 15—Fair Values of Financial Instruments

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

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

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

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

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

Investment Securities

The fair values for investment securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar investment securities (Level 2). For investment securities where quoted prices or market prices of similar investment securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). The fair value of the collateralized debt obligations, which are categorized as Level 3, is obtained from third-party pricing information. It is determined by calculating discounted cash flows that include 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.

Loans Held for Sale

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

Impaired Loans

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

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 6—Mortgage Servicing Rights, net, the valuation model utilizes interest rate, prepayment speed and default rate assumptions that market participants would use in estimating future net servicing income (Level 3).

Assets Measured at Fair Value on a Recurring Basis

The table below presents the assets measured at fair value on a recurring basis categorized by the level of inputs used in the valuation of each asset at December 31, 2022 and 2021:



			Fair Value Measurements at
			December 31, 2022
			Quoted Prices in		Significant
			Active Markets		Other		Significant
			for 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	$	168,437	$	116,355	$	52,082	$	—
Mortgage-backed securities		36,733		—		36,733		—
Collateralized mortgage obligations		138,241		—		138,241		—
Collateralized debt obligations		147		—		—		147
Equity securities		4,396		4,396		—		—



			Fair Value Measurements at
			December 31, 2021
			Quoted Prices in		Significant
			Active Markets		Other		Significant
			for 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 all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2022 and 2021:


	Fair Value Measurements Using Significant
	Unobservable Inputs (Level 3)
	Collateralized Debt Obligations
	2022		2021
Balance of recurring Level 3 assets at beginning of year	$	203	$	187
Total gains or losses (realized/unrealized):
Included in other comprehensive income (loss)		(2)		19
Principal maturities/settlements		(54)		(3)
Balance of recurring Level 3 assets at end of year	$	147	$	203

Assets Measured at Fair Value on a Nonrecurring 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 consolidated balance sheets at December 31, 2022 and 2021, the following table provides the level of valuation assumptions used to determine each adjustment and the related carrying value:

Fair Value Measurements at December 31, 2022

Quoted Prices in

Significant

Active Markets

Other

Significant

Identical

Observable

Unobservable

Fair

Assets

Inputs

Value

(Level 1)

(Level 2)

(Level 3)

Mortgage servicing rights

391

—

391


	Fair Value Measurements at December 31, 2021
			Quoted Prices in		Significant
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
	Fair		Assets		Inputs		Inputs
	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 for assets measured at fair value on a nonrecurring basis at December 31, 2022 and 2021:


	Quantitative Information about Level 3 Fair Value Measurements at December 31, 2022
					Range
	Fair Value		Valuation Technique	Unobservable Inputs	(Weighted Average)⁽¹⁾
Mortgage servicing rights	$	391	Discounted cash flow	Discount rate	10.0% - 12.5%
					(12.2)%
				Prepayment speed	7.5% - 22.4%
					(19.0)%
				Default rate	0.1% - 0.2%
					(0.2)%


	Quantitative Information about Level 3 Fair Value Measurements at December 31, 2021
					Range
	Fair Value		Valuation Technique	Unobservable Inputs	(Weighted Average)⁽¹⁾
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 December 31, 2022 and 2021, are as follows:


	Fair Value Measurements at December 31, 2022
	Carrying		Fair
	Amount		Value		Level 1		Level 2		Level 3
Financial Assets
Cash and due from banks	$	379,798	$	379,798	$	379,798	$	—	$	—
Interest-bearing time deposits with other banks		934		934		934		—		—
Loans held for sale		7,725		7,833		—		7,833		—
Loans, net		1,613,385		1,516,771		—		—		1,516,771

Financial Liabilities
Time deposits		861,733		855,566		—		855,566		—
Federal Home Loan Bank borrowings		50,000		48,360		—		48,360		—
Subordinated notes, net		65,271		65,355		—		65,355		—


	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 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

Income Taxes

12 Months Ended

Dec. 31, 2022

Income Taxes

Income Taxes

Note 16—Income Taxes

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


	Year Ended December 31,
	2022		2021		2020
Current:
Federal	$	1,636	$	4,814	$	4,489
State		214		1,429		1,908
Total current expense		1,850		6,243		6,397
Deferred:
Federal		3,251		2,088		(8,373)
State		1,528		1,312		(3,933)
Total deferred expense (benefit)		4,779		3,400		(12,306)
Total income tax expense (benefit)	$	6,629	$	9,643	$	(5,909)

The reconciliation between income taxes computed at the U.S. federal statutory income tax rate to our income tax expense (benefit) is as follows:


	Year Ended December 31,
	2022		2021		2020
Income tax expense (benefit) at 21%	$	(1,589)	$	6,937	$	(3,964)
Effect of:
State taxes, net of federal benefit		1,376		2,165		(1,600)
Taxable income on surrender of company-owned life insurance		2,760		—		—
Contingent loss		3,830		—		—
Non-taxable cancellation of split-dollar life insurance		(863)		—		—
Non-deductible items		731		480		—
Other, net		384		61		(345)
Total income tax expense (benefit)	$	6,629	$	9,643	$	(5,909)

The components of deferred tax assets and liabilities at December 31, 2022 and 2021 comprised the following:


	December 31,
	2022		2021
Deferred tax assets:
Allowance for loan losses	$	12,518	$	15,557
Net unrealized loss on investment securities		7,594		349
Operating lease liabilities		4,402		5,337
Interest on nonaccrual loans		1,031		833
Accrued expenses		980		891
Compensation plans		963		902
Depreciation		482		—
State franchise tax		358		422
Mortgage repurchase liability		223		812
Loans held for sale valuation allowance		121		2,180
Other		391		630
Total deferred tax assets		29,063		27,913
Less: valuation allowance		(120)		(30)
Total deferred tax assets, net of valuation allowance		28,943		27,883
Deferred tax liabilities:
Operating lease right-of-use asset		(4,075)		(5,003)
Mortgage servicing rights		(494)		(749)
Other		(670)		(705)
Total deferred tax liabilities		(5,239)		(6,457)
Deferred tax asset, net	$	23,704	$	21,426

At December 31, 2022, the Company has a capital loss carryforward of $743. The capital loss can be carried forward and utilized against capital gains during the carryforward period which expires in December 2025. The Company has recorded a deferred tax asset of $205 reflecting the benefit of the capital loss carryforward. As of December 31, 2022, a valuation allowance of $120 has been established against the portion of the deferred tax asset that is more likely than not to be realized.

Realization of the remaining deferred tax assets is dependent upon the generation of future taxable income. A valuation allowance is provided when it is more likely than not that some portion of the deferred tax assets will not be realized. Management evaluated the deferred tax assets for recoverability by considering negative and positive evidence. Based on the weight of all available evidence, the Company believes it is more likely than not that the deferred tax asset at December 31, 2022 will be realized through the future reversals of existing taxable temporary differences and projected future taxable income.

The Company is subject to U.S. federal income tax as well as income taxes of the state of New York and California. The Company’s federal income tax returns are subject to examination by the Internal Revenue Service for the years after 2018.

There were no unrecognized tax benefits at December 31, 2022, and the Company does not expect the total amount of unrecognized tax benefits to significantly increase in the next twelve months.

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: 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(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Related Party Transactions

12 Months Ended

Dec. 31, 2022

Related Party Transactions

Related Party Transactions

Note 17—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 10—Shareholders’ Equity.

Prior to 2021, the Company had made charitable contributions to a foundation for which certain members of the boards of directors of the Company and Bank, and who are also related to the Company’s controlling shareholders, serve as trustees. The Company paid $375 to the foundation during the year ended December 31, 2020.

Prior to 2021, the Company had provided monthly data processing and programming services to entities controlled by the Company’s controlling shareholders. Aggregate fees received for such services amounted to $79 during the year ended December 31, 2020. The Company terminated such data processing agreement, effective as of November 2020.

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

Operating Leases

12 Months Ended

Dec. 31, 2022

Operating Leases

Operating Leases

Note 18—Operating Leases

The Company leases its corporate headquarters and branch offices through noncancelable operating lease contracts. Such noncancelable operating lease contracts have remaining terms ranging from 2024 to 2030 and generally have options to extend for one or two five-year periods. The lease term may include options to extend the lease when it is reasonably certain that the option will be exercised based on the facts and circumstances at lease commencement. The lease contracts, most often, provide for rental payments that increase over the lease term based on a fixed percentage or based on a specified consumer price index. Any changes in the consumer price index after the lease commencement date are considered variable lease payments and recorded in the period when incurred. Additionally, the Company, in most cases, is required to pay insurance costs, real estate taxes and other operating expenses such as common area maintenance. The Company has made an accounting policy election for property leases to not separate nonlease components from lease components.

The Company leased certain storage and office space from entities owned by the Company’s controlling shareholders. These leases were terminated as of December 31, 2020. Amounts paid under such leases totaled $203 for the year ended December 31, 2020. The Company also subleased certain office space to entities owned by the Company’s controlling shareholders. Amounts received under such subleases totaled $97, $439 and $277 for the year ended December 31, 2022, 2021 and 2020, respectively. The sublease agreements ended on March 31, 2022.

The Company’s operating leases are included in operating lease right-of-use assets and operating lease liabilities in the consolidated balance sheets at December 31, 2022 and 2021. The lessors’ respective rates implicit in these operating leases and subsequent operating leases are generally not available and were not determinable from the terms of the lease. Therefore, the Company uses its incremental borrowing rate in determining the present value of the future lease payments when measuring the operating lease liabilities. The incremental borrowing rates are not observable, and therefore the rates are estimated primarily using observable borrowing rates on the Company’s FHLB advances. The FHLB borrowing rates are generally for over-collateralized advances with varying lengths of maturities. Therefore, the risk-free U.S. government bond rate and high-credit quality unsecured corporate bond rates are also considered in estimating the incremental borrowing rates. The Company’s incremental borrowing rates are developed considering its monthly payment amounts and the initial terms of its leases.

The components of total lease costs, which are recorded in non-interest expense – occupancy and equipment, in the consolidated statements of operations for the year ended December 31, 2022, 2021 and 2020 were as follows:


	Year Ended December 31,
	2022		2021		2020
Operating lease costs	$	4,083	$	4,377	$	4,554
Variable lease costs		861		1,136		959
Total lease costs	$	4,944	$	5,513	$	5,513

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


Year Ended December 31,
2023	$	4,086
2024		3,822
2025		3,260
2026		2,490
2027		1,702
Thereafter		1,805
Total lease payments		17,165
Less: future interest costs⁽¹⁾		(1,175)
Present value of lease liabilities	$	15,990

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

Other information related to the lease liabilities as of and for the year ended December 31, 2022, 2021 and 2020 was as follows:


	Year Ended December 31,
Other Information	2022			2021			2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	4,110		$	4,355		$	4,478
Weighted average remaining lease term (years)		4.85			5.53			6.60
Weighted average discount rate		2.97	%		2.94	%		3.16	%

Commitments and Contingencies

12 Months Ended

Dec. 31, 2022

Commitments and Contingencies

Commitments and Contingencies

Note 19—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 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 may 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 used. 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 December 31, 2022, there were no outstanding commitments to make loans.

Unused Lines of Credit

The Company also issues unused lines of credit to meet customer financing needs. At December 31, 2022, the unused lines of credit include residential second mortgages of $10,749, construction loans of $9,141 and commercial and industrial loans of $975, totaling $20,865. These variable-rate unused lines of credit commitments have interest rates ranging from 4.72% to 9.88% at December 31, 2022 with maturities ranging from two months 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 December 31, 2022 and 2021:

Lease Commitments

The Company’s lease commitments are disclosed in Note 18—Operating Leases.

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.

In September 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 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 OCC entered into 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 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 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 U.S. Securities and Exchange Commission (“SEC”). The Bank is fully cooperating with this investigation. In this regard, the Company is currently in discussions with the DOJ regarding a possible resolution of the DOJ investigation. Through December 31, 2022, the discussions have been preliminary and have involved providing various information requested by the DOJ as well as communications regarding the possible charges that might be part of a resolution. The Company had not received a specific proposal from the DOJ as of December 31, 2022. Subsequent to December 31, 2022, the Company entered into a Plea Agreement, resolving the DOJ investigation. See Note 21 — Subsequent Events.

In addition, the Company remains 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, including to reimburse third parties for the legal costs pursuant to requests for indemnification and advancement of expenses, which are reflected in the Company’s consolidated results of operations for the year ended December 31, 2022 and 2021.

At December 31, 2022 and 2021, the Company has a liability for contingent losses of $27,239 and $15,000, respectively, for the outcome of the pending investigations. This liability was increased at December 31, 2022 to reflect the accrual needed for the estimated financial impact of the DOJ resolution (refer to Note 21 — Subsequent Events) and an offset for the payment of the $6,000 civil money penalty pursuant to a Consent Order entered into by the Bank on September 27, 2022 with the OCC, which resolved the OCC Investigation. There can be no assurance (i) that the accrual for contingent losses will be sufficient to cover the cost of any payments required by the DOJ resolution, or (ii) that such costs will not materially exceed such accrual and have a further material impact on the Company’s business, financial condition or results of operations.

Mortgage Repurchase Liability

The Company has previously 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 established a mortgage repurchase liability of $7,823, and subsequently increased the liability by $2,527 during 2020.

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

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. These loans were previously sold to third-party investors with servicing of the loan retained. Losses expected to be incurred upon the repurchase of such loans are reflected in the mortgage repurchase liability.

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

In 2021, certain third-party investors accepted the above-mentioned offer, from which the Company repurchased pools of Advantage Loan Program loans previously sold with a total outstanding unpaid principal balance of $173,829. In connection with these repurchases, the Company recognized a disposition of mortgage servicing rights of $2,381 and charged a loss of $5,511 against the mortgage repurchase liability.

In 2022, the Company repurchased pools of Advantage Loan Program loans with a total outstanding unpaid principal balance of $65,621. In connection with these repurchases, the Company recognized a loss of $2,303 related to a fair value discount in other non-interest expense and a disposition of mortgage servicing rights of $863 and charged a loss of $1,506 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. At December 31, 2022, there are outstanding agreements to repurchase an additional pool of Advantage Loan Program loans with an unpaid principal balance of $21,277 that extends to July 2025, with the final decision to effect any such repurchase, as determined by the applicable investor.

At December 31, 2022, 2021 and 2020, the mortgage repurchase liability was $809, $2,954 and $9,699, respectively, which is included in accrued expenses and other liabilities in the consolidated balance sheets. The unpaid principal balance of residential real estate loans sold that were subject to potential repurchase obligations in the event of breach of representations and warranties totaled $112,542 and $237,049 at December 31, 2022 and 2021, respectively, including Advantage Loan Program loans totaling $43,274 and $142,810 at December 31, 2022 and 2021, respectively.

Activity in the mortgage repurchase liability was as follows:


	Year Ended December 31,
	2022		2021		2020
Balance, beginning of period	$	2,954	$	9,699	$	7,823
Net provision (recovery)		(639)		(1,234)		2,527
Loss on loan repurchases		(1,506)		(5,511)		(651)
Balance, end of the period	$	809	$	2,954	$	9,699

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

12 Months Ended

Dec. 31, 2022

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

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

Note 20—Condensed Financial Information of Sterling Bancorp, Inc. (Parent Company Only)

Summarized financial information for Sterling Bancorp, Inc. (the “Parent”) is shown below. The Parent has no significant operating activities.

CONDENSED BALANCE SHEETS


	December 31,
	2022		2021
ASSETS
Cash held at Bank	$	20,064	$	26,905
Investment in subsidiaries		386,363		381,936
Other assets		1,160		1,777
Total assets	$	407,587	$	410,618
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Subordinated notes, net	$	65,271	$	65,343
Other liabilities		29,689		1,648
Total liabilities		94,960		66,991
Total shareholders’ equity		312,627		343,627
Total liabilities and shareholders’ equity	$	407,587	$	410,618

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)


	Year Ended December 31,
	2022		2021		2020
Expenses:
Interest expense	$	4,969	$	4,127	$	4,713
Provision (recovery) for contingent losses, net		27,239		—		(10,000)
Other		7,602		3,574		6,135
Total expenses		39,810		7,701		848
Loss before income taxes and equity in subsidiaries income (loss)		(39,810)		(7,701)		(848)
Income tax benefit		(3,461)		(2,108)		(246)
Loss before equity in subsidiaries income (loss)		(36,349)		(5,593)		(602)
Equity in subsidiaries income (loss)		22,155		28,983		(12,365)
Net income (loss)	$	(14,194)	$	23,390	$	(12,967)
Other comprehensive income (loss)
Equity in other comprehensive income (loss) of subsidiaries		(18,628)		(1,284)		191
Comprehensive income (loss)	$	(32,822)	$	22,106	$	(12,776)

CONDENSED STATEMENTS OF CASH FLOWS


	Year Ended December 31,
	2022		2021		2020
Cash flows from operating activities
Net income (loss)	$	(14,194)	$	23,390	$	(12,967)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Equity in subsidiaries (income) loss		(22,155)		(28,983)		12,365
Provision (recovery) for contingent losses		27,239		—		(10,000)
Other		(72)		2		162
Change in operating assets and liabilities:
Other assets		617		12,137		(289)
Other liabilities		802		(11,897)		2,548
Net cash used in operating activities		(7,763)		(5,351)		(8,181)
Cash flows from investing activities
Capital contributed to subsidiary (Bank)		—		—		(50,000)
Dividends received from subsidiaries		—		10,000		—
Net cash provided by (used in) investing activities		—		10,000		(50,000)
Cash flows from financing activities
Proceeds from issuance of shares of common stock		—		1,350		—
Consideration received for issuance of shares of common stock to defined contribution retirement plan		1,138		—		—
Repurchase of shares of common stock		—		—		(82)
Repurchase of restricted shares to pay employee tax liability		(216)		(46)		—
Dividends paid to shareholders		—		—		(499)
Net cash provided by (used in) financing activities		922		1,304		(581)
Net change in cash		(6,841)		5,953		(58,762)
Cash held at Bank, beginning of year		26,905		20,952		79,714
Cash held at Bank, end of year	$	20,064	$	26,905	$	20,952
Supplemental cash flows information:
Cash paid for:
Interest	$	4,484	$	4,249	$	4,550

The Parent received cash dividends from its subsidiaries of $10,000 during the year ended December 31, 2021. During 2020, the Parent made a capital contribution to the Bank of $50,000.

Subsequent Events

12 Months Ended

Dec. 31, 2022

Subsequent Events

Subsequent Events

Note 21—Subsequent Events

On March 15, 2023, the Company, entered into a Plea Agreement (the “Plea Agreement”) with the DOJ, resolving the DOJ’s investigation. Under the Plea Agreement, the Company has agreed to plead guilty to one count of securities fraud primarily relating to disclosures with respect to the Advantage Loan Program contained in the Company’s 2017 IPO Registration Statement and its immediately following Annual Reports on Form 10-K filed in March 2018 and March 2019; pay $27,239 in restitution for the benefit of non-insider victim shareholders; further enhance its compliance program and internal controls with respect to securities law compliance; and provide periodic reports to the DOJ with respect to compliance matters. No criminal fine was imposed. The Company’s obligations under the Plea Agreement are generally effective for three years. This resolution releases the Company, as well as the Bank, from further prosecution for securities fraud and underlying mortgage fraud in the Advantage Loan Program. The Plea Agreement remains subject to final court approval.

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2022

Summary of Significant Accounting Policies

Principles of Consolidation

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

Use of Estimates

Fair Value Measurements

Consolidated Statements of Cash Flows

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

Cash flows related to loans are classified within operating and investing activities in the consolidated statements of cash flows based on their initial classification of the loan.

Cash and Due from Banks

Cash and due from banks includes cash, certificates of deposit and other deposits held with other banks with original maturities of three months or less.

Interest-bearing Time Deposits with Other Banks

Concentration of Credit Risk

Employee Retention Credits Under the CARES Act

Investment Securities

Investment securities includes debt securities and equity securities.

Debt Securities

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

Equity Securities

Loans Held for Sale

Loans

Troubled Debt Restructurings

Allowance for Loan Losses

The following portfolio segments have been identified:

Mortgage Servicing Rights, net

Transfers of Financial Assets

FHLB Stock

Company-Owned Life Insurance

During the year ended December 31, 2022, the Company surrendered certain life insurance policies related to former executives and a controlling shareholder. Refer to Note 14—Employee Benefit Plans.

Long-Lived Assets

Mortgage Repurchase Liability

Legal Contingencies and Litigation Accruals

Revenue from Contracts with Customers

Stock-based Compensation

Comprehensive Income

Loan Commitments and Related Financial Instruments

Income Taxes

Income (Loss) per Share, Basic and Diluted

Recently Issued Accounting Guidance

Also, the Company did not record an allowance related to its available for sale debt securities at the date of adoption since credit losses do not exist in its investment portfolio.

Investment Securities (Tables)

12 Months Ended

Dec. 31, 2022

Investment Securities

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


	December 31, 2022
	Amortized		Gross Unrealized				Fair
	Cost		Gain		Loss		Value
Available for sale:
U.S. Treasury and Agency securities	$	175,878	$	17	$	(7,458)	$	168,437
Mortgage-backed securities		41,388		—		(4,655)		36,733
Collateralized mortgage obligations		153,066		4		(14,829)		138,241
Collateralized debt obligations		157		—		(10)		147
Total	$	370,489	$	21	$	(26,952)	$	343,558


	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 information pertaining to sales of debt securities available for sale


	Year Ended December 31,
	2022		2021		2020
Proceeds from the sale of investment securities	$	6,999	$	—	$	99,971

Gross realized gains	$	33	$	—	$	337
Gross realized losses		(1)		—		(158)
Total net realized gains	$	32	$	—	$	179

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	$	47,482	$	47,314
Due after one year through five years		128,396		121,123
Mortgage-backed securities		41,388		36,733
Collateralized mortgage obligations		153,066		138,241
Collateralized debt obligations		157		147
Total	$	370,489	$	343,558

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


	December 31, 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	$	100,815	$	(2,839)	$	44,605	$	(4,619)	$	145,420	$	(7,458)
Mortgage-backed securities		5,792		(139)		30,941		(4,516)		36,733		(4,655)
Collateralized mortgage obligations		69,088		(3,169)		64,715		(11,660)		133,803		(14,829)
Collateralized debt obligations		—		—		147		(10)		147		(10)
Total	$	175,695	$	(6,147)	$	140,408	$	(20,805)	$	316,103	$	(26,952)


	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


	Year Ended
	December 31,
	2022		2021		2020
Net gains (losses) recorded during the year on equity securities	$	(580)	$	(142)	$	108
Less: net gains (losses) recorded during the year on equity securities sold during the period		—		—		—
Unrealized gains (losses) recorded during the year on equity securities held at the reporting date	$	(580)	$	(142)	$	108

Loans (Tables)

12 Months Ended

Dec. 31, 2022

Loans

Schedule of major categories of loans held for sale, investment and allowance for loan losses


	December 31,
	2022		2021
Residential real estate	$	6,181	$	11,359
Commercial real estate		1,544		53,628
Total loans held for sale	$	7,725	$	64,987


	December 31,
	2022		2021
Residential real estate	$	1,391,276	$	1,704,231
Commercial real estate		221,669		201,240
Construction		44,503		106,759
Commercial lines of credit		1,396		363
Other consumer		5		221
Total loans		1,658,849		2,012,814
Less: allowance for loan losses		(45,464)		(56,548)
Loans, net	$	1,613,385	$	1,956,266

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


							Commercial
	Residential		Commercial				Lines of		Other
December 31, 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		(5,105)		3,060		(7,919)		30		—		(9,934)
Charge offs		(197)		(4,064)		—		—		—		(4,261)
Recoveries		1,051		90		1,970		—		—		3,111
Total ending balance	$	27,951	$	11,694	$	5,781	$	38	$	—	$	45,464

							Commercial
	Residential		Commercial				Lines of		Other
December 31, 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		(1,578)		(2,052)		(4,552)		(83)		—		(8,265)
Charge offs		—		(7,921)		(1,965)		—		—		(9,886)
Recoveries		1,414		639		259		—		—		2,312
Total ending balance	$	32,202	$	12,608	$	11,730	$	8	$	—	$	56,548

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


							Commercial
	Residential		Commercial				Lines of		Other
December 31, 2022	Real Estate		Real Estate		Construction		Credit		Consumer		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	11	$	—	$	—	$	—	$	—	$	11
Collectively evaluated for impairment		27,940		11,694		5,781		38		—		45,453
Total ending allowance balance	$	27,951	$	11,694	$	5,781	$	38	$	—	$	45,464
Loans:
Loans individually evaluated for impairment	$	45	$	—	$	2,485	$	107	$	—	$	2,637
Loans collectively evaluated for impairment		1,391,231		221,669		42,018		1,289		5		1,656,212
Total ending loans balance	$	1,391,276	$	221,669	$	44,503	$	1,396	$	5	$	1,658,849


							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 December 31, 2022						Year Ended December 31, 2022
	Unpaid						Average		Interest		Cash Basis
	Principal		Recorded		Allowance for		Recorded		Income		Interest
	Balance		Investment		Loan Losses		Investment		Recognized		Recognized
With no related allowance for loan losses recorded:
Commercial real estate:
Retail	$	227	$	—	$	—	$	—	$	—	$	—
Construction		2,485		2,485		—		6,004		166		149
Commercial lines of credit:
Private banking		107		107		—		112		6		5
Subtotal		2,819		2,592		—		6,116		172		154
With an allowance for loan losses recorded:
Residential real estate, first mortgage		79		45		11		169		4		4
Total	$	2,898	$	2,637	$	11	$	6,285	$	176	$	158


	At December 31, 2021						Year Ended December 31, 2021
	Unpaid						Average		Interest		Cash Basis
	Principal		Recorded		Allowance for		Recorded		Income		Interest
	Balance		Investment		Loan Losses		Investment		Recognized		Recognized
With no related allowance for loan losses recorded:
Residential real estate, first mortgage	$	91	$	65	$	—	$	79	$	—	$	—
Commercial real estate:
Retail		—		—		—		612		—		—
Hotels/Single-room occupancy hotels		4,459		4,441		—		14,370		—		—
Office		—		—		—		1,846		—		—
Other		—		—		—		68		—		—
Construction		15,004		14,984		—		30,239		231		218
Commercial lines of credit:
Private banking		116		116		—		1,034		8		8
Subtotal		19,670		19,606		—		48,248		239		226
With an allowance for loan losses recorded:
Residential real estate, first mortgage		273		285		159		281		3		3
Construction		—		—		—		2,541		219		200
Subtotal		273		285		159		2,822		222		203
Total	$	19,943	$	19,891	$	159	$	51,070	$	461	$	429


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

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


	At December 31,
	2022				2021
			Loans Past				Loans Past
			Due Over 90				Due Over 90
	Nonaccrual		Days Still		Nonaccrual		Days Still
	Loans		Accruing		Loans		Accruing
Residential real estate:
Residential first mortgage	$	33,501	$	35	$	45,439	$	39
Residential second mortgage		189		—		236		—
Commercial real estate:
Hotels/Single-room occupancy hotels		—		—		4,441		—
Construction		—		—		12,499		—
Total	$	33,690	$	35	$	62,615	$	39


	30 ‑ 59		60 ‑ 89		Greater than
	Days		Days		89 Days		Total		Loans Not
December 31, 2022	Past Due		Past Due		Past Due		Past Due		Past Due		Total
Residential real estate:
Residential first mortgage	$	17,881	$	5,337	$	33,536	$	56,754	$	1,324,545	$	1,381,299
Residential second mortgage		99		—		189		288		9,689		9,977
Commercial real estate:
Retail		—		—		—		—		28,971		28,971
Multifamily		—		—		—		—		81,444		81,444
Office		—		—		—		—		39,610		39,610
Hotels/Single-room occupancy hotels		—		—		—		—		5,208		5,208
Industrial		—		—		—		—		30,242		30,242
Other		—		—		—		—		36,194		36,194
Construction		—		—		—		—		44,503		44,503
Commercial lines of credit:
Private banking		—		—		—		—		107		107
C&I lending		—		—		—		—		1,289		1,289
Other consumer		—		—		—		—		5		5
Total	$	17,980	$	5,337	$	33,725	$	57,042	$	1,601,807	$	1,658,849


	30 ‑ 59		60 ‑ 89		Greater 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 troubled debt restructurings


	At December 31,
	2022				2021
	Recorded		Allowance for		Recorded		Allowance for
	Investment		Loan Losses		Investment		Loan Losses
Residential real estate, first mortgage	$	45	$	11	$	181	$	39
Commercial real estate:
Hotels/Single-room occupancy hotels		—		—		4,441		—
Construction		2,485		—		13,678		—
Commercial lines of credit, private banking		107		—		116		—
Total	$	2,637	$	11	$	18,416	$	39

Schedule of risk rating of loans by class of loans


			Special
December 31, 2022	Pass		Mention		Substandard		Doubtful		Total
Residential real estate:
Residential first mortgage	$	1,347,763	$	—	$	33,536	$	—	$	1,381,299
Residential second mortgage		9,788		—		189		—		9,977
Commercial real estate:
Retail		28,971		—		—		—		28,971
Multifamily		67,361		14,083		—		—		81,444
Office		39,610		—		—		—		39,610
Hotels/Single-room occupancy hotels		—		3,669		1,539		—		5,208
Industrial		30,242		—		—		—		30,242
Other		21,036		15,158		—		—		36,194
Construction		31,369		4,650		8,484		—		44,503
Commercial lines of credit:
Private banking		107		—		—		—		107
C&I lending		1,289		—		—		—		1,289
Other consumer		5		—		—		—		5
Total	$	1,577,541	$	37,560	$	43,748	$	—	$	1,658,849


			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

Leasehold Improvements and Equipment, net (Tables)

12 Months Ended

Dec. 31, 2022

Leasehold Improvements and Equipment, net

Schedule of leasehold improvements and equipment, net


	Estimated
	Useful
	Life	December 31,
	(in years)	2022		2021
Leasehold improvements	*	$	11,592	$	11,527
Furniture and equipment	3 ‑ 7		11,959		14,568
Total			23,551		26,095
Less: accumulated depreciation and amortization			(17,250)		(18,674)
Leasehold improvements and equipment, net		$	6,301	$	7,421

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

Mortgage Servicing Rights, net (Tables)

12 Months Ended

Dec. 31, 2022

Mortgage Servicing Rights, net

Schedule of principal balance of mortgage loans serviced for others


	December 31,
	2022		2021
Residential real estate mortgage loan portfolios serviced for:
FNMA	$	113,704	$	124,764
FHLB		34,282		40,209
Private investors		43,274		142,810
Total	$	191,260	$	307,783

Schedule of activity for mortgage servicing rights and related valuation allowance


	Year Ended December 31,
	2022		2021		2020
Mortgage servicing rights:
Beginning of year	$	3,332	$	7,853	$	10,845
Additions		11		136		713
Disposals (Note 19)		(863)		(2,381)		(789)
Amortization		(640)		(2,276)		(2,916)
End of year		1,840		3,332		7,853
Valuation allowance:
Beginning of year		610		2,165		1,080
Additions (recoveries)		(564)		(1,555)		1,085
End of year		46		610		2,165
Mortgage servicing rights, net	$	1,794	$	2,722	$	5,688

Deposits (Tables)

12 Months Ended

Dec. 31, 2022

Deposits

Schedule of maturities of time deposits, including brokered deposits

At December 31, 2022, the scheduled maturities of time deposits for the next five years were as follows:


2023	$	444,911
2024		399,589
2025		13,421
2026		2,403
2027		1,409

FHLB Borrowings (Tables)

12 Months Ended

Dec. 31, 2022

FHLB Borrowings

Schedule of FHLB borrowings


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

Subordinated Notes, net (Tables)

12 Months Ended

Dec. 31, 2022

Subordinated Notes, net

Schedule of subordinated notes


	December 31,
	2022		2021
Subordinated notes	$	65,000	$	65,000
Unamortized note premium		271		343
Total	$	65,271	$	65,343

Stock-based Compensation (Tables)

12 Months Ended

Dec. 31, 2022

Stock-based Compensation

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


	Year Ended
	December 31, 2020
Risk-free interest rate		0.49	%
Expected term (in years)		5.61
Expected stock price volatility		33.91	%
Dividend yield		0.10	%

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 December 31, 2022	349,545	$	5.19	7.17	$	627
Exercisable at December 31, 2022	344,506	$	5.14	7.18	$	627

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	(110,402)		6.14
Forfeited	(24,952)		5.79
Nonvested at December 31, 2022	390,125	$	6.17

Regulatory Capital Requirements (Tables)

12 Months Ended

Dec. 31, 2022

Regulatory Capital Requirements

Schedule of actual and minimum required capital amounts and ratios


					For Capital
					Adequacy				To be Well
	Actual				Purposes				Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
December 31, 2022
Total adjusted capital to risk-weighted assets
Consolidated	$	390,591	25.64	%	$	121,888	8.00	%		N/A	N/A
Bank		425,159	27.93			121,795	8.00		$	152,244	10.00	%
Tier 1 (core) capital to risk-weighted assets
Consolidated		332,068	21.79			91,416	6.00			N/A	N/A
Bank		405,803	26.65			91,346	6.00			121,795	8.00
Common Equity Tier 1 (CET1)
Consolidated		332,068	21.79			68,562	4.50			N/A	N/A
Bank		405,803	26.65			68,510	4.50			98,959	6.50
Tier 1 (core) capital to adjusted tangible assets (leverage ratio)
Consolidated		332,068	13.54			98,073	4.00			N/A	N/A
Bank		405,803	16.56			98,032	4.00			122,540	5.00


					For Capital
					Adequacy				To be Well
	Actual				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

Income (Loss) Per Share (Tables)

12 Months Ended

Dec. 31, 2022

Income (Loss) Per Share

Schedule of computation of income per share, basic and diluted


	Year Ended December 31,
	2022		2021		2020
Numerator:
Net income (loss)	$	(14,194)	$	23,390	$	(12,967)

Denominator:
Weighted average common shares outstanding, basic		50,346,198		50,049,902		49,840,882
Weighted average effect of potentially dilutive common shares:
Stock options		—		55,060		—
Restricted stock		—		34,348		—
Weighted average common shares outstanding, diluted		50,346,198		50,139,310		49,840,882

Income (loss) per share:
Basic	$	(0.28)	$	0.47	$	(0.26)
Diluted	$	(0.28)	$	0.47	$	(0.26)

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


	Year Ended December 31,
	2022	2021	2020
Stock options	349,808	69,546	359,234
Restricted stock	372,395	78,418	166,621
Total	722,203	147,964	525,855

Fair Values of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 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
			December 31, 2022
			Quoted Prices in		Significant
			Active Markets		Other		Significant
			for 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	$	168,437	$	116,355	$	52,082	$	—
Mortgage-backed securities		36,733		—		36,733		—
Collateralized mortgage obligations		138,241		—		138,241		—
Collateralized debt obligations		147		—		—		147
Equity securities		4,396		4,396		—		—



			Fair Value Measurements at
			December 31, 2021
			Quoted Prices in		Significant
			Active Markets		Other		Significant
			for 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
	2022		2021
Balance of recurring Level 3 assets at beginning of year	$	203	$	187
Total gains or losses (realized/unrealized):
Included in other comprehensive income (loss)		(2)		19
Principal maturities/settlements		(54)		(3)
Balance of recurring Level 3 assets at end of year	$	147	$	203

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

Fair Value Measurements at December 31, 2022

Quoted Prices in

Significant

Active Markets

Other

Significant

Identical

Observable

Unobservable

Fair

Assets

Inputs

Value

(Level 1)

(Level 2)

(Level 3)

Mortgage servicing rights

391

—

391


	Fair Value Measurements at December 31, 2021
			Quoted Prices in		Significant
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
	Fair		Assets		Inputs		Inputs
	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 December 31, 2022
					Range
	Fair Value		Valuation Technique	Unobservable Inputs	(Weighted Average)⁽¹⁾
Mortgage servicing rights	$	391	Discounted cash flow	Discount rate	10.0% - 12.5%
					(12.2)%
				Prepayment speed	7.5% - 22.4%
					(19.0)%
				Default rate	0.1% - 0.2%
					(0.2)%


	Quantitative Information about Level 3 Fair Value Measurements at December 31, 2021
					Range
	Fair Value		Valuation Technique	Unobservable Inputs	(Weighted Average)⁽¹⁾
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

The carrying amounts and estimated fair values of financial instruments not carried at fair value at December 31, 2022 and 2021, are as follows:


	Fair Value Measurements at December 31, 2022
	Carrying		Fair
	Amount		Value		Level 1		Level 2		Level 3
Financial Assets
Cash and due from banks	$	379,798	$	379,798	$	379,798	$	—	$	—
Interest-bearing time deposits with other banks		934		934		934		—		—
Loans held for sale		7,725		7,833		—		7,833		—
Loans, net		1,613,385		1,516,771		—		—		1,516,771

Financial Liabilities
Time deposits		861,733		855,566		—		855,566		—
Federal Home Loan Bank borrowings		50,000		48,360		—		48,360		—
Subordinated notes, net		65,271		65,355		—		65,355		—


	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 December 31, 2021.

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Taxes

Schedule of components of the income tax expense (benefit)


	Year Ended December 31,
	2022		2021		2020
Current:
Federal	$	1,636	$	4,814	$	4,489
State		214		1,429		1,908
Total current expense		1,850		6,243		6,397
Deferred:
Federal		3,251		2,088		(8,373)
State		1,528		1,312		(3,933)
Total deferred expense (benefit)		4,779		3,400		(12,306)
Total income tax expense (benefit)	$	6,629	$	9,643	$	(5,909)

Schedule of reconciliation between income taxes computed at the U.S. federal statutory income tax rate to income tax expense (benefit)


	Year Ended December 31,
	2022		2021		2020
Income tax expense (benefit) at 21%	$	(1,589)	$	6,937	$	(3,964)
Effect of:
State taxes, net of federal benefit		1,376		2,165		(1,600)
Taxable income on surrender of company-owned life insurance		2,760		—		—
Contingent loss		3,830		—		—
Non-taxable cancellation of split-dollar life insurance		(863)		—		—
Non-deductible items		731		480		—
Other, net		384		61		(345)
Total income tax expense (benefit)	$	6,629	$	9,643	$	(5,909)

Schedule of components of deferred tax assets and liabilities


	December 31,
	2022		2021
Deferred tax assets:
Allowance for loan losses	$	12,518	$	15,557
Net unrealized loss on investment securities		7,594		349
Operating lease liabilities		4,402		5,337
Interest on nonaccrual loans		1,031		833
Accrued expenses		980		891
Compensation plans		963		902
Depreciation		482		—
State franchise tax		358		422
Mortgage repurchase liability		223		812
Loans held for sale valuation allowance		121		2,180
Other		391		630
Total deferred tax assets		29,063		27,913
Less: valuation allowance		(120)		(30)
Total deferred tax assets, net of valuation allowance		28,943		27,883
Deferred tax liabilities:
Operating lease right-of-use asset		(4,075)		(5,003)
Mortgage servicing rights		(494)		(749)
Other		(670)		(705)
Total deferred tax liabilities		(5,239)		(6,457)
Deferred tax asset, net	$	23,704	$	21,426

Operating Leases (Tables)

12 Months Ended

Dec. 31, 2022

Operating Leases

Schedule of Operating lease expense information


	Year Ended December 31,
	2022		2021		2020
Operating lease costs	$	4,083	$	4,377	$	4,554
Variable lease costs		861		1,136		959
Total lease costs	$	4,944	$	5,513	$	5,513

Schedule of Maturity of lease liabilities


Year Ended December 31,
2023	$	4,086
2024		3,822
2025		3,260
2026		2,490
2027		1,702
Thereafter		1,805
Total lease payments		17,165
Less: future interest costs⁽¹⁾		(1,175)
Present value of lease liabilities	$	15,990

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

Schedule of Other information


	Year Ended December 31,
Other Information	2022			2021			2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	4,110		$	4,355		$	4,478
Weighted average remaining lease term (years)		4.85			5.53			6.60
Weighted average discount rate		2.97	%		2.94	%		3.16	%

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2022

Commitments and Contingencies

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

Schedule of activity in the mortgage repurchase liability


	Year Ended December 31,
	2022		2021		2020
Balance, beginning of period	$	2,954	$	9,699	$	7,823
Net provision (recovery)		(639)		(1,234)		2,527
Loss on loan repurchases		(1,506)		(5,511)		(651)
Balance, end of the period	$	809	$	2,954	$	9,699

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

12 Months Ended

Dec. 31, 2022

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

Schedule of Financial statements of Sterling Bancorp, Inc

CONDENSED BALANCE SHEETS


	December 31,
	2022		2021
ASSETS
Cash held at Bank	$	20,064	$	26,905
Investment in subsidiaries		386,363		381,936
Other assets		1,160		1,777
Total assets	$	407,587	$	410,618
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Subordinated notes, net	$	65,271	$	65,343
Other liabilities		29,689		1,648
Total liabilities		94,960		66,991
Total shareholders’ equity		312,627		343,627
Total liabilities and shareholders’ equity	$	407,587	$	410,618

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)


	Year Ended December 31,
	2022		2021		2020
Expenses:
Interest expense	$	4,969	$	4,127	$	4,713
Provision (recovery) for contingent losses, net		27,239		—		(10,000)
Other		7,602		3,574		6,135
Total expenses		39,810		7,701		848
Loss before income taxes and equity in subsidiaries income (loss)		(39,810)		(7,701)		(848)
Income tax benefit		(3,461)		(2,108)		(246)
Loss before equity in subsidiaries income (loss)		(36,349)		(5,593)		(602)
Equity in subsidiaries income (loss)		22,155		28,983		(12,365)
Net income (loss)	$	(14,194)	$	23,390	$	(12,967)
Other comprehensive income (loss)
Equity in other comprehensive income (loss) of subsidiaries		(18,628)		(1,284)		191
Comprehensive income (loss)	$	(32,822)	$	22,106	$	(12,776)

CONDENSED STATEMENTS OF CASH FLOWS


	Year Ended December 31,
	2022		2021		2020
Cash flows from operating activities
Net income (loss)	$	(14,194)	$	23,390	$	(12,967)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Equity in subsidiaries (income) loss		(22,155)		(28,983)		12,365
Provision (recovery) for contingent losses		27,239		—		(10,000)
Other		(72)		2		162
Change in operating assets and liabilities:
Other assets		617		12,137		(289)
Other liabilities		802		(11,897)		2,548
Net cash used in operating activities		(7,763)		(5,351)		(8,181)
Cash flows from investing activities
Capital contributed to subsidiary (Bank)		—		—		(50,000)
Dividends received from subsidiaries		—		10,000		—
Net cash provided by (used in) investing activities		—		10,000		(50,000)
Cash flows from financing activities
Proceeds from issuance of shares of common stock		—		1,350		—
Consideration received for issuance of shares of common stock to defined contribution retirement plan		1,138		—		—
Repurchase of shares of common stock		—		—		(82)
Repurchase of restricted shares to pay employee tax liability		(216)		(46)		—
Dividends paid to shareholders		—		—		(499)
Net cash provided by (used in) financing activities		922		1,304		(581)
Net change in cash		(6,841)		5,953		(58,762)
Cash held at Bank, beginning of year		26,905		20,952		79,714
Cash held at Bank, end of year	$	20,064	$	26,905	$	20,952
Supplemental cash flows information:
Cash paid for:
Interest	$	4,484	$	4,249	$	4,550

Nature of Operations (Details) $ in Thousands	1 Months Ended	12 Months Ended
Nature of Operations (Details) $ in Thousands	Jul. 31, 2021 USD ($)	Dec. 31, 2022 segment item	Dec. 31, 2021 USD ($)
Nature of Operations
Number of branches \| item		28
Number of reportable segments \| segment		1
Gain on sale of branch office			$ 1,417
Net cash paid on sale of branch office			63,545
Bellevue, Washington branch office
Nature of Operations
Disposal Group Deposits	$ 65,437
Gain on sale of branch office			$ 1,417
Net cash paid on sale of branch office	$ 63,545
San Francisco and Los Angeles, California
Nature of Operations
Number of branches \| item		26

Summary of Significant Accounting Policies - Concentration of Credit Risk (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2022	Dec. 31, 2021
Concentration of Credit Risk
FDIC insurance limit		$ 250
Minimum down payment percentage for Advantage Loan Program loans	35.00%
Loans held for sale		7,725	$ 64,987
Loans Receivable		1,658,849	2,012,814
Residential Real Estate [Member]
Concentration of Credit Risk
Loans Receivable		$ 1,391,276	$ 1,704,231
Residential real estate loans \| Loans receivables \| Residential Real Estate [Member]
Concentration of Credit Risk
Concentration of credit risk		84.00%	83.00%
California \| Loans receivables \| Residential Real Estate [Member]
Concentration of Credit Risk
Concentration of credit risk		81.00%	85.00%
Advantage Loan Program \| Loans receivables \| Residential Real Estate [Member]
Concentration of Credit Risk
Concentration of credit risk		63.00%	69.00%
Loans held for sale		$ 6,181	$ 11,359
Loans Held For Sale Include Nonaccrual Loans		1,942	8,671
Loans Receivable		$ 880,373	$ 1,185,458

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 ($)	Sep. 30, 2021 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2019 employee	Jun. 30, 2021 USD ($)	Mar. 31, 2021 USD ($)
Summary of Significant Accounting Policies
Percentage of Employee Retention Credits to qualified wages payments to employees		70.00%
Employee Retention Credits capped for qualified wages for each employee	$ 10,000	$ 10,000
CARES Act ERC tax credit benefit recorded				$ 6,529
CARES Act ERC tax credit receivable				6,529
CARES Act ERC tax refunds or credits received			$ 886
CARES Act ERC tax remaining receivable			$ 5,643	$ 6,529
Maximum [Member]
Summary of Significant Accounting Policies
Employee Retention Credits claimed per employee for each quarter	$ 7,000	$ 7,000				$ 7,000	$ 7,000
Average number of employees \| employee					500
Minimum [Member]
Summary of Significant Accounting Policies
Decrease in gross receipts (percentage)	20

Summary of Significant Accounting Policies - Federal Home Loan Bank Stock (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Summary of Significant Accounting Policies
Servicing fees	$ 905	$ 1,841	$ 3,373
Cash dividends received on investment securities	$ 433	$ 609	$ 847

Investment Securities - Amortized Cost and Fair Value Corresponding Gross Unrealized Gains and Losses (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Investment Securities
Available for sale, Amortized Cost	$ 370,489	$ 309,903
Available for sale, Gross Unrealized Gain	21	720
Available for sale, Gross Unrealized Loss	(26,952)	(1,966)
Investment securities available for sale, at fair value	343,558	308,657
Accrued interest receivable related to investment securities	930	410
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%
Proceeds from the sale of investment securities	$ 6,999		$ 99,971
Gross realized gains	33		337
Gross realized losses	(1)		(158)
Total net realized gains	32		179
Income tax expense on net realized gains	9		$ 50
Collateralized mortgage obligations \| US Government Corporations and Agencies Securities
Investment Securities
Investment securities available for sale, at fair value	353	$ 529
Debt securities \| Pledged as collateral \| FHLB borrowings
Investment Securities
Investment securities available for sale, at fair value	106,697
U.S. Treasury and Agency securities
Investment Securities
Available for sale, Amortized Cost	175,878	122,291
Available for sale, Gross Unrealized Gain	17	106
Available for sale, Gross Unrealized Loss	(7,458)	(229)
Investment securities available for sale, at fair value	168,437	122,168
Mortgage-backed securities
Investment Securities
Available for sale, Amortized Cost	41,388	49,739
Available for sale, Gross Unrealized Gain		84
Available for sale, Gross Unrealized Loss	(4,655)	(386)
Investment securities available for sale, at fair value	36,733	49,437
Collateralized mortgage obligations
Investment Securities
Available for sale, Amortized Cost	153,066	137,662
Available for sale, Gross Unrealized Gain	4	530
Available for sale, Gross Unrealized Loss	(14,829)	(1,343)
Investment securities available for sale, at fair value	138,241	136,849
Collateralized debt obligations
Investment Securities
Available for sale, Amortized Cost	157	211
Available for sale, Gross Unrealized Loss	(10)	(8)
Investment securities available for sale, at fair value	$ 147	$ 203

Investment Securities - Amortized Cost and Fair Value By Contractual Maturity (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Available for sale, Amortized Cost
Available for sale, Amortized Cost	$ 370,489	$ 309,903
Available for sale, Fair Value
Available for sale, Fair Value	343,558	308,657
U.S. Treasury and Agency securities
Available for sale, Amortized Cost
Due less than one year	47,482
Due after one year through five years	128,396
Available for sale, Amortized Cost	175,878	122,291
Available for sale, Fair Value
Due less than one year	47,314
Due after one year through five years	121,123
Available for sale, Fair Value	168,437	122,168
Mortgage-backed securities
Available for sale, Amortized Cost
Available for sale, Amortized Cost	41,388	49,739
Available for sale, Fair Value
Available for sale, Fair Value	36,733	49,437
Collateralized mortgage obligations
Available for sale, Amortized Cost
Available for sale, Amortized Cost	153,066	137,662
Available for sale, Fair Value
Available for sale, Fair Value	138,241	136,849
Collateralized debt obligations
Available for sale, Amortized Cost
Available for sale, Amortized Cost	157	211
Available for sale, Fair Value
Available for sale, Fair Value	$ 147	$ 203

Investment Securities - Aggregated by Major Security Type and Length of Time in a Continuous Unrealized Loss Position (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($) security	Dec. 31, 2021 USD ($)
Fair Value
Less than 12 Months, Fair value	$ 175,695	$ 144,097
12 Months or More, Fair Value	140,408	11,345
Available for sale, Continuous unrealized loss position, Fair Value	316,103	155,442
Unrealized Losses
Less than 12 Months, Unrealized Losses	(6,147)	(1,607)
12 Months or More, Unrealized Losses	(20,805)	(359)
Available for sale, Continuous unrealized loss position, Unrealized Losses	$ (26,952)	(1,966)
Number of debt securities in portfolio \| security	33
Number of debt securities in an unrealized loss position \| security	30
U.S. Treasury and Agency securities
Fair Value
Less than 12 Months, Fair value	$ 100,815	49,865
12 Months or More, Fair Value	44,605
Available for sale, Continuous unrealized loss position, Fair Value	145,420	49,865
Unrealized Losses
Less than 12 Months, Unrealized Losses	(2,839)	(229)
12 Months or More, Unrealized Losses	(4,619)
Available for sale, Continuous unrealized loss position, Unrealized Losses	(7,458)	(229)
Mortgage-backed securities
Fair Value
Less than 12 Months, Fair value	5,792	7,878
12 Months or More, Fair Value	30,941	8,729
Available for sale, Continuous unrealized loss position, Fair Value	36,733	16,607
Unrealized Losses
Less than 12 Months, Unrealized Losses	(139)	(36)
12 Months or More, Unrealized Losses	(4,516)	(350)
Available for sale, Continuous unrealized loss position, Unrealized Losses	(4,655)	(386)
Collateralized mortgage obligations
Fair Value
Less than 12 Months, Fair value	69,088	86,354
12 Months or More, Fair Value	64,715	2,413
Available for sale, Continuous unrealized loss position, Fair Value	133,803	88,767
Unrealized Losses
Less than 12 Months, Unrealized Losses	(3,169)	(1,342)
12 Months or More, Unrealized Losses	(11,660)	(1)
Available for sale, Continuous unrealized loss position, Unrealized Losses	(14,829)	(1,343)
Collateralized debt obligations
Fair Value
12 Months or More, Fair Value	147	203
Available for sale, Continuous unrealized loss position, Fair Value	147	203
Unrealized Losses
12 Months or More, Unrealized Losses	(10)	(8)
Available for sale, Continuous unrealized loss position, Unrealized Losses	$ (10)	$ (8)

Investment Securities - Equity Securities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Investment Securities
Fair value of equity securities	$ 4,642	$ 5,222
Equity securities with readily determinable fair values	4,396	4,976
Equity securities with readily determinable fair values
Net gains (losses) recorded during the year on equity securities	(580)	(142)	$ 108
Unrealized gains (losses) recorded during the year on equity securities held at the reporting date	(580)	(142)	$ 108
Level 3
Investment Securities
Investment in equity securities without readily determinable fair value	$ 246	$ 246

Loans - Major Categories of Loans Held for Sale (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Feb. 28, 2022	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Loans
Total loans held for sale		$ 7,725	$ 64,987
Nonaccrual loans held for sale			18,026
Modified troubled debt restructuring		2,637	18,416
Charge offs		4,261	9,886	$ 4,301
Residential real estate
Loans
Total loans held for sale		6,181	11,359
Nonaccrual loans held for sale			8,671
Charge offs		197		$ 3,594
Nonaccrual residential real estate loans
Loans
Nonaccrual loans held for sale		1,942
Commercial real estate
Loans
Total loans held for sale		1,544	53,628
Nonaccrual loans held for sale			9,355
Modified troubled debt restructuring			2,059
Loans transferred from loans held for investment to loans held for sale			61,549
Charge offs		$ 4,064	$ 7,921
Loans carrying value on date of sale	$ 49,455
Proceeds from sale of loans held for sale	$ 49,610

Loans - Major Categories of Loans Held for Investment and the Allowance for Loan Losses (Details) - USD ($) $ in Thousands	1 Months Ended		12 Months Ended
	Oct. 31, 2022	May 31, 2020	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Loans
Total loans			$ 1,658,849	$ 2,012,814
Less: allowance for loan losses			(45,464)	(56,548)	$ (72,387)	$ (21,730)
Total outstanding principal balance			1,613,385	1,956,266
Accrued interest receivable related to gross loans			6,894	7,282
Advantage Loan Program
Loans
Total outstanding principal balance			21,277	173,829
Loans repurchased during the period		$ 38,704	65,621	173,829	30,934
Advantage Loan Program loans repurchased
Loans
Total loans			179,828	171,185
Total outstanding principal balance			65,621
Residential real estate mortgage loans
Loans
Unpaid principal balance of loans acquired	$ 31,307
Purchase price of loans acquired	$ 30,847
Pledged as collateral \| FHLB borrowings
Loans
Total outstanding principal balance			389,830	557,410
Residential real estate
Loans
Total loans			1,391,276	1,704,231
Less: allowance for loan losses			(27,951)	(32,202)	(32,366)	(12,336)
Commercial real estate
Loans
Total loans			221,669	201,240
Less: allowance for loan losses			(11,694)	(12,608)	(21,942)	(5,243)
Total outstanding principal balance				53,628
Loans receivable charged off			4,064
Net cash proceeds from sale of commercial real estate loans to third party investor			17,794
Gain (loss) on sale of loans receivable			0
Construction
Loans
Total loans			44,503	106,759
Less: allowance for loan losses			(5,781)	(11,730)	(17,988)	(3,822)
Commercial lines of credit
Loans
Total loans			1,396	363
Less: allowance for loan losses			(38)	(8)	$ (91)	(328)
Other consumer
Loans
Total loans			$ 5	$ 221
Less: allowance for loan losses						$ (1)

Loans - Activity in the Allowance For Loan Losses by Portfolio Segment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Allowance for loan losses
Beginning balance	$ 56,548	$ 72,387	$ 21,730
Provision (recovery) for loan losses	(9,934)	(8,265)	54,865
Charge offs	(4,261)	(9,886)	(4,301)
Recoveries	3,111	2,312	93
Total ending balance	45,464	56,548	72,387
Residential Real Estate
Allowance for loan losses
Beginning balance	32,202	32,366	12,336
Provision (recovery) for loan losses	(5,105)	(1,578)	23,604
Charge offs	(197)		(3,594)
Recoveries	1,051	1,414	20
Total ending balance	27,951	32,202	32,366
Commercial Real Estate
Allowance for loan losses
Beginning balance	12,608	21,942	5,243
Provision (recovery) for loan losses	3,060	(2,052)	16,634
Charge offs	(4,064)	(7,921)
Recoveries	90	639	65
Total ending balance	11,694	12,608	21,942
Construction
Allowance for loan losses
Beginning balance	11,730	17,988	3,822
Provision (recovery) for loan losses	(7,919)	(4,552)	14,866
Charge offs		(1,965)	(707)
Recoveries	1,970	259	7
Total ending balance	5,781	11,730	17,988
Commercial Lines of Credit
Allowance for loan losses
Beginning balance	8	91	328
Provision (recovery) for loan losses	30	(83)	(237)
Total ending balance	$ 38	$ 8	91
Other consumer
Allowance for loan losses
Beginning balance			1
Provision (recovery) for loan losses			(2)
Recoveries			$ 1

Loans - Activity in the Allowance For Loan Losses by Portfolio Segment And Based On Impairment Evaluation Method (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$ 11	$ 159
Collectively evaluated for impairment	45,453	56,389
Total ending allowance balance	45,464	56,548	$ 72,387	$ 21,730
Loans:
Loans individually evaluated for impairment	2,637	19,891
Loans collectively evaluated for impairment	1,656,212	1,992,923
Total loans	1,658,849	2,012,814
Residential Real Estate
Ending allowance balance attributable to loans:
Individually evaluated for impairment	11	159
Collectively evaluated for impairment	27,940	32,043
Total ending allowance balance	27,951	32,202	32,366	12,336
Loans:
Loans individually evaluated for impairment	45	350
Loans collectively evaluated for impairment	1,391,231	1,703,881
Total loans	1,391,276	1,704,231
Commercial Real Estate
Ending allowance balance attributable to loans:
Collectively evaluated for impairment	11,694	12,608
Total ending allowance balance	11,694	12,608	21,942	5,243
Loans:
Loans individually evaluated for impairment		4,441
Loans collectively evaluated for impairment	221,669	196,799
Total loans	221,669	201,240
Construction
Ending allowance balance attributable to loans:
Collectively evaluated for impairment	5,781	11,730
Total ending allowance balance	5,781	11,730	17,988	3,822
Loans:
Loans individually evaluated for impairment	2,485	14,984
Loans collectively evaluated for impairment	42,018	91,775
Total loans	44,503	106,759
Commercial lines of credit
Ending allowance balance attributable to loans:
Collectively evaluated for impairment	38	8
Total ending allowance balance	38	8	$ 91	328
Loans:
Loans individually evaluated for impairment	107	116
Loans collectively evaluated for impairment	1,289	247
Total loans	1,396	363
Other consumer
Ending allowance balance attributable to loans:
Total ending allowance balance				$ 1
Loans:
Loans collectively evaluated for impairment	5	221
Total loans	$ 5	$ 221

Loans - Impaired Loans by Class of Loans (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Loans
Unpaid principal balance, with no related allowance for loan losses recorded	$ 2,819	$ 19,670	$ 59,317
Unpaid principal balance, with an allowance for loan losses recorded		273	15,803
Total Unpaid Principal Balance	2,898	19,943	75,120
Recorded investment, with no related allowance for loan losses recorded	2,592	19,606	58,350
Recorded investment, with an allowance for loan losses recorded		285	15,684
Total Recorded Investment	2,637	19,891	74,034
Allowance for Loan Losses	11	159	2,237
Average recorded investment, with no related allowance for loan losses recorded	6,116	48,248	38,466
Average recorded investment, with an allowance for loan losses recorded		2,822	10,291
Total Average Recorded Investment	6,285	51,070	48,757
Interest Income Recognized, with no related allowance for loan losses recorded	172	239	1,064
Interest Income Recognized, with an allowance for loan losses recorded		222	267
Total Interest Income Recognized	176	461	1,331
Cash Basis Interest Recognized, with no related allowance for loan losses recorded	154	226	827
Cash Basis Interest Recognized, with an allowance for loan losses recorded		203	236
Total Cash Basis Interest Recognized	158	429	1,063
Residential real estate \| Real estate loan, first mortgage
Loans
Unpaid principal balance, with no related allowance for loan losses recorded		91	116
Unpaid principal balance, with an allowance for loan losses recorded	79	273	114
Recorded investment, with no related allowance for loan losses recorded		65	94
Recorded investment, with an allowance for loan losses recorded	45	285	114
Allowance for Loan Losses	11	159	41
Average recorded investment, with no related allowance for loan losses recorded		79	96
Average recorded investment, with an allowance for loan losses recorded	169	281	116
Interest Income Recognized, with an allowance for loan losses recorded	4	3	5
Cash Basis Interest Recognized, with an allowance for loan losses recorded	4	3	4
Commercial real estate \| Retail
Loans
Unpaid principal balance, with no related allowance for loan losses recorded	227		1,247
Recorded investment, with no related allowance for loan losses recorded			1,029
Average recorded investment, with no related allowance for loan losses recorded		612	1,065
Interest Income Recognized, with no related allowance for loan losses recorded			58
Cash Basis Interest Recognized, with no related allowance for loan losses recorded			48
Commercial real estate \| Office
Loans
Average recorded investment, with no related allowance for loan losses recorded		1,846
Commercial real estate \| Hotels/Single-room occupancy hotels
Loans
Unpaid principal balance, with no related allowance for loan losses recorded		4,459	11,428
Unpaid principal balance, with an allowance for loan losses recorded			8,645
Recorded investment, with no related allowance for loan losses recorded		4,441	11,419
Recorded investment, with an allowance for loan losses recorded			8,526
Allowance for Loan Losses			287
Average recorded investment, with no related allowance for loan losses recorded		14,370	5,221
Average recorded investment, with an allowance for loan losses recorded			3,858
Commercial real estate \| Other
Loans
Average recorded investment, with no related allowance for loan losses recorded		68
Construction
Loans
Unpaid principal balance, with no related allowance for loan losses recorded	2,485	15,004	42,669
Unpaid principal balance, with an allowance for loan losses recorded			6,920
Recorded investment, with no related allowance for loan losses recorded	2,485	14,984	41,951
Recorded investment, with an allowance for loan losses recorded			6,920
Allowance for Loan Losses			1,905
Average recorded investment, with no related allowance for loan losses recorded	6,004	30,239	29,395
Average recorded investment, with an allowance for loan losses recorded		2,541	6,189
Interest Income Recognized, with no related allowance for loan losses recorded	166	231	964
Interest Income Recognized, with an allowance for loan losses recorded		219	255
Cash Basis Interest Recognized, with no related allowance for loan losses recorded	149	218	744
Cash Basis Interest Recognized, with an allowance for loan losses recorded		200	226
Commercial lines of credit \| Private banking
Loans
Unpaid principal balance, with no related allowance for loan losses recorded	107	116
Unpaid principal balance, with an allowance for loan losses recorded			124
Recorded investment, with no related allowance for loan losses recorded	107	116
Recorded investment, with an allowance for loan losses recorded			124
Allowance for Loan Losses			4
Average recorded investment, with no related allowance for loan losses recorded	112	1,034	1,505
Average recorded investment, with an allowance for loan losses recorded			128
Interest Income Recognized, with no related allowance for loan losses recorded	6	8	42
Interest Income Recognized, with an allowance for loan losses recorded			7
Cash Basis Interest Recognized, with no related allowance for loan losses recorded	$ 5	$ 8	35
Cash Basis Interest Recognized, with an allowance for loan losses recorded			6
Commercial lines of credit \| C&I lending
Loans
Unpaid principal balance, with no related allowance for loan losses recorded			3,857
Recorded investment, with no related allowance for loan losses recorded			3,857
Average recorded investment, with no related allowance for loan losses recorded			$ 1,184

Loans - Investment in Nonaccrual and Loans Past Due Still Accruing by Class of Loans (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Loans
Nonaccrual loans	$ 33,690	$ 62,615
Loans Past Due Over 90 Days Still Accruing	35	39
Total	1,658,849	2,012,814
Allowance for loan losses, non accrual loans	5,160
Not Past Due
Loans
Total	1,601,807	1,912,084
Past Due
Loans
Total	57,042	100,730
30 - 59 Days Past Due
Loans
Total	17,980	34,651
60 - 89 Days Past Due
Loans
Total	5,337	3,425
Greater than 89 Days Past Due
Loans
Total	33,725	62,654
Residential real estate
Loans
Total	1,391,276	1,704,231
Residential real estate \| Real estate loan, first mortgage
Loans
Nonaccrual loans	33,501	45,439
Loans Past Due Over 90 Days Still Accruing	35	39
Total	1,381,299	1,690,456
Residential real estate \| Real estate loan, first mortgage \| Not Past Due
Loans
Total	1,324,545	1,617,509
Residential real estate \| Real estate loan, first mortgage \| Past Due
Loans
Total	56,754	72,947
Residential real estate \| Real estate loan, first mortgage \| 30 - 59 Days Past Due
Loans
Total	17,881	24,044
Residential real estate \| Real estate loan, first mortgage \| 60 - 89 Days Past Due
Loans
Total	5,337	3,425
Residential real estate \| Real estate loan, first mortgage \| Greater than 89 Days Past Due
Loans
Total	33,536	45,478
Residential real estate \| Real estate loan, second mortgage
Loans
Nonaccrual loans	189	236
Total	9,977	13,775
Residential real estate \| Real estate loan, second mortgage \| Not Past Due
Loans
Total	9,689	13,432
Residential real estate \| Real estate loan, second mortgage \| Past Due
Loans
Total	288	343
Residential real estate \| Real estate loan, second mortgage \| 30 - 59 Days Past Due
Loans
Total	99	107
Residential real estate \| Real estate loan, second mortgage \| Greater than 89 Days Past Due
Loans
Total	189	236
Commercial real estate
Loans
Total	221,669	201,240
Commercial real estate \| Retail
Loans
Total	28,971	19,574
Commercial real estate \| Retail \| Not Past Due
Loans
Total	28,971	19,574
Commercial real estate \| Multifamily
Loans
Total	81,444	96,960
Commercial real estate \| Multifamily \| Not Past Due
Loans
Total	81,444	96,960
Commercial real estate \| Office
Loans
Total	39,610	12,382
Commercial real estate \| Office \| Not Past Due
Loans
Total	39,610	12,382
Commercial real estate \| Hotels/Single-room occupancy hotels
Loans
Nonaccrual loans		4,441
Total	5,208	14,221
Commercial real estate \| Hotels/Single-room occupancy hotels \| Not Past Due
Loans
Total	5,208	9,780
Commercial real estate \| Hotels/Single-room occupancy hotels \| Past Due
Loans
Total		4,441
Commercial real estate \| Hotels/Single-room occupancy hotels \| Greater than 89 Days Past Due
Loans
Total		4,441
Commercial real estate \| Industrial
Loans
Total	30,242	7,320
Commercial real estate \| Industrial \| Not Past Due
Loans
Total	30,242	7,320
Commercial real estate \| Other
Loans
Total	36,194	50,783
Commercial real estate \| Other \| Not Past Due
Loans
Total	36,194	50,783
Construction
Loans
Nonaccrual loans		12,499
Total	44,503	106,759
Construction \| Not Past Due
Loans
Total	44,503	83,760
Construction \| Past Due
Loans
Total		22,999
Construction \| 30 - 59 Days Past Due
Loans
Total		10,500
Construction \| Greater than 89 Days Past Due
Loans
Total		12,499
Commercial lines of credit
Loans
Total	1,396	363
Commercial lines of credit \| Private banking
Loans
Total	107	116
Commercial lines of credit \| Private banking \| Not Past Due
Loans
Total	107	116
Commercial lines of credit \| C&I lending
Loans
Total	1,289	247
Commercial lines of credit \| C&I lending \| Not Past Due
Loans
Total	1,289	247
Other consumer
Loans
Total	5	221
Other consumer \| Not Past Due
Loans
Total	$ 5	$ 221

Loans - Troubled Debt Restructurings (Details)	12 Months Ended
Loans - Troubled Debt Restructurings (Details)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($) loan
Troubled Debt Restructurings
Loans classified as troubled debt restructurings	$ 2,637,000	$ 18,416,000
Allowance for outstanding loan losses classified as troubled debt restructurings	$ 11,000	39,000
Number of loans modified during the period, that were considered as TDRs	0
Troubled debt restructuring that defaulted within twelve months of modification	$ 0	0
Total outstanding principal balance	1,613,385,000	$ 1,956,266,000
Loans outstanding under COVID-19 forbearance program	0
Five Loans
Troubled Debt Restructurings
Number of TDRs subsequently defaulted \| loan		5
Loans modified as TDRs that are in default		$ 15,752,000
Residential real estate
Troubled Debt Restructurings
Loans secured by residential real estate properties in the process of foreclosure	5,711,000	2,780,000
Residential real estate \| Real estate loan, first mortgage
Troubled Debt Restructurings
Loans classified as troubled debt restructurings	45,000	181,000
Allowance for outstanding loan losses classified as troubled debt restructurings	11,000	39,000
Construction
Troubled Debt Restructurings
Loans classified as troubled debt restructurings	2,485,000	13,678,000
Commercial lines of credit and private banking
Troubled Debt Restructurings
Loans classified as troubled debt restructurings	107,000	116,000
Commercial real estate
Troubled Debt Restructurings
Loans classified as troubled debt restructurings		2,059,000
Total outstanding principal balance		53,628,000
Commercial real estate \| Hotels/Single-room occupancy hotels
Troubled Debt Restructurings
Loans classified as troubled debt restructurings		4,441,000
Mortgage loans held for sale
Troubled Debt Restructurings
Increase in allowance for outstanding loan losses classified as troubled debt restructurings	$ 603,000	$ 2,770,000

Loans - Risk Rating of Loans by Class of Loans (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Loans
Total	$ 1,658,849	$ 2,012,814
Pass
Loans
Total	1,577,541	1,895,663
Special Mention
Loans
Total	37,560	27,761
Substandard
Loans
Total	43,748	83,226
Doubtful
Loans
Total		6,164
Residential real estate
Loans
Total	1,391,276	1,704,231
Residential real estate \| Real estate loan, first mortgage
Loans
Total	1,381,299	1,690,456
Residential real estate \| Real estate loan, second mortgage
Loans
Total	9,977	13,775
Residential real estate \| Pass \| Real estate loan, first mortgage
Loans
Total	1,347,763	1,644,974
Residential real estate \| Pass \| Real estate loan, second mortgage
Loans
Total	9,788	13,539
Residential real estate \| Substandard \| Real estate loan, first mortgage
Loans
Total	33,536	45,249
Residential real estate \| Substandard \| Real estate loan, second mortgage
Loans
Total	189	236
Residential real estate \| Doubtful \| Real estate loan, first mortgage
Loans
Total		233
Commercial real estate
Loans
Total	221,669	201,240
Commercial real estate \| Retail
Loans
Total	28,971	19,574
Commercial real estate \| Multifamily
Loans
Total	81,444	96,960
Commercial real estate \| Office
Loans
Total	39,610	12,382
Commercial real estate \| Hotels/Single-room occupancy hotels
Loans
Total	5,208	14,221
Commercial real estate \| Industrial
Loans
Total	30,242	7,320
Commercial real estate \| Other
Loans
Total	36,194	50,783
Commercial real estate \| Pass \| Retail
Loans
Total	28,971	18,846
Commercial real estate \| Pass \| Multifamily
Loans
Total	67,361	75,543
Commercial real estate \| Pass \| Office
Loans
Total	39,610	10,413
Commercial real estate \| Pass \| Hotels/Single-room occupancy hotels
Loans
Total		8,205
Commercial real estate \| Pass \| Industrial
Loans
Total	30,242	7,320
Commercial real estate \| Pass \| Other
Loans
Total	21,036	48,996
Commercial real estate \| Special Mention \| Retail
Loans
Total		728
Commercial real estate \| Special Mention \| Multifamily
Loans
Total	14,083	8,104
Commercial real estate \| Special Mention \| Hotels/Single-room occupancy hotels
Loans
Total	3,669
Commercial real estate \| Special Mention \| Other
Loans
Total	15,158	1,692
Commercial real estate \| Substandard \| Multifamily
Loans
Total		13,313
Commercial real estate \| Substandard \| Office
Loans
Total		1,969
Commercial real estate \| Substandard \| Hotels/Single-room occupancy hotels
Loans
Total	1,539	6,016
Commercial real estate \| Substandard \| Other
Loans
Total		95
Construction
Loans
Total	44,503	106,759
Construction \| Pass
Loans
Total	31,369	67,254
Construction \| Special Mention
Loans
Total	4,650	17,226
Construction \| Substandard
Loans
Total	8,484	16,348
Construction \| Doubtful
Loans
Total		5,931
Commercial Lines of Credit
Loans
Total	1,396	363
Commercial Lines of Credit \| Private banking
Loans
Total	107	116
Commercial Lines of Credit \| C&I lending
Loans
Total	1,289	247
Commercial Lines of Credit \| Pass \| Private banking
Loans
Total	107	116
Commercial Lines of Credit \| Pass \| C&I lending
Loans
Total	1,289	236
Commercial Lines of Credit \| Special Mention \| C&I lending
Loans
Total		11
Other consumer
Loans
Total	5	221
Other consumer \| Pass
Loans
Total	$ 5	$ 221

Leasehold Improvements and Equipment, net (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Leasehold Improvements and Equipment, net
Leasehold improvements and equipment, gross	$ 23,551	$ 26,095
Less: accumulated depreciation and amortization	(17,250)	(18,674)
Leasehold improvements and equipment, net	6,301	7,421
Depreciation and amortization on leasehold improvements and equipment	1,541	1,754	$ 1,608
Leasehold improvements
Leasehold Improvements and Equipment, net
Leasehold improvements and equipment, gross	11,592	11,527
Furniture and equipment
Leasehold Improvements and Equipment, net
Leasehold improvements and equipment, gross	$ 11,959	$ 14,568
Minimum \| Furniture and equipment
Leasehold Improvements and Equipment, net
Estimated Useful Life (in years)	P3Y
Maximum \| Furniture and equipment
Leasehold Improvements and Equipment, net
Estimated Useful Life (in years)	P7Y

Mortgage Servicing Rights, net - Principle Balance by Category (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Mortgage Servicing Rights
Total	$ 191,260	$ 307,783
Custodial escrow balances maintained on serviced loans	380	5,501
FNMA
Mortgage Servicing Rights
Total	113,704	124,764
FHLB
Mortgage Servicing Rights
Total	34,282	40,209
Private investors
Mortgage Servicing Rights
Total	$ 43,274	$ 142,810

Mortgage Servicing Rights net - Activity and Related Valuation Allowance (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Mortgage servicing rights activity
Mortgage servicing rights Beginning of period	$ 3,332	$ 7,853	$ 10,845
Additions	11	136	713
Disposals	(863)	(2,381)	(789)
Amortization	(640)	(2,276)	(2,916)
Mortgage servicing rights End of period	1,840	3,332	7,853
Valuation allowance at beginning of period	610	2,165	1,080
Additions (recoveries)	(564)	(1,555)	1,085
Valuation allowance at end of period	46	610	2,165
Mortgage servicing rights, net	1,794	2,722	5,688
Servicing fee loss, net of amortization of servicing rights and changes in valuation allowance	$ (20)	$ (1,208)	$ (1,324)

Mortgage Servicing Rights, net - Valuation techniques (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Mortgage Servicing Rights
Fair value of mortgage servicing rights	$ 2,154	$ 2,916
Minimum
Mortgage Servicing Rights
Discount rate range	10.00%	9.50%
Maximum
Mortgage Servicing Rights
Discount rate range	12.50%	12.00%
Weighted Average
Mortgage Servicing Rights
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%

Deposits (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Deposits
Interest-bearing time deposits	$ 861,733	$ 891,820
Brokered time deposits		20,109
Time deposits that meet or exceed the FDIC insurance limit of $250	$ 243,861	$ 244,868

Deposits - Scheduled maturities of time deposits (Details) $ in Thousands	Dec. 31, 2022 USD ($)
Scheduled maturities of time deposits
2023	$ 444,911
2024	399,589
2025	13,421
2026	2,403
2027	$ 1,409

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

FHLB Borrowings - FHLB Advances (Details) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended	12 Months Ended
	Sep. 30, 2022	May 31, 2022	Dec. 31, 2021	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
FHLB Borrowings
Long-term fixed-rate FHLBNY advances			$ 150,000	$ 50,000	$ 150,000
Payments of FHLBank Borrowings, Financing Activities			$ 157,000	$ 135,000	$ 168,000	$ 11,000
Callable Option May, 2022
FHLB Borrowings
Repayment of advance		$ 100,000
Callable Option March, 2023
FHLB Borrowings
Short term variable rate advances	$ 35,000
Callable Option May, 2023
FHLB Borrowings
Repayment of advance	$ 35,000

FHLB Borrowings - FHLB Overdraft Line of Credit and Letters of Credit (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Oct. 31, 2021	Dec. 31, 2022	Dec. 31, 2021	Jun. 30, 2022
FHLB Borrowings
FHLB overdraft line of credit outstanding borrowings		$ 0	$ 0
FHLB letter of credit			11,500
Borrowings outstanding on FHLB standby letters of credit		2	11,500
FHLB fixed rate advances and overdraft line of credit additional borrowing capacity		332,309
FHLB short-term overdraft line of credit expiring October, 2021
FHLB Borrowings
FHLB line of credit agreement maximum borrowing limit	$ 50,000
FHLB short-term overdraft line of credit expiring October, 2022
FHLB Borrowings
FHLB overdraft line of credit average borrowings outstanding			$ 7
FHLB overdraft line of credit (as percent)			0.43%
FHLB short-term overdraft line of credit expiring October, 2023
FHLB Borrowings
FHLB overdraft line of credit outstanding borrowings		$ 0	$ 0
FHLB overdraft line of credit	$ 20,000
FHLB overdraft line of credit (as percent)		4.74%
FHLB, agreement term		1 year
FHLB, overdraft line of credit term	1 year
FHLB, additional agreement term		1 year
FHLB line of credit agreement current borrowing capacity	$ 20,000
Standby letter of credit expiring July, 2022
FHLB Borrowings
FHLB letter of credit		$ 7,500
FHLB letter of credit term		16 months
Standby letters of credit expiring July 2024
FHLB Borrowings
FHLB letter of credit		$ 4,000
FHLB letter of credit reduced				$ 2,000
FHLB letter of credit term		36 months

FHLB Borrowings - Other Borrowings (Details) - Other Banks - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 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

Subordinated Notes, net (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
Subordinated Notes, net (Details) - USD ($) $ in Thousands	Apr. 30, 2021	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Subordinated Notes, net
Total		$ 65,271	$ 65,343
Interest expense		4,969	4,127	$ 4,713
Subordinated notes
Subordinated Notes, net
Subordinated notes		65,000	65,000
Unamortized note premium		271	343
Total		$ 65,271	$ 65,343
Interest rate (as a percent)	7.00%	9.90%	5.94%
Interest expense		$ 4,969	$ 4,127	$ 4,713
Redemption price percentage of outstanding principal amount		100.00%
Integral multiple		$ 1
Notes redeemed		$ 0
LIBOR \| Subordinated notes
Subordinated Notes, net
Variable interest rate on subordinate notes (in percent)	5.82%

Shareholders' Equity (Details) $ / shares in Units, $ in Thousands	1 Months Ended		12 Months Ended
	Apr. 30, 2022 USD ($) $ / shares shares	May 31, 2021 USD ($) $ / shares shares	Dec. 31, 2022 USD ($) Vote $ / shares shares	Dec. 31, 2021 USD ($) $ / shares shares	Dec. 31, 2020 USD ($) $ / shares shares
Shareholders' Equity
Preferred stock, shares authorized \| shares			10,000,000	10,000,000
Common stock, shares authorized \| shares			500,000,000	500,000,000
Common stock, par value (in dollars per share) \| $ / shares			$ 0	$ 0
Number of votes \| Vote			1
Dividends paid per common share (in dollars per share) \| $ / shares					$ 0.01
Dividends distributed					$ 499
Preferred stock, shares issued \| shares			0	0
Preferred stock, shares outstanding \| shares			0	0
Issuance of shares of common stock to defined contribution retirement plan			$ 1,138
Shares repurchased and cancelled, value					82
Proceeds from issuance of shares of common stock				$ 1,350
Common stock
Shareholders' Equity
Common stock, shares authorized \| shares			500,000,000
Shares repurchased and cancelled, value					$ 82
Shares repurchased and canceled \| shares					10,912
Average repurchase price (in dollars per share) \| $ / shares					$ 7.57
Common stock authorized repurchase amount remaining			$ 19,568
Common stock \| Chief Executive Officer
Shareholders' Equity
Number of shares of stock issued and sold \| shares		300,000
Proceeds from issuance of shares of common stock		$ 1,350
Offering price (in dollars per share) \| $ / shares		$ 4.50
Common stock \| Maximum
Shareholders' Equity
Stock repurchase program authorized amount			$ 50,000
Common stock \| Annual matching contribution
Shareholders' Equity
Issuance of shares of common stock to defined contribution retirement plan (in shares) \| shares	160,978
Issuance of shares of common stock to defined contribution retirement plan	$ 1,138
Issue price per share \| $ / shares	$ 7.07

Stock-based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands				1 Months Ended	12 Months Ended
	Jan. 01, 2022	Jan. 01, 2021	Jun. 05, 2020	Jun. 30, 2021	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Key employee
Stock-based Compensation
Number of share instruments issued							67,361
Non-employee directors Restricted Stock Awards
Stock-based Compensation
Number of share instruments issued			300,000
Exercise price			$ 4.00
Weighted Average Exercise Price
Granted			$ 4.00
Stock options
Stock-based Compensation
Maximum term of stock awards granted					10 years
Weighted Average Remaining Contractual Term
Stock-based compensation costs recognized					$ (6)	$ 173	$ 200
Total unrecognized compensation cost - stock options					$ 1
Stock options \| Awards vesting on January 1, 2021 \| Chief Executive Officer
Stock-based Compensation
Number of options vested		100,000
Stock options \| Awards vesting on first anniversary of the date of grant \| Chief Executive Officer
Stock-based Compensation
Number of options vested				100,000
Stock options \| Awards vesting on January 1, 2022 \| Chief Executive Officer
Stock-based Compensation
Number of options vested	100,000
Restricted Stock
Stock-based Compensation
Number of share instruments issued					231,842	252,123	151,874
Weighted Average Remaining Contractual Term
Shares withheld in order to pay employee tax liabilities on vested awards					32,929	8,536
Stock-based compensation costs recognized					$ 906	$ 453	$ 134
Employee tax liability associated with restricted stock awards the vested during the period					216	$ 46
Total unrecognized compensation cost - restricted stock awards					$ 1,568
Unrecognized compensation cost related to nonvested awards, expected to be recognized over a weighted-average period					1 year 11 months 26 days
Number of Shares
Nonvested, Opening balance	293,637				293,637
Granted					231,842
Vested					(110,402)
Forfeited					(24,952)
Nonvested, Ending balance					390,125	293,637
Weighted Average Grant Date Fair Value
Nonvested, Opening balance	$ 5.81				$ 5.81
Granted					6.57
Vested					6.14
Forfeited					5.79
Nonvested, Ending balance					$ 6.17	$ 5.81
Grant Date Fair Value of Restricted Stock that Vested During the year
Fair value of restricted stock awards vested					$ 673	$ 249
Restricted Stock \| Key employee
Stock-based Compensation
Number of share instruments issued					186,842	207,123
Weighted average grant-date fair value					$ 6.77	$ 5.05	$ 6.91
Restricted Stock \| Non-employee directors Restricted Stock Awards
Stock-based Compensation
Number of share instruments issued					45,000	45,000
Weighted average grant-date fair value					$ 5.75	$ 4.71
2017 Omnibus Equity Incentive Plan
Stock-based Compensation
Number of shares authorized					4,237,100
2017 Omnibus Equity Incentive Plan \| Stock options
Stock-based Compensation
Percentage of awards vesting					50.00%
Weighted average grant-date fair value							$ 1.29
Fair value assumptions used in Black-Scholes option pricing model
Risk-free interest rate							0.0049%
Expected term (in years)							5 years 7 months 9 days
Expected stock price volatility							0.3391%
Dividend yield							0.001%
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 \| 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%
2020 Omnibus Equity Incentive Plan
Stock-based Compensation
Number of shares authorized					3,979,661
Number of shares available for future grants					3,495,696
Number of Shares
Outstanding at January 1, 2022	367,767				367,767
Outstanding at December 31, 2022					349,545	367,767
Exercisable at December 31, 2022					344,506
Weighted Average Exercise Price
Outstanding at January 1, 2022	$ 5.41				$ 5.41
Outstanding at December 31, 2022					5.19	$ 5.41
Exercisable at December 31, 2022					$ 5.14
Weighted Average Remaining Contractual Term
Weighted Average Remaining Contractual Term (Years)					7 years 2 months 1 day	8 years 1 month 17 days
Weighted Average Remaining Contractual Term, Exercisable					7 years 2 months 4 days
Aggregate Intrinsic Value					$ 627	$ 525
Aggregate Intrinsic Value Exercisable					$ 627
2020 Omnibus Equity Incentive Plan \| Stock options
Number of Shares
Forfeited/expired					(18,222)
Weighted Average Exercise Price
Forfeited/expired					$ 9.67
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%

Regulatory Capital Requirements - Actual and minimum required capital amounts and ratios and dividend restrictions (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Regulatory Capital Requirements
Capital conservation buffer increase (as a percent)	2.50%
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
Minimum required Tier 1 leverage ratio for CBRL framework	9.00%
Maximum allowed total consolidated assets for CBRL framework	$ 10,000,000
Leverage ratio percentage	8.00%
Total adjusted capital to risk-weighted assets, Amount
Actual	$ 390,591	$ 421,732
For Capital Adequacy Purposes	$ 121,888	$ 158,851
Total adjusted capital to risk-weighted assets, Ratio
Actual	0.2564	0.2124
For Capital Adequacy Purposes	0.0800	0.0800
Tier 1 (core) capital to risk-weighted assets, Amount
Actual	$ 332,068	$ 344,247
For Capital Adequacy Purposes	$ 91,416	$ 119,138
Tier 1 (core) capital to risk-weighted assets, Ratio
Actual	0.2179	0.1734
For Capital Adequacy Purposes	0.0600	0.0600
Common Equity Tier 1 (CET1), Amount
Actual	$ 332,068	$ 344,247
For Capital Adequacy Purposes	$ 68,562	$ 89,354
Common Equity Tier 1 (CET1), Ratio
Actual	0.2179	0.1734
For Capital Adequacy Purposes	0.0450	0.0450
Tier 1 (core) capital to adjusted tangible assets, Amount
Actual	$ 332,068	$ 344,247
For Capital Adequacy Purposes	$ 98,073	$ 120,039
Tier 1 (core) capital to adjusted tangible assets, Leverage Ratio
Actual	0.1354	0.1147
For Capital Adequacy Purposes	0.0400	0.0400
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%
Risk-weighting 50% Scenario \| Advantage Loan Program
Regulatory Capital Requirements
Risk weighted percentage	50.00%
If 100% Risk Weight Is Applied \| Advantage Loan Program
Regulatory Capital Requirements
Risk weighted percentage	100.00%	100.00%
Bank
Total adjusted capital to risk-weighted assets, Amount
Actual	$ 425,159	$ 407,699
For Capital Adequacy Purposes	121,795	158,707
To be Well Capitalized	$ 152,244	$ 198,384
Total adjusted capital to risk-weighted assets, Ratio
Actual	0.2793	0.2055
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	$ 405,803	$ 382,509
For Capital Adequacy Purposes	91,346	119,030
To be Well Capitalized	$ 121,795	$ 158,707
Tier 1 (core) capital to risk-weighted assets, Ratio
Actual	0.2665	0.1928
For Capital Adequacy Purposes	0.0600	0.0600
To be Well Capitalized	0.0800	0.0800
Common Equity Tier 1 (CET1), Amount
Actual	$ 405,803	$ 382,509
For Capital Adequacy Purposes	68,510	89,273
To be Well Capitalized	$ 98,959	$ 128,950
Common Equity Tier 1 (CET1), Ratio
Actual	0.2665	0.1928
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	$ 405,803	$ 382,509
For Capital Adequacy Purposes	98,032	119,859
To be Well Capitalized	$ 122,540	$ 149,824
Tier 1 (core) capital to adjusted tangible assets, Leverage Ratio
Actual	0.1656	0.1277
For Capital Adequacy Purposes	0.0400	0.0400
To be Well Capitalized	0.0500	0.0500

Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Numerator:
Net income (loss)	$ (14,194)	$ 23,390	$ (12,967)
Denominator:
Weighted average common shares outstanding, basic	50,346,198	50,049,902	49,840,882
Weighted average effect of potentially dilutive common shares:
Weighted average common shares outstanding, diluted	50,346,198	50,139,310	49,840,882
Income (loss) per share:
Basic (in dollar per shares)	$ (0.28)	$ 0.47	$ (0.26)
Diluted (in dollar per shares)	$ (0.28)	$ 0.47	$ (0.26)
Common stock
Income (loss) per share:
Securities excluded from the computation of weighted average diluted shares outstanding as inclusion of such items would be anti-dilutive	722,203	147,964	525,855
Common stock \| Stock options
Weighted average effect of potentially dilutive common shares:
Incremental shares from share-based compensation		55,060
Income (loss) per share:
Securities excluded from the computation of weighted average diluted shares outstanding as inclusion of such items would be anti-dilutive	349,808	69,546	359,234
Common stock \| Restricted stock
Weighted average effect of potentially dilutive common shares:
Incremental shares from share-based compensation		34,348
Income (loss) per share:
Securities excluded from the computation of weighted average diluted shares outstanding as inclusion of such items would be anti-dilutive	372,395	78,418	166,621

Employee Benefit Plans (Details) - USD ($) $ in Thousands	12 Months Ended
Employee Benefit Plans (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Employee Benefit Plans
Income tax expense	$ 3,614
Increase in income tax expense	1,314
Contribution plan cost	$ 1,463	$ 935	$ 256
Percentage of employee's contribution or deferred contribution that will be matched by employer	3.00%
Defined contribution plan employer matching contribution percent of employee quarterly base salary	3.00%
Employer matching contribution, as a percent of employee's contribution	100.00%
Maximum percentage of additional contribution in-excess employee match	1.00%
Annual matching contribution
Employee Benefit Plans
Employer matching contribution, as a percent of employee's contribution		100.00%
Percentage of employee's eligible compensation that will be match by employer		6.00%
Spilt Dollar Life Insurance Agreement
Employee Benefit Plans
Defined benefit plan benefit obligation		$ 4,216
Benefit plan benefit obligation	$ 4,109
Executive Incentive Retirement Plan Agreement
Employee Benefit Plans
Pension and other postretirement benefits cost	(405)	470	$ 141
Liability defined benefit plan	359	$ 983
BOLI cash surrender value \| Spilt Dollar Life Insurance Agreement
Employee Benefit Plans
Cash surrender value	24,877
Increase in the cash surrender value	$ 13,142

Fair Values of Financial Instruments - Assets measured at fair value on a recurring basis (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Available for sale debt securities:
Available for sale debt securities, at fair value	$ 343,558	$ 308,657
Equity securities
Equity securities	4,396	4,976
U.S. Treasury and Agency securities
Available for sale debt securities:
Available for sale debt securities, at fair value	168,437	122,168
U.S. Treasury and Agency securities \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	168,437	122,168
U.S. Treasury and Agency securities \| Level 1 \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	116,355	48,827
U.S. Treasury and Agency securities \| Level 2 \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	52,082	73,341
Mortgage-backed securities
Available for sale debt securities:
Available for sale debt securities, at fair value	36,733	49,437
Mortgage-backed securities \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	36,733	49,437
Mortgage-backed securities \| Level 2 \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	36,733	49,437
Collateralized mortgage obligations
Available for sale debt securities:
Available for sale debt securities, at fair value	138,241	136,849
Collateralized mortgage obligations \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	138,241	136,849
Collateralized mortgage obligations \| Level 2 \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	138,241	136,849
Collateralized debt obligations
Available for sale debt securities:
Available for sale debt securities, at fair value	147	203
Collateralized debt obligations \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	147	203
Collateralized debt obligations \| Level 3 \| Recurring
Available for sale debt securities:
Available for sale debt securities, at fair value	147	203
Equity securities \| Recurring
Equity securities
Equity securities	4,396	4,976
Equity securities \| Level 1 \| Recurring
Equity securities
Equity securities	$ 4,396	$ 4,976

Fair Values of Financial Instruments - Reconciliation and income statement classification using Level 3 inputs (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	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 year	$ 203	$ 187
Included in other comprehensive income (loss)	(2)	19
Principal maturities/settlements	(54)	(3)
Balance of recurring Level 3 assets at end of year	$ 147	$ 203

Fair Values of Financial Instruments - Assets Measured at Fair Value on a Nonrecurring Basis and Fair Value of Financial Instruments (Details) $ in Thousands	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Financial Assets
Interest-bearing time deposits with other banks	$ 934	$ 1,183
Loans held for sale	7,725	64,987
Financial Liabilities
Interest-bearing Deposit Liabilities	$ 1,900,996	2,197,975
Nonrecurring \| Impaired loans, Residential real estate \| Level 3 \| Sales comparison approach
Fair value of financial assets and liabilities
Assets measured at fair value on a nonrecurring basis		$ 86
Nonrecurring \| Impaired loans, Residential real estate \| Weighted Average \| Level 3 \| Adjustments for differences between the comparable sales
Fair value of financial assets and liabilities
Assets measured at fair value, measurement input		(0.15)
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 \| Commercial real estate loans held for sale
Fair value of financial assets and liabilities
Assets measured at fair value on a nonrecurring basis		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		53,628
Nonrecurring \| Mortgage loans held for sale \| Maximum \| Level 3 \| Discounted cash flow \| Prepayment speed
Fair value of financial assets and liabilities
Assets measured at fair value, measurement input	(0.224)
Nonrecurring \| Mortgage servicing rights
Fair value of financial assets and liabilities
Assets measured at fair value on a nonrecurring basis	$ 391	2,052
Nonrecurring \| Mortgage servicing rights \| Level 3
Fair value of financial assets and liabilities
Assets measured at fair value on a nonrecurring basis	391	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	$ 391	$ 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	0.125	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		(0.371)
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	0.100	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	0.122	(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	0.190	(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	$ 379,798	$ 411,676
Interest-bearing time deposits with other banks	934	1,183
Loans held for sale	7,725	11,359
Loans, net	1,613,385	1,956,180
Financial Liabilities
Time deposits	861,733	891,820
Federal Home Loan Bank borrowings	50,000	150,000
Subordinated notes, net	65,271	65,343
Estimated fair value
Financial Assets
Cash and due from banks	379,798	411,676
Interest-bearing time deposits with other banks	934	1,183
Loans held for sale	7,833	11,809
Loans, net	1,516,771	2,025,409
Financial Liabilities
Time deposits	855,566	894,049
Federal Home Loan Bank borrowings	48,360	152,560
Subordinated notes, net	65,355	65,073
Estimated fair value \| Level 1
Financial Assets
Cash and due from banks	379,798	411,676
Interest-bearing time deposits with other banks	934	1,183
Estimated fair value \| Level 2
Financial Assets
Loans held for sale	7,833	11,809
Financial Liabilities
Time deposits	855,566	894,049
Federal Home Loan Bank borrowings	48,360	152,560
Subordinated notes, net	65,355	65,073
Estimated fair value \| Level 3
Financial Assets
Loans, net	$ 1,516,771	$ 2,025,409

Income Taxes - Components of income tax (benefit) expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Current:
Federal	$ 1,636	$ 4,814	$ 4,489
State	214	1,429	1,908
Total current expense	1,850	6,243	6,397
Deferred:
Federal	3,251	2,088	(8,373)
State	1,528	1,312	(3,933)
Total deferred expense (benefit)	4,779	3,400	(12,306)
Total income tax expense (benefit)	$ 6,629	$ 9,643	$ (5,909)

- Definition

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

+ References + Details

Income Taxes - Reconciliation of income tax rate (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Reconciliation of U.S. federal statutory tax rate and effective income tax rate
Statutory tax rate	21.00%	21.00%	21.00%
Income tax expense (benefit) at 21%	$ (1,589)	$ 6,937	$ (3,964)
Effect of:
State taxes, net of federal benefit	1,376	2,165	(1,600)
Taxable income on surrender of company-owned life insurance	2,760
Contingent loss	3,830
Non-taxable cancellation of split-dollar life insurance	(863)
Non-deductible items	731	480
Other, net	384	61	(345)
Total income tax expense (benefit)	$ 6,629	$ 9,643	$ (5,909)

Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Deferred tax assets:
Allowance for loan losses	$ 12,518	$ 15,557
Net unrealized loss on investment securities	7,594	349
Operating lease liabilities	4,402	5,337
Interest on nonaccrual loans	1,031	833
Accrued expenses	980	891
Compensation plans	963	902
Depreciation	482
State franchise tax	358	422
Mortgage repurchase liability	223	812
Loans held for sale valuation allowance	121	2,180
Other	391	630
Total deferred tax assets	29,063	27,913
Less: valuation allowance	(120)	(30)
Total deferred tax assets, net of valuation allowance	28,943	27,883
Deferred tax liabilities:
Operating lease right-of-use asset	(4,075)	(5,003)
Mortgage servicing rights	(494)	(749)
Other	(670)	(705)
Total deferred tax liabilities	(5,239)	(6,457)
Deferred tax asset, net	$ 23,704	$ 21,426

Income Taxes - Capital loss carryforward and unrecognized tax benefits (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Capital loss carryforward and unrecognized tax benefits
Capital loss carryforward	$ 743
Unrecognized tax benefits	0
Deferred tax asset	28,943	$ 27,883
Valuation allowance	120	$ 30
Capital loss carryforward
Capital loss carryforward and unrecognized tax benefits
Deferred tax asset	$ 205

Related Party Transactions (Details) $ in Thousands	12 Months Ended
Related Party Transactions (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Controlling Shareholders \| Related Party Transaction Data Processing And Programming Services [Member]
Related party transactions
Revenue from Related Parties	$ 79
Director [Member] \| Related Party Transaction Donation To Foundation Company Board Members As Foundation Trustees [Member]
Related party transactions
Amount of related party transaction, expense	$ 375

- Definition

Amount of revenue, fees and commissions earned from transactions between (a) a parent company and its subsidiaries; (b) subsidiaries of a common parent; (c) an entity and trusts for the benefit of employees, for example, but not limited to, pension and profit-sharing trusts that are managed by or under the trusteeship of the entity's management; (d) an entity and its principal, owners, management, or members of their immediate families; and (e) affiliates.

+ References

Reference 1: 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 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 946
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07.1(c))
-URI https://asc.fasb.org/extlink&oid=120401555&loc=SL114874292-224272

Reference 3: 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)(B))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442526-122756

Reference 4: 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)(C))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 5: 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 6: 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 7: 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 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 210.5-03.1(e))
-URI https://asc.fasb.org/extlink&oid=126953954&loc=SL114868664-224227

+ Details

Operating Leases (Details) - USD ($) $ in Thousands	12 Months Ended
Operating Leases (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Operating Leases
Lessee, operating lease, existence of option to extend [true false]	true
Components of lease expense
Operating lease costs	$ 4,083	$ 4,377	$ 4,554
Variable lease costs	861	1,136	959
Total lease costs	$ 4,944	5,513	5,513
Minimum [Member]
Operating Leases
Renewal term (in years)	5 years
Controlling Shareholders
Operating Leases
Payments under leases			203
Sublease income	$ 97	$ 439	$ 277

Operating Leases - Maturity of lease liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Maturities of lease liabilities
2023	$ 4,086
2024	3,822
2025	3,260
2026	2,490
2027	1,702
Thereafter	1,805
Total lease payments	17,165
Less: future interest costs	(1,175)
Present value of lease liabilities	$ 15,990	$ 19,400

Operating Leases - Other Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$ 4,110	$ 4,355	$ 4,478
Weighted average remaining lease term (years)	4 years 10 months 6 days	5 years 6 months 10 days	6 years 7 months 6 days
Weighted average discount rate	2.97%	2.94%	3.16%

Commitments and Contingencies - Unfunded Commitments and Litigation (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2022	Dec. 31, 2020	Dec. 31, 2021
Commitments and Contingencies
OCC civil money penalty		$ 6,000
Threshold period for responding to Demand letter		90 days
Recovery of contingent losses			$ (12,500)
Loss contingency from Internal review of Advantage Loan Program
Commitments and Contingencies
Liability for contingent losses		$ 27,239		$ 15,000
Unfunded commitments to extend credit \| Residential Real Estate [Member]
Commitments and Contingencies
Outstanding commitments with fixed interest rates		0
Commitments to make loans
Commitments and Contingencies
Commitments to make loans				23,610
Unused lines of credit
Commitments and Contingencies
Unused lines of credit		$ 20,865		45,805
Unused lines of credit \| Minimum [Member]
Commitments and Contingencies
Variable interest rate (as a percentage)		4.72%
Maturity period for variable interest loans		2 months
Unused lines of credit \| Maximum [Member]
Commitments and Contingencies
Variable interest rate (as a percentage)		9.88%
Maturity period for variable interest loans		23 years
Unused lines of credit \| Construction Loans [Member]
Commitments and Contingencies
Unused lines of credit		$ 9,141
Unused lines of credit \| Commercial and industrial loans
Commitments and Contingencies
Unused lines of credit		975
Unused lines of credit \| Real estate loan, second mortgage \| Residential Real Estate [Member]
Commitments and Contingencies
Unused lines of credit		10,749
Standby letters of credit
Commitments and Contingencies
Unused lines of credit		$ 24		$ 24
Advantage Loans [Member]
Commitments and Contingencies
OCC civil money penalty	$ 6,000

Commitments and Contingencies - Mortgage Repurchase Liability and Offers (Details) $ in Thousands	1 Months Ended	12 Months Ended
	May 31, 2020 USD ($) item	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Commitments and Contingencies
Mortgage loan repurchase liability		$ 809	$ 2,954	$ 9,699	$ 7,823
Other non-interest expense		9,772	7,486	6,270
Loans and leases receivable, net amount		1,613,385	1,956,266
Advantage Loans [Member]
Commitments and Contingencies
Mortgage loan repurchase liability					$ 7,823
Increase in mortgage loan repurchase liability				2,527
Percentage of loans offered to each of investors to repurchase	100.00%
Loans repurchased during the period	$ 38,704	65,621	173,829	30,934
Other non-interest expense	136			135
Disposition of mortgage servicing rights	$ 428	863		361
Loss charged against mortgage repurchase liability				(651)
Loans and leases receivable, net amount		21,277	173,829
Number of loan pools negotiated to be repurchased. \| item	2
Advantage Loan Program loans repurchased
Commitments and Contingencies
Increase in mortgage loan repurchase liability		1,506
Other non-interest expense		2,303
Disposition of mortgage servicing rights			2,381
Loss charged against mortgage repurchase liability			(5,511)
Loans and leases receivable, net amount		65,621
Residential Real Estate [Member]
Commitments and Contingencies
Mortgage loan repurchase liability		$ 809	$ 2,954	$ 9,699

Commitments and Contingencies - Mortgage Repurchase Liability Activity and Balances (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Commitments and Contingencies
Unpaid principal balance	$ 1,613,385	$ 1,956,266
Mortgage repurchase liability:
Balance, beginning of period	2,954	9,699	$ 7,823
Net provision (recovery)	(639)	(1,234)	2,527
Loss on loan repurchases	(1,506)	(5,511)	(651)
Balance, end of the period	809	2,954	9,699
Residential Real Estate [Member]
Mortgage repurchase liability:
Balance, beginning of period	2,954	9,699
Balance, end of the period	809	2,954	9,699
Obligation to repurchase receivables sold member \| Residential Real Estate [Member]
Commitments and Contingencies
Unpaid principal balance	112,542	237,049
Advantage Loans [Member]
Commitments and Contingencies
Unpaid principal balance	21,277	173,829
Mortgage repurchase liability:
Balance, beginning of period			$ 7,823
Advantage Loans [Member] \| Obligation to repurchase receivables sold member \| Residential Real Estate [Member]
Commitments and Contingencies
Unpaid principal balance	$ 43,274	$ 142,810

Condensed Financial Information of Sterling Bancorp, Inc. (Parent Only) - CONDENSED BALANCE SHEETS (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
ASSETS
Other assets	$ 11,476	$ 15,407
Total assets	2,444,735	2,876,830
Liabilities:
Subordinated notes, net	65,271	65,343
Total liabilities	2,132,108	2,533,203
Total shareholders' equity	312,627	343,627	$ 319,591	$ 332,614
Total liabilities and shareholders' equity	2,444,735	2,876,830
Parent company \| Reportable legal entities
ASSETS
Cash held at Bank	20,064	26,905
Investment in subsidiaries	386,363	381,936
Other assets	1,160	1,777
Total assets	407,587	410,618
Liabilities:
Subordinated notes, net	65,271	65,343
Other liabilities	29,689	1,648
Total liabilities	94,960	66,991
Total shareholders' equity	312,627	343,627
Total liabilities and shareholders' equity	$ 407,587	$ 410,618

Condensed Financial Information of Sterling Bancorp, Inc. (Parent Only) - CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Expenses:
Interest expense	$ 4,969	$ 4,127	$ 4,713
Income tax benefit	(6,629)	(9,643)	5,909
Net income (loss)	(14,194)	23,390	(12,967)
Other comprehensive income (loss)
Comprehensive income (loss)	(32,822)	22,106	(12,776)
Parent company \| Reportable legal entities
Expenses:
Interest expense	4,969	4,127	4,713
Provision (recovery) for contingent losses, net	27,239		(10,000)
Other	7,602	3,574	6,135
Total expenses	39,810	7,701	848
Loss before income taxes and equity in subsidiaries income (loss)	(39,810)	(7,701)	(848)
Income tax benefit	(3,461)	(2,108)	(246)
Loss before equity in subsidiaries income (loss)	(36,349)	(5,593)	(602)
Equity in subsidiaries income (loss)	22,155	28,983	(12,365)
Net income (loss)	(14,194)	23,390	(12,967)
Other comprehensive income (loss)
Equity in other comprehensive income (loss) of subsidiaries	(18,628)	(1,284)	191
Comprehensive income (loss)	$ (32,822)	$ 22,106	$ (12,776)

Condensed Financial Information of Sterling Bancorp, Inc. (Parent Only) - CONDENSED STATEMENTS OF CASH FLOWS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Cash flows from operating activities
Net income (loss)	$ (14,194)	$ 23,390	$ (12,967)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Other	70	468	162
Change in operating assets and liabilities:
Other assets	4,887	14,718	(8,946)
Net cash provided by operating activities	2,338	30,746	8,646
Cash flows from investing activities
Net cash provided by investing activities	373,698	352,470	223,788
Cash flows from financing activities
Proceeds from issuance of shares of common stock		1,350
Repurchase of shares of common stock			(82)
Dividends paid to shareholders			(499)
Net cash provided by (used in) financing activities	(407,914)	(970,037)	688,244
Net change in cash and due from banks	(31,878)	(586,821)	920,678
Cash and due from banks, beginning of year	411,676	998,497	77,819
Cash and due from banks, end of year	379,798	411,676	998,497
Cash paid for:
Interest	19,835	50,751	48,270
Parent company \| Reportable legal entities
Cash flows from operating activities
Net income (loss)	(14,194)	23,390	(12,967)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Equity in subsidiaries (income) loss	(22,155)	(28,983)	12,365
Provision (recovery) for contingent losses	27,239		(10,000)
Other	(72)	2	162
Change in operating assets and liabilities:
Other assets	617	12,137	(289)
Other liabilities	802	(11,897)	2,548
Net cash provided by operating activities	(7,763)	(5,351)	(8,181)
Cash flows from investing activities
Capital contributed to subsidiary (Bank)			(50,000)
Dividends received from subsidiaries		10,000
Net cash provided by investing activities		10,000	(50,000)
Cash flows from financing activities
Proceeds from issuance of shares of common stock		1,350
Consideration received for issuance of shares of common stock to defined contribution plan	1,138
Repurchase of shares of common stock			(82)
Repurchase of restricted shares to pay employee tax liability	(216)	(46)
Dividends paid to shareholders			(499)
Net cash provided by (used in) financing activities	922	1,304	(581)
Net change in cash and due from banks	(6,841)	5,953	(58,762)
Cash and due from banks, beginning of year	26,905	20,952	79,714
Cash and due from banks, end of year	20,064	26,905	20,952
Cash paid for:
Interest	$ 4,484	$ 4,249	$ 4,550

Subsequent Events (Details) - Plea Agreement - Subsequent event $ in Thousands	1 Months Ended
	Mar. 31, 2023 USD ($)
Subsequent Events
Payment for restitution	$ 27,239
Criminal fine imposed	$ 0
Obligations under the agreement effective term	3 years