Financial Statements and Supplementary Data.
−Removed: REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ( Crowe LLP Los Angeles, California PCAOB ID 173 )
+Added: REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ( Crowe LLP Los Angeles, California PCAOB ID 173 )
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (Eide Bailly LLP Laguna Hills, California PCAOB ID 286) 78
10 unchanged sentences
Opinion on the Financial Statements
−Removed: We have audited the accompanying consolidated balance sheet of RBB Bancorp (the "Company") as of December 31, 2022, and the related consolidated statements of income, comprehensive income, changes in shareholders’
−Removed: equity, and cash flows for the year ended December 31, 2022, and the related notes (collectively referred to as the "financial statements").
−Removed: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the year ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.
−Removed: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control –
−Removed: Integrated Framework:
−Removed: (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated April 7, 2023 expressed an adverse opinion.
−Removed: Change in Accounting Principle
−Removed: As discussed in Note 2 to the financial statements, the Company changed its method for accounting for credit losses effective January 1, 2022, due to the adoption of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification No.
+Added: We have audited the accompanying consolidated balance sheets of RBB Bancorp (the "Company") as of December 31, 2023 and 2022, and the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for the years ended December 31, 2023 and 2022, and the related notes (collectively referred to as the "financial statements").
+Added: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years ended December 31, 2023 and 2022, in conformity with accounting principles generally accepted in the United States of America.
+Added: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework:
+Added: (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated March 12, 2024 expressed an adverse opinion.
+Added: Change in Accounting Principal
+Added: As discussed in Note 2 to the financial statements, the Company changed its method for accounting for credit losses effective January 1, 2022, due to the adoption of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification No.
326, Financial Instruments - Credit Losses (ASC 326).
1 unchanged sentence
2016-13 such that prior period amounts are not adjusted and continue to be reported in accordance with previously applicable generally accepted accounting principles.
−Removed: See critical audit matter below.
Basis for Opinion
10 unchanged sentences
Critical Audit Matters
−Removed: The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:
−Removed: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. 
−Removed: The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
+Added: The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:
+Added: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
+Added: The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Allowance for Credit Losses on Loans
−Removed: As described in Notes 2 and 5 to the consolidated financial statements, the Company adopted ASU 2016-13 “Financial Instruments –
−Removed: Credit Losses (Topic 326):
−Removed: Measurement of Credit Losses on Financial Instruments”, effective January 1, 2022, which requires the Company to record an estimate of expected lifetime credit losses for loans at the time of origination.
+Added: As described in Notes 2 and 5 to the consolidated financial statements, the Company adopted ASU 2016-13 “Financial Instruments – Credit Losses (Topic 326):
+Added: Measurement of Credit Losses on Financial Instruments”, effective January 1, 2022, which requires the Company to record an estimate of expected lifetime credit losses for loans at the time of origination.
Due to the adoption of Current Expected Credit Losses (CECL), the Company recorded a $2.10 million transition adjustment for the allowance for credit losses (ACL) through retained earnings on January 1, 2022.
As of December 31, 2023, the Company had gross loan portfolio of $3.03 billion and a related allowance for credit losses on loans of $41.90 million.
−Removed: The Company’s discounted cash flow methodology incorporates a probability of default, loss given default and exposure at default model, as well as expectations of future economic conditions, using reasonable and supportable forecasts.
−Removed: The use of reasonable and supportable forecasts requires significant judgment, such as selecting forecast scenarios and related scenario-weighting, as well as determining the appropriate length of the forecast horizon.
−Removed: Management estimates the allowance balance required using past loan loss experience from peers with similar portfolio sizes and geographic locations to the Company, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors.
−Removed: The Company’s CECL methodology utilizes a four-quarter reasonable and supportable forecast period, and a four-quarter reversion period.
−Removed: The Company is using the Federal Open Market Committee to obtain forecasts for the unemployment rate, while reverting to a long-run average of each considered economic factor.
−Removed: Within the CECL model, the Company uses both internal and external qualitative factors including lending policies, procedures, and strategies;
+Added: The Company’s discounted cash flow methodology incorporates a probability of default, loss given default and exposure at default model, as well as expectations of future economic conditions, using reasonable and supportable forecasts.
+Added: The Company uses both internal and external qualitative factors within the current expected credit losses (“CECL”) model:
+Added: lending policies, procedures, and strategies;
changes in nature and volume of the portfolio;
6 unchanged sentences
and economic conditions.
−Removed: We identified auditing the Company’s implementation of Current Expected Credit Losses to be a critical audit matter, particularly as it pertains to auditing the impact of the adoption to the qualitative factors and the assumptions used to develop quantitative factors, as the matter involved significant audit effort and especially subjective auditor judgment.
−Removed: The primary procedures performed to address the critical audit matter included:
−Removed: Evaluating and testing management’s methodology and conceptual soundness of the DCF model, including the use of valuation specialists to assist with evaluating the model used in forecasting future economic conditions and testing of inputs into the model;
−Removed: Evaluating the reasonableness of management’s judgments over the application of reasonable and supportable forecasts, determination of the forecast period and reversion periods,
−Removed: Testing the completeness and accuracy of internally derived data and evaluating the relevance and reliability of internal and external data used to inform management’s judgments related to the forecast and reversion periods;
−Removed: Evaluating the subjective assumptions within the quantitative discounted cash flow calculation;
−Removed: Evaluating the reasonableness of management’s judgments over selection of qualitative adjustments,
−Removed: Testing the completeness and accuracy of internally derived data, and evaluating the relevance and reliability of external data used to inform management’s judgments related to the qualitative adjustments;
−Removed: Evaluating the procedures and results of the Company’s third-party model validation, as well as management’s responses to results.
−Removed: Completeness of Related Party Transactions
−Removed: As described in Note 15 to the consolidated financial statements, the Company has loans, outstanding loan commitments and deposit relationships with principal officers, directors and their affiliates.
−Removed: The principal consideration for our determination that auditing the completeness of related party transactions is a critical audit matter is the nature and extent of audit procedures related to a) the identification of related parties and affiliates and b) the completeness and accuracy of disclosures of transactions with related parties and affiliates, due to the material weakness in internal controls over related party transactions.
+Added: We identified auditing the Company’s estimate of Current Expected Credit Losses to be a critical audit matter, particularly as it pertains to auditing the application of qualitative factors, as the matter involved significant audit effort and especially subjective auditor judgment.
The primary procedures performed to address the critical audit matter included:
−Removed: Obtaining an understanding of the terms and the business purpose of transactions with related parties and affiliates;
−Removed: Evaluating the completeness and accuracy of the identification of related parties and affiliates by management;
−Removed: Testing the completeness and accuracy of disclosed transactions with related parties and affiliates;
−Removed: Evaluating the reasonableness of management's judgements on whether affiliates meet the definition of immediate family under accounting principles generally accepted in the United States of America.
+Added: Testing the design and operating effectiveness of controls over qualitative adjustments within the ACL model, including controls addressing:
+Added: Management’s review of the reasonableness of assumptions and judgments, including the qualitative risk factors.
+Added: Management’s evaluation of the relevance and reliability of data utilized in the calculation of the qualitative factors.
+Added: Testing the relevance and reliability of the data used in the determination of qualitative factor adjustments.
+Added: Evaluating the reasonableness of management’s assumptions and judgments used in the determination of the qualitative factor adjustments and the resulting qualitative allocation to the allowance for credit losses.
/s/ Crowe LLP
1 unchanged sentence
Los Angeles, California
−Removed: April 7, 2023
+Added: March 12, 2024
Report of Independent Registered Public Accounting Firm
2 unchanged sentences
Opinion on Internal Control over Financial Reporting
−Removed: We have audited RBB Bancorp’s (the “Company”) internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control –
−Removed: Integrated Framework:
−Removed: (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 
−Removed: In our opinion, because of the effects of the material weaknesses discussed in the following paragraph, the Company has not maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control –
−Removed: Integrated Framework:
+Added: We have audited RBB Bancorp’s (the “Company”) internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework:
+Added: (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
+Added: In our opinion, because of the effects of the material weaknesses discussed in the following paragraph, the Company has not maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework:
(2013) issued by COSO.
−Removed: A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis. 
−Removed: The following material weakness has been identified and included in management's report. 
−Removed: Material weakness in controls over the review, analysis, and approval of related party transactions and relied on the completeness and accuracy of director and officer questionnaires.
−Removed: Material weakness in controls over segregation of duties with respect to the review, posting and approval of journal entries and accounts payable transactions and maintaining effective IT access controls around the related system.  
−Removed: Material weakness in controls over the review of various assumptions and judgements within the CECL.
−Removed: This includes subjective assumptions within the quantitative discounted cash flow calculation and subjective judgments related to qualitative factors and maintaining effective IT access controls around the related system.  
−Removed: Material weakness in the Company’s control environment.
−Removed: Specifically, the Company failed to demonstrate a commitment to attract, develop, and retain competent individuals in the area of internal control over financial reporting.  
−Removed: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheet of RBB Bancorp (the "Company") as of December 31, 2022, and the related consolidated statements of income, comprehensive income, changes in shareholders’
−Removed: equity, and cash flows for the year ended December 31, 2022, and the related notes (collectively referred to as the "financial statements") and our report dated April 7, 2023 expressed an unqualified opinion. 
+Added: A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis.
+Added: The following material weakness has been identified and included in management's report.
+Added: Material weakness in controls related to infrequent transactions such as the income recognition for the Community Development Financial Institution Equitable Recovery Program award.
+Added: Material weakness in the Company’s control environment.
+Added: Specifically, the Company failed to demonstrate a commitment to attract, develop, and retain competent individuals in the area of internal control over financial reporting.
+Added: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of RBB Bancorp (the "Company") as of December 31, 2023 and 2022, and the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for the years ended December 31, 2023 and 2022, and the related notes (collectively referred to as the "financial statements") and our report dated March 12, 2024 expressed an unqualified opinion.
We considered the material weaknesses identified above in determining the nature, timing, and extent of audit procedures applied in our audit of the 2023 financial statements, and this report on Internal Control over Financial Reporting does not affect such report on the financial statements.
Basis for Opinion
−Removed: The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. 
−Removed: Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.
+Added: The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting.
+Added: Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.
We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
2 unchanged sentences
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
−Removed: Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 
−Removed: Our audit also included performing such other procedures as we considered necessary in the circumstances. 
+Added: Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.
+Added: Our audit also included performing such other procedures as
+Added: we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
−Removed: A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. 
−Removed: A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
+Added: A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
+Added: A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;
−Removed: and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
−Removed: Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 
−Removed: Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 
+Added: and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
+Added: Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
+Added: Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Crowe LLP
Los Angeles, California
−Removed: April 7, 2023
+Added: March 12, 2024
Report of Independent Registered Public Accounting Firm
3 unchanged sentences
Opinion on the Consolidated Financial Statements
−Removed: We have audited the accompanying consolidated balance sheet of RBB Bancorp and Subsidiaries (the Company) as of December 31, 2021, the related consolidated statements of income, comprehensive income, changes in shareholders’
−Removed: equity, and cash flows for the years ended December 31, 2021 and 2020, and the related notes (collectively referred to as the “financial statements”).
−Removed: In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of RBB Bancorp and Subsidiaries as of December 31, 2021, and the results of their operations and cash flows for the years ended December 31, 2021 and 2020, in conformity with accounting principles generally accepted in the United States of America.
+Added: We have audited the accompanying consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows of RBB Bancorp and Subsidiaries (the Company) for the year ended December 31, 2021, and the related notes (collectively referred to as the “financial statements”).
+Added: In our opinion, these financial statements present fairly, in all material respects, the results of operations and cash flows of RBB Bancorp and Subsidiaries for the year ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.
Change in Accounting Principle
2 unchanged sentences
Basis for Opinion
−Removed: The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting.
−Removed: Our responsibility is to express an opinion on the Company’s financial statements.
−Removed: We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.
+Added: The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting.
+Added: Our responsibility is to express an opinion on the Company’s financial statements.
+Added: We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
6 unchanged sentences
We believe that our audit provides a reasonable basis for our opinion.
−Removed: We served as the Company’s auditor since 2019.
−Removed: Vavrinek, Trine, Day & Co., LLP, who joined Eide Bailly LLP in 2019, had served as the Company’s auditor since 2008.
+Added: We served as the Company’s auditor since 2019.
+Added: Vavrinek, Trine, Day & Co., LLP, who joined Eide Bailly LLP in 2019, had served as the Company’s auditor since 2008.
Laguna Hills, California
−Removed: April 7, 2023
+Added: March 12, 2024
RBB BANCORP AND SUBSIDIARIES
3 unchanged sentences
Cash and due from banks
−Removed: $ 83,548  
−Removed: $ 501,372  
−Removed: Federal funds sold and other cash equivalents
−Removed: 193,000  
−Removed: Cash and cash equivalents
−Removed: 83,548  
−Removed: 694,372  
+Added: $ 431,373 $ 83,548
Interest-earning deposits in other financial institutions
Available for sale
−Removed: 256,830  
−Removed: 368,260  
−Removed: Held to maturity (fair value of $ 5,563 and $ 6,577 at December 31, 2022 and December 31, 2021, respectively)
+Added: 318,961 256,830
+Added: Held to maturity (fair value of $ 5,097 and $ 5,563 at December 31, 2023 and December 31, 2022)
Mortgage loans held for sale
Loans held for investment
−Removed: 3,053,864  
−Removed: 2,560,465  
−Removed: Commercial and other
−Removed: 283,106  
−Removed: 375,684  
−Removed: 3,336,970  
−Removed: 2,936,149  
+Added: 3,031,319 3,336,970
Unaccreted discount on acquired loans
−Removed: ( 1,238 )  
−Removed: Deferred loan fees, net
−Removed: Total loans, net of deferred loan fees and unaccreted discounts on acquired loans
−Removed: 3,336,449  
−Removed: 2,931,350  
−Removed: Allowance for credit losses
−Removed: ( 41,076 )  
−Removed: 3,295,373  
−Removed: 2,898,438  
+Added: ( 970 ) ( 1,238 )
+Added: Deferred loan costs, net
+Added: Total loans, net of deferred loan costs and unaccreted discounts on acquired loans
+Added: 3,031,861 3,336,449
+Added: Allowance for loan losses
+Added: ( 41,903 ) ( 41,076 )
+Added: Total loans held for investment, net
+Added: 2,989,958 3,295,373
Premises and equipment, net
−Removed: 27,009  
−Removed: 27,199  
+Added: 25,684 27,009
Federal Home Loan Bank (FHLB) stock
−Removed: 15,000  
−Removed: 15,000  
+Added: 15,000 15,000
Net deferred tax assets
−Removed: 16,977  
−Removed: Income tax receivable
+Added: 15,765 16,977
Cash surrender value of bank owned life insurance (BOLI)
−Removed: 57,310  
−Removed: 55,988  
−Removed: 71,498  
−Removed: 69,243  
+Added: 58,719 57,310
+Added: 71,498 71,498
Servicing assets
−Removed: 11,517  
Core deposit intangibles
Right-of-use assets - operating leases
−Removed: 25,447  
−Removed: 22,454  
+Added: 29,803 25,447
Accrued interest and other assets
−Removed: 50,498  
−Removed: 43,507  
−Removed: $ 3,919,058  
−Removed: $ 4,228,194  
−Removed: The accompanying notes are an integral part of these consolidated financial statements.
−Removed: RBB BANCORP AND SUBSIDIARIES
−Removed: CONSOLIDATED BALANCE SHEETS
−Removed: AS OF DECEMBER 31,
−Removed: (In thousands, except for share data)
−Removed: Liabilities and Shareholders’
+Added: 50,639 50,498
+Added: $ 4,026,025 $ 3,919,058
+Added: Liabilities and Shareholders’ Equity
Noninterest-bearing demand
−Removed: $ 798,741  
−Removed: $ 1,291,484  
+Added: $ 539,621 $ 798,741
Savings, NOW and money market accounts
−Removed: 615,339  
−Removed: 927,609  
+Added: 632,729 615,339
Time deposits $250,000 and under
−Removed: 837,369  
−Removed: 587,940  
+Added: 1,190,821 837,369
Time deposits over $250,000
−Removed: 726,234  
−Removed: 578,499  
+Added: 811,589 726,234
Total deposits
−Removed: 2,977,683  
−Removed: 3,385,532  
+Added: 3,174,760 2,977,683
Reserve for unfunded commitments
FHLB advances
−Removed: 220,000  
−Removed: 150,000  
−Removed: Long-term debt (net of unamortized debt issuance costs of $ 1,415 and $ 1,993 at December 31, 2022 and December 31, 2021, respectively)
−Removed: 173,585  
−Removed: 173,007  
−Removed: Subordinated debentures
−Removed: 14,720  
−Removed: 14,502  
+Added: 150,000 220,000
+Added: Long-term debt, net of issuance costs
+Added: 119,147 173,585
+Added: Subordinated debentures (net of unamortized valuation reserve of $ 2,589 and $ 2,807 at December 31, 2023 and December 31, 2022)
+Added: 14,938 14,720
Lease liabilities - operating leases
−Removed: 26,523  
−Removed: 23,282  
+Added: 31,191 26,523
Accrued interest and other liabilities
−Removed: 20,827  
−Removed: 13,985  
+Added: 24,089 20,827
Total liabilities
−Removed: 3,434,495  
−Removed: 3,761,511  
+Added: 3,514,765 3,434,495
Commitments and contingencies - Note 13
4 unchanged sentences
18,609,179 shares issued and outstanding at December 31, 2023 and 18,965,776 shares issues and outstanding at December 31, 2022
−Removed: 276,912  
−Removed: 282,335  
+Added: 271,925 276,912
Additional paid-in capital
Retained earnings
−Removed: 225,883  
−Removed: 181,329  
+Added: 255,152 225,883
Non-controlling interest
Accumulated other comprehensive loss, net
−Removed: ( 21,665 )  
−Removed: Total shareholders’
−Removed: 484,563  
−Removed: 466,683  
−Removed: Total liabilities and shareholders’
−Removed: $ 3,919,058  
−Removed: $ 4,228,194  
+Added: ( 19,512 ) ( 21,665 )
+Added: Total shareholders’ equity
+Added: 511,260 484,563
+Added: Total liabilities and shareholders’ equity
+Added: $ 4,026,025 $ 3,919,058
The accompanying notes are an integral part of these consolidated financial statements.
1 unchanged sentence
CONSOLIDATED STATEMENTS OF INCOME
−Removed: FOR THE YEAR ENDED DECEMBER 31,
−Removed: (In thousands, except share and per share data)
+Added: FOR THE YEAR ENDED DECEMBER 31,
+Added: (In thousands, except share and per share data)
Interest and dividend income:
Interest and fees on loans
+Added: $ 194,264 $ 171,099 $ 141,569
Interest on interest-earning deposits
+Added: 10,746 1,353 552
Interest on investment securities
+Added: 14,028 6,084 3,379
Dividend income on FHLB stock
+Added: 1,125 938 869
Interest on federal funds sold and other
−Removed: Total interest income
+Added: 985 1,496 694
+Added: Total interest and dividend income
+Added: 221,148 180,970 147,063
Interest expense:
Interest on savings deposits, NOW and money market accounts
+Added: 12,205 5,561 2,786
Interest on time deposits
+Added: 76,837 13,338 9,170
Interest on subordinated debentures and long-term debt
+Added: 9,951 9,645 8,999
Interest on other borrowed funds
+Added: 2,869 2,872 1,765
Total interest expense
−Removed: Net interest income
+Added: 101,862 31,416 22,720
+Added: Net interest income before provision for credit losses
+Added: 119,286 149,554 124,343
Provision for credit losses
+Added: 3,362 4,935 3,959
Net interest income after provision for credit losses
+Added: 115,924 144,619 120,384
Noninterest income:
−Removed: Service charges, fees and other
−Removed: Gain on sale of loans
+Added: Service charges and fees
+Added: 4,172 4,145 4,524
Loan servicing fees, net of amortization
−Removed: Recoveries on loans acquired in business combinations
−Removed: Unrealized loss on equity investments
−Removed: (Loss)/gain on derivatives
−Removed: Increase in cash surrender value of life insurance
−Removed: Gain on sale of securities
+Added: 2,576 2,209 684
+Added: Increase in cash surrender value of BOLI
+Added: 1,409 1,322 1,067
+Added: Gain on sale of loans
+Added: 374 1,895 9,991
Gain on sale of fixed assets
+Added: 6,455 924 2,479
+Added: Total noninterest income
+Added: 15,018 11,252 18,745
Noninterest expense:
Salaries and employee benefits
+Added: 37,795 35,488 33,568
Occupancy and equipment expenses
+Added: 9,629 9,092 8,691
Data processing
+Added: 5,326 5,060 4,474
Legal and professional
+Added: 8,198 5,383 3,773
Office expenses
+Added: 1,512 1,438 1,197
Marketing and business promotion
+Added: 1,132 1,578 1,157
Insurance and regulatory assessments
−Removed: Core deposit premium
−Removed: Merger expenses
+Added: 3,165 1,850 1,561
+Added: Core deposit premium amortization
+Added: 923 1,086 1,121
Other expenses
−Removed: Income before income taxes
+Added: 3,016 3,551 2,650
+Added: Total noninterest expense
+Added: 70,696 64,526 58,192
+Added: Net income before income taxes
+Added: 60,246 91,345 80,937
Income tax expense
+Added: 17,781 27,018 24,031
+Added: $ 42,465 $ 64,327 $ 56,906
Net income per share
+Added: $ 2.24 $ 3.37 $ 2.92
+Added: 2.24 3.33 2.86
Weighted-average common shares outstanding
+Added: 18,965,346 19,099,509 19,423,549
+Added: 18,985,233 19,332,639 19,834,306
The accompanying notes are an integral part of these consolidated financial statements.
1 unchanged sentence
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
−Removed: FOR THE YEAR ENDED DECEMBER 31,
+Added: FOR THE YEAR ENDED DECEMBER 31,
(In thousands)
−Removed: Other comprehensive (loss)/income:
−Removed: Unrealized (losses)/gains on securities available for sale:
−Removed: Change in unrealized (losses)/gains
−Removed: Reclassification of gains recognized in net income
+Added: $ 42,465 $ 64,327 $ 56,906
+Added: Other comprehensive income/(loss):
+Added: Unrealized gains/(losses) on securities available for sale
+Added: 3,149 ( 28,905 ) ( 3,957 )
Related income tax effect
−Removed: Change in unrealized losses/(gains)
−Removed: Reclassification of gains recognized in net income
−Removed: Total other comprehensive (loss)/income
+Added: ( 996 ) 8,896 1,172
+Added: Total other comprehensive income/(loss)
+Added: 2,153 ( 20,009 ) ( 2,785 )
Total comprehensive income
+Added: $ 44,618 $ 44,318 $ 54,121
The accompanying notes are an integral part of these consolidated financial statements.
1 unchanged sentence
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
−Removed: FOR THE YEARS ENDED DECEMBER 31, 2022, 2021 AND 2020 
+Added: FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(In thousands, except share data)
4 unchanged sentences
Balance at January 1, 2021
−Removed: 20,030,866  
−Removed: $ 290,395  
−Removed: $ 4,938  
−Removed: $ 112,046  
−Removed: $ 407,690  
−Removed: 32,928  
−Removed: 32,928  
+Added: 19,565,921 $ 284,261 $ 4,932 $ 138,094 $ 72 $ 1,129 $ 428,488
+Added: — — — 56,906 — — 56,906
Stock-based compensation, net
+Added: — — 1,086 — — — 1,086
+Added: Restricted stock granted
+Added: 60,000 — — — — — —
Restricted stock vested
−Removed: ( 425 )  
+Added: — 425 ( 425 ) — — — —
Cash dividends on common stock ($ 0.51 per share)
−Removed: ( 6,567 )  
+Added: — — — ( 9,947 ) — — ( 9,947 )
Stock options exercised
−Removed: 56,498  
−Removed: ( 267 )  
+Added: 302,745 4,465 ( 990 ) — — — 3,475
Repurchase of common stock
−Removed: ( 521,443 )  
−Removed: ( 7,538 )  
−Removed: ( 313 )  
−Removed: Other comprehensive income, net of taxes
+Added: ( 473,122 ) ( 6,816 ) — ( 3,724 ) — — ( 10,540 )
+Added: Other comprehensive loss, net of taxes
+Added: — — — — — ( 2,785 ) ( 2,785 )
Balance at December 31, 2021
−Removed: 19,565,921  
−Removed: $ 284,261  
−Removed: $ 4,932  
−Removed: $ 138,094  
−Removed: $ 1,129  
−Removed: $ 428,488  
−Removed: 56,906  
−Removed: 56,906  
+Added: 19,455,544 $ 282,335 $ 4,603 $ 181,329 $ 72 $ ( 1,656 ) $ 466,683
+Added: Cumulative effect of change in accounting principle related to ASC 326 (1)
+Added: — — — ( 2,204 ) — — ( 2,204 )
+Added: — — — 64,327 — — 64,327
Stock-based compensation, net
−Removed: Restricted stock granted
−Removed: 60,000  
+Added: — — 848 — — — 848
+Added: Restricted stock cancelled
+Added: ( 40,000 ) — — — — — —
Restricted stock vested
−Removed: ( 425 )  
+Added: — 355 ( 355 ) — — — —
+Added: Restricted stock unit vested
+Added: 7,450 202 ( 202 ) — — — —
Cash dividends on common stock ($ 0.56 per share)
−Removed: ( 9,947 )  
+Added: — — — ( 10,736 ) — — ( 10,736 )
Stock options exercised
−Removed: 302,745  
−Removed: ( 990 )  
+Added: 445,308 7,009 ( 1,533 ) — — — 5,476
Repurchase of common stock
−Removed: ( 473,122 )  
−Removed: ( 6,816 )  
−Removed: ( 3,724 )  
+Added: ( 902,526 ) ( 12,989 ) — ( 6,833 ) — — ( 19,822 )
Other comprehensive loss, net of taxes
−Removed: ( 2,785 )  
+Added: — — — — — ( 20,009 ) ( 20,009 )
Balance at December 31, 2022
−Removed: 19,455,544  
−Removed: $ 282,335  
−Removed: $ 4,603  
−Removed: $ 181,329  
−Removed: $ ( 1,656 )  
−Removed: $ 466,683  
−Removed: Cumulative effect of change in accounting principle related to ASC 326 (1)
−Removed: ( 2,204 )  
−Removed: 64,327  
−Removed: 64,327  
+Added: 18,965,776 $ 276,912 $ 3,361 $ 225,883 $ 72 $ ( 21,665 ) $ 484,563
+Added: — — — 42,465 — — 42,465
Stock-based compensation, net
−Removed: Restricted stock cancelled
−Removed: ( 40,000 )  
−Removed: Restricted stock vested
−Removed: ( 355 )  
+Added: — — 750 — — — 750
Restricted stock unit vested
−Removed: ( 202 )  
+Added: 20,374 391 ( 391 ) — — — —
Cash dividends on common stock ($ 0.64 per share)
−Removed: ( 10,736 )  
+Added: — — — ( 12,163 ) — — ( 12,163 )
Stock options exercised
−Removed: 445,308  
−Removed: ( 1,533 )  
+Added: 19,403 392 ( 97 ) — — — 295
Repurchase of common stock
−Removed: ( 902,526 )  
−Removed: ( 12,989 )  
−Removed: ( 6,833 )  
−Removed: Other comprehensive loss, net of taxes
−Removed: ( 20,009 )  
+Added: ( 396,374 ) ( 5,770 ) — ( 1,033 ) — — ( 6,803 )
+Added: Other comprehensive income, net of taxes
+Added: — — — — — 2,153 2,153
Balance at December 31, 2023
−Removed: 18,965,776  
−Removed: $ 276,912  
−Removed: $ 3,361  
−Removed: $ 225,883  
−Removed: $ ( 21,665 )  
−Removed: $ 484,563  
−Removed: (1) Represents the impact of the adoption of Accounting Standards Update ASU 2016-13, Financial Instruments –
−Removed: Credit Losses (Topic 326) on January 1, 2022.
+Added: 18,609,179 $ 271,925 $ 3,623 $ 255,152 $ 72 $ ( 19,512 ) $ 511,260
+Added: (1) Represents the impact of the adoption of Accounting Standards Update ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) on January 1, 2022.
The accompanying notes are an integral part of these consolidated financial statements.
1 unchanged sentence
CONSOLIDATED STATEMENTS OF CASH FLOWS
−Removed: FOR THE YEARS ENDED DECEMBER 31, 2022, 2021 AND 2020
+Added: FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(In thousands)
Operating activities
+Added: $ 42,465 $ 64,327 $ 56,906
Adjustments to reconcile net income to net cash from Operating activities:
Depreciation and amortization of premises and equipment
−Removed: Net accretion of securities, loans, deposits, and other
−Removed: Unrealized loss on equity securities
+Added: 2,018 2,022 1,943
+Added: Net accretion of discount for securities, loans, deposits, and other
+Added: ( 5,396 ) ( 432 ) ( 191 )
+Added: Unrealized (gain)/loss on equity securities
Amortization of investment in affordable housing tax credits
+Added: 1,127 1,053 1,037
Amortization of intangible assets
−Removed: Change in valuation allowance on mortgage servicing rights
+Added: 2,568 3,853 6,347
+Added: Reversal of an impairment allowance on mortgage servicing rights
Amortization of right-of-use asset
+Added: 5,042 5,145 5,245
Change in operating lease liabilities
+Added: ( 4,730 ) ( 4,897 ) ( 5,058 )
Provision for credit losses
+Added: 3,362 4,935 3,959
Stock-based compensation, net
−Removed: Deferred tax benefit
−Removed: Gain on sale of securities
+Added: 750 848 1,086
+Added: Deferred tax expense/(benefit)
+Added: 216 ( 2,249 ) ( 1,093 )
Gain on sale of loans
+Added: ( 374 ) ( 1,895 ) ( 9,991 )
+Added: Gain on sale of OREO
Gain on sale of fixed assets
−Removed: Increase in cash surrender value of life insurance
+Added: ( 32 ) ( 757 ) —
+Added: Increase in cash surrender value of BOLI
+Added: ( 1,409 ) ( 1,322 ) ( 1,067 )
Loans originated and purchased for sale, net
+Added: ( 15,058 ) ( 39,152 ) ( 161,972 )
Proceeds from loans sold
+Added: 18,743 60,170 305,337
+Added: 2,158 2,163 ( 256 )
Net cash provided by operating activities
+Added: 51,292 93,812 202,175
Investing activities
Securities available for sale:
−Removed: Maturities, prepayments and calls
+Added: ( 694,210 ) ( 402,656 ) ( 603,836 )
+Added: Maturities, repayments and calls
+Added: 640,993 485,796 442,056
Securities held to maturity:
−Removed: Maturities, prepayments and calls
+Added: Maturities, repayments and calls
Redemption of Federal Home Loan Bank stock
Purchase of Federal Home Loan Bank stock and other equity securities, net
+Added: ( 479 ) ( 2,608 ) ( 5,839 )
Net increase of investment in qualified affordable housing projects
−Removed: Net increase in loans
+Added: ( 279 ) ( 227 ) ( 763 )
+Added: Net decrease/(increase) in loans
+Added: 296,693 ( 411,316 ) ( 315,551 )
+Added: Proceeds from sales of OREO
Purchase of bank owned life insurance
+Added: — — ( 19,800 )
Net cash received in connection with acquisition
1 unchanged sentence
Purchases of premises and equipment
−Removed: Net cash used in investing activities
+Added: ( 652 ) ( 2,065 ) ( 1,989 )
+Added: Net cash provided by/(used in) investing activities
+Added: 243,309 ( 260,171 ) ( 504,181 )
Financing activities
Net (decrease)/increase in demand deposits and savings accounts
+Added: ( 241,730 ) ( 886,712 ) 870,803
Net increase/(decrease) in time deposits
+Added: 438,625 397,329 ( 120,178 )
Advances from Federal Home Loan Bank
+Added: 80,000 570,000 —
Repayment of Federal Home Loan Bank borrowings
+Added: ( 150,000 ) ( 500,000 ) —
Cash dividends paid
−Removed: Redemption of subordinated debentures
−Removed: Issuance of subordinated debentures, net of issuance costs
+Added: ( 12,163 ) ( 10,736 ) ( 9,947 )
+Added: Redemption of subordinated notes
+Added: ( 55,000 ) — ( 50,000 )
+Added: Issuance of subordinated notes, net of issuance costs
Common stock repurchased, net of repurchased costs
+Added: ( 6,803 ) ( 19,822 ) ( 10,540 )
Exercise of stock options
−Removed: Net cash (used in)/provided by financing activities
−Removed: Net (decrease)/increase in cash and cash equivalents
+Added: 295 5,476 3,475
+Added: Net cash provided by/(used in) financing activities
+Added: 53,224 ( 444,465 ) 801,724
+Added: Net increase/(decrease) in cash and cash equivalents
+Added: 347,825 ( 610,824 ) 499,718
Cash and cash equivalents at beginning of period
+Added: 83,548 694,372 194,654
Cash and cash equivalents at end of period
+Added: $ 431,373 $ 83,548 $ 694,372
Supplemental disclosure of cash flow information
1 unchanged sentence
Interest paid
+Added: $ 93,721 $ 29,734 $ 22,507
+Added: 21,389 24,019 25,786
Non-cash investing and financing activities:
1 unchanged sentence
Loans transfer to held for sale, net
−Removed: Loan to facilitate OREO
+Added: 5,254 13,166 89,368
Additions to servicing assets
−Removed: Net change in unrealized holding (loss) gain on securities available for sale
+Added: 234 771 2,361
Recognition of operating lease right-of-use assets
+Added: ( 9,398 ) ( 8,138 ) ( 27,699 )
Recognition of operating lease liabilities
+Added: 9,398 8,138 27,699
Assets acquired, net of cash received
Liabilities assumed
−Removed: Cash (receipts)/considerations
+Added: Cash receipts
+Added: — ( 71,040 ) —
The accompanying notes are an integral part of these consolidated financial statements.
2 unchanged sentences
NOTE 1 - BUSINESS DESCRIPTION
−Removed: RBB Bancorp is a bank holding company registered under the Bank Holding Company Act of 1956, as amended.
−Removed: RBB Bancorp’s principal business is to serve as the holding company for its wholly-owned banking subsidiaries, Royal Business Bank (“Bank”) and RBB Asset Management Company ("RAM"), collectively referred to herein as “the Company.” At December 31, 2022, the Company had total assets of $ 3.9  billion, gross consolidated loans (held for investment and held for sale) of $ 3.3  billion, total deposits of $ 3.0  billion and total shareholders' equity of $ 484.6  million.
−Removed: On July 31, 2017, the Company completed its initial public offering of 3,750,000 shares at a price to the public of $ 23.00 per share.
−Removed: The Company’s stock trades on the Nasdaq Global Select Market under the symbol “RBB.”
−Removed: The Bank provides business-banking services to the Asian-American communities in Los Angeles County, Orange County and Ventura County in California, in the Las Vegas, Nevada and New York City metropolitan areas, Chicago (Illinois), Edison (New Jersey) and Honolulu (Hawaii).
−Removed: Specific services include remote deposit, E-banking, mobile banking, commercial and investor real estate loans, business loans and lines of credit, Small Business Administration (“SBA”) 7A and 504 loans, mortgage loans, trade finance and a full range of depository accounts. The Bank closed its acquisition of the Honolulu, Hawaii branch (the “Hawaii Branch”) from Bank of the Orient (“BOTO”) on January 14, 2022.
+Added: RBB Bancorp is a bank holding company registered under the Bank Holding Company Act of 1956, as amended.
+Added: RBB Bancorp’s principal business is to serve as the holding company for its wholly owned banking subsidiaries, Royal Business Bank (“Bank”) and RBB Asset Management Company (“RAM”), collectively referred to herein as “the Company.” RBB Bancorp was formed in January 2011 as a bank holding company and RAM was formed in 2012 to hold and manage problem assets acquired in business combinations.
+Added: When we refer to “we”, “us”, “our”, or the “Company”, we are referring to RBB Bancorp and its consolidated subsidiaries including the Bank, collectively.
+Added: When we refer to the “parent company”, “Bancorp”, or the “holding company”, we are referring to RBB Bancorp, the parent company, on a stand-along basis.
+Added: At December 31, 2023, the Company had total assets of $ 4.0 billion, gross consolidated loans (held for investment and held for sale) of $ 3.0 billion, total deposits of $ 3.2 billion and total shareholders' equity of $ 511.3 million.
+Added: The Bank provides business-banking products and services predominantly to the Asian-American communities through full service branches located in Los Angeles County, Orange County and Ventura County in California, in the Las Vegas, Nevada and New York City metropolitan areas, Chicago (Illinois), Edison (New Jersey) and Honolulu (Hawaii).
+Added: The products and services include commercial and investor real estate loans, business loans and lines of credit, Small Business Administration (“SBA”) 7A and 504 loans, mortgage loans, trade finance and a full range of depository accounts, including specialized services such as remote deposit, E-banking, and mobile banking.
+Added: The Bank acquired the Honolulu, Hawaii branch (the “Hawaii Branch”) from Bank of the Orient (“BOTO”) on January 14, 2022.
The Company operates full-service banking offices in Arcadia, Cerritos, Diamond Bar, Irvine, Los Angeles, Monterey Park, Oxnard, Rowland Heights, San Gabriel, Silver Lake, Torrance, and Westlake Village, California;
Las Vegas, Nevada;
−Removed: Manhattan, Brooklyn, Flushing and Elmhurst, New York;
−Removed: the Chinatown and Bridgeport neighborhoods of Chicago, Illinois;
+Added: Manhattan, Brooklyn, Flushing and Elmhurst, New York;
+Added: the Chinatown and Bridgeport neighborhoods of Chicago, Illinois;
Edison, New Jersey;
and Honolulu, Hawaii.
−Removed: The Company's primary source of revenue is providing loans to customers, who are predominately small and middle-market businesses and individuals. On May 2, 2022, we opened our Bensonhurst branch on 86th Street in Brooklyn, New York.
+Added: The Company's primary source of revenue is providing loans to customers, who are predominately small and middle-market businesses and individuals.
The Company generates its revenue primarily from interest received on loans and leases and, to a lesser extent, from interest received on investment securities.
The Company also derives income from noninterest sources, such as fees received in connection with various lending and deposit services, loan servicing, gain on sales of loans and wealth management services.
−Removed: The Company’s principle expenses include interest expense on deposits and subordinated debentures, and operating expenses, such as salaries and employee benefits, occupancy and equipment, data processing, and income tax expense.
−Removed: As part of the acquisition of First American International Corp (“FAIC”), the Company acquired FAIB Capital Corp.
−Removed: (“FAICC”), which was formed on January 29, 2014.
−Removed: FAICC is a real estate investment trust subsidiary of the Bank.
−Removed: The Company has completed six whole bank acquisitions and one branch acquisition from July 2011 through January 2022.
−Removed: All of the Company’s acquisitions have been accounted for using the acquisition method of accounting and, accordingly, the operating results of the acquired entities have been included in the consolidated financial statements from their respective acquisition dates.
−Removed: In addition, on December 28, 2021, the Company announced that it had entered into a definitive agreement to acquire Gateway Bank F.S.B.
−Removed: (“Gateway”), a commercial bank based in Oakland, California, in a cash transaction valued at approximately $ 22.9 million, subject to certain terms and conditions, including customary holdbacks if certain contingencies are not met, and other possible adjustments as contained in the agreement.
−Removed: As of December 31, 2022, Gateway had total assets of $ 181.4  million, total gross loans of $ 121.9  million, total deposits of $ 162.5  million and total tangible equity of $ 17.2  million.
−Removed: The expiration of the agreement has been extended to September 30, 2023 and the acquisition is subject to several conditions, including the receipt of all requisite regulatory approvals.
+Added: The Company’s principle expenses include interest expense on deposits and other long-term debt, and operating expenses, such as salaries and employee benefits, occupancy and equipment, data processing, and income tax expense.
+Added: The Company completed six whole bank acquisitions and one branch acquisition from July 2011 through January 2022.
+Added: All of the Company’s acquisitions have been accounted for using the acquisition method of accounting and, accordingly, the operating results of the acquired entities have been included in the consolidated financial statements from their respective acquisition dates.
+Added: The Company previously disclosed that, on December 28, 2021, it entered into a definitive agreement to acquire Gateway Bank F.S.B.
+Added: (“Gateway”) in an all cash transaction, subject to certain terms and conditions.
+Added: On September 28, 2023, the Company announced that it and Gateway have mutually agreed to terminate the definitive agreement, effective as of September 28, 2023.
+Added: Neither party has or will have any liability or pay any penalty to the other party as a result of the termination, and each party has released the other from any and all claims related to the definitive agreement or the transactions contemplated by the definitive agreement.
NOTE 2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
−Removed: The accompanying consolidated financial statements and notes thereto of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for Form 10 -K and conform to practices within the banking industry and include all of the information and disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for financial reporting.
+Added: The accompanying consolidated financial statements and notes thereto of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for Form 10 -K and conform to practices within the banking industry and include all of the information and disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for financial reporting.
Principles of Consolidation and Nature of Operations
−Removed: The accompanying consolidated financial statements include the accounts of RBB Bancorp and its wholly-owned subsidiaries Royal Business Bank and RBB Asset Management Company, collectively referred to herein as "the Company".
+Added: The accompanying consolidated financial statements include the accounts of RBB Bancorp and its wholly-owned subsidiaries RBB and RAM.
All significant intercompany transactions have been eliminated.
−Removed: RBB Bancorp was formed in January 2011 as a bank holding company.
−Removed: RAM was formed in 2012 to hold and manage problem assets acquired in business combinations.
−Removed: In connection with the 2018 acquisition of FAIC, the Company acquired a real estate investment trust (“REIT”) as a subsidiary of the Bank and is a New York State corporation.
−Removed: In addition to the REIT, the Company acquired four inactive subsidiaries:
−Removed: FAIC Insurance Services (a New York corporation formed in 2006 ), P4G8, LLC, FAIB Reacquisitions I, LLC and FAIB REO Acquisition II, LLC.
−Removed: FAIC Insurance Services was dissolved in January 2020;
−Removed: the other three were dissolved in 2019.
−Removed: We acquired three  statutory business trusts:
−Removed: TFC Statutory Trust in 2016,  FAIC Statutory Trust in 2018 and PGB Capital Trust I in 2020.
−Removed: These trusts issued trust preferred securities representing undivided preferred beneficial interests in the assets of the Trusts.
−Removed: The proceeds of these trust preferred securities were invested in certain securities issued by us, with similar terms to the relevant series of securities issued by the Trusts, which we refer to as subordinated debentures.
−Removed: RBB Bancorp has no significant business activity other than its investments in the Bank and RAM.
−Removed: Parent only condensed financial information on RBB Bancorp is provided in Note 23.
+Added: RBB Bancorp has no significant business activity other than its investments in the Bank and in RAM.
+Added: However, through our whole bank acquisition activity, we have acquired three statutory business trusts:
+Added: TFC Statutory Trust, FAIC Statutory Trust and PGB Capital Trust I.
+Added: These trusts issued trust preferred securities representing undivided preferred beneficial interests in the assets of these trusts.
+Added: The proceeds of these trust preferred securities were invested in certain securities issued by the entities we have acquired, with similar terms to the relevant series of securities issued by these trusts, which we refer to as subordinated debentures, and are included in Tier 2 capital.
+Added: The parent company only condensed financial information on RBB Bancorp is provided in Note 22.
+Added: In connection with the 2018 acquisition of First American International Corp (“FAIC”), the Company acquired FAIB Capital Corp.
+Added: (“FAICC”), a real estate investment trust formed on August 28, 2013 as a New York State corporation, which operates as a wholly-owned subsidiary of the Bank.
Use of Estimates in the Preparation of Financial Statements
−Removed: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
−Removed: It is reasonably possible that these estimates could change as actual results could differ from those estimates.
+Added: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
+Added: It is reasonably possible that these estimates could change as actual results could differ from those estimates.
+Added: The allowance for credit losses, realization of deferred tax assets, the valuation of goodwill and other intangible assets, other derivatives, and the fair value measurement of financial instruments are particularly subject to change and such change could have a material effect on the consolidated financial statements.
Cash and Cash Equivalents
3 unchanged sentences
Banking regulations require that banks maintain a percentage of their deposits as reserves in cash or on deposit with the Federal Reserve Bank.
−Removed: There were no reserves required to be held as of December 31, 2022 
+Added: There were no reserves required to be held as of December 31, 2023 and 2022.
The Company maintains amounts in due from bank accounts, which may exceed federally insured limits.
The Company has not experienced any losses in such accounts.
−Removed: Interest-Earning Deposits in Other Financial Institutions  
+Added: Interest-Earning Deposits in Other Financial Institutions
Interest-bearing deposits in other financial institutions not included in cash and cash equivalents are carried at cost and generally mature in one year or less.
4 unchanged sentences
Interest income includes amortization of purchase premiums or discounts.
−Removed: Premiums and discounts on securities are amortized on the level-yield method. Premiums are amortized to the earlier of maturity or call date.
+Added: Premiums and discounts on securities are amortized on the level-yield method to the earlier of the maturity date or call date of the underlying securities.
Gains and losses on sales are recorded on the trade date and determined using the specific identification method.
−Removed: Prior to January 1, 2022, management evaluated debt securities for other-than-temporary impairment ("OTTI") on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation.
−Removed: For securities in an unrealized loss position, management considered the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer.
−Removed: Management also assessed whether it intended to sell, or it was more likely than not that it would be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis.
−Removed: If either of the criteria regarding intent or requirement to sell was met, the entire difference between amortized cost and fair value was recognized as impairment through earnings.
+Added: Prior to January 1, 2022, management evaluated debt securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation.
+Added: For securities in an unrealized loss position, management considered the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer.
+Added: Management also assessed whether it intended to sell, or it was more likely than not that it would be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis.
+Added: If either of the criteria regarding intent or requirement to sell was met, the entire difference between amortized cost and fair value was recognized as impairment through earnings.
For debt securities that do not meet the aforementioned criteria, the amount of impairment was split into two components as follows;
2 unchanged sentences
The credit loss was defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis.
−Removed: Effective January 1, 2022, upon the adoption of ASU 2016 - 13, the Company accounts for credit losses on available for sale securities in accordance with ASC 326 - 30.
+Added: Effective January 1, 2022, upon the adoption of ASU 2016 - 13, Financial Instruments—Credit Losses (Topic 326 ), the Company accounts for credit losses on available for sale securities in accordance with ASC 326 - 30.
Debt securities are measured at fair value and subject to impairment testing.
When a debt security is considered impaired, the Company must determine if the decline in fair value has resulted from a credit-related loss or other factors and then, ( 1 ) recognize an allowance for credit loss by a charge to earnings for the credit-related component (if any) of the decline in fair value, and ( 2 ) recognize in other comprehensive income (loss) any non-credit related components of the fair value change.
−Removed: If the amount of the amortized cost basis expected to be recovered increases in a future period, the valuation reserve would be reduced, but not more than the amount of the current existing reserve for that security. 
+Added: If the amount of the amortized cost basis expected to be recovered increases in a future period, the valuation reserve would be reduced, but not more than the amount of the current existing reserve for that security.
For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis.
−Removed: If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income.
+Added: If either of the criteria regarding intent or requirement to sell is met, then the security’s amortized cost basis is written down to fair value through income.
For debt securities available-for-sale that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors.
In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors.
−Removed: If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security.
−Removed: If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis.
+Added: If this assessment indicates that a credit loss exists, then the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security.
+Added: If the present value of cash flows expected to be collected is less than the amortized cost basis, then a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis.
Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income (loss).
1 unchanged sentence
Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met.
−Removed: Accrued interest receivable on available-for-sale debt securities totaled $ 759,000  at December 31, 2022 and is excluded from the estimate of credit losses.
+Added: Accrued interest receivable on available-for-sale debt securities totaled $ 919,000 and $ 759,000 at December 31, 2023 and 2022, and is excluded from the estimate of credit losses.
Management measures expected credit losses on held-to-maturity debt securities on a collective basis by major security type.
−Removed: Accrued interest receivable on held-to-maturity debt securities totaled $ 51,000  at December 31, 2022 and is excluded from the estimate of credit losses.
−Removed: Loans Held For Sale  
+Added: Accrued interest receivable on held-to-maturity debt securities totaled $ 43,000 and $ 51,000 at December 31, 2023 and 2022, and is excluded from the estimate of credit losses.
+Added: Loans Held For Sale
Mortgage loans originated or acquired and intended for sale in the secondary market are carried at the lower of aggregate cost or fair value, as determined by outstanding commitments from investors.
4 unchanged sentences
Gains and losses on sales of mortgage loans are based on the difference between the selling price and the carrying value of the related loans sold.
−Removed: Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at their outstanding unpaid principal balances reduced by any charge-offs or specific valuation accounts and net of any deferred fees or costs on originated loans, or unamortized premiums or discounts on purchased loans.
+Added: Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at their outstanding unpaid principal balances reduced by any charge-offs and net of any deferred fees or costs on originated loans, or unamortized premiums or discounts on purchased loans.
Loan origination fees and certain direct origination costs are deferred and recognized in interest income using the level-yield method without anticipating prepayments.
6 unchanged sentences
Allowance for Credit Losses - Loans
−Removed: Effective January 1, 2022, upon the adoption of ASU 2016 - 13, the Company accounts for credit losses on loans in accordance with ASC 326, which requires the Company to record an estimate of expected lifetime credit losses for loans at the time of origination.
−Removed: The allowance for credit losses (“ACL”) is maintained at a level deemed appropriate by management to provide for expected credit losses in the portfolio as of the date of the consolidated balance sheet.
+Added: Effective January 1, 2022, upon the adoption of ASU 2016 - 13, Financial Instruments—Credit Losses (Topic 326 ), the Company accounts for credit losses on loans in accordance with ASC 326, which requires the Company to record an estimate of expected lifetime credit losses for loans at the time of origination.
+Added: The allowance for credit losses (“ACL”) is maintained at a level deemed appropriate by management to provide for expected credit losses in the loan portfolio as of the date of the consolidated balance sheet.
Estimating expected credit losses requires management to use relevant forward-looking information, including the use of reasonable and supportable forecasts.
The measurement of the ACL is performed by collectively evaluating loans with similar risk characteristics.
−Removed: The Company has elected to utilize a discounted cash flow (“DCF”) approach for all segments except consumer loans and loans to non-depository financial institutions, for these a remaining life approach was elected. 
−Removed: The Company’s discounted cash flow methodology incorporates a probability of default and loss given default model, as well as expectations of future economic conditions, using reasonable and supportable forecasts.
−Removed: The use of reasonable and supportable forecasts require significant judgment, such as selecting forecast scenarios and related scenario-weighting, as well as determining the appropriate length of the forecast horizon management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors. The Company’s CECL methodology utilizes a four -quarter reasonable and supportable forecast period, and a four -quarter reversion period.
−Removed: Management relies on multiple forecasts, blending them into a single loss estimate. The Company is using the Federal Open Market Committee to obtain forecasts for unemployment rate, while reverting to a long-run average of each considered economic factor.
−Removed: The Company uses both internal and external qualitative factors within the CECL model:
+Added: The Company has elected to utilize a DCF approach for all segments except for consumer loans and loans to non-depository financial institutions, which use a remaining life approach.
+Added: The Company’s DCF methodology incorporates a probability of default, loss given default and exposure at default model, as well as expectations of future economic conditions, using reasonable and supportable forecasts.
+Added: The Company uses both internal and external qualitative factors within the current expected credit losses (“CECL”) model including:
lending policies, procedures, and strategies;
changes in nature and volume of the portfolio;
−Removed: credit & lending personnel experience;
+Added: credit and lending personnel experience;
changes in volume and trends in classified loans, delinquencies, and nonaccrual;
4 unchanged sentences
and economic conditions.
−Removed: The Company determined weighting of the qualitative factors based on management’s ability to directly control or influence the level of risk exposure.
−Removed: The factors related to economic conditions, collateral values, and regulatory and business environment were assigned higher allocation, and the remaining factors were internal and manageable, and therefore received lower allocation.
−Removed: The Company records a liability for lifetime expected losses on off-balance-sheet credit exposure that do not fit the definition of unconditionally cancelable in accordance with ASC 326.
−Removed:  The Company uses the loss rate and exposure of default framework to estimate a reserve for unfunded commitments. Loss rates for the expected funded balances are determined based on the associated pooled loan analysis loss rate and the exposure at default is based on an estimated utilization given default.
+Added: The Company determines the weighting of the qualitative factors based on management’s ability to directly control or influence the level of risk exposure.
+Added: The factors related to economic conditions, collateral values, and the regulatory and business environment were assigned a higher allocation, and the remaining factors related to internal conditions received a lower allocation.
+Added: Management further estimates the allowance balance required using past loan loss experience from peers with similar portfolio sizes and geographic locations to the Company, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors.
+Added: The Company’s CECL methodology utilizes a four -quarter reasonable and supportable forecast period, and a four -quarter reversion period.
+Added: The Company is using the Federal Open Market Committee to obtain forecasts for the unemployment rate, while reverting to a long-run average of each considered economic factor.
+Added: The Company records a liability for lifetime expected credit losses on off-balance-sheet credit exposure that do not fit the definition of unconditionally cancelable in accordance with ASC 326.
+Added: The Company uses the loss rate and exposure of default framework to estimate a reserve for unfunded commitments.
+Added: Loss rates for the expected funded balances are determined based on the associated pooled loan analysis loss rate and the exposure at default is based on an estimated utilization given default.
The Company assesses expected credit losses for individual instruments that have different risk characteristics than those that are evaluated on a collective (pooled) basis, in accordance with ASC 326.
−Removed:  An individual analysis will provide a specific reserve for instruments involved with fair market value of collateral or present value of future cash flow.
−Removed: In such a manner, the Bank performs individual analysis on loans that are 90 or more days past due, on non-accrual status or a trouble debt restructuring (“TDR”).
−Removed: Upon adoption of ASU 2022 - 02, the Company evaluates all receivable modifications under ASC 310 to determine whether a modification made to a borrower results in a new loan or a continuation of the existing loan.
−Removed: The Company no longer consider renewals, modifications, or extensions resulting from reasonably expected TDRs when calculating the allowance for credit losses under ASC 326.
−Removed: The post-modification effective interest rate is used to calculate the allowance for credit losses when discounted cash flow (“DCF”) method is applied.
−Removed: Allowance for Loan Losses
−Removed: Prior to the Company's adoption of ASC 326 on January 1, 2022, the Company maintained an allowance for loan losses ("ALLL") in accordance with ASC 450, Contingencies and ASC 310, Receivables .
−Removed: The ALLL was a valuation allowance for probable incurred credit losses.
−Removed: Loan losses were charged against the allowance when management believed the uncollectibility of a loan balance was confirmed.
+Added: An individual analysis will provide a specific reserve for instruments involved with fair market value of collateral or present value of future cash flow.
+Added: In such a manner, the Bank performs individual analysis on loans that are 90 or more days past due, on non-accrual status or modified loans.
+Added: Credit losses are not estimated for accrued interest receivable as interest that is deemed uncollectible is written off through interest income.
+Added: The Company adopted ASU 2022 - 02, Financial Instruments—Credit Losses (Topic 326 ), effective January 1, 2023.
+Added: Upon adoption, the Company evaluates all receivable modifications under ASC 310 to determine whether a modification made to a borrower results in a new loan or a continuation of the existing loan.
+Added: The Company no longer considers renewals, modifications, or extensions resulting from reasonably expected troubled debt restructurings (“TDRs”) when calculating the allowance for credit losses under ASC 326.
+Added: The post-modification effective interest rate is used to calculate the allowance for credit losses when the DCF method is applied.
+Added: Allowance for Loan Losses (prior to January 1, 2022)
+Added: Prior to the Company's adoption of ASC 326, Financial Instruments—Credit Losses, on January 1, 2022, the Company maintained an allowance for loan losses (“ALL”) in accordance with ASC 450, Contingencies, and ASC 310, Receivables.
+Added: The ALL was a valuation allowance for probable incurred credit losses.
+Added: Loan losses were charged against the allowance when management believed the uncollectibility of a loan balance was confirmed.
Subsequent recoveries, if any, were credited to the allowance.
−Removed: Management estimated the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors.
−Removed: Allocations of the allowance may have been made for specific loans, but the entire allowance was available for any loan that, in management's judgment, should be charged-off.
−Removed: Amounts were charged-off when available information confirmed that specific loans or portions thereof, were uncollectible.
−Removed: This methodology for determining charge-offs was consistently applied to each segment.
+Added: Management estimated the allowance balance required 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.
+Added: Allocations of the allowance may have been made for specific loans, but the entire allowance was available for any loan that, in management's judgment, should be charged-off.
+Added: Amounts were charged-off when available information confirmed that specific loans or portions thereof, were uncollectible.
+Added: This methodology for determining charge-offs was consistently applied to each segment.
Servicing Rights
−Removed: When mortgage and SBA loans are sold with servicing retained, servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sales of loans.
+Added: Servicing rights are established as an intangible asset when mortgage loans and SBA loans are sold with servicing retained and they are initially recorded at fair value with the income statement effect recorded in the gain on sale of loans.
Fair value is based on a valuation model that calculates the present value of estimated future net servicing income.
All classes of servicing assets are subsequently measured using the amortization method, which requires servicing rights to be amortized into noninterest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans.
−Removed: Servicing rights are evaluated for impairment based upon the fair value of the rights as compared to carrying amount.
−Removed: Impairment is recognized through a valuation allowance for an individual grouping, to the extent that fair value is less than the carrying amount.
+Added: Quarterly impairment is based upon the fair value of the rights as compared to carrying amount.
+Added: Impairment is recognized through a charge to income to establish a valuation allowance for an individual grouping, to the extent that fair value is less than the carrying amount.
If the Company later determines that all or a portion of the impairment no longer exists for a particular grouping, a reduction of the allowance may be recorded as an increase to income.
+Added: The estimated fair value of the servicing rights is obtained through independent third party valuations based on an analysis of future cash flows, incorporating key assumptions including discount rates, prepayment speeds and interest rates.
Servicing fee income, which is reported on the income statement as loan servicing fees, net of amortization , is recorded for fees earned for servicing loans.
The fees are based on a contractual percentage of the outstanding principal.
−Removed: The amortization of mortgage servicing rights is netted against loan servicing fee income.
−Removed: Transfers of Financial Assets  
+Added: The amortization of the mortgage and SBA servicing rights is offset against loan servicing fee income and reported as a net amount in the consolidated income statement.
+Added: 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.
−Removed: Gains on sale of mortgage loans totaled $ 1.2  million, $ 7.9  million, and $ 5.2  million, and gains on sale of SBA loans totaled $ 696,000 , $ 2.1 million, and $ 754,000  in 2022, 2021, and 2020, respectively. 
+Added: Gains on sale of mortgage loans totaled $ 112,000 , $ 1.2 million, and $ 7.9 million, and gains on sale of SBA loans totaled $ 262,000 , $ 696,000 , and $ 2.1 million in 2023, 2022, and 2021, respectively.
Premises and Equipment
5 unchanged sentences
Operating Lease ROU Assets and Lease Liabilities
−Removed: Operating lease Right-of-Use ("ROU") assets and lease liabilities are included in other assets and other liabilities, respectively, on the Company’s consolidated balance sheet.
−Removed: The Company uses its incremental borrowing rate, factoring in the lease term, to determine the lease liability, which is measured at the present value of future lease payments.
−Removed: The ROU asset, at adoption of this ASU, was recorded at the amount of the lease liability plus any prepaid rent and initial direct costs, less any lease incentives and accrued rent.
−Removed: The lease terms include periods covered by options to extend or terminate the lease depending on whether the Company is reasonably certain to exercise such options.
+Added: Operating lease Right-of-Use (“ROU”) assets and lease liabilities are included in other assets and other liabilities, respectively, on the Company’s consolidated balance sheet.
+Added: The ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date.
+Added: The lease terms include periods covered by options to extend or terminate the lease depending on whether the Company is reasonably certain to exercise such options.
+Added: The Company uses its incremental borrowing rate to determine the present value of its lease liabilities.
+Added: The ROU asset, at adoption of ASU 2016 - 02, Leases (Topic 842 ), was recorded at the amount of the lease liability plus any prepaid rent and initial direct costs, less any lease incentives and accrued rent.
+Added: Upon adoption of this Topic on January 1, 2021, the Company elected the package of practical expedients that permits the Company to not reassess its prior conclusions about lease identification, lease classification and initial direct costs.
+Added: The Company also elected all of the new standard’s available transition practical expedients, including the short-term lease recognition exemption that includes not recognizing ROU assets or lease liabilities for existing short-term leases, and the practical expedient to not separate lease and non-lease components for all of the Company’s leases.
+Added: The Company determines if a contract arrangement is a lease at inception and primarily enters into operating lease contracts for its branch locations, office space, and certain equipment.
+Added: As part of its property lease agreements, the Company may seek to include options to extend or terminate at lease when it is reasonably certain that the Company will exercise those options.
+Added: The Company's measurement of the ROU assets and operating lease liabilities does not include payments associated with the option to extend or terminate the lease term unless the Company is reasonably certain to exercise such options then the period will cover the option to extend or terminate.
+Added: The ROU lease asset also includes any lease payments made and lease incentives.
+Added: Lease expense for lease payments is recognized on a straight-line basis over the lease term.
+Added: The Company did not possess any leases that have variable lease payments or residual value guarantees as of December 31, 2023.
Other Real Estate Owned
−Removed: Real estate acquired by foreclosure or deed in lieu of foreclosure is recorded at fair value at the date of foreclosure, establishing a new cost basis by a charge to the allowance for credit losses, if necessary.
+Added: Real estate acquired by foreclosure or deed in lieu of foreclosure is recorded at fair value at the date of foreclosure, establishing a new cost basis by a charge to the allowance for credit losses, if necessary.
Other real estate owned is carried at the lower of the Company's carrying value of the property or its fair value, less estimated carrying costs and costs of disposition.
4 unchanged sentences
Goodwill is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date.
−Removed: Goodwill resulting from whole bank acquisitions is not amortized, but tested for impairment at least annually.
−Removed: The Company has selected October 
−Removed: 1 as the date to perform the annual impairment test.
−Removed: Goodwill amounted to $ 71.5  million and $ 69.2  million as of December 31, 2022 
−Removed: and 2021, respectively, and is the only intangible asset with an indefinite life on the balance sheet.
−Removed: No impairment was recognized on goodwill during 2022  and 2021.
+Added: Goodwill resulting from whole bank and branch acquisitions is not amortized, but tested for impairment at least annually.
+Added: The Company has selected October 1 as the date to perform the annual impairment test.
+Added: Goodwill amounted to $ 71.5 million as of December 31, 2023 and 2022, and is the only intangible asset with an indefinite life on the balance sheet.
+Added: No impairment was recognized on goodwill during 2023 and 2022.
Goodwill in the amount of $ 2.3 million was recognized in conjunction with the acquisition of the Hawaii Branch from BOTO.
−Removed: Other intangible assets consist of core deposit intangible ("CDI") assets arising from whole bank acquisitions.
+Added: After evaluating the prolonged decrease in the Company’s market value, management performed a quantitative goodwill impairment analysis as of September 30, 2023.
+Added: Management engaged a third -party valuation specialist to assist with the quantitative analysis.
+Added: The evaluation used two methods to estimate the value of the Company:
+Added: the market approach and the income approach.
+Added: The market approach uses pricing information available on publicly traded companies that are similar to the subject company to determine the value of the subject company.
+Added: Estimates used in the market approach included selecting a representative peer group of institutions, determining the price to tangible book value based on the results of the peer group institutions, and estimating a control premium based on the whole-bank acquisition prices for representative transactions.
+Added: The income approach is based on the discounted free cash flows of the subject company using projections of future results, and considering future economic forecasts and management’s plans.
+Added: Estimates used in the income approach include management’s projections of the Company’s income in future periods and an appropriate rate of return that would be required by a market participant.
+Added: Based on this quantitative analysis, the fair value of the Company exceeds its carrying amount with a passing amount of 9.6 % at September 30, 2023.
+Added: In addition, due to changes in the Company’s projections of income in future periods during the fourth quarter of 2023 resulting from the current economic environment, at December 31, 2023, management performed certain calculations and sensitivity analyses related to the quantitative goodwill impairment analysis performed at September 30, 2023 and the current information.
+Added: Based on this most recent analysis, management concluded that goodwill was also not impaired at December 31, 2023.
+Added: Other intangible assets consist of core deposit intangible (“CDI”) assets arising from acquisitions.
CDI assets are amortized on an accelerated method over their estimated useful life of 8 to 10 years.
−Removed: CDI was recognized in the 2013 acquisition of Los Angeles National Bank, in the 2016 acquisition of TFC Holding Company, in the 2018 acquisition of FAIC and in the 2020 acquisition of PGBH.
+Added: CDI was recognized in the 2013 acquisition of Los Angeles National Bank, in the 2016 acquisition of TFC Holding Company, in the 2018 acquisition of FAIC and in the 2020 acquisition of PGBH.
In January 2022, $ 729,000 of CDI was recognized in conjunction with the Hawaii Branch purchase from BOTO.
−Removed: The unamortized balance as of December 31, 2022 
−Removed: and 2021  was $ 3.7  million and $ 4.1  million, respectively.
−Removed: Accumulated amortization as of December 31, 2022 
−Removed: and 2021  was $ 6.7  million and $ 5.7  million, respectively.
−Removed: CDI amortization expense was $ 1.1  million, $ 1.1  million, and $ 1.4  million in 2022, 2021  and 2020, respectively.
+Added: The following table presents changes in the carrying amount of CDI for the periods indicated:
+Added: Year ended December 31,
+Added: (dollars in thousands)
+Added: Core deposit intangibles
+Added: Balance, beginning of year
+Added: $ 10,459 $ 9,730 $ 9,730
+Added: Acquired from acquisitions
+Added: Balance, end of year
+Added: $ 10,459 $ 10,459 $ 9,730
+Added: Accumulated amortization:
+Added: Balance, beginning of year
+Added: $ 6,741 $ 5,655 $ 4,534
+Added: 923 1,086 1,121
+Added: Balance, end of year
+Added: $ 7,664 $ 6,741 $ 5,655
+Added: Core deposit intangibles, net
+Added: $ 2,795 $ 3,718 $ 4,075
Estimated CDI amortization expense for the next 5 years is as follows:
1 unchanged sentence
Year ending December 31:
−Removed: $ 3,718  
Bank Owned Life Insurance
The Company has purchased life insurance policies on a select group of employees and directors.
−Removed: Bank owned life insurance (“BOLI”) is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement.
−Removed: Increases of the cash value of these policies, as well as insurance proceeds received, are recorded in the other noninterest income and are not subject to income tax for as long as they are held for the life of the covered employee and director.
+Added: Bank Owned Life Insurance (“BOLI”) is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement.
+Added: Increases of the cash value of these policies, as well as insurance proceeds received, are recorded in the other noninterest income and are not subject to income tax for as long as they are held for the life of the covered employees and directors.
FHLB Stock and Other Equity Securities
−Removed: The Company is a member of the Federal Home Loan Bank (“FHLB”) system.
+Added: The Company is a member of the Federal Home Loan Bank (“FHLB”) system.
Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts.
1 unchanged sentence
Both cash and stock dividends are reported as income.
−Removed: The Company also owns equity investment in banker’s bank stock.
+Added: The Company also owns an equity investment in Pacific Coast Banker’s Bank and Atlantic Community Bankers Bank stock.
The Company adopted ASU 2016 - 01 on January 1, 2019, and elected the measurement alternative for measuring equity securities without readily determinable fair values at cost less impairment, plus or minus observable price changes in orderly transactions.
−Removed: As of December 31, 2022 
−Removed: the Company had several CRA equity investments without readily determinable fair values in the amount of $ 22.2  million, and $ 20.0  million at December 31, 2021.
+Added: As of December 31, 2023, the Company had several equity investments without readily determinable fair values in the amount of $ 22.3 million, and $ 22.2 million at December 31, 2022.
+Added: There were no impairment charges in 2023 or 2022.
+Added: There was a $ 360,000 impairment charge in 2021.
Stock-Based Compensation
+Added: The Company currently recognizes stock-based compensation based on the grant date fair value of equity awards, including stock options, restricted stock units and restricted stock, which have been granted to employees.
+Added: The expense related to equity-based awards granted to directors or other qualified non-employee awardees is recognized as other noninterest expense.
Stock option compensation expense is calculated based on the fair value of the award at the grant date for those options expected to vest and is recognized as an expense over the vesting period of the grant using the straight-line method.
−Removed: The Company uses the Black-Scholes option pricing model to estimate the value of granted options.
−Removed: This model takes into account the option exercise price, the expected life, the current price of the underlying stock, the expected volatility of the Company’s stock, expected dividends on the stock and a risk-free interest rate.
−Removed: The Company estimates the expected volatility based on the Company’s historical stock prices for the period corresponding to the expected life of the stock options.
−Removed: Restricted stock units are valued at the closing price of the Company’s stock on the date of the grant.
−Removed: Compensation cost is recognized for stock options and restricted stock awards issued to employees and directors, based on the fair value of these awards.
−Removed: This cost is recognized over the period which an employee is required to provide services in exchange for the award, generally defined as the vesting period.
−Removed: When the options are exercised, the Company’s policy is to issue new shares of stock.
−Removed: The Company’s accounting policy is to recognize forfeitures as they occur.
+Added: The Company uses the Black-Scholes option-pricing model to estimate the value of granted stock options.
+Added: This model takes into account the option exercise price, the expected life, the current price of the underlying stock, the expected volatility of the Company’s stock, expected dividends on the stock and a risk-free interest rate.
+Added: The Company estimates the expected volatility based on the Company’s historical stock prices for the period corresponding to the expected life of the stock options.
+Added: Restricted stock and restricted stock units are valued based on the closing price of the Company’s stock on the date of the grant.
+Added: Stock-based compensation expense is recognized over the period which an employee is required to provide services in exchange for the award, generally defined as the vesting period.
+Added: When the options are exercised, the Company’s policy is to issue new shares of stock.
+Added: The Company’s accounting policy is to recognize forfeitures as they occur.
+Added: Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities.
The Company files its income taxes on a consolidated basis with its subsidiaries.
−Removed: The allocation of income tax expense represents each entity’s proportionate share of the consolidated provision for income taxes.
+Added: The allocation of income tax expense represents each entity’s proportionate share of the consolidated provision for income taxes.
Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities.
+Added: Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates.
+Added: The effect of a change in tax rates on deferred tax assets and liabilities is recognized in earnings in the period that includes the enactment date.
A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.
1 unchanged sentence
Interest and penalties related to uncertain tax positions are recorded as part of income tax expense.
−Removed: Retirement Plans  
+Added: Under ASC 740, a valuation allowance is required to be recognized if it is “more likely than not” that all or a portion of the Company's deferred tax assets will not be realized.
+Added: The Company's policy is to evaluate the deferred tax assets on a quarterly basis and record a valuation allowance for the Company's deferred tax assets if there is not sufficient positive evidence available to demonstrate utilization of the Company's deferred tax assets.
+Added: Initial setup or an increase to deferred tax asset valuation allowance would be charged to income tax expense that would negatively impact our earnings.
+Added: Retirement Plans
The Company established a 401 (k) plan in 2010.
−Removed: The Company contributed $ 594,000 , $ 532,000 , and $ 424,000 in 2022, 2021  and 2020, respectively.
+Added: The Company contributed $ 707,000 , $ 594,000 , and $ 532,000 in 2023, 2022 and 2021, respectively.
Comprehensive Income
Comprehensive income consists of net income and other comprehensive income.
−Removed: Other comprehensive income includes unrealized gains and losses on securities available for sale.
+Added: Other comprehensive income includes unrealized gains and losses on securities available for sale, net of taxes.
Financial Instruments
2 unchanged sentences
Such financial instruments are recorded in the financial statements when they are funded.
−Removed: Interest Rate Lock Commitments (“IRLCs”) are agreements under which the Company agrees to extend credit to a borrower under certain specified terms and conditions in which the interest rate and the maximum amount of the loan are set prior to funding.
−Removed: Under the agreement, the Company commits to lend funds to a potential borrower (subject to the Company’s approval of the loan) on a fixed or adjustable rate basis, regardless of whether interest rates change in the market, or on a floating rate basis. As such, outstanding IRLCs are subject to interest rate risk and related price risk during the period from the date of issuance through the date of loan funding, cancelling or expiration. Loan commitments generally range between 30 and 90 days;
−Removed: however, the borrower is not obligated to obtain the loan. The Company is subject to fallout risk related to IRLCs , which is realized if approved borrowers choose not to close on the loans within the terms of the IRLCs.
−Removed: The Company uses best efforts commitments to substantially eliminate these risks. Historical commitment-to-closing ratios are considered to estimate the quantity of mortgage loans that will fund within the terms of the IRLCs.
−Removed: The FASB Accounting Standards Codification (“FASB ASC”) provides that IRLCs on mortgage loans that will be held for resale are derivatives and must be accounted for at fair value on the balance sheet (if material).
−Removed: FASB ASC Topic 820 –
−Removed: Fair Value Measurements and Disclosures specifies how these derivatives are to be valued. Commitments to originate mortgage loans to be held for investment and other types of loans are generally not derivatives.
−Removed: Consequently, the Company has elected to account for these obligations at fair value.
−Removed: Forward Mortgage Loan Sale Contracts (“FMLSC”)  
−Removed: were utilized to avoid interest rate risk at the time an interest rate lock commitment is made to the buyer. The Company is subject to interest rate and price risk on its mortgage loans held for sale from the loan funding date until the date the loan is sold. Best efforts commitments which fix the forward sales price that will be realized in the secondary market are used to eliminate the interest rate and price risk to the Company.
−Removed: The buyer can enter into mortgage loan sales commitments on a “mandatory”
−Removed: or “best efforts”
−Removed: Mandatory commitments provide that the loan must be delivered or the commitment be “paired off”.
−Removed: In general, best efforts commitments provide that the loan be delivered if and when it closes.
−Removed: Forward commitments, also known as forward loan sales commitments, are considered to be derivatives under FASB ASC Topic 815 (Derivatives and Hedging) because they meet all of the following criteria:
+Added: Interest Rate Lock Commitments (“IRLCs”) are agreements under which the Company agrees to extend credit to a borrower under certain specified terms and conditions in which the interest rate and the maximum amount of the loan are set prior to funding.
+Added: Under the agreement, the Company commits to lend funds to a potential borrower (subject to the Company’s approval of the loan) on a fixed or adjustable rate basis, regardless of whether interest rates change in the market, or on a floating rate basis.
+Added: As such, outstanding IRLCs are subject to interest rate risk and related price risk during the period from the date of issuance through the date of loan funding, cancelling or expiration.
+Added: Loan commitments generally range between 30 and 90 days;
+Added: however, the borrower is not obligated to obtain the loan.
+Added: The Company is subject to fallout risk related to IRLCs, which is realized if approved borrowers choose not to close on the loans within the terms of the IRLCs.
+Added: The Company uses best efforts commitments to substantially eliminate these risks.
+Added: Historical commitment-to-closing ratios are considered to estimate the quantity of mortgage loans that will fund within the terms of the IRLCs.
+Added: ASC 815, Derivatives and Hedging, provides that IRLCs on mortgage loans that will be held for resale are derivatives and must be accounted for at fair value on the balance sheet.
+Added: ASC 820, Fair Value Measurements and Disclosures, specifies how these derivatives are to be valued.
+Added: Commitments to originate mortgage loans to be held for investment and other types of loans are generally not derivatives.
+Added: The Company has elected to account for these obligations at fair value.
+Added: Forward Mortgage Loan Sale Contracts (“FMLSC”) are utilized to avoid interest rate risk at the time an interest rate lock commitment is made to the buyer.
+Added: The Company is subject to interest rate and price risk on its mortgage loans held for sale from the loan funding date until the date the loan is sold.
+Added: Best efforts commitments which fix the forward sales price that will be realized in the secondary market are used to eliminate the interest rate and price risk to the Company.
+Added: To avoid interest rate risk, the Company will enter into FMLSCs at the time they make an interest rate lock commitment to the buyer.
+Added: The buyer can enter into mortgage loan sales commitments on a “mandatory” or “best efforts” basis.
+Added: Mandatory commitments provide that the loan must be delivered or the commitment be “paired off.” In general, best efforts commitments provide that the loan be delivered if and when it closes.
+Added: Forward commitments, also known as forward loan sales commitments, are considered derivatives under ASC Topic 815, Derivatives and Hedging, because they meet all of the following criteria:
They have a specified underlying (the contractually specified price for the loans);
2 unchanged sentences
They require or permit net settlement as the institution via a pair-off transaction or the payment of a pair-off fee.
−Removed: Earnings Per Share ( “
−Removed: Basic and diluted EPS are calculated using the 
−Removed: two -class method since the Company has issued share-based payment awards considered participating securities because they entitle holders the rights to dividends during the vesting term.
+Added: See Note 18 for more information and disclosures relating to the Company's derivatives.
+Added: Earnings Per Share ( “ EPS ” )
+Added: Basic and diluted EPS are calculated using the two -class method since the Company has issued share-based payment awards considered participating securities because they entitle holders the rights to dividends during the vesting term.
The two -class method is an earnings allocation formula that determines net income per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings.
10 unchanged sentences
Significant unobservable inputs that reflect the Company's own assumptions about the assumptions that market participants would use in pricing an asset or liability.
−Removed: See Note 18  and Note 19  for more information and disclosures relating to the Company's fair value measurements.
+Added: See Note 18 for more information and disclosures relating to the Company's fair value measurements.
Operating Segments
1 unchanged sentence
Recent Accounting Pronouncements
−Removed: In February 2016, the FASB issued ASU 2016 - 02, Leases (Topic 842 ) .
−Removed: The change for lessees to recognize ROU assets and lease liabilities for all leases not considered short-term leases, which is generally defined as a lease term of less than 12 months.
−Removed: This change will result in lessees recognizing ROU assets and lease liabilities for most leases currently accounted for as operating leases under current lease accounting guidance.
−Removed: The amendments are effective for annual periods beginning after December 15, 2020 and for interim periods beginning after December 15, 2021.
−Removed: The Company early adopted this ASU on January 1, 2021 and recorded the ROU asset and lease liability of $ 26.8 million.
+Added: Recently Adopted
In June 2016, the FASB issued ASU 2016 - 13, Measurement of Credit Losses on Financial Instrument (Topic 326 ), including subsequent amendments to this ASU.
−Removed: This ASU changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income.
−Removed: The standard will replace today's "incurred loss" approach with an "expected loss" model.
−Removed: The new model, referred to as the current expected credit loss ("CECL") model, will apply to:
+Added: This ASU changes how entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income.
+Added: The standard replaced the “incurred loss” approach with an “expected loss” model.
+Added: The new model, referred to as the CECL model, applies to:
( 1 ) financial assets subject to credit losses and measured at amortized cost, and ( 2 ) certain off-balance sheet credit exposures.
This includes, but is not limited to, loans, leases, held to maturity securities, loan commitments, and financial guarantees.
−Removed: For available for sale (“AFS”) debt securities with unrealized losses losses will be recognized as allowances rather than reductions in the amortized cost of the securities.
−Removed: ASU 2016 - 13 also expands the disclosure requirements regarding an entity's assumptions, models, and methods for estimating the allowance for loan and lease losses.
−Removed: In addition, entities will need to disclose the amortized cost balance for each class of financial asset by credit quality indicator, disaggregated by the year of origination. The Company retroactively adopted CECL to January 1, 2022 as the Company's EGC status expired as of December 
−Removed: A one -time cumulative adjustment of $ 2.1  million was made to the Company's allowance for credit losses which was recorded through retained earnings upon adoption of ASU 2016 - 13 as of January 1, 2022.
−Removed: The following table sets forth the cumulative effect of the changes to the Company's consolidated balance sheet at January 1, 2022, for the adoption of ASU 
+Added: For available for sale (“AFS”) debt securities with unrealized losses, losses will be recognized as allowances rather than reductions in the amortized cost of the securities.
+Added: ASU 2016 - 13 also expands the disclosure requirements regarding an entity's assumptions, models, and methods for estimating the allowance for credit losses.
+Added: In addition, entities are required to disclose the amortized cost balance for each class of financial asset by credit quality indicator, disaggregated by the year of origination.
+Added: The Company retroactively adopted CECL to January 1, 2022 as the Company’s emerging growth company status expired as of December 31, 2022.
+Added: A one -time cumulative adjustment of $ 2.1 million was made to the Company’s ACL, which was recorded through retained earnings upon adoption of ASU 2016 - 13 as of January 1, 2022.
+Added: The following table sets forth the cumulative effect of the changes to the Company's consolidated balance sheets at January 1, 2022, for the adoption of ASU 2016 - 13:
(dollars in thousands)
2 unchanged sentences
Allowance for credit losses on loans
−Removed: $ 32,912  
−Removed: $ 2,135  
−Removed: $ 35,047  
+Added: $ 32,912 $ 2,135 $ 35,047
Deferred tax assets
−Removed: Allowance for unfunded commitments
−Removed: $ 1,203  
−Removed: $ 1,045  
−Removed: $ 2,248  
+Added: 4,855 977 5,832
+Added: Reserve for unfunded commitments
+Added: $ 1,203 $ 1,045 $ 2,248
Stockholders' equity:
Retained earnings, net of tax
−Removed: $ 181,329  
−Removed: $ ( 2,204 )  
−Removed: $ 179,125  
+Added: $ 181,329 $ ( 2,204 ) $ 179,125
In February 2019, the U.S.
1 unchanged sentence
Additionally, in March 2020, the U.S.
−Removed: federal bank regulatory agencies issued an interim final rule that provides banking organizations an option to delay the estimated CECL impact on regulatory capital for an additional two years for a total transition period of up to five years to provide regulatory relief to banking organizations to better focus on supporting lending to creditworthy households and businesses in light of recent strains on the U.S.
+Added: federal bank regulatory agencies issued an interim final rule that provided banking organizations that adopted CECL in the 2020 an option to delay the estimated CECL impact on regulatory capital for an additional two years for a total transition period of up to five years to provide regulatory relief to banking organizations to better focus on supporting lending to creditworthy households and businesses in light of recent strains on the U.S.
economy as a result of the novel coronavirus disease 2019 (“COVID- 19” ) pandemic.
−Removed: As a result, entities will have the option to gradually phase in the full effect of CECL on regulatory capital over a five -year transition period.
−Removed: Effective January 1, 2022, the Company adopted ASU 2016 - 13,  reflected the full effect of CECL at December 31, 2022, and did not elect the three -year or five -year CECL phase-in options on regulatory capital.
−Removed: In January 2017, the FASB issued ASU 2017 - 04, Intangibles—Goodwill and Other (Topic 350 ) .
+Added: As a result, entities that adopted CECL in 2020 had the option to gradually phase in the full effect of CECL on regulatory capital over a five -year transition period.
+Added: For entities who adopted CECL after 2020, the three -year phase-in transition provision is available if any entity experiences a reduction in retained earnings due to CECL adoption as of the beginning of the fiscal year in which the institution adopts CECL and makes an election to use this phase-in option.
+Added: Effective January 1, 2022, the Company adopted ASU 2016 - 13, reflected the full effect of CECL at December 31, 2022, and did not elect the three -year CECL phase-in option on regulatory capital.
+Added: In January 2017, the FASB issued ASU 2017 - 04, Intangibles—Goodwill and Other (Topic 350 ).
This Update simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test.
−Removed: Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill.
+Added: Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill.
The amendments in this Update are required for public business entities and other entities that have goodwill reported in their financial statements and have not elected the private company alternative for the subsequent measurement of goodwill.
−Removed: As a result, under this Update, “an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value;
−Removed: however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.”
−Removed: The Company adopted this ASU on December 31, 2022.
−Removed: Adoption of ASU 2017 - 04 did 
−Removed: not  have a significant impact on the Company’s consolidated financial statements.
−Removed: In February 2020, the FASB issued ASU 2020 - 02, “Financial Instruments—Credit Losses (Topic 326 ) and Leases (Topic 842 )—Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No.
+Added: As a result, under this Update, “an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value;
+Added: however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.” The Company adopted this ASU on December 31, 2022.
+Added: Adoption of ASU 2017 - 04 did not have a significant impact on the Company’s consolidated financial statements.
+Added: In February 2020, the FASB issued ASU 2020 - 02, Financial Instruments—Credit Losses (Topic 326 ) and Leases (Topic 842 )—Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No.
119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No.
−Removed: 2016 - 02, Leases (Topic 842 ) (SEC Update)”.
+Added: 2016 - 02, Leases (Topic 842 ) (SEC Update).
This is an amendment to add the SEC Staff guidance on CECL) to the FASB codification.
It contains guidance on what the SEC would expect the Company to perform and document when measuring and recording its allowance for credit losses for financial assets recorded at amortized cost.
−Removed: The Company implemented CECL on January 
−Removed: In March 2020, the FASB issued ASU 2020 - 04, "Reference Rate Reform (Topic 848 ), Facilitation of the Effects of Reference Rate Reform on Financial Reporting," which provides temporary optional expedients to ease the financial reporting burdens of the expected market transition from London Interbank Offered Rate (“LIBOR”) to an alternative reference rate such as Secured Overnight Financing Rate (“SOFR”).
+Added: The Company implemented CECL on January 1, 2022.
+Added: Upon adoption of CECL, the Company recorded a $ 2.1 million transition adjustment for the allowance for credit losses through retained earnings.
+Added: In March 2020, the FASB issued ASU 2020 - 04, Reference Rate Reform (Topic 848 ), Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients to ease the financial reporting burdens of the expected market transition from London Interbank Offered Rate (“LIBOR”) to an alternative reference rate such as Secured Overnight Financing Rate (“SOFR”).
This pronouncement is applicable to all companies with contracts or hedging relationships that reference an interest rate that is expected to be discontinued.
2 unchanged sentences
However, the guidance will only be available for a limited time.
−Removed: For contract modifications, companies can account for the modification as a continuation of the existing contract without additional analysis.
−Removed: For held-to-maturity (“HTM”) debt securities, one -time sale and/or transfer to available-for-sale or trading may be made for HTM debt securities that both reference an eligible reference rate and were classified as HTM before January 1, 2020.
−Removed: Regarding the effective date and transition:
−Removed: ( 1 ) companies can apply the ASU as of the beginning of the interim period that includes March 12, 2020 ( e.g.
−Removed: January 1, 2020 for calendar year-end companies) or any date thereafter, ( 2 ) the ASU applies prospectively to contract modifications and hedging relationships, and ( 3 ) the one -time election to sell and/or transfer debt securities classified as HTM may be made at any time after March 12, 2020.
The optional relief generally does not apply to contract modifications made, sales and transfers of HTM debt securities, and hedging relationships entered into or evaluated after December 31, 2022.
−Removed: The guidance was effective upon issuance and generally can be applied through December 31, 2022. 
−Removed: The LIBOR termination deadline (except for the 1 -week and 2 -month indexes) is June 30, 2023. 
−Removed: No  LIBOR indexed loans are being originated. The Company's current plan is to convert LIBOR to SOFR for all loans indexed under LIBOR by June 30, 2023. 
−Removed: Of the Company’s $ 3.3  billion in total gross loans as of December 31, 2022, approximately 5 % have a LIBOR based reference rate.
+Added: The guidance was effective upon issuance and generally can be applied through December 31, 2022.
+Added: In December 2022, the FASB issued 2022 - 06, Reference Rate Reform (Topic 848 ):
+Added: Deferral of the Sunset Date of Topic 848, to defer the sunset date of Topic 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848.
+Added: The LIBOR termination date was June 30, 2023.
+Added: The Company converted all loans indexed under LIBOR to CME Term SOFR with relevant spread adjustment as the alternative reference rate beginning on and after July 3, 2023.
+Added: No LIBOR indexed loans are being originated.
The Company has several issuances of LIBOR based long-term debt and subordinated debentures.
−Removed: Refer to Notes 9 and 10 of the Company’s consolidated financial statements included in this Form 10 -K. After the LIBOR replacement date June 30, 2023, the Company will adopt SOFR with relevant spread adjustment as the alternative reference rate to replace LIBOR with respect to the Company’s subordinated debentures.
+Added: Refer to Notes 9 and 10 of the Company’s consolidated financial statements included in this Annual Report.
In October 2021, the FASB issued ASU 2021 - 08, Accounting for Contract Assets and Contract Liabilities, to require an acquirer to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with revenue recognition guidance as if the acquirer had originated the contract.
−Removed: That is, such acquired contracts will not be measured at fair value. The ASU is potentially material to the Company, depending on the materiality of an acquired contract asset or liability. The Update is effective for public companies in fiscal years starting after December 15, 2022.
−Removed: Early adoption is permitted. This ASU will be effective for the Company on January 1, 2023. 
−Removed: Adoption of ASU 2021 - 08 is not expected to have a material impact on the Company's consolidated financial statements.
−Removed: In March 2022, the FASB issued ASU 2022 - 02, “Financial Instruments-Credit Losses (Topic 326 )”.
+Added: That is, such acquired contracts will not be measured at fair value.
+Added: The Update is effective for public companies in fiscal years starting after December 15, 2022.
+Added: The Company adopted ASU 2021 - 08 on January 1, 2023 and the adoption did not have a material impact on the Company's consolidated financial statements.
+Added: In March 2022, the FASB issued ASU 2022 - 02, Financial Instruments-Credit Losses (Topic 326 ).
The standard addresses the following:
1 ) eliminates the accounting guidance for TDRs, and will require an entity to determine whether a modification results in a new loan or a continuation of an existing loan, 2 ) expands disclosures related to modifications, and 3 ) will require disclosure of current period gross write-offs of financing receivables within the vintage disclosures table.
−Removed: The amendments in this ASU are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years and are applied prospectively, except with respect to the recognition and measurement of TDRs, where an entity has the option to apply a modified retrospective transition method.
+Added: The amendments in this ASU are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years and are applied prospectively, except with respect to the recognition and measurement of TDRs, where an entity has the option to apply a modified retrospective transition method.
Early adoption of the amendments in this ASU is permitted.
An entity may elect to early adopt the amendments regarding TDRs and related disclosure enhancements separately from the amendments related to vintage disclosures.
−Removed: The Company adopted ASU 2021 - 08 on January 1, 2023 and the adoption did not have a material impact on the Company’s consolidated financial statements.
−Removed: In June 2022, the FASB issued ASU 
−Removed: 2022 - 03 ,  Fair Value Measurement (Topic 
−Removed: 820 )—Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.
−Removed: This pronouncement clarifies that a contractual restriction on the sale of an equity security is 
−Removed: not  considered part of the unit of account of the equity security and, therefore, is  
−Removed: not  considered in measuring fair value.
−Removed: 2022 - 03  also clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction and requires certain new disclosures for equity securities subject to contractual sale restrictions.
−Removed: 2022 - 03  will be effective for the Company on 
−Removed: January 1, 2024 .
−Removed:  Adoption of ASU 
−Removed: 2022 - 03  is 
−Removed: not  expected to have a material impact on the Company’s consolidated financial statements.
−Removed: In December 2022, the FASB issued 2022 - 06, “Reference Rate Reform (Topic 848 ):
−Removed: Deferral of the Sunset Date of Topic 848”, to defer the sunset date of Topic 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848.
−Removed: Topic 848, which was established by the previously issued ASU 2020 - 04, Reference Rate Reform (Topic 848 ):
−Removed: Facilitation of the Effects of Reference Rate Reform on Financial Reporting, provides relief to entities during the reference rate’s temporary transition period by providing optional expedients and exceptions for applying generally accepted accounting principles to certain contract modifications and hedging relationships that reference LIBOR or another reference rate expected to be discontinued.
−Removed: Since ASU 2020 - 04 was issued, the UK Financial Conduct Authority delayed the intended cessation date of certain tenors of US LIBOR to June 30, 2023, which is beyond the current sunset date of Topic 848.
−Removed: The new ASU defers the sunset date accordingly to continue to provide the intended relief.
−Removed: The Company adopted ASU 2022 - 06 during 2022 with no material impact to the Company’s consolidated financial statements.
−Removed: NOTE 3 –
+Added: The Company adopted ASU 2022 - 02 on January 1, 2023 and see Note 5 for the disclosure impact.
+Added: Recently Issued;
+Added: Not Yet Effective
+Added: In June 2022, the FASB issued ASU 2022 - 03 , Fair Value Measurement (Topic 820 )—Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.
+Added: This pronouncement clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value.
+Added: ASU 2022 - 03 also clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction and requires certain new disclosures for equity securities subject to contractual sale restrictions.
+Added: ASU 2022 - 03 will be effective for the Company on January 1, 2024 .
+Added: Adoption of ASU 2022 - 03 is not expected to have a material impact on the Company’s consolidated financial statements.
+Added: In March 2023, the FASB issued ASU 2023 - 02 , Investments - Equity Method and Joint Ventures (Topic 323 ).
+Added: This Update permits reporting entities to elect to account for their tax equity investments using the proportional amortization method if certain conditions are met.
+Added: It requires that a liability be recognized for delayed equity contributions that are unconditional and legally binding or for equity contributions that are contingent upon a future event when that contingent event becomes probable.
+Added: The reporting entity needs to disclose the nature of its tax equity investments and the effect of its tax equity investments on its financial position and results of operations.
+Added: ASU 2023 - 02 will be effective for the Company in fiscal years beginning after December 15, 2023 , including interim periods within those fiscal years.
+Added: Adoption of ASU 2023 - 02 is not expected to have a material impact on the Company's consolidated financial statements.
+Added: In October 2023, the FASB issued ASU 2023 - 06 , Disclosure Improvements.
+Added: This pronouncement amends the FASB Accounting Standards Codification to reflect updates and simplifications to certain disclosure requirements referred to the FASB by the SEC in 2018, including disclosures for the statement of cash flows, earnings per share, commitments, debt and equity instruments, and certain industry information, among other things.
+Added: Each amendment is effective when the related disclosure is effectively removed from Regulations S- X or S-K;
+Added: early adoption is prohibited.
+Added: All amendments should be applied prospectively.
+Added: If the SEC has not removed the applicable requirement from Regulation S- X or Regulation S-K by June 30, 2027, the pending amendments will be removed and will not become effective for any entity.
+Added: In December 2023, the FASB issued ASU 2023 - 09, Income Taxes (Topic 740 ) - Improvements to Income Tax Disclosures.
+Added: This Update enhances the transparency and decision usefulness of income tax disclosures.
+Added: The amendments in this Update require the following:
+Added: 1 ) consistent categories and greater disaggregation of information in the rate reconciliation, and 2 ) income taxes paid disaggregated by jurisdiction.
+Added: The amendments in the ASU are effective for annual periods beginning after December 15, 2024.
+Added: Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance.
+Added: The amendments in this Update should be applied on a prospective basis.
+Added: Retrospective application is permitted.
+Added: Adoption of ASU 2023 - 09 is not expected to have a material impact on the Company's consolidated financial statements.
+Added: NOTE 3 – ACQUISITIONS
Completion of Acquisition of Certain Assets and Liabilities of the Honolulu, Hawaii Branch Office of Bank of the Orient
−Removed: On January 14, 2022, the Company completed the acquisition of the Hawaii Branch from BOTO.
−Removed: The assets and liabilities, both tangible and intangible, were recorded at their estimated fair values as of January 14, 2022. 
−Removed: The total fair value of assets acquired approximated $ 8.5  million, which included $ 312,000 in cash and cash equivalents, $ 7.4  million in selected performing loans, $ 729,000  in core deposit intangible assets and $ 64,000 in other assets.
−Removed: The total fair value of liabilities assumed was $ 81.8  million, which included $ 81.7  million in deposits, $ 27,000 in certificate of deposit premium, and $ 90,000 in other liabilities. The Bank received $ 71.0 million in cash in connection with the acquisition which represented consideration for the deposits assumed by the Bank, partially offset by the purchase price of the assets acquired and the premium paid.
+Added: On January 14, 2022, the Company completed the acquisition of the Hawaii Branch from BOTO.
+Added: The assets and liabilities, both tangible and intangible, were recorded at their estimated fair values as of January 14, 2022.
+Added: The total fair value of assets acquired approximated $ 8.5 million, which included $ 312,000 in cash and cash equivalents, $ 7.4 million in selected performing loans, $ 729,000 in core deposit intangible assets and $ 64,000 in other assets.
+Added: The total fair value of liabilities assumed was $ 81.8 million, which included $ 81.7 million in deposits, $ 27,000 in certificate of deposit premium, and $ 90,000 in other liabilities.
+Added: The Bank received $ 71.0 million in cash in connection with the acquisition, which represented consideration for the deposits assumed by the Bank, partially offset by the purchase price of the assets acquired and the premium paid.
The Company acquired Hawaii Branch from BOTO to strategically establish a presence in the Hawaiian Islands area.
−Removed: Goodwill in the amount of $ 2.3  million and core deposit intangible of $ 729,000 was recognized in connection with this acquisition.
−Removed: Goodwill represents the future economic benefits arising from net assets acquired that are not individually identified and separately recognized and is attributable to synergies expected to be derived from the combination of the two entities.
−Removed: Goodwill is not  deductible for income tax purposes.
−Removed: The following table represents the assets acquired and liabilities assumed from the Hawaii Branch as of January 14, 2022 
−Removed: and the fair value adjustments and amounts recorded by the Company under the acquisition method of accounting:
+Added: Goodwill in the amount of $ 2.3 million and core deposit intangible of $ 729,000 was recognized in connection with this acquisition.
+Added: Goodwill represents the future economic benefits arising from net assets acquired that are not individually identified and separately recognized and is attributable to synergies expected to be derived from the combination of the two entities.
+Added: Goodwill is not deductible for income tax purposes.
+Added: The following table represents the assets acquired and liabilities assumed from the Hawaii Branch as of January 14, 2022 and the fair value adjustments and amounts recorded by the Company under the acquisition method of accounting:
(dollars in thousands)
1 unchanged sentence
Cash and cash equivalents
+Added: $ 312 $ — $ 312
+Added: 7,352 38 7,390
Bank premises and equipment
Core deposit intangible
−Removed: ( 360 )  
+Added: 412 ( 360 ) 52
Total assets acquired
−Removed: $ 8,088  
−Removed: $ 8,495  
+Added: $ 8,088 $ 407 $ 8,495
Liabilities assumed
−Removed: $ 81,673  
−Removed: $ 81,700  
+Added: $ 81,673 $ 27 $ 81,700
Escrow Payable
Other liabilities
−Removed: ( 372 )  
+Added: 460 ( 372 ) 88
Total liabilities assumed
−Removed: 82,135  
−Removed: ( 345 )  
−Removed: 81,790  
+Added: 82,135 ( 345 ) 81,790
Excess of assets acquired over liabilities assumed
−Removed: ( 74,047 )  
−Removed: $ 8,088  
+Added: ( 74,047 ) 752 ( 73,295 )
+Added: $ 8,088 $ 407
Cash received
−Removed: 71,040  
Goodwill recognized
−Removed: $ 2,255  
−Removed: The Company accounted for this transaction under the acquisition method of accounting in accordance with ASC 805, Business Combinations, which requires purchased assets and liabilities assumed to be recorded at their respective fair values at the date of acquisition.
−Removed: The loan portfolio of the Hawaii branch was recorded at fair value at the date of acquisition with the assistance of a third -party valuation.
+Added: The Company accounted for this transaction under the acquisition method of accounting in accordance with ASC 805, Business Combinations, which requires purchased assets and liabilities assumed to be recorded at their respective fair values at the date of acquisition.
+Added: The loan portfolio of the Hawaii branch was recorded at fair value at the date of acquisition with the assistance of a third -party valuation.
A valuation of the loan portfolio was performed as of the acquisition date to assess the fair value of the loan portfolio.
1 unchanged sentence
loans with credit deterioration and loans without credit deterioration, and then split further by loan type.
−Removed: There were no loans acquired with credit deterioration. The fair value was calculated on an individual loan basis using a discounted cash flow analysis.
+Added: There were no loans acquired with credit deterioration.
+Added: The fair value was calculated on an individual loan basis using a DCF analysis.
The discount rate utilized was based on a weighted average cost of capital, considering the cost of equity and cost of debt.
4 unchanged sentences
The value of the benefit is the present value over the period of the tax benefit, using the discount rate applicable to the asset.
−Removed: Agreement to Acquire Gateway Bank, F.S.B.
−Removed: On December 28, 2021, RBB Bancorp announced that it entered into a definitive agreement to acquire Gateway Bank in a cash transaction valued at approximately $ 22.9 million, subject to certain terms and conditions, including customary holdbacks if certain contingencies are not met, and other possible adjustments as contained in the definitive agreement.
−Removed: Gateway Bank, a commercial bank based in Oakland, California, had total assets of $ 181.4  million, total gross loans of $ 121.9  million, total deposits of $ 162.5  million, and total tangible equity of $ 17.2  million as of December 31, 2022.
−Removed: Principally serving the Asian-American communities in the San Francisco Bay Area, Gateway Bank has one branch located in Oakland’s Chinatown neighborhood, offering consumer and business banking and loan products and services.
−Removed: The expiration of the agreement has been extended to September 30, 2023 and the acquisition is subject to regulatory approvals.
+Added: In determining the fair value of certificates of deposit, a DCF analysis was used, which involved present valuing the contractual payments over the remaining life of the certificates of deposit at market-based interest rates.
+Added: Third-party acquisition related expenses are recognized as incurred and continue until the acquired system is converted and operational functions become fully integrated.
NOTE 4 - INVESTMENT SECURITIES
−Removed: The following table summarizes the amortized cost and fair value of available for sale (“AFS”) securities and held to maturity (“HTM”) securities at December 31, 2022 
−Removed: and 2021, and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income:
+Added: The following table summarizes the amortized cost and fair value of available for sale (“AFS”) securities and held to maturity (“HTM”) securities at December 31, 2023 and 2022, and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive loss:
(dollars in thousands)
2 unchanged sentences
Government agency securities
−Removed: $ 5,012  
−Removed: $ ( 517 )  
−Removed: $ 4,495  
+Added: $ 8,705 $ — $ ( 544 ) $ 8,161
SBA agency securities
−Removed: ( 223 )  
−Removed: Mortgage-backed securities:
−Removed: 44,809  
−Removed: ( 6,752 )  
−Removed: 38,057  
+Added: 13,289 144 ( 216 ) 13,217
Mortgage-backed securities:
−Removed: ( 16 )  
+Added: 40,507 — ( 5,855 ) 34,652
Collateralized mortgage obligations:
−Removed: 82,759  
−Removed: ( 12,856 )  
−Removed: 69,903  
+Added: 94,071 454 ( 12,198 ) 82,327
Collateralized mortgage obligations:
−Removed: 44,591  
−Removed: ( 2,901 )  
−Removed: 41,690  
+Added: 69,941 22 ( 2,664 ) 67,299
Commercial paper
−Removed: 49,551  
−Removed: ( 16 )  
−Removed: 49,537  
+Added: 73,121 — ( 16 ) 73,105
Corporate debt securities
−Removed: 41,176  
−Removed: ( 4,165 )  
−Removed: 37,012  
+Added: 34,800 — ( 4,109 ) 30,691
Municipal securities
−Removed: 12,669  
−Removed: ( 3,815 )  
−Removed: $ 288,088  
−Removed: $ ( 31,261 )  
−Removed: $ 256,830  
+Added: 12,636 — ( 3,127 ) 9,509
+Added: $ 347,070 $ 620 $ ( 28,729 ) $ 318,961
Held to maturity
Municipal taxable securities
−Removed: $ 1,003  
−Removed: $ ( 3 )  
−Removed: $ 1,007  
+Added: $ 501 $ 3 $ — $ 504
Municipal securities
−Removed: ( 170 )  
−Removed: $ 5,729  
−Removed: $ ( 173 )  
−Removed: $ 5,563  
+Added: 4,708 — ( 115 ) 4,593
+Added: $ 5,209 $ 3 $ ( 115 ) $ 5,097
(dollars in thousands)
−Removed: Amortized  
−Removed: Unrealized  
−Removed: Unrealized  
+Added: Amortized Unrealized Unrealized Fair
December 31, 2022
1 unchanged sentence
Government agency securities
−Removed: $ 5,689  
−Removed: $ ( 83 )  
−Removed: $ 5,610  
+Added: $ 5,012 $ — $ ( 517 ) $ 4,495
SBA agency securities
+Added: 2,634 — ( 223 ) 2,411
Mortgage-backed securities:
−Removed: 45,557  
−Removed: ( 536 )  
−Removed: 45,052  
+Added: 44,809 — ( 6,752 ) 38,057
Mortgage-backed securities:
+Added: 4,887 — ( 16 ) 4,871
Collateralized mortgage obligations:
−Removed: 61,798  
−Removed: ( 1,595 )  
−Removed: 60,216  
+Added: 82,759 — ( 12,856 ) 69,903
Collateralized mortgage obligations:
−Removed: 59,579  
−Removed: ( 399 )  
−Removed: 59,295  
+Added: 44,591 — ( 2,901 ) 41,690
Commercial paper
−Removed: 129,962  
−Removed: ( 36 )  
−Removed: 129,926  
+Added: 49,551 2 ( 16 ) 49,537
Corporate debt securities
−Removed: 41,999  
−Removed: ( 254 )  
−Removed: 42,205  
+Added: 41,176 1 ( 4,165 ) 37,012
Municipal securities
−Removed: 12,701  
−Removed: ( 187 )  
−Removed: 12,514  
−Removed: $ 370,613  
−Removed: $ ( 3,094 )  
−Removed: $ 368,260  
+Added: 12,669 — ( 3,815 ) 8,854
+Added: $ 288,088 $ 3 $ ( 31,261 ) $ 256,830
Held to maturity
Municipal taxable securities
−Removed: $ 1,506  
−Removed: $ 1,583  
+Added: $ 1,003 $ 7 $ ( 3 ) $ 1,007
Municipal securities
−Removed: $ 6,252  
−Removed: $ 6,577  
−Removed: There was no sale of investment securities during the twelve months ended December 31, 2022 and 2021.
−Removed: Proceeds of $ 11.7  million were received from the sale of investment securities during the year ended December 31, 
−Removed:  There were no gains or losses recorded for sales of investment securities during the years ended December 31, 
−Removed: 2022 and 2021.
−Removed: During the year ended December 31, 2020, there were gains realized on sales of investment securities of $ 210,000 .
−Removed: One security with a fair value of $ 76,000  and $ 117,000 was pledged to secure a local agency deposit at December 31, 2022 
−Removed: and 2021, respectively.
−Removed: Accrued interest receivable for investment debt securities at December 31, 2022 and 2021 totaled $ 810,000 and $ 665,000 , respectively
−Removed: The amortized cost and fair value of the investment securities portfolio as of December 31, 2022 
−Removed: are shown by expected maturity below.
+Added: 4,726 — ( 170 ) 4,556
+Added: $ 5,729 $ 7 $ ( 173 ) $ 5,563
+Added: There was no sale of investment securities during the years ended December 31, 2023, 2022, and 2021.
+Added: At December 31, 2023, we pledged investment securities with a fair value of $ 95.2 million for certificates of deposit from the state of California.
+Added: One security with a fair value of $ 61,000 and $ 76,000 was pledged to secure a local agency deposit at December 31, 2023 and 2022.
+Added: Accrued interest receivable for investment debt securities at December 31, 2023 and 2022 totaled $ 962,000 and $ 810,000 .
+Added: The amortized cost and fair value of the investment securities portfolio as of December 31, 2023 and 2022 are shown by expected maturity below.
+Added: Mortgage-backed securities are classified in accordance with their estimated average life.
Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties.
3 unchanged sentences
More than Ten Years
−Removed: Amortized  
−Removed: Amortized  
−Removed: Amortized  
−Removed: Amortized  
−Removed: Amortized  
+Added: Amortized Amortized Amortized Amortized Amortized
(dollars in thousands)
1 unchanged sentence
Government agency securities
−Removed: $ 5,012  
−Removed: $ 4,495  
−Removed: $ 5,012  
−Removed: $ 4,495  
+Added: $ — $ — $ 8,705 $ 8,161 $ — $ — $ — $ — $ 8,705 $ 8,161
SBA securities
−Removed: Mortgage-backed securities:
−Removed: 13,013  
−Removed: 11,598  
−Removed: 29,114  
−Removed: 24,361  
−Removed: 44,809  
−Removed: 38,057  
+Added: — — 2,292 2,095 10,997 11,122 — — 13,289 13,217
Mortgage-backed securities:
+Added: — — 11,023 9,986 19,762 16,965 9,722 7,701 40,507 34,652
Collateralized mortgage obligations:
−Removed: 20,687  
−Removed: 19,646  
−Removed: 62,072  
−Removed: 50,257  
−Removed: 82,759  
−Removed: 69,903  
+Added: 18 17 36,876 35,758 57,177 46,552 — — 94,071 82,327
Collateralized mortgage obligations:
−Removed: 16,382  
−Removed: 14,644  
−Removed: 28,209  
−Removed: 27,046  
−Removed: 44,591  
−Removed: 41,690  
+Added: 3,014 3,018 20,296 18,481 46,631 45,800 — — 69,941 67,299
Commercial paper
−Removed: 49,551  
−Removed: 49,537  
−Removed: 49,551  
−Removed: 49,537  
+Added: 73,121 73,105 — — — — — — 73,121 73,105
Corporate debt securities
−Removed: 11,355  
−Removed: 10,806  
−Removed: 23,454  
−Removed: 20,662  
−Removed: 41,176  
−Removed: 37,012  
+Added: — — 12,912 12,491 19,249 16,232 2,639 1,968 34,800 30,691
Municipal securities
−Removed: 12,669  
−Removed: 12,669  
+Added: — — — — — — 12,636 9,509 12,636 9,509
Total available for sale
−Removed: $ 53,256  
−Removed: $ 53,243  
−Removed: $ 73,970  
−Removed: $ 68,471  
−Removed: $ 142,849  
−Removed: $ 122,326  
−Removed: $ 18,013  
−Removed: $ 12,790  
−Removed: $ 288,088  
−Removed: $ 256,830  
+Added: $ 76,153 $ 76,140 $ 92,104 $ 86,972 $ 153,816 $ 136,671 $ 24,997 $ 19,178 $ 347,070 $ 318,961
Municipal taxable securities
−Removed: $ 1,003  
−Removed: $ 1,007  
+Added: $ — $ — $ 501 $ 504 $ — $ — $ — $ — $ 501 $ 504
Municipal securities
+Added: — — — — 2,952 2,873 1,756 1,720 4,708 4,593
Total held to maturity
−Removed: $ 1,739  
−Removed: $ 1,692  
−Removed: $ 2,987  
−Removed: $ 2,864  
−Removed: $ 5,729  
−Removed: $ 5,563  
+Added: $ — $ — $ 501 $ 504 $ 2,952 $ 2,873 $ 1,756 $ 1,720 $ 5,209 $ 5,097
(dollars in thousands)
1 unchanged sentence
Government agency securities
−Removed: $ 5,689  
−Removed: $ 5,610  
−Removed: $ 5,689  
−Removed: $ 5,610  
+Added: $ — $ — $ 5,012 $ 4,495 $ — $ — $ — $ — $ 5,012 $ 4,495
SBA securities
+Added: — — 2,634 2,411 — — — — 2,634 2,411
Mortgage-backed securities:
−Removed: 30,278  
−Removed: 30,025  
−Removed: 15,279  
−Removed: 15,027  
−Removed: 45,557  
−Removed: 45,052  
+Added: — — 13,013 11,598 29,114 24,361 2,682 2,098 44,809 38,057
Mortgage-backed securities:
+Added: — — 4,887 4,871 — — — — 4,887 4,871
Collateralized mortgage obligations:
−Removed: 52,655  
−Removed: 51,277  
−Removed: 61,798  
−Removed: 60,216  
+Added: — — 20,687 19,646 62,072 50,257 — — 82,759 69,903
Collateralized mortgage obligations:
−Removed: 25,366  
−Removed: 25,219  
−Removed: 34,213  
−Removed: 34,076  
−Removed: 59,579  
−Removed: 59,295  
+Added: — — 16,382 14,644 28,209 27,046 — — 44,591 41,690
Commercial paper
−Removed: 129,962  
−Removed: 129,926  
−Removed: 129,962  
−Removed: 129,926  
+Added: 49,551 49,537 — — — — — — 49,551 49,537
Corporate debt securities
−Removed: 22,927  
−Removed: 22,931  
−Removed: 41,999  
−Removed: 42,205  
+Added: 3,705 3,706 11,355 10,806 23,454 20,662 2,662 1,838 41,176 37,012
Municipal securities
−Removed: 12,701  
−Removed: 12,514  
−Removed: 12,701  
−Removed: 12,514  
+Added: — — — — — — 12,669 8,854 12,669 8,854
Total available for sale
−Removed: $ 143,079  
−Removed: $ 143,048  
−Removed: $ 128,904  
−Removed: $ 127,321  
−Removed: $ 83,245  
−Removed: $ 82,743  
−Removed: $ 15,385  
−Removed: $ 15,148  
−Removed: $ 370,613  
−Removed: $ 368,260  
+Added: $ 53,256 $ 53,243 $ 73,970 $ 68,471 $ 142,849 $ 122,326 $ 18,013 $ 12,790 $ 288,088 $ 256,830
Municipal taxable securities
−Removed: $ 1,006  
−Removed: $ 1,081  
−Removed: $ 1,506  
−Removed: $ 1,583  
+Added: $ 501 $ 498 $ 502 $ 509 $ — $ — $ — $ — $ 1,003 $ 1,007
Municipal securities
+Added: — — — — 1,739 1,692 2,987 2,864 4,726 4,556
Total held to maturity
−Removed: $ 1,006  
−Removed: $ 1,081  
−Removed: $ 1,743  
−Removed: $ 1,818  
−Removed: $ 3,003  
−Removed: $ 3,176  
−Removed: $ 6,252  
−Removed: $ 6,577  
−Removed: The securities that were in an unrealized loss position at December 31, 2022, were evaluated to determine whether the decline in fair value below the amortized cost basis resulted from a credit loss or other factors.
−Removed: For a discussion of the factors and criteria the Company uses in analyzing securities for impairment related to credit losses, see Note 2 Summary of Significant Accounting Policies - Allowance for Credit Losses on Available-for-Sale Securities and Held-to-Maturity Securities. At December 31, 2022, allowance for credit losses on held-to-maturity were immaterial and less than five hundred dollars.
−Removed: The Company concluded the unrealized losses were primarily attributed to yield curve movement, together with widened liquidity spreads and credit spreads.
+Added: $ 501 $ 498 $ 502 $ 509 $ 1,739 $ 1,692 $ 2,987 $ 2,864 $ 5,729 $ 5,563
+Added: The securities that were in an unrealized loss position at December 31, 2023, and December 31, 2022, were evaluated to determine whether the decline in fair value below the amortized cost basis resulted from a credit loss or other factors.
+Added: For a discussion of the factors and criteria the Company uses in analyzing securities for impairment related to credit losses, see Note 2 Summary of Significant Accounting Policies - Allowance for Credit Losses on Available-for-Sale Securities and Held-to-Maturity Securities.
+Added: At December 31, 2023 and 2022, there was no reserve of credit losses on the HTM securities portfolio.
+Added: Based on the Company’s review of its debt securities in an unrealized loss position, the Company concluded the unrealized losses were due to non-credit factors primarily attributed to yield curve movement, together with widened liquidity spreads.
The issuers have not, to the Company's knowledge, established any cause for default on these securities.
−Removed: The Company expects to recover the amortized cost basis of its securities and has no present intent to sell and will not be required to sell securities that have declined below their cost before their anticipated recovery.
−Removed: Accordingly, no allowance for credit losses was recorded as of December 31, 2022, against these securities, and there was no provision for credit losses recognized for the year ended December 31, 2022.
−Removed: The following tables show the related fair value and the gross unrealized losses of the Company's investment securities, aggregated by investment category and the length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2022, and December 31, 2021:
+Added: All the securities that the Company owned were investment grade at December 31, 2023.
+Added: At December 31, 2023, unrealized losses of $ 28.7 million comprised of $ 18.1 million, or 62.8 %, residential mortgage-backed securities and collateralized mortgage obligations, $ 4.1 million, or 14.3 %, corporate debt securities, $ 3.1 million, or 10.9 %, municipal securities, $ 2.7 million, or 9.3 %, commercial collateralized mortgage obligations, and $ 760,000 , or 2.6 %, government agency securities and SBA securities.
+Added: The Company expects to recover the amortized cost basis of its securities and has no present intent to sell and will not be required to sell securities that have declined below their cost before their anticipated recovery based on the Company’s current financial condition.
+Added: The following tables show the related fair value and the gross unrealized losses of the Company's investment securities, aggregated by investment category and the length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2023, and December 31, 2022:
Less than Twelve Months
6 unchanged sentences
Government agency securities
−Removed: $ ( 24 )  
−Removed: $ 4,141  
−Removed: $ ( 493 )  
−Removed: $ 4,495  
+Added: $ 4,238 $ ( 72 ) $ 3,923 $ ( 472 ) $ 8,161 $ ( 544 )
SBA securities
−Removed: ( 223 )  
−Removed: Mortgage-backed securities:
−Removed: ( 362 )  
−Removed: 32,522  
−Removed: ( 6,390 )  
−Removed: 38,057  
+Added: 5,102 ( 18 ) 2,094 ( 198 ) 7,196 ( 216 )
Mortgage-backed securities:
−Removed: ( 16 )  
+Added: — — 34,652 ( 5,855 ) 34,652 ( 5,855 )
Collateralized mortgage obligations:
−Removed: 27,050  
−Removed: ( 1,842 )  
−Removed: 39,815  
−Removed: ( 11,014 )  
−Removed: 66,865  
+Added: 2,597 ( 37 ) 60,275 ( 12,161 ) 62,872 ( 12,198 )
Collateralized mortgage obligations:
−Removed: 18,741  
−Removed: ( 790 )  
−Removed: 22,949  
−Removed: ( 2,111 )  
−Removed: 41,690  
+Added: 18,463 ( 70 ) 35,077 ( 2,594 ) 53,540 ( 2,664 )
Commercial paper (1)
−Removed: 39,624  
−Removed: ( 16 )  
−Removed: 39,624  
+Added: 53,211 ( 16 ) — — 53,211 ( 16 )
Corporate debt securities
−Removed: 22,977  
−Removed: ( 1,843 )  
−Removed: 10,330  
−Removed: ( 2,322 )  
−Removed: 33,307  
+Added: — — 30,691 ( 4,109 ) 30,691 ( 4,109 )
Municipal securities
−Removed: ( 3,815 )  
+Added: — — 9,509 ( 3,127 ) 9,509 ( 3,127 )
Total available for sale
−Removed: $ 121,563  
−Removed: $ ( 5,116 )  
−Removed: $ 118,611  
−Removed: $ ( 26,145 )  
−Removed: $ 240,174  
−Removed: Municipal taxable securities
−Removed: $ ( 3 )  
+Added: $ 83,611 $ ( 213 ) $ 176,221 $ ( 28,516 ) $ 259,832 $ ( 28,729 )
Municipal securities
−Removed: ( 170 )  
+Added: $ 1,397 $ ( 19 ) $ 3,196 $ ( 96 ) $ 4,593 $ ( 115 )
Total held to maturity
−Removed: $ 5,054  
−Removed: $ ( 173 )  
−Removed: $ 5,054  
+Added: $ 1,397 $ ( 19 ) $ 3,196 $ ( 96 ) $ 4,593 $ ( 115 )
+Added: ( 1 ) The Company held $ 19.9 million of commercial paper where the recorded value and fair value are equal as of December 31, 2023.
Less than Twelve Months
6 unchanged sentences
Government agency securities
−Removed: $ 4,860  
−Removed: $ ( 83 )  
−Removed: $ 4,860  
+Added: $ 354 $ ( 24 ) $ 4,141 $ ( 493 ) $ 4,495 $ ( 517 )
+Added: SBA securities
+Added: 2,411 ( 223 ) — — 2,411 ( 223 )
Mortgage-backed securities:
−Removed: 44,009  
−Removed: ( 536 )  
−Removed: 44,009  
+Added: 5,535 ( 362 ) 32,522 ( 6,390 ) 38,057 ( 6,752 )
Mortgage-backed securities:
+Added: 4,871 ( 16 ) — — 4,871 ( 16 )
Collateralized mortgage obligations:
−Removed: 59,540  
−Removed: ( 1,595 )  
−Removed: 59,540  
+Added: 27,050 ( 1,842 ) 39,815 ( 11,014 ) 66,865 ( 12,856 )
Collateralized mortgage obligations:
−Removed: 20,311  
−Removed: ( 321 )  
−Removed: 17,782  
−Removed: ( 78 )  
−Removed: 38,093  
+Added: 18,741 ( 790 ) 22,949 ( 2,111 ) 41,690 ( 2,901 )
Commercial paper (1)
−Removed: 129,926  
−Removed: ( 36 )  
−Removed: 129,926  
+Added: 39,624 ( 16 ) — — 39,624 ( 16 )
Corporate debt securities
−Removed: 13,208  
−Removed: ( 254 )  
−Removed: 13,208  
+Added: 22,977 ( 1,843 ) 10,330 ( 2,322 ) 33,307 ( 4,165 )
Municipal securities
−Removed: 11,447  
−Removed: ( 160 )  
−Removed: ( 27 )  
−Removed: 12,514  
+Added: — — 8,854 ( 3,815 ) 8,854 ( 3,815 )
Total available for sale
−Removed: $ 283,301  
−Removed: $ ( 2,985 )  
−Removed: $ 28,823  
−Removed: $ ( 109 )  
−Removed: $ 312,124  
−Removed: NOTE 5 - LOANS
+Added: $ 121,563 $ ( 5,116 ) $ 118,611 $ ( 26,145 ) $ 240,174 $ ( 31,261 )
+Added: Municipal taxable securities
+Added: $ 498 $ ( 3 ) $ — $ — $ 498 $ ( 3 )
+Added: Municipal securities
+Added: 4,556 ( 170 ) — — 4,556 ( 170 )
+Added: Total held to maturity
+Added: $ 5,054 $ ( 173 ) $ — $ — $ 5,054 $ ( 173 )
+Added: ( 1 ) The Company held $ 9.9 million of commercial paper where the recorded value and fair value are equal as of December 31, 2022.
+Added: NOTE 5 - LOANS AND ALLOWANCE FOR CREDIT LOSSES - LOANS
The Company's loan portfolio consists primarily of loans to borrowers within the Los Angeles, California metropolitan area, the New York City metropolitan area, Chicago, Illinois metropolitan area and Las Vegas, Nevada.
2 unchanged sentences
(dollars in thousands)
−Removed: Commercial and industrial
−Removed: $ 201,223  
−Removed: $ 268,709  
−Removed: 61,411  
−Removed: 76,136  
Construction and land development
−Removed: 276,876  
−Removed: 303,144  
Commercial real estate (2)
−Removed: 1,312,132  
−Removed: 1,247,999  
+Added: 1,167,857 1,312,132
Single-family residential mortgages
−Removed: 1,464,108  
−Removed: 1,004,576  
−Removed: 20,699  
−Removed: 30,786  
+Added: 1,487,796 1,464,108
+Added: Commercial and industrial
+Added: 130,096 201,223
+Added: 52,074 61,411
+Added: 12,569 20,699
Total loans (1)
−Removed: $ 3,336,449  
−Removed: $ 2,931,350  
−Removed: Allowance for credit losses
−Removed: ( 41,076 )  
+Added: $ 3,031,861 $ 3,336,449
+Added: Allowance for loan losses
+Added: ( 41,903 ) ( 41,076 )
Total loans, net
−Removed: $ 3,295,373  
−Removed: $ 2,898,438  
−Removed: ( 1 ) net of discounts and deferred fees and costs
−Removed: ( 2 ) includes non-farm & non-residential real estate loans, multifamily resident and 1 - 4 family single family residential loan for a business purpose 
−Removed: Allowance for Credit Losses
−Removed: Effective January 1, 2022, the Company adopted ASC 326, which requires the Company to record an estimate of expected lifetime credit losses for loans at the time of origination.
−Removed: The Company uses qualitative factors within the CECL model:
−Removed: lending policies, procedures, and strategies;
−Removed: changes in nature and volume of the portfolio;
−Removed: credit & lending personnel experience;
−Removed: changes in volume and trends in classified loans, delinquencies, and nonaccrual;
−Removed: concentration risk;
−Removed: collateral values;
−Removed: regulatory and business environment;
−Removed: loan review results;
−Removed: and economic conditions. The Company determined weighting of the qualitative factors based on management’s ability to directly control or influence the level of risk exposure.
−Removed: The factors related to economic conditions, collateral values, and regulatory and business environment were assigned higher allocation, and the remaining factors were internal and manageable, and therefore received lower allocation. As a result, the Company recorded an increase of $ 2.1  million to allowance for credit losses and an increase of $ 1.0 million to allowance for unfunded commitments.
−Removed: The Company applied the modified retrospective transition approach, and recorded a decrease of $ 2.2  million, net of tax, to the beginning balance of retained earnings as of January 1, 2022 for the cumulative effect adjustment.
−Removed: A summary of the changes in the allowance for credit losses for the years indicated follows:
+Added: $ 2,989,958 $ 3,295,373
+Added: ( 1 ) net of discounts on acquired loans and deferred fees and costs
+Added: ( 2 ) includes non-farm & non-residential real estate loans, multifamily resident and 1 - 4 family single-family residential loan for a business purpose
+Added: A summary of the changes in the ACL for the years indicated follows:
(dollars in thousands)
+Added: Allowance for loan losses
+Added: Reserve for unfunded loan commitments
Allowance for credit losses
+Added: Allowance for loan losses
+Added: Reserve for unfunded loan commitments
+Added: Allowance for credit losses
+Added: Allowance for loan losses
+Added: Reserve for unfunded loan commitments
+Added: Allowance for credit losses
Beginning balance
−Removed: $ 32,912  
−Removed: $ 29,337  
−Removed: $ 18,816  
+Added: $ 41,076 $ 1,156 $ 42,232 $ 32,912 $ 1,203 $ 34,115 $ 29,337 $ 1,383 $ 30,720
ASU 2016-13 transition adjustment
+Added: — — — 2,135 1,045 3,180 — — —
Adjusted beginning balance
−Removed: $ 35,047  
−Removed: $ 29,337  
−Removed: $ 18,816  
−Removed: Additions to the allowance charged to expense
−Removed: 11,823  
+Added: $ 41,076 $ 1,156 $ 42,232 $ 35,047 $ 2,248 $ 37,295 $ 29,337 $ 1,383 $ 30,720
+Added: Provision/(reversal) for credit losses
+Added: 3,878 ( 516 ) 3,362 6,027 ( 1,092 ) 4,935 3,959 ( 180 ) 3,779
Less loans charged-off
−Removed: ( 256 )  
−Removed: ( 627 )  
+Added: ( 3,194 ) — ( 3,194 ) ( 256 ) — ( 256 ) ( 627 ) — ( 627 )
Recoveries on loans charged-off
+Added: 143 — 143 258 — 258 243 — 243
Ending balance
−Removed: $ 41,076  
−Removed: $ 32,912  
−Removed: $ 29,337  
−Removed: The following table presents the activity in the allowance for credit losses by portfolio segment for the year ended December 31, 2022:
+Added: $ 41,903 $ 640 $ 42,543 $ 41,076 $ 1,156 $ 42,232 $ 32,912 $ 1,203 $ 34,115
+Added: ( 1 ) Reserve was under the ALL method in accordance with ASC 450 and ASC 310.
+Added: The following tables present the activity in the ALL by portfolio segment for the years ended December 31, 2023 and 2022:
(dollars in thousands)
December 31, 2023
−Removed: Allowance for credit losses:
+Added: Construction and land development
+Added: Commercial real estate
+Added: Single-family residential mortgages
+Added: Commercial and industrial
+Added: Allowance for loan losses:
Beginning of year
−Removed: $ 28,592  
−Removed: $ 3,793  
−Removed: $ 32,912  
−Removed: ASU 2016-13 Transition Adjustment
−Removed: ( 604 )  
−Removed: Adjusted beginning balance
−Removed: $ 30,204  
−Removed: $ 3,189  
−Removed: $ 1,654  
−Removed: $ 35,047  
−Removed: ( 974 )  
−Removed: ( 730 )  
−Removed: ( 19 )  
−Removed: ( 237 )  
+Added: $ 2,638 $ 17,657 $ 17,640 $ 1,804 $ 621 $ 716 $ 41,076
+Added: (Reversals)/provisions for credit losses
+Added: ( 1,279 ) 2,626 2,570 ( 458 ) 636 ( 217 ) 3,878
+Added: ( 140 ) ( 2,537 ) ( 93 ) — ( 62 ) ( 362 ) ( 3,194 )
+Added: — 80 — 2 1 60 143
Ending allowance balance
−Removed: $ 37,935  
−Removed: $ 2,425  
−Removed: $ 41,076  
−Removed: The following tables present the recorded investment in loans and impairment method as of December 31, 
−Removed: 2021  and 2020  and the activity in the allowance for loan losses by portfolio segment for the years then ended:
+Added: $ 1,219 $ 17,826 $ 20,117 $ 1,348 $ 1,196 $ 197 $ 41,903
+Added: (dollars in thousands)
December 31, 2022
+Added: Construction and land development
+Added: Commercial real estate
+Added: Single-family residential mortgages
+Added: Commercial and industrial
Allowance for loan losses:
Beginning of year
−Removed: $ 24,677  
−Removed: $ 4,617  
−Removed: $ 29,337  
−Removed: ( 480 )  
−Removed: ( 67 )  
−Removed: ( 501 )  
−Removed: ( 59 )  
+Added: $ 4,150 $ 16,603 $ 7,839 $ 2,813 $ 980 $ 527 $ 32,912
+Added: ASU 2016-13 Transition Adjustment
+Added: 314 ( 2,662 ) 3,960 ( 188 ) ( 416 ) 1,127 2,135
+Added: Adjusted beginning balance
+Added: $ 4,464 $ 13,941 $ 11,799 $ 2,625 $ 564 $ 1,654 $ 35,047
+Added: (Reversals)/provisions for credit losses
+Added: ( 1,826 ) 3,716 5,841 ( 818 ) ( 156 ) ( 730 ) 6,027
+Added: — — — ( 5 ) ( 14 ) ( 237 ) ( 256 )
+Added: — — — 2 227 29 258
Ending allowance balance
−Removed: $ 28,592  
−Removed: $ 3,793  
−Removed: $ 32,912  
−Removed: 28,592  
−Removed: 32,882  
−Removed: Total allowance for loan losses
−Removed: $ 28,592  
−Removed: $ 3,793  
−Removed: $ 32,912  
−Removed: Loans evaluated for impairment:
−Removed: $ 10,340  
−Removed: $ 10,385  
−Removed: $ 20,725  
−Removed: 2,545,379  
−Removed: 334,460  
−Removed: 30,786  
−Removed: 2,910,625  
−Removed: Total loans, net of deferred loan fees and unaccreted discount on acquired loans
−Removed: $ 2,555,719  
−Removed: $ 344,845  
−Removed: $ 30,786  
−Removed: $ 2,931,350  
+Added: $ 2,638 $ 17,657 $ 17,640 $ 1,804 $ 621 $ 716 $ 41,076
+Added: The following table presents the activity in the ALL by portfolio segment for the year ended December 31, 2021, prior to the adoption of ASU 2016 - 13:
+Added: (dollars in thousands)
December 31, 2021
+Added: Construction and land development
+Added: Commercial real estate
+Added: Single-family residential mortgages
+Added: Commercial and industrial
Allowance for loan losses:
Beginning of year
−Removed: $ 15,118  
−Removed: $ 3,588  
−Removed: $ 18,816  
−Removed: ( 101 )  
−Removed: 11,823  
−Removed: ( 1,258 )  
−Removed: ( 45 )  
+Added: $ 2,472 $ 13,719 $ 8,486 $ 3,690 $ 927 $ 43 $ 29,337
+Added: Provisions/(reversals)
+Added: 1,678 2,951 ( 647 ) ( 533 ) 53 457 3,959
+Added: — ( 67 ) — ( 501 ) — ( 59 ) ( 627 )
+Added: — — — 157 — 86 243
Ending allowance balance
−Removed: $ 24,677  
−Removed: $ 4,617  
−Removed: $ 29,337  
−Removed: 24,677  
−Removed: 28,812  
−Removed: Total allowance for loan losses
−Removed: $ 24,677  
−Removed: $ 4,617  
−Removed: $ 29,337  
−Removed: Loans evaluated for impairment:
−Removed: $ 10,514  
−Removed: $ 9,025  
−Removed: $ 19,554  
−Removed: 2,304,203  
−Removed: 378,935  
−Removed: 2,687,212  
−Removed: Total loans, net of deferred loan fees and unaccreted discount on acquired loans
−Removed: $ 2,314,717  
−Removed: $ 387,960  
−Removed: $ 4,089  
−Removed: $ 2,706,766  
+Added: $ 4,150 $ 16,603 $ 7,839 $ 2,813 $ 980 $ 527 $ 32,912
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, collateral adequacy, credit documentation, and current economic trends, among other factors.
9 unchanged sentences
They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.
−Removed: Doubtful 
−Removed: - 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, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.
−Removed: The following table summarizes the Company's loan held for investment as of December 31, 2022 by loan portfolio segments, risk ratings and vintage year.
+Added: 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, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.
+Added: The following tables summarize the Company's loan held for investment as of December 31, 2023 and 2022 by loan portfolio segments, risk ratings and vintage year.
The vintage year is the year of origination, renewal or major modification.
+Added: Revolving loans that are converted to term loans presented in the table below are excluded from the term loans by vintage year columns.
(dollars in thousands)
3 unchanged sentences
Construction and land development
−Removed: $ 125,216  
−Removed: $ 52,262  
−Removed: $ 99,016  
−Removed: $ 276,735  
+Added: $ 127,602 $ 25,880 $ 12,168 $ 3,919 $ 192 $ 32 $ — $ — $ 169,793
Special mention
−Removed: $ 125,216  
−Removed: $ 52,262  
−Removed: $ 99,016  
−Removed: $ 276,876  
−Removed: YTD period charge-offs
−Removed: YTD period recoveries
+Added: — — 11,676 — — — — — 11,676
+Added: — — — — — — — — —
+Added: — — — — — — — — —
+Added: $ 127,602 $ 25,880 $ 23,844 $ 3,919 $ 192 $ 32 $ — $ — $ 181,469
+Added: YTD gross write-offs
+Added: $ — $ — $ — $ — $ — $ 140 $ — $ — $ 140
Commercial real estate
−Removed: $ 479,304  
−Removed: $ 293,058  
−Removed: $ 195,051  
−Removed: $ 110,442  
−Removed: $ 73,013  
−Removed: $ 117,068  
−Removed: $ 1,267,936  
+Added: $ 90,126 $ 423,564 $ 186,904 $ 175,650 $ 94,796 $ 152,847 $ — $ — $ 1,123,887
Special mention
−Removed: 23,426  
−Removed: 34,916  
−Removed: $ 479,591  
−Removed: $ 293,058  
−Removed: $ 212,983  
−Removed: $ 112,771  
−Removed: $ 73,235  
−Removed: $ 140,494  
−Removed: $ 1,312,132  
−Removed: YTD period charge-offs
−Removed: YTD period recoveries
+Added: — — — — 7,719 4,880 — — 12,599
+Added: 301 — — 11,410 2,295 17,365 — — 31,371
+Added: — — — — — — — — —
+Added: $ 90,427 $ 423,564 $ 186,904 $ 187,060 $ 104,810 $ 175,092 $ — $ — $ 1,167,857
+Added: YTD gross write-offs
+Added: $ — $ 2,078 $ — $ 459 $ — $ — $ — $ — $ 2,537
Single-family residential mortgages
−Removed: $ 637,893  
−Removed: $ 255,529  
−Removed: $ 137,964  
−Removed: $ 96,355  
−Removed: $ 134,415  
−Removed: $ 182,893  
−Removed: $ 2,992  
−Removed: $ 1,448,041  
+Added: $ 156,372 $ 593,539 $ 239,502 $ 125,346 $ 83,002 $ 265,050 $ 1,720 $ — $ 1,464,531
Special mention
−Removed: 12,142  
−Removed: $ 637,893  
−Removed: $ 255,529  
−Removed: $ 141,918  
−Removed: $ 96,355  
−Removed: $ 145,971  
−Removed: $ 183,345  
−Removed: $ 3,097  
−Removed: $ 1,464,108  
−Removed: YTD period charge-offs
−Removed: YTD period recoveries
+Added: — — 619 — — 3,855 — — 4,474
+Added: — 719 758 4,985 545 11,740 44 — 18,791
+Added: — — — — — — — — —
+Added: $ 156,372 $ 594,258 $ 240,879 $ 130,331 $ 83,547 $ 280,645 $ 1,764 $ — $ 1,487,796
+Added: YTD gross write-offs
+Added: $ — $ — $ — $ 93 $ — $ — $ — $ — $ 93
Commercial and industrial
−Removed: $ 8,038  
−Removed: $ 7,513  
−Removed: $ 4,448  
−Removed: $ 3,470  
−Removed: $ 1,016  
−Removed: $ 8,827  
−Removed: $ 129,483  
−Removed: $ 162,881  
+Added: $ 1,305 $ 3,283 $ 6,281 $ 2,901 $ 2,049 $ 4,700 $ 99,339 $ — $ 119,858
Special mention
−Removed: 17,805  
−Removed: 29,007  
−Removed: $ 8,038  
−Removed: $ 13,500  
−Removed: $ 6,048  
−Removed: $ 3,486  
−Removed: $ 2,654  
−Removed: $ 26,971  
−Removed: $ 140,440  
−Removed: $ 201,223  
−Removed: YTD period charge-offs
−Removed: $ ( 5 )  
−Removed: YTD period recoveries
−Removed: $ ( 5 )  
−Removed: $ 14,922  
−Removed: $ 10,664  
−Removed: $ 6,496  
−Removed: $ 4,688  
−Removed: $ 2,579  
−Removed: $ 16,793  
−Removed: $ 56,142  
+Added: — — — — — — 2,737 — 2,737
+Added: — 87 — 1,410 7 4,952 1,045 — 7,501
+Added: — — — — — — — — —
+Added: $ 1,305 $ 3,370 $ 6,281 $ 4,311 $ 2,056 $ 9,652 $ 103,121 $ — $ 130,096
+Added: YTD gross write-offs
+Added: $ — $ — $ — $ — $ — $ — $ — $ — $ —
+Added: $ 5,642 $ 11,023 $ 10,037 $ 2,324 $ 4,588 $ 13,783 $ — $ — $ 47,397
Special mention
−Removed: $ 14,922  
−Removed: $ 10,664  
−Removed: $ 6,496  
−Removed: $ 4,779  
−Removed: $ 3,596  
−Removed: $ 20,954  
−Removed: $ 61,411  
−Removed: YTD period charge-offs
−Removed: $ ( 14 )  
−Removed: YTD period recoveries
−Removed: $ 4,224  
−Removed: $ 14,684  
−Removed: $ 1,505  
−Removed: $ 20,536  
+Added: — — 331 — — 1,025 — — 1,356
+Added: — — — — 85 3,236 — — 3,321
+Added: — — — — — — — — —
+Added: $ 5,642 $ 11,023 $ 10,368 $ 2,324 $ 4,673 $ 18,044 $ — $ — $ 52,074
+Added: YTD gross write-offs
+Added: $ — $ — $ — $ — $ — $ 62 $ — $ — $ 62
+Added: $ 193 $ 2,727 $ 8,813 $ 674 $ 29 $ — $ 18 $ — $ 12,454
Special mention
−Removed: $ 4,329  
−Removed: $ 14,732  
−Removed: $ 1,515  
−Removed: $ 20,699  
−Removed: YTD period charge-offs
−Removed: $ ( 237 )  
−Removed: YTD period recoveries
−Removed: $ ( 210 )  
+Added: — — — — — — — — —
+Added: — 80 28 7 — — — — 115
+Added: — — — — — — — — —
+Added: $ 193 $ 2,807 $ 8,841 $ 681 $ 29 $ — $ 18 $ — $ 12,569
+Added: YTD gross write-offs
+Added: $ — $ 79 $ 273 $ 10 $ — $ — $ — $ — $ 362
Total by risk rating:
−Removed: $ 1,269,597  
−Removed: $ 633,710  
−Removed: $ 444,480  
−Removed: $ 215,246  
−Removed: $ 211,030  
−Removed: $ 325,621  
−Removed: $ 132,501  
−Removed: $ 3,232,271  
+Added: $ 381,240 $ 1,060,016 $ 463,705 $ 310,814 $ 184,656 $ 436,412 $ 101,077 $ — $ 2,937,920
Special mention
−Removed: 17,805  
−Removed: 42,212  
−Removed: 14,216  
−Removed: 28,519  
−Removed: 61,966  
−Removed: $ 1,269,989  
−Removed: $ 639,745  
−Removed: $ 467,976  
−Removed: $ 217,682  
−Removed: $ 225,463  
−Removed: $ 371,945  
−Removed: $ 143,563  
−Removed: $ 3,336,449  
−Removed: Net recoveries (charge-offs)
−Removed: $ ( 210 )  
−Removed: $ ( 5 )  
−Removed: Revolving loans that are converted to term loans presented in the table above are excluded from the term loans by vintage year columns.
−Removed: In connection with the adoption of ASU 2016 - 13, the Company no longer provides information on impaired loans.
−Removed: The following table presents loan portfolio by risk rating as of December 31, 2021:
+Added: — — 12,626 — 7,719 9,760 2,737 — 32,842
+Added: 301 886 786 17,812 2,932 37,293 1,089 — 61,099
+Added: — — — — — — — — —
+Added: $ 381,541 $ 1,060,902 $ 477,117 $ 328,626 $ 195,307 $ 483,465 $ 104,903 $ — $ 3,031,861
+Added: Total YTD gross write-offs
+Added: $ — $ 2,157 $ 273 $ 562 $ — $ 202 $ — $ — $ 3,194
(Dollars in thousands)
+Added: Term Loan by Vintage
December 31, 2022
+Added: Revolving Converted to Term During the Period
Construction and land development
−Removed: $ 299,333  
−Removed: $ 3,662  
−Removed: $ 303,144  
+Added: $ 125,216 $ 52,262 $ 99,016 $ 201 $ — $ 40 $ — $ — $ 276,735
+Added: Special mention
+Added: — — — — — — — — —
+Added: — — — — — 141 — — 141
+Added: — — — — — — — — —
+Added: $ 125,216 $ 52,262 $ 99,016 $ 201 $ — $ 181 $ — $ — $ 276,876
+Added: YTD gross write-offs
+Added: $ — $ — $ — $ — $ — $ — $ — $ — $ —
Commercial real estate
−Removed: 1,184,889  
−Removed: 55,104  
−Removed: 1,247,999  
+Added: $ 479,304 $ 293,058 $ 195,051 $ 110,442 $ 73,013 $ 117,068 $ — $ — $ 1,267,936
+Added: Special mention
+Added: — — 9,280 — — — — — 9,280
+Added: 287 — 8,652 2,329 222 23,426 — — 34,916
+Added: — — — — — — — — —
+Added: $ 479,591 $ 293,058 $ 212,983 $ 112,771 $ 73,235 $ 140,494 $ — $ — $ 1,312,132
+Added: YTD gross write-offs
+Added: $ — $ — $ — $ — $ — $ — $ — $ — $ —
Single-family residential mortgages
−Removed: 1,000,385  
−Removed: 1,004,576  
+Added: $ 637,893 $ 255,529 $ 137,964 $ 96,355 $ 134,415 $ 182,893 $ 2,992 $ — $ 1,448,041
+Added: Special mention
+Added: — — — — 3,925 — — — 3,925
+Added: — — 3,954 — 7,631 452 105 — 12,142
+Added: — — — — — — — — —
+Added: $ 637,893 $ 255,529 $ 141,918 $ 96,355 $ 145,971 $ 183,345 $ 3,097 $ — $ 1,464,108
+Added: YTD gross write-offs
+Added: $ — $ — $ — $ — $ — $ — $ — $ — $ —
Commercial and industrial
−Removed: 255,439  
−Removed: 268,709  
−Removed: 62,300  
−Removed: 76,136  
−Removed: 30,786  
−Removed: 30,786  
−Removed: $ 2,833,132  
−Removed: $ 6,971  
−Removed: $ 70,522  
−Removed: $ 20,725  
−Removed: $ 2,931,350  
−Removed: The following tables present the aging of the recorded investment in past-due loans as of December 31, 2022 
−Removed: and 2021  by class of loans.
−Removed: Past due loans presented in tables below also includes non-accrual loans. 
+Added: $ 8,038 $ 7,513 $ 4,448 $ 3,470 $ 1,016 $ 8,827 $ 129,483 $ 86 $ 162,881
+Added: Special mention
+Added: — 5,987 — — 1,638 17,805 3,577 — 29,007
+Added: — — 1,600 16 — 339 7,380 — 9,335
+Added: — — — — — — — — —
+Added: $ 8,038 $ 13,500 $ 6,048 $ 3,486 $ 2,654 $ 26,971 $ 140,440 $ 86 $ 201,223
+Added: YTD gross write-offs
+Added: $ — $ — $ — $ 5 $ — $ — $ — $ — $ 5
+Added: $ 14,922 $ 10,664 $ 6,496 $ 4,688 $ 2,579 $ 16,793 $ — $ — $ 56,142
+Added: Special mention
+Added: — — — — — — — — —
+Added: — — — 91 1,017 4,161 — — 5,269
+Added: — — — — — — — — —
+Added: $ 14,922 $ 10,664 $ 6,496 $ 4,779 $ 3,596 $ 20,954 $ — $ — $ 61,411
+Added: YTD gross write-offs
+Added: $ — $ — $ — $ — $ — $ 14 $ — $ — $ 14
+Added: $ 4,224 $ 14,684 $ 1,505 $ 90 $ 7 $ — $ 26 $ — $ 20,536
+Added: Special mention
+Added: — — — — — — — — —
+Added: 105 48 10 — — — — — 163
+Added: — — — — — — — — —
+Added: $ 4,329 $ 14,732 $ 1,515 $ 90 $ 7 $ — $ 26 $ — $ 20,699
+Added: YTD gross write-offs
+Added: $ — $ 237 $ — $ — $ — $ — $ — $ — $ 237
+Added: Total by risk rating:
+Added: $ 1,269,597 $ 633,710 $ 444,480 $ 215,246 $ 211,030 $ 325,621 $ 132,501 $ 86 $ 3,232,271
+Added: Special mention
+Added: — 5,987 9,280 — 5,563 17,805 3,577 — 42,212
+Added: 392 48 14,216 2,436 8,870 28,519 7,485 — 61,966
+Added: — — — — — — — — —
+Added: $ 1,269,989 $ 639,745 $ 467,976 $ 217,682 $ 225,463 $ 371,945 $ 143,563 $ 86 $ 3,336,449
+Added: Total YTD gross write-offs
+Added: $ — $ 237 $ — $ 5 $ — $ 14 $ — $ — $ 256
+Added: The following tables present the aging of the recorded investment in past-due loans as of December 31, 2023 and 2022 by class of loans.
+Added: Past due loans presented in tables below also include non-accrual loans.
(dollars in thousands)
−Removed: 30 - 59  
−Removed: 60 - 89  
+Added: 30 - 59 60 - 89 90 Days
December 31, 2023
Construction and land development
−Removed: $ 276,735  
−Removed: $ 276,876  
+Added: $ — $ — $ — $ — $ 181,469 $ 181,469 $ —
Commercial real estate
−Removed: 1,310,143  
−Removed: 1,312,132  
−Removed: 13,189  
+Added: 1,341 216 1,582 3,139 1,164,718 1,167,857 10,569
Single-family residential mortgages
−Removed: 12,764  
−Removed: 19,419  
−Removed: 1,444,689  
−Removed: 1,464,108  
+Added: 9,050 5,795 15,134 29,979 1,457,817 1,487,796 18,103
Commercial and industrial
−Removed: 200,671  
−Removed: 201,223  
−Removed: 59,016  
−Removed: 61,411  
−Removed: 20,370  
−Removed: 20,699  
−Removed: $ 13,626  
−Removed: $ 4,433  
−Removed: $ 6,766  
−Removed: $ 24,825  
−Removed: $ 3,311,624  
−Removed: $ 3,336,449  
−Removed: $ 22,323  
−Removed: Single-family residential mortgages held for sale
1,544 — 854 2,398 127,698 130,096 854
+Added: 356 — 2,085 2,441 49,633 52,074 2,085
+Added: 160 20 8 188 12,381 12,569 8
+Added: $ 12,451 $ 6,031 $ 19,663 $ 38,145 $ 2,993,716 $ 3,031,861 $ 31,619
+Added: Single-family residential mortgage loans held for sale
+Added: $ — $ — $ — $ — $ 1,911 $ 1,911 $ —
+Added: ________________
( 1 ) Included in total loans
(dollars in thousands)
+Added: 30 - 59 60 - 89 90 Days
December 31, 2022
Construction and land development
−Removed: $ 302,995  
−Removed: $ 303,144  
+Added: $ — $ — $ 141 $ 141 $ 276,735 $ 276,876 $ 141
Commercial real estate
−Removed: 1,242,416  
−Removed: 1,247,999  
+Added: 558 240 1,191 1,989 1,310,143 1,312,132 13,189
Single-family residential mortgages
−Removed: 10,554  
−Removed: 15,472  
−Removed: 989,104  
−Removed: 1,004,576  
+Added: 12,764 2,555 4,100 19,419 1,444,689 1,464,108 5,936
Commercial and industrial
−Removed: 263,445  
−Removed: 268,709  
−Removed: 69,564  
−Removed: 76,136  
−Removed: 30,722  
−Removed: 30,786  
−Removed: $ 14,100  
−Removed: $ 6,980  
−Removed: $ 12,024  
−Removed: $ 33,104  
−Removed: $ 2,898,246  
−Removed: $ 2,931,350  
−Removed: $ 18,987  
−Removed: Single-family residential mortgages held for sale
−Removed: $ 5,957  
−Removed: $ 5,957  
+Added: — 545 7 552 200,671 201,223 713
+Added: 150 1,017 1,228 2,395 59,016 61,411 2,245
+Added: 154 76 99 329 20,370 20,699 99
+Added: $ 13,626 $ 4,433 $ 6,766 $ 24,825 $ 3,311,624 $ 3,336,449 $ 22,323
+Added: Single-family residential mortgage loans held for sale
+Added: $ — $ — $ — $ — $ — $ — $ —
( 1 ) Included in total loans
−Removed: The Company has 
−Removed: no  loans that are 
−Removed: 90  days or more past due and still accruing at December 
−Removed: 2022  and 
−Removed: December 31, 2021.
−Removed: The following table presents the loans on nonaccrual status as of December 31, 2022:
+Added: The Company has no loans that are 90 days or more past due and still accruing at December 31, 2023 and December 31, 2022.
+Added: The following tables present the loans on nonaccrual status as of December 31, 2023 and 2022:
(dollars in thousands)
1 unchanged sentence
for Credit Loss
−Removed: Construction and land development
Commercial real estate
−Removed: 13,189  
+Added: 10,569 10,569
Single-family residential mortgages
+Added: 18,103 18,103
Commercial and industrial
−Removed: $ 10,277  
−Removed: $ 22,323  
−Removed: In connection with the adoption of ASU 2016 - 13, the Company no longer provides information on impaired loans.
−Removed: Information relating to individually impaired loans presented by class of loans was as follows as of December 31, 2021 
+Added: $ 30,219 $ 31,619
(dollars in thousands)
December 31, 2022
−Removed: With no related allowance recorded
−Removed: Construction and land development
−Removed: Commercial and industrial  
−Removed: Commercial real estate
−Removed: Single-family residential mortgage loans
−Removed: Commercial - SBA
−Removed: 11,589  
−Removed: With related allowance recorded
−Removed: Commercial and industrial  
−Removed: Commercial-SBA
−Removed: $ 21,012  
−Removed: $ 20,725  
−Removed: $ 26,980  
−Removed: (dollars in thousands)  
−Removed: December 31, 2020
−Removed: With no related allowance recorded
+Added: for Credit Loss
Construction and land development
−Removed:  Commercial and industrial  
Commercial real estate
−Removed: Single-family residential mortgage loans
−Removed: Commercial - SBA
−Removed:  Other  
−Removed: With related allowance recorded
+Added: Single-family residential mortgages
Commercial and industrial
−Removed: Commercial-SBA
−Removed: $ 19,751  
−Removed: $ 19,554  
−Removed: $ 23,196  
−Removed: No interest income was recognized on a cash basis as of December 31, 2022 
−Removed: We did not recognize any interest income on nonaccrual loans during the years ended December 31, 2022 
−Removed: and December 31, 2021 
−Removed: while the loans were in nonaccrual status.
−Removed: We recognized interest income on modified loans of $ 143,000  and $ 159,000 during the years ended December 31, 2022 
−Removed: and 2021, respectively.
+Added: $ 10,277 $ 22,323
+Added: At December 31, 2023, nonaccrual commercial real estate loans comprised of $ 8.8 million collateralized by office, $ 1.4 million by warehouse, and $ 360,000 by other.
+Added: No interest income was recognized on a cash basis during the years ended December 31, 2023 and 2022.
+Added: We did not recognize any interest income on nonaccrual loans during the years ended December 31, 2023 and December 31, 2022 while the loans were in nonaccrual status.
Occasionally, the Company modifies loans to borrowers in financial distress by providing principal forgiveness, term extension, or interest rate reduction.
−Removed: When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses.
−Removed: The Company had four modified loans at December 31, 2022 
−Removed: and nine modified loans at December 31, 2021, respectively, with aggregate balances of $ 1.6  million and $ 3.4  million, respectively.
−Removed: Non-accrual modified loans were $ 363,000  at December 31, 2022, and $ 1.7  million at December 31, 2021.
−Removed: There were no  specific reserves allocated to the modified loans as of December 31, 2022 but $ 3,000  at 
−Removed: December 31, 2021.
−Removed: There are no commitments to lend additional amounts at December 31, 2022 
−Removed: and 2021  to customers with outstanding modified loans.
−Removed: There were no  non-accrual loans that were modified during the past twelve months that had payment defaults during the periods.
−Removed: The modification of the terms generally included loans where a moratorium on loan payments was granted.
−Removed: Such moratoriums ranged from six months to nine months on the loans restructured in 2021.
−Removed: There were no loans that were both experiencing financial difficulty and modified during the year ended December 31, 2022.
−Removed: The following table presents modified loans by class that occurred during the years ended December 31, 2022, 2021  and 2020:
−Removed: (dollars in thousands)
−Removed: $ 1,090  
−Removed: $ 1,090  
−Removed: Commercial real estate
−Removed: Construction and land development
−Removed: $ 1,695  
−Removed: $ 1,695  
−Removed: $ 1,719  
−Removed: $ 1,719  
−Removed: There were none  and five  non-accrual loans defaults in 2022 and 2021, respectively, where the loan was modified within the prior twelve months.
+Added: The Company may provide multiple types of concessions on one loan.
+Added: When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for loan losses.
+Added: There were no loans that were both experiencing financial difficulty and modified during the year ended December 31, 2023 and 2022.
+Added: There were no commitments to lend additional amounts at December 31, 2023 and 2022 to customers with outstanding modified loans.
+Added: There were no nonaccrual loans that were modified during the past twelve months that had payment defaults during the periods.
NOTE 6 - LOAN SERVICING
−Removed: Mortgage and SBA loans serviced for others are not reported as assets.
−Removed: The principal balances as of December 31, 2022 
−Removed: and 2021  are as follows:
+Added: The mortgage loans and SBA loans being serviced for others are not reported as assets in the Company’s consolidated balance sheet.
+Added: The principal balances of the loans serviced for others are as follows for the dates indicated:
+Added: At December 31,
(dollars in thousands)
1 unchanged sentence
Mortgage loans
−Removed: $ 1,127,668  
−Removed: $ 1,308,672  
−Removed: 119,893  
−Removed: 138,173  
+Added: $ 1,014,017 $ 1,127,668
+Added: 100,336 119,893
Commercial real estate loans
Construction loans
−Removed: Estimates of the loan servicing asset fair value are derived through a discounted cash flow analysis.
−Removed: Portfolio characteristics include loan delinquency rates, age of loans, note rate and geography.
−Removed: The assumptions embedded in the valuation are obtained from a range of metrics utilized by active buyers in the market place.
−Removed: The analysis accounts for recent transactions, and supply and demand within the market.
−Removed: Servicing fees net of servicing asset amortization totaled $ 2.2 million, $ 684,000  and $ 2.1  million for the twelve months ended December 31, 2022, 
−Removed: 2021  and 2020, respectively. Custodial balances maintained in connection with the foregoing loan servicing (including in non-interest bearing deposits) totaled $ 7.0  million and $ 14.3  million as of December 31, 2022 
−Removed: and 2021, respectively.
−Removed: When mortgage and SBA loans are sold with servicing retained, servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sales of loans.
+Added: Loan servicing fees, net of amortization, totaled $ 2.6 million, $ 2.2 million and $ 684,000 for the years ended December 31, 2023, 2022 and 2021.
+Added: Custodial balances maintained in connection with the foregoing loan servicing (including in non-interest bearing deposits) totaled $ 6.4 million and $ 7.0 million as of December 31, 2023 and 2022.
+Added: When mortgage and SBA loans are sold with servicing retained, servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sale of loans.
Fair value is based on a valuation model that calculates the present value of estimated future net servicing income.
3 unchanged sentences
If the Company later determines that all or a portion of the impairment no longer exists for a particular grouping, a reduction of the allowance may be recorded as an increase to income.
−Removed: During the twelve months ended December 31, 2021, the Company reversed an impairment write-down of $ 417,000 on mortgage servicing rights.
−Removed: Servicing fee income is recorded for fees earned for servicing loans.
−Removed: The fees are based on a contractual percentage of the outstanding principal.
−Removed: The amortization of mortgage servicing rights is netted against loan servicing fee income.
+Added: During the year ended December 31, 2021, the Company reversed an impairment allowance of $ 417,000 on mortgage servicing rights, which is included in other income.
+Added: The following table presents the activity in serving assets for the years ended December 31, 2023, 2022, and 2021:
(dollars in thousands)
1 unchanged sentence
Beginning of period
−Removed: $ 8,748  
−Removed: $ 2,769  
−Removed: $ 10,529  
−Removed: $ 3,436  
−Removed: $ 12,997  
−Removed: $ 4,086  
−Removed: ( 794 )  
−Removed: ( 478 )  
−Removed: ( 2,129 )  
−Removed: ( 646 )  
−Removed: ( 1,513 )  
+Added: $ 7,354 $ 2,167 $ 8,748 $ 2,769 $ 10,529 $ 3,436
+Added: 176 58 532 239 1,920 441
+Added: ( 329 ) ( 344 ) ( 794 ) ( 478 ) ( 2,129 ) ( 646 )
Amortized to expense
−Removed: ( 1,132 )  
−Removed: ( 363 )  
−Removed: ( 1,989 )  
−Removed: ( 462 )  
−Removed: ( 1,960 )  
−Removed: ( 417 )  
+Added: ( 692 ) ( 280 ) ( 1,132 ) ( 363 ) ( 1,989 ) ( 462 )
+Added: Impairment reversal
+Added: — — — — 417 —
End of period
−Removed: $ 7,354  
−Removed: $ 2,167  
−Removed: $ 8,748  
−Removed: $ 2,769  
−Removed: $ 10,529  
−Removed: $ 3,436  
−Removed: The fair value of servicing assets for mortgage loans was $ 18.3  million and $ 15.4  million as of December 31, 2022 
−Removed: and 2021, respectively.
−Removed: Fair value at December 31, 2022 
−Removed: was determined using a discount rate of 11.10 %, average prepayment speed of 7.73 %, depending on the stratification of the specific right, and a weighted-average default rate of 0.10 %.
−Removed: Fair value at December 31, 2021 
−Removed: was determined using a discount rate of 10.86 %, average prepayment speed of 14.04 %, depending on the stratification of the specific right, and a weighted-average default rate of 0.10 %.
−Removed: The fair value of servicing assets for SBA loans was $ 3.5  million and $ 4.1  million as of December 31, 2022 
−Removed: and 2021, respectively.
−Removed: Fair value at December 31, 2022 
−Removed: was determined using a discount rate of 8.5 %, average prepayment speed of 16.79 %, depending on the stratification of the specific right, and a weighted-average default rate of 0.37 %.
−Removed: Fair value at December 31, 2021 
−Removed: was determined using a discount rate of 8.5 % and average prepayment speed of 15.87 %, depending on the stratification of the specific right and a weighted-average default rate of 0.61 %.
+Added: $ 6,509 $ 1,601 $ 7,354 $ 2,167 $ 8,748 $ 2,769
+Added: Estimates of the loan servicing asset fair value are derived through a DCF analysis.
+Added: Portfolio characteristics include loan delinquency rates, age of loans, note rate and geography.
+Added: The assumptions embedded in the valuation are obtained from a range of metrics utilized by active buyers in the market place.
+Added: The analysis accounts for recent transactions, and supply and demand within the market.
+Added: The fair value of servicing assets for mortgage loans was $ 12.1 million and $ 18.3 million as of December 31, 2023 and 2022, respectively.
+Added: Fair value at December 31, 2023 was determined using a discount rate of 11.23 %, average prepayment speed of 7.91 %, depending on the stratification of the specific right, and a weighted-average default rate of 0.10 %.
+Added: Fair value at December 31, 2022 was determined using a discount rate of 11.10 %, average prepayment speed of 7.73 %, depending on the stratification of the specific right, and a weighted-average default rate of 0.10 %.
+Added: The fair value of servicing assets for SBA loans was $ 2.8 million and $ 3.5 million as of December 31, 2023 and 2022, respectively.
+Added: Fair value at December 31, 2023 was determined using a discount rate of 8.5 %, average prepayment speed of 17.68 %, depending on the stratification of the specific right, and a weighted-average default rate of 0.73 %.
+Added: Fair value at December 31, 2022 was determined using a discount rate of 8.5 % and average prepayment speed of 16.79 %, depending on the stratification of the specific right and a weighted-average default rate of 0.37 %.
NOTE 7 - PREMISES AND EQUIPMENT
−Removed: A summary of premises and equipment as of December 31 follows:
+Added: A summary of premises and equipment as of December 31, 2023 and 2022 follows:
(dollars in thousands)
−Removed: $ 8,974  
−Removed: $ 9,066  
+Added: $ 8,974 $ 8,974
Building and improvements
−Removed: 15,523  
−Removed: 15,265  
+Added: 15,549 15,523
Furniture, fixtures, and equipment
Leasehold improvements
−Removed: 39,611  
−Removed: 38,361  
+Added: 40,630 39,611
Less accumulated depreciation and amortization
−Removed: ( 13,387 )  
+Added: ( 14,949 ) ( 13,387 )
Construction in progress
−Removed: $ 27,009  
−Removed: $ 27,199  
−Removed: Depreciation and leasehold amortization expense was $ 2.0  million, $ 1.9  million, and $ 2.0  million for 2022, 2021, and 2020, respectively.
−Removed: $757,000  gain on sale of fixed assets was recorded from the sale of a real estate asset during 2022, which was used to house staff while traveling.
+Added: $ 25,684 $ 27,009
+Added: Depreciation and leasehold amortization expense was $ 2.0 million, $ 2.0 million, and $ 1.9 million for 2023, 2022, and 2021, respectively.
+Added: A $ 32,000 gain on sale of fixed assets was recorded from the sale of an automobile during 2023.
+Added: A $ 757,000 gain on sale of fixed assets was recorded from the sale of a real estate asset during 2022, which was used to house staff while traveling.
NOTE 8 - DEPOSITS
−Removed: At December 31, 2022 
−Removed: the scheduled maturities of time deposits are as follows:
+Added: At December 31, 2023, the scheduled maturities of time deposits are as follows:
(dollars in thousands)
−Removed: December 31, 2022  
−Removed: $ 1,540,582  
+Added: December 31, 2023
Two to three years
−Removed: 21,780  
Over three years
−Removed: $ 1,563,603  
−Removed: Brokered time deposits were $ 255.0  million at December 31, 2022 
−Removed: and $ 2.4  million at December 31, 2021.
+Added: Time deposits include deposits acquired through both retail and wholesale channels.
+Added: Wholesale funding includes brokered deposits, collateralized deposits from the State of California, and deposits acquired through internet listing services totaled $ 405.6 million at December 31, 2023.
+Added: Retail deposits include time deposits.
+Added: Brokered time deposits were $ 254.9 million at December 31, 2023 and $ 255.0 million at December 31, 2022.
+Added: Collateralized deposits from the State of California totaled $ 80.0 million at December 31, 2023 and none at December 31, 2022.
+Added: Time deposits acquired through internet listing services totaled $ 61.4 million at December 31, 2023 and $ 10.7 million at December 31, 2022.
+Added: In addition, we offer retail deposit products where customers are able to achieve FDIC insurance for balances on deposit in excess of the $250,000 FDIC limit through the Certificate of Deposit Account Registry Service (“CDARS”) and Insured Cash Sweeps (“ICS”) programs.
+Added: Time deposits held through the CDARS program were $ 135.7 million at December 31, 2023 and $ 17.7 million at December 31, 2022.
NOTE 9 - LONG-TERM DEBT
−Removed: In March 2016, the Company issued $ 50 million of 6.5 % fixed-to-floating rate subordinated notes, due March 31, 2026.
−Removed: The interest rate is fixed through March 31, 2021 and floats at 3 month LIBOR plus 516 basis points thereafter.
−Removed: The Company redeemed these subordinated notes on March 31, 2021.
−Removed: The redemption price for the subordinated notes was equal to 100% of principal amount of the notes redeemed, plus any accrued and unpaid interest.
−Removed: In November 2018, the Company issued $ 55 million of 6.18 % fixed to floating rate subordinated notes, due December 1, 2028.
−Removed: The interest rate is fixed through December 1, 2023 and floats at 3 month LIBOR plus 315 basis points thereafter.
−Removed: The Company can redeem these subordinated notes beginning December 1, 2023.
−Removed: The subordinated notes are considered Tier 2  capital at the Company.
−Removed: The Company allocated $ 25 million to the Bank as Tier- 1  capital.
−Removed: In March 
−Removed: 2021, the Company issued $ 120  million of 4.00 % fixed-to-floating rate subordinated notes, due April 
−Removed: The interest rate is fixed through April 
−Removed: 1, 2026  and floats at three  month SOFR plus 329  basis points thereafter.
−Removed: The Company can redeem these subordinated notes beginning April 
+Added: In November 2018, the Company issued $ 55.0 million of 6.18 % fixed-to-floating rate subordinated notes, with a December 1, 2028 maturity date (the “2028 Subordinated Notes”).
+Added: The interest rate was fixed through December 1, 2023 and was scheduled to float at three -month CME Term SOFR plus applicable tenor spread adjustment of 26 basis points plus 315 basis points thereafter.
+Added: On December 1, 2023, the Company redeemed the 2028 Subordinated Notes at a redemption price equal to 100 % of the principal amount plus accrued and unpaid interest.
+Added: In March 2021, the Company issued $ 120.0 million of 4.00 % fixed-to-floating rate subordinated notes, with an April 1, 2031 maturity date (the “2031 Subordinated Notes”).
+Added: The interest rate is fixed through April 1, 2026 and is scheduled to float at three -month SOFR plus 329 basis points thereafter.
+Added: The Company can redeem the 2031 Subordinated Notes beginning April 1, 2026.
The 2031 Subordinated Notes are considered Tier 2 capital at the Company.
−Removed: At December 31, 2022 
−Removed: and 2021, respectively, long-term debt was as follows:
+Added: Long-term debt and unamortized debt issuance costs were as follows as of the dates indicated:
+Added: At December 31, 2023
+Added: At December 31, 2022
(dollars in thousands)
1 unchanged sentence
Unamortized debt issuance costs
−Removed: 6.18% subordinated notes, due December 1, 2028
−Removed: $ 55,000  
−Removed: $ 55,000  
−Removed: 4.00% subordinated notes, due April 1, 2031
−Removed: 120,000  
−Removed: 120,000  
−Removed: $ 175,000  
−Removed: $ 1,415  
−Removed: $ 175,000  
−Removed: $ 1,993  
−Removed: The following table presents interest and amortization expense the Company incurred for the years ended December 31, 2022 
+Added: 2028 Subordinated Notes
+Added: $ — $ — $ 55,000 $ 180
+Added: 2031 Subordinated Notes
+Added: 120,000 853 120,000 1,235
+Added: $ 120,000 $ 853 $ 175,000 $ 1,415
+Added: The following table presents interest and amortization expense the Company incurred for the years ended December 31, 2023 and 2022:
For the Year Ended December 31,
1 unchanged sentence
Interest Expense:
−Removed: $ 8,199  
−Removed: $ 7,878  
−Removed: The United Kingdom's Financial Conduct Authority and Intercontinental Exchange Benchmark Administration announced to cease publishing 1 -week and 2 -month LIBOR rate at the end of 2021 and will cease publishing all other LIBOR tenors at June 30, 2023.
−Removed: After the LIBOR replacement date June 30, 2023, the Company will adopt SOFR with relevant spread adjustment as the alternative reference rate to replace LIBOR with respect to the Company’s subordinated notes and subordinated debentures.
+Added: $ 7,916 $ 8,199
+Added: At December 31, 2023, the Company duly and punctually paid all payments and timely delivered both the annual reports and compliance certificate to the Trustee as agreed.
+Added: The Company was in compliance with all covenants under the long-term debt at December 31, 2023.
NOTE 10 - SUBORDINATED DEBENTURES
−Removed: The Company, through the acquisition of TomatoBank and its holding company, TFC Holding Company (“TFC”), the Company acquired the TFC Statutory Trust (the “
−Removed: TFC Trust”).
−Removed: TFC Trust contained a pooled private offering of 5,000 trust preferred securities with a liquidation amount of $ 1,000 per security.
−Removed: TFC issued $ 5 million of subordinated debentures to TFC Trust in exchange for ownership of all of the common security of TFC Trust and the proceeds of the preferred securities sold by TFC trust.
−Removed: The Company is not considered the primary beneficiary of TFC trust (variable interest entity), therefore TFC Trust is not consolidated in the Company's financial statements, but rather the subordinated debentures are shown as a liability at market value as of the close of the acquisition which was $ 3.3 million.
−Removed: There was a $ 1.9 million valuation reserve recorded to arrive at market value, which is treated as a yield adjustment and is amortized over the life of the security.
−Removed: The Company also purchased an investment in the common stock of the trust for $ 155,000 , which is included in other assets.
−Removed: The Company may redeem the subordinated debentures, subject to prior approval by the Board of Governors of the Federal Reserve System (the “Federal Reserve”) on or after March 15, 2012, at 100 % of the principal amount, plus accrued and unpaid interest.
−Removed: The subordinated debentures mature on March 15, 2037.
−Removed: The Company has the option to defer interest payments on the subordinated debentures from time to time for a period not to exceed five consecutive years.
−Removed: The Company has been paying interest on a quarterly basis.
−Removed: The subordinated debentures may be included in Tier I capital (with certain limitations applicable) under current regulatory guidelines and interpretations.
−Removed: The subordinated debentures have a variable rate of interest equal to the three month LIBOR plus 1.65 %, which was 6.42 % as of December 31, 2022 
−Removed: and 1.85 % at December 31, 2021.
−Removed: In October 2018, the Company, through the acquisition of FAIC, acquired First American International Statutory Trust I (“FAIC Trust”), a Delaware statutory trust formed in December 2004.
−Removed: FAIC Trust issued 7,000 units of thirty -year fixed to floating rate capital securities with an aggregate liquidation amount of $ 7 million to an independent investor, and FAIC issued $ 7 million of subordinated debentures to FAIC Trust and all of its common securities, amounting to $ 217,000 , which is included in other assets.
−Removed: There was a $ 1.2 million valuation reserve recorded to arrive at market value which is treated as a yield adjustment and is amortized over the life of the security.
−Removed: The Company has the option to defer interest payments on the subordinated debentures from time to time for a period not to exceed five consecutive years.
−Removed: The subordinated debentures have a variable rate of interest equal to the three -month LIBOR plus 2.25 % through final maturity on December 15, 2034.
−Removed: The rate at December 31, 2022, was 7.02 % and 2.45 % at December 31, 2021.
−Removed: In January 2020, the Company, through the acquisition of PGBH, acquired PGB Capital Trust I (“PGBH Trust”), a Delaware statutory trust formed in December 2004.
−Removed: PGBH Trust issued 5,000 units of fixed to floating rate capital securities with an aggregate liquidation amount of $ 5,000,000 and 155 common securities with an aggregate liquidation amount of $ 155,000 .
−Removed: PGBH issued $ 5.2 million of subordinated debentures to PGBH Trust in exchange for ownership of all the common securities of PGBH Trust.
−Removed: There was a $ 763,000 valuation reserve recorded to arrive at market value which is treated as a yield adjustment and is amortized over the life of the security.
−Removed: The Company has the option to defer interest payments on the subordinated debentures from time to time for a period not to exceed five consecutive years.
−Removed: The subordinated debentures have a variable rate of interest equal to the three -month LIBOR plus 2.10 % through final maturity on December 15, 2034.
−Removed: The rate at December 31, 2022 
−Removed: was 6.87 % and 2.30 % at December 31, 2021.
−Removed: The Company paid interest expense of $ 650,000  in 2022, $ 377,000 in 2021  and $ 468,000 in 2020.
−Removed: The amount of aggregate amortization expense recognized was $ 218,000 in 2022, 2021  and, 2020.
−Removed: For regulatory reporting purposes, the Federal Reserve Board has indicated that the capital securities qualify as Tier I capital of the Company subject to previously specified limitations, until further notice.
+Added: Subordinated debentures consist of subordinated debentures issued in connection with three separate trust preferred securities and totaled $ 14.9 million and $ 14.7 million as of December 31, 2022 and 2023, respectively.
+Added: Under the terms of our subordinated debentures issued in connection with the issuance of trust preferred securities, we are not permitted to declare or pay any dividends on our capital stock if an event of default occurs under the terms of the long-term debt.
+Added: In addition, the Company has the option to defer interest payments on the subordinated debentures from time to time for a period not to exceed five consecutive years.
+Added: The subordinated debentures may be included in Tier 1 capital (with certain limitations applicable) under current regulatory guidelines and interpretations.
+Added: The Company may redeem the subordinated debentures, subject to prior approval by the Board of Governors of the Federal Reserve System at 100% of the principal amount, plus accrued and unpaid interest.
+Added: These subordinated debentures consist of the following and are described in detail after the table below:
+Added: December 31, 2023
+Added: (dollars in thousands)
+Added: Valuation Reserve
+Added: Effective Rate
+Added: Subordinated debentures
+Added: December 22, 2006
+Added: $ 5,155 $ 1,189 $ 3,966 Three-month CME Term SOFR plus 0.26% (a) plus 1.65%,
+Added: 7.30 % March 15, 2037
+Added: December 15, 2004
+Added: 7,217 842 6,375 Three-month CME Term SOFR 0.26% (a) plus 2.25%
+Added: 7.90 % December 15, 2034
+Added: December 15, 2004
+Added: 5,155 558 4,597 Three-month CME Term SOFR 0.26% (a) plus 2.10%
+Added: 7.75 % December 15, 2034
+Added: $ 17,527 $ 2,589 $ 14,938
+Added: Represents applicable tenor spread adjustment when the original Libor index was discontinued on June 30, 2023
+Added: In 2016, the Company, through the acquisition of TomatoBank and its holding company, TFC Holding Company (“TFC”), acquired TFC Statutory Trust (the “TFC Trust”).
+Added: TFC Trust issued 5,000 fixed-to-floating rate capital securities with an aggregate liquidation amount of $ 5.0 million to an independent investor, and all of its common securities, with an aggregate liquidation amount of $ 155,000 .
+Added: TFC issued $ 5 million of subordinated debentures to TFC Trust in exchange for ownership of all of the common securities of TFC Trust and the proceeds of the preferred securities sold by TFC Trust.
+Added: The Company is not considered the primary beneficiary of TFC trust (variable interest entity), therefore TFC Trust is not consolidated in the Company's financial statements, but rather the subordinated debentures are shown as a liability.
+Added: The Company also purchased an investment in the common stock of TFC Trust for $ 155,000 , which is included in other assets.
+Added: At the close of this acquisition, a $ 1.9 million valuation reserve was recorded to arrive at its fair market value, which is treated as a yield adjustment and amortized over the life of the security.
+Added: The unamortized valuation reserve was $ 1.2 million at December 31, 2023 and $ 1.3 million at December 31, 2022.
+Added: The subordinated debentures have a variable rate of interest equal to three - month CME Term SOFR plus applicable tenor spread adjustment of 0.26 % plus 1.65 %, which was 7.30 % as of December 31, 2023, and three -month LIBOR plus 1.65 %, which was 6.42 % at December 31, 2022.
+Added: In October 2018, the Company, through the acquisition of FAIC, acquired First American International Statutory Trust I (“FAIC Trust”).
+Added: FAIC Trust issued 7,000 units of thirty -year fixed-to-floating rate capital securities with an aggregate liquidation amount of $ 7.0 million to an independent investor, and all of its common securities, with an aggregate liquidation amount of $ 217,000 .
+Added: The Company is not considered the primary beneficiary of FAIC Trust (variable interest entity), therefore FAIC Trust is not consolidated in the Company's financial statements, but rather the subordinated debentures are shown as a liability.
+Added: The Company purchased an investment in the common stock of FAIC Trust for $ 217,000 , which is included in other assets.
+Added: At the close of this acquisition, a $ 1.2 million valuation reserve was recorded to arrive at its fair market value, which is treated as a yield adjustment and amortized over the life of the security.
+Added: The unamortized valuation reserve was $ 842,000 at December 31, 2023 and $ 918,000 at December 31, 2022.
+Added: The subordinated debentures have a variable rate of interest equal to three - month CME Term SOFR plus applicable tenor spread adjustment of 0.26 % plus 1.65 %, which was 7.90 % as of December 31, 2023, and three -month LIBOR plus 2.25 %, which was 7.02 % at December 31, 2022.
+Added: In January 2020, the Company, through the acquisition of PGBH, acquired PGB Capital Trust I (“PGBH Trust”).
+Added: PGBH Trust issued 5,000 units of fixed-to-floating rate capital securities with an aggregate liquidation amount of $ 5 million to an independent investor, and all of its common securities, with an aggregate liquidation amount of $ 155,000 .
+Added: The Company is not considered the primary beneficiary of PGBH Trust (variable interest entity), therefore PGBH Trust is not consolidated in the Company's financial statements, but rather the subordinated debentures are shown as a liability.
+Added: The Company purchased an investment in the common stock of PGBH Trust for $ 155,000 , which is included in other assets.
+Added: At the close of this acquisition, a $ 763,000 valuation reserve recorded to arrive at it fair market value, which is treated as a yield adjustment and amortized over the life of the security.
+Added: The unamortized valuation reserve was $ 559,000 at December 31, 2023 and $ 610,000 at December 31, 2022.
+Added: The subordinated debentures have a variable rate of interest equal to three - month CME Term SOFR plus applicable tenor spread adjustment of 0.26 % plus 1.65 %, which was 7.75 % as of December 31, 2023, and three -month LIBOR plus 2.10 %, which was 6.87 % at December 31, 2022.
+Added: The Company paid interest expense of $ 1.3 million in 2023, $ 650,000 in 2022 and $ 377,000 in 2021.
+Added: The amount of aggregate amortization expense recognized was $ 218,000 in each of the years ended December 31, 2023, 2022 and 2021.
+Added: For regulatory reporting purposes, the Federal Reserve Board has indicated that the capital securities qualify as Tier 1 capital of the Company subject to previously specified limitations, until further notice.
If regulators make a determination that the capital securities can no longer be considered in regulatory capital, the securities become callable and the Company may redeem them.
−Removed: The United Kingdom's Financial Conduct Authority and Intercontinental Exchange Benchmark Administration announced to cease publishing 1 -week and 2 -month LIBOR rate at the end of 2021 and will cease publishing all other LIBOR tenors at June 30, 2023.
−Removed: After the LIBOR replacement date June 30, 2023, the Company will adopt SOFR with relevant spread adjustment as the alternative reference rate to replace LIBOR with respect to the Company’s subordinated notes and subordinated debentures.
+Added: At December 31, 2023, the Company duly and punctually paid all payments, maintained 100% ownership of the common securities, and did not incur any additional indebtedness as agreed.
+Added: The Company was in compliance with all covenants under all subordinated debentures at December 31, 2023.
NOTE 11 - BORROWING ARRANGEMENTS
2 unchanged sentences
Federal Funds Arrangements with Commercial Bank s.
−Removed: As of December 31, 2022 
−Removed: the Company may borrow on an unsecured basis, up to $ 20.0 million, $ 10.0 million, $ 12.0 million and $ 50.0 million overnight from Zions Bank, Wells Fargo Bank, First Horizon Bank, and Pacific Coast Bankers' Bank, respectively.
+Added: As of December 31, 2023, the Company may borrow on an unsecured basis, up to $ 92.0 million from other financial institutions.
Letter of Credit Arrangements.
−Removed: As of December 31, 2022 
−Removed: the Company had an unsecured commercial letter of credit line with Wells Fargo Bank for $ 2.0 million.
+Added: As of December 31, 2023, the Company had an unsecured commercial letter of credit line with another financial institution for $ 2.0 million.
FRB Secured Line of Credit.
−Removed: The secured borrowing capacity with the FRB of $ 12.0  million at December 31, 2022 
−Removed: is collateralized by loans pledged with a carrying value of $ 16.8  million.
+Added: As of December 31, 2023, the Bank had a secured borrowing capacity with the FRB of $ 42.3 million at December 31, 2023 collateralized by pledged loans with a carrying value of $ 62.8 million.
FHLB Secured Line of Credit and Advances.
−Removed: The secured borrowing capacity with the FHLB of $ 1.1  billion at December 31, 2022 
−Removed: is pledged by residential and commercial loans with a carrying value of $ 1.6  billion.
−Removed: December 31, 2022, the Company had overnight advances of $ 70.0 million and long-term ( five year original term) advances of $ 150.0  million at a weighted average rate of 2.28 % with the FHLB. The Company paid interest expenses of $ 2.9  million, $ 1.8  million and $ 1.5  million on such FHLB advances for the twelve months ended December 31, 2022, 2021  and 2020.
−Removed: There were no amounts outstanding under any of the other borrowing arrangements above as of December 31, 2022 
−Removed: except FHLB advances maturing in 2025.
+Added: As of December 31, 2023, the Bank had a secured borrowing capacity with the FHLB of $ 1.0 billion collateralized by pledged residential and commercial loans with a carrying value of $ 1.5 billion.
+Added: At December 31, 2023, the Company had no overnight advances and $ 150.0 million of long-term advances with an original term of 5 years at a weighted average rate of 1.18 %.
+Added: The Company paid interest expenses of $ 2.9 million, $ 2.9 million and $ 1.8 million on such FHLB advances for the years ended December 31, 2023, 2022 and 2021, respectively.
+Added: There were no amounts outstanding under any of the other borrowing arrangements above as of December 31, 2023 except FHLB advances maturing in 2025.
NOTE 12 - INCOME TAXES
3 unchanged sentences
(dollars in thousands)
−Removed: $ 18,315  
−Removed: $ 16,037  
−Removed: $ 10,927  
−Removed: 10,952  
+Added: $ 10,804 $ 18,315 $ 16,037
+Added: 6,761 10,952 9,087
Total Current
−Removed: 29,267  
−Removed: 25,124  
−Removed: 17,529  
−Removed: ( 1,756 )  
−Removed: ( 1,148 )  
−Removed: ( 493 )  
+Added: 17,565 29,267 25,124
+Added: ( 288 ) ( 1,756 ) ( 1,148 )
+Added: 504 ( 493 ) 55
Total Deferred
−Removed: ( 2,249 )  
−Removed: ( 1,093 )  
+Added: 216 ( 2,249 ) ( 1,093 )
Total income tax expense
−Removed: $ 27,018  
−Removed: $ 24,031  
−Removed: $ 14,531  
−Removed: A comparison of the federal statutory income tax rates to the Company's effective income tax rates as of the years ended December 
+Added: $ 17,781 $ 27,018 $ 24,031
+Added: A comparison of the federal statutory income tax rates to the Company's effective income tax rates for the years ended December 31 follows:
(dollars in thousands)
Statutory federal tax
−Removed: $ 19,182  
−Removed: $ 16,997  
−Removed: 21.0 %  
−Removed: $ 9,966  
+Added: $ 12,652 21.0
+Added: % $ 19,182 21.0 % $ 16,997 21.0 %
State tax, net of federal benefit
+Added: % 8,278 9.1 % 7,182 8.9 %
Tax-exempt income
−Removed: ( 355 )  
−Removed: ( 285 )  
−Removed: - 0.4 %  
−Removed: ( 192 )  
+Added: ( 399 ) ( 0.7
+Added: )% ( 355 ) ( 0.4 )% ( 285 ) ( 0.4 )%
Stock-based compensation
−Removed: ( 396 )  
−Removed: ( 404 )  
−Removed: - 0.5 %  
+Added: % ( 396 ) ( 0.4 )% ( 404 ) ( 0.5 )%
Other items, net
+Added: % 309 0.3 % 541 0.7 %
Total income tax expense
−Removed: $ 27,018  
−Removed: 29.6 %  
−Removed: $ 24,031  
−Removed: 29.7 %  
−Removed: $ 14,531  
+Added: $ 17,781 29.5 % $ 27,018 29.6 % $ 24,031 29.7 %
Deferred taxes are a result of differences between income tax accounting and generally accepted accounting principles with respect to income and expense recognition.
−Removed: The following is a summary of the components of the net deferred tax asset accounts recognized in the accompanying balance sheets as of the years ended December 31:
+Added: The following is a summary of the components of the net deferred tax asset accounts recognized in the accompanying balance sheets as of December 31:
(dollars in thousands)
Deferred tax assets:
−Removed: Pre-opening expenses
−Removed: Allowance for loan losses
−Removed: 12,479  
+Added: Allowance for credit losses
+Added: $ 13,011 $ 12,834
Stock-based compensation
−Removed: Off balance sheet reserve
Operating loss carryforwards
1 unchanged sentence
Lease liability
−Removed: Mark to market on held for sale mortgage loans
−Removed: 34,640  
−Removed: 22,215  
+Added: 34,332 34,640
Deferred tax liabilities:
−Removed: ( 1,598 )  
+Added: ( 1,389 ) ( 1,598 )
Deferred loan costs
−Removed: ( 2,808 )  
+Added: ( 3,123 ) ( 2,808 )
Acquisition accounting fair value adjustments
−Removed: ( 3,052 )  
+Added: ( 2,794 ) ( 3,052 )
Mortgage servicing rights
−Removed: ( 2,259 )  
+Added: ( 1,991 ) ( 2,259 )
Right of use asset
−Removed: ( 7,818 )  
−Removed: ( 128 )  
−Removed: ( 17,663 )  
+Added: ( 9,115 ) ( 7,818 )
+Added: ( 155 ) ( 128 )
+Added: ( 18,567 ) ( 17,663 )
Net deferred tax assets
−Removed: $ 16,977  
−Removed: $ 4,855  
−Removed: At December 31, 2022, 
−Removed: the Company has usable net operating loss carryforwards from acquisitions of approximately $ 24,000  for federal, $ 6,000  for California, $ 1.5  million for New York State and $ 725,000  for New York City income tax purposes. Net operating loss carry forwards, to the extent not used will begin to expire in 2028.
−Removed:  The net operating loss carryforwards were generated through acquisitions, and as a result, are substantially limited by Section 382 of the Internal Revenue Code.
+Added: $ 15,765 $ 16,977
+Added: At December 31, 2023, the Company has usable net operating loss carryforwards from acquisitions of $ 21,104 for federal and $ 5,570 for California income tax purposes.
+Added: Net operating loss carry forwards, to the extent not used, will begin to expire in 2028.
+Added: The net operating loss carryforwards were generated through acquisitions, and as a result, are substantially limited by Section 382 of the Internal Revenue Code.
Benefits not expected to be realized due to the limitation have been excluded from the deferred tax asset and net operating loss carryforward amounts noted above.
−Removed: Based on management's assessment, the Company concluded that no valuation allowance is necessary for the Company's deferred tax assets as of December 31, 2022. 
−Removed: On March 27, 2020, the CARES Act was enacted in response to the COVID- 19 pandemic.
−Removed: The CARES Act, among other things, permits net operating loss carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021.
−Removed: In addition, the CARES Act allows net operating losses incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. On December 27, 2020, the Consolidated Appropriations Act, 2021 was signed into law and extended several provisions of the CARES Act.
−Removed: As of December 31, 2021, the Company has determined that neither the CARES Act nor changes to income tax laws or regulations in other jurisdictions have a significant impact on our effective tax rate.
−Removed: The Company’s net operating losses were not generated during the 2018 - 2020 period.
−Removed: The Company is subject to federal income tax and state tax laws of California, New York, New Jersey, Hawaii and Illinois. Income tax returns for the years ended after December 31, 2017 
−Removed: are open to audit by the federal, New York and Illinois authorities and for the years ended after December 31, 2016 
−Removed: are open to audit by California state authorities. The 2020 and 2021 tax returns are open to audit by New Jersey state authorities at December 31, 2022. 
−Removed: The Company is currently under tax examination by the state of New York for 2018, 2019 and 2020 New York state returns.
−Removed: The Company expanded operations to the State of Hawaii starting January 14, 2022. 
−Removed: No  income tax returns are open to audit by Hawaii state authorities at 
−Removed: December 31, 2022.
−Removed: There were no recorded interest or penalties related to uncertain tax positions as part of income tax for the years ended December 31, 2022, 2021  and 2020, respectively.
−Removed: The Company has determined that as of December 31, 2022 
−Removed: all tax positions taken to date are highly certain and, accordingly, no accounting adjustment has been made to the consolidated financial statements.
+Added: Based on management's assessment, the Company concluded that no valuation allowance was necessary for the Company's deferred tax assets as of December 31, 2023.
+Added: The Company files income tax returns in federal and various state jurisdictions.
+Added: The Company is subject to examinations in federal jurisdiction for the years ended after December 31, 2019.
+Added: The statutes of limitations for state income tax returns remain open for tax years in accordance with each state's statutes.
+Added: The audit of the Company's New York State tax returns for the tax period from January 1, 2018 to December 31, 2020 was completed in August 2023.
+Added: The Company paid additional tax and interest of $ 70,000 without penalties to settle the tax audit findings with New York State.
+Added: The Company had no material uncertain tax positions at December 31, 2023 and 2022, and recognized no material interest or penalties as part of income taxes for the years ended December 31, 2023, 2022, and 2021.
NOTE 13 - COMMITMENTS AND CONTINGENCIES
4 unchanged sentences
The Company uses the same credit policies in making commitments as it does for loans reflected in the financial statements.
−Removed: As of December 31, 2022 
−Removed: and 2021, the Company had the following financial commitments whose contractual amount represents credit risk:
+Added: As of December 31, 2023 and 2022, the Company had the following financial commitments whose contractual amount represents credit risk:
(dollars in thousands)
Commitments to make loans
−Removed: $ 1,141  
−Removed: $ 128,680  
−Removed: $ 1,474  
−Removed: $ 200,814  
+Added: $ 614 $ 77,230 $ 1,141 $ 128,680
Unused lines of credit
−Removed: 13,730  
−Removed: 197,314  
−Removed: 22,777  
−Removed: 229,154  
+Added: 10,629 95,686 13,730 197,314
Commercial and similar letters of credit
+Added: 90 3,814 1,154 867
Standby letters of credit
−Removed: $ 17,602  
−Removed: $ 327,922  
−Removed: $ 27,507  
−Removed: $ 432,654  
+Added: 1,626 1,061 1,577 1,061
+Added: $ 12,959 $ 177,791 $ 17,602 $ 327,922
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract.
3 unchanged sentences
The Company records a liability for lifetime expected losses on off-balance-sheet credit exposure that do not fit the definition of unconditionally cancelable in accordance with ASC 326.
−Removed:  The Company uses the loss rate and exposure of default framework to estimate a reserve for unfunded commitments. Loss rates for the expected funded balances are determined based on the associated pooled loan analysis loss rate and the exposure at default is based on an estimated utilization given default.
−Removed: The off-balance sheet commitment allowance were $ 1.2 million and $ 1.2 million as of December 31, 2022 and December 31, 2021, respectively.
−Removed: The provision (benefit) for off-balance sheet commitment expenses were $ 1.1 million and ($ 180,000 ) in 2022 and 2021, respectively.
−Removed: The Company is involved in various matters of litigation which have arisen in the ordinary course of business and accruals for estimates of potential losses have been provided when necessary and appropriate under generally accepted accounting principles. In the opinion of management, the disposition of such pending litigation will not have a material effect on the Company's financial statements.
+Added: The Company uses the loss rate and exposure of default framework to estimate a reserve for unfunded commitments.
+Added: Loss rates for the expected funded balances are determined based on the associated pooled loan analysis loss rate and the exposure at default is based on an estimated utilization given default.
+Added: The off-balance sheet commitment allowance were $ 640,000 and $ 1.2 million as of December 31, 2023 and December 31, 2022, respectively.
+Added: The (reversal of)/provision for off-balance sheet commitments totaled were ($ 516,000 ) and $ 1.1 million for the years ended December 31, 2023 and 2022.
+Added: Additionally, we have commitments to invest in certain affordable housing partnerships and SBIC funds that call for capital contributions up to an amount specific in the partnership agreements.
+Added: Such unfunded commitments totaled $ 3.3 million and $ 3.5 million as of December 31, 2023 and 2022.
+Added: The Company is involved in various matters of litigation, which have arisen in the ordinary course of business, and accruals for estimates of potential losses have been provided when necessary and appropriate under generally accepted accounting principles.
+Added: In the opinion of management, the disposition of such pending litigation will not have a material effect on the Company's financial statements.
NOTE 14 - LEASES
−Removed: On January 1, 2021, the Company adopted ASU 
−Removed: 2016 - 02, Leases (Topic 842 ) and elected the package of practical expedients that permits the Company to not reassess its prior conclusions about lease identification, lease classification and initial direct costs.
−Removed: The Company also elected all of the new standard’s available transition practical expedients, including the short-term lease recognition exemption that includes not recognizing ROU assets or lease liabilities for existing short-term leases, and the practical expedient to not separate lease and non-lease components for all of the Company's leases.
−Removed: The Company determines if a contract arrangement is a lease at inception and primarily enters into operating lease contracts for its branch locations, office space, and certain equipment.
−Removed: As part of its property lease agreements, the Company may seek to include options to extend or terminate at lease when it is reasonably certain that the Company will exercise those options.
−Removed: The Company's measurement of the ROU assets and operating lease liabilities does not include payments associated with the option to extend or terminate the lease.
−Removed: The ROU lease asset also includes any lease payments made and lease incentives.
−Removed: Lease expense for lease payments is recognized on a straight-line basis over the lease term.
−Removed: The Company did 
−Removed: not possess any leases that have variable lease payments or residual value guarantees as of December 31, 2022.
−Removed: The ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date.
−Removed: The Company uses its incremental borrowing rate to determine the present value of its lease liabilities.
The Company leases several of its operating facilities under various non-cancellable operating leases expiring at various dates through 2037.
The Company is also responsible for common area maintenance, taxes, and insurance at the various branch locations.
−Removed: Future minimum rent payments on the Company’s leases were as follows at December 31, 2022:
+Added: Future minimum rent payments on the Company’s leases were as follows at December 31, 2023:
(dollars in thousands)
−Removed: As of December 31, 2022:
−Removed: $ 4,469  
−Removed: $ 28,685  
+Added: For the year ended December 31,:
Less amount of payment representing interest
Total present value of lease payments
−Removed: $ 26,523  
The minimum rent payments shown above are given for the existing lease obligation and are not a forecast of future rental expense.
−Removed: Total rental expense, recognized on a straight-line basis, was $ 5.4  million, $ 5.3  million, and $ 5.7 million for the twelve months ended December 31, 2022, 
−Removed: 2021, and 2020, respectively. The Company received rental income of $ 548,000 , $ 479,000 , and $ 395,000 for the twelve months ended December 31, 2022, 2021, and 2020, respectively.
−Removed: In July 
−Removed: 2020, the Company signed a lease, commencing on August 1, 2020, on Canal Street in New York City for our New York Bowery branch relocation, and the Canal Street branch opened by December 
−Removed:  In January 2020, the Company signed a lease to for a new branch in Edison, New Jersey, which the Company occupied in November 2020.
−Removed: In March 2019, the Company signed a new lease to move its Diamond Bar, California branch to a new location, which opened in January 2021.
−Removed: In January 2022, the Company acquired a new lease through its acquisition of the Hawaii Branch from BOTO.
−Removed: The future payments for all of the new leases are included in the schedule above.
−Removed: The Company recorded $ 548,000 , $ 479,000 , and $ 395,000 in sub-lease income in 
−Removed: 2022, 2021, and 2020, respectively.
−Removed: The following table presents the operating lease related assets and liabilities recorded on the Consolidated Balance Sheet, and the weighted-average remaining lease terms and discount rates as of 
−Removed: December 31, 2022 
−Removed: and December 
+Added: Total rental expense, recognized on a straight-line basis, was $ 5.7 million, $ 5.4 million, and $ 5.3 million for the years ended December 31, 2023, 2022, and 2021, respectively.
+Added: The Company received rental income of $ 570,000 , $ 548,000 , and $ 479,000 for the years ended December 31, 2023, 2022, and 2021, respectively.
+Added: The following table presents the operating lease related assets and liabilities recorded on the consolidated balance sheets, and the weighted-average remaining lease terms and discount rates as of December 31, 2023 and December 31, 2022 :
(dollars in thousands)
Operating Leases
−Removed: $ 25,447  
−Removed: $ 22,454  
+Added: $ 29,803 $ 25,447
Lease liabilities
−Removed: 26,523  
−Removed: 23,282  
+Added: 31,191 26,523
Weighted-average remaining lease term (in years)
Weighted-average discount rate
−Removed: 2.19 %  
−Removed: NOTE 15  - RELATED PARTY TRANSACTIONS
+Added: 1.72 % 2.19 %
+Added: NOTE 15 - RELATED PARTY TRANSACTIONS
Loans to principal officers, directors, and their affiliates were as follows:
−Removed: December 31,  
−Removed: December 31,  
+Added: For the year ended December 31,
(dollars in thousands)
Beginning balance
−Removed: $ 8,441  
−Removed: $ 1,243  
−Removed: New loans and advances
−Removed: 10,292  
−Removed: ( 1,572 )  
+Added: $ 6,869 $ 8,441
+Added: Balance re-categorized to non-related party
Ending balance
−Removed: $ 6,869  
−Removed: $ 8,441  
−Removed: Outstanding loan commitments to executive officers, directors and their related interests with whom they are associated were $ 1.6  million and none  as of December 31, 2022 
−Removed: and 2021, respectively.
−Removed: Deposits from principal officers, directors, and their affiliates at December 31, 
−Removed: 2022  and 2021  were $ 88.1  million and $ 57.6  million. 
−Removed: Several directors and their affiliates own $ 8.1  million of RBB subordinated debentures as of December 31, 2022 and as of December 31, 2021.
−Removed: NOTE 16  
−Removed: - STOCK OPTION PLAN
−Removed: RBB Bancorp  
−Removed: Stock Option Plan
−Removed: Under the RBB Bancorp 
−Removed: 2010  Stock Option Plan (the 
−Removed: “2010  Plan”), the Company was permitted to grant awards to eligible persons in the form of qualified and non-qualified stock options.
−Removed: The Company reserved up to 
−Removed: 30 % of the issued and outstanding shares of common stock as of the date the Company adopted the 
−Removed: 2010  Plan or 
−Removed: 3,494,478  shares, for issuance under the 
−Removed: 2010  Plan.
−Removed: Following receipt of shareholder approval of the 
−Removed: 2017  Omnibus Stock Incentive Plan (the “OSIP”) in 
−Removed: 2017 ,  
−Removed: no  additional grants were made under the 
−Removed: 2010  Plan.
−Removed: 2010  Plan has been terminated and options that were granted under the 
−Removed: 2010  Plan have become subject to the OSIP.
−Removed: Awards that were granted under the 
−Removed: 2010  Plan will remain exercisable pursuant to the terms and conditions set forth in individual award agreements, but such awards will be assumed and administered under the OSIP.
−Removed: 2010  Plan award agreements allow for acceleration of exercise privileges of grants upon occurrence of a change in control of the Company.
−Removed: If a participant’s job is terminated for cause, then all unvested awards expire at the date of termination.
−Removed: Amended and Restated RBB Bancorp  
−Removed: Omnibus Stock Incentive Plan
−Removed: The Amended and Restated RBB Bancorp 
−Removed: 2017  Omnibus Stock Incentive Plan (the "Amended OSIP") was approved by the Company’s board of directors in 
−Removed: January 2019 
−Removed: and approved by the Company’s shareholders in 
−Removed:  The Amended OSIP was designed to ensure continued availability of equity awards that will assist the Company in attracting and retaining competent managerial personnel and rewarding key employees, directors and other service providers for high levels of performance.
−Removed: Pursuant to the Amended OSIP, the Company’s board of directors are allowed to grant awards to eligible persons in the form of qualified and non-qualified stock options, restricted stock, restricted stock units, stock appreciation rights and other incentive awards.
−Removed: The Company has reserved up to 
−Removed: 30 % of issued and outstanding shares of common stock as of the date the Company adopted the Amended OSIP, or 3,848,341  shares.
−Removed: December 31, 2022, there were 1,043,617  shares of common stock available for issuance under the Amended OSIP.
−Removed: This represents 5.5 % of the issued and outstanding shares of the Company’s common stock as of December 31, 2022. 
+Added: Outstanding loan commitments to executive officers, directors and their related interests with whom they are associated were none and $ 1.6 million as of December 31, 2023 and 2022, respectively.
+Added: Deposits from principal officers, directors, and their affiliates at December 31, 2023 and 2022 were $ 25.7 million and $ 88.1 million, respectively.
+Added: Certain directors and their affiliates own $ 6.0 million of RBB subordinated debentures as of December 31, 2023 and $ 8.1 million as of December 31, 2022.
+Added: NOTE 16 - STOCK OPTION PLAN
+Added: RBB Bancorp 2010 Stock Option Plan
+Added: Under the RBB Bancorp 2010 Stock Option Plan (the “2010 Plan”), the Company was permitted to grant awards to eligible persons in the form of qualified and non-qualified stock options.
+Added: The Company reserved up to 30 % of the issued and outstanding shares of common stock as of the date the Company adopted the 2010 Plan, or 3,494,478 shares, for issuance under the 2010 Plan.
+Added: Following receipt of shareholder approval of the 2017 Omnibus Stock Incentive Plan (the “OSIP”) in May 2017 , no additional grants were made under the 2010 Plan.
+Added: The 2010 Plan has been terminated and options that were granted under the 2010 Plan have become subject to the OSIP.
+Added: Awards that were granted under the 2010 Plan will remain exercisable pursuant to the terms and conditions set forth in individual award agreements, but such awards will be assumed and administered under the OSIP.
+Added: The 2010 Plan award agreements allow for acceleration of exercise privileges of grants upon occurrence of a change in control of the Company.
+Added: If a participant’s job is terminated for cause, then all unvested awards expire at the date of termination.
+Added: Amended and Restated RBB Bancorp 2017 Omnibus Stock Incentive Plan
+Added: The Amended and Restated RBB Bancorp 2017 Omnibus Stock Incentive Plan (the “Amended OSIP”) was approved by the Company’s board of directors in January 2019 and approved by the Company’s shareholders in May 2022 .
+Added: The Amended OSIP was designed to ensure continued availability of equity awards that will assist the Company in attracting and retaining competent managerial personnel and rewarding key employees, directors and other service providers for high levels of performance.
+Added: Pursuant to the Amended OSIP, the Company’s board of directors are allowed to grant awards to eligible persons in the form of qualified and non-qualified stock options, restricted stock, restricted stock units, stock appreciation rights and other incentive awards.
+Added: The Company has reserved up to 30 % of issued and outstanding shares of common stock as of the date the Company adopted the Amended OSIP, or 3,848,341 shares.
+Added: As of December 31, 2023, there were 1,032,173 shares of common stock available for issuance under the Amended OSIP.
+Added: This represents 5.5 % of the issued and outstanding shares of the Company’s common stock as of December 31, 2023.
Awards vest, become exercisable and contain such other terms and conditions as determined by the board of directors and set forth in individual agreements with the employees receiving the awards.
The Amended OSIP enables the board of directors to set specific performance criteria that must be met before an award vests.
−Removed: The Amended OSIP allows for acceleration of vesting and exercise privileges of grants if a participant’s termination of employment is due to a change in control, death or total disability.
−Removed: If a participant’s job is terminated for cause, then all awards expire at the date of termination.
−Removed: The Company recognized total stock-based compensation expense of $ 848,000 , $ 1.1 million, and $ 686,000 in 
−Removed: 2022, 2021  and 2020.
−Removed: The recorded compensation expense for stock option was $ 300,000 , $ 485,000 , and $ 260,000 and the Company recognized income tax benefit of $ 587,000 , $ 873,000 , and $ 26,000 for the twelve months ended December 
−Removed: 31, 2022, 2021, and 2020, respectively.
−Removed: Unrecognized stock-based compensation expense related to options was $ 400,000 , $ 635,000 , and $ 476,000  as of December 31, 2022, 2021, and 2020, respectively. Unrecognized stock-based compensation expense will be recognized over a weighted-average period of 1.3  years as of 
−Removed: December 31, 2022.
−Removed: The fair value of each option grant was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions presented below for 
−Removed: 2022, 2021  and 2020.
+Added: The Amended OSIP allows for acceleration of vesting and exercise privileges of grants if a participant’s termination of employment is due to a change in control, death or total disability.
+Added: If a participant’s job is terminated for cause, then all awards expire at the date of termination.
+Added: The Company recognized total stock-based compensation expense of $ 750,000 , $ 848,000 , and $ 1.1 million in 2023, 2022 and 2021.
+Added: The total unrecognized stock-based expense totaled $ 517,000 , $ 581,000 , and $ 1.4 million as of December 31, 2023, 2022, and 2021.
+Added: Stock Options
+Added: The recorded compensation expense for stock option was $ 246,000 , $ 300,000 , and $ 485,000 and the Company recognized income tax expense/(benefit) of $ 3,000 , ($ 587,000 ), and ($ 873,000 ) for the years ended December 31, 2023, 2022, and 2021, respectively.
+Added: Unrecognized stock-based compensation expense related to options was $ 179,000 , $ 400,000 , and $ 635,000 as of December 31, 2023, 2022, and 2021, respectively.
+Added: Unrecognized stock-based compensation expense will be recognized over a weighted-average period of 1.2 years as of December 31, 2023.
+Added: The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions presented below for 2023, 2022 and 2021.
December 2022
Expected volatility
−Removed: 28.9 %  
−Removed: 29.5 %  
−Removed: 31.6 %  
−Removed: 30.8 %  
−Removed: 31.8 %  
+Added: 28.4 % 28.9 % 29.5 % 31.6 % 30.8 %
Expected term (years)
+Added: 8.0 8.0 6.0 6.0 6.0
Expected dividends
−Removed: 2.55 %  
−Removed: 2.52 %  
−Removed: 1.98 %  
−Removed: 1.86 %  
−Removed: 2.48 %  
+Added: 2.92 % 2.55 % 2.52 % 1.98 % 1.86 %
Risk free rate
−Removed: 4.00 %  
−Removed: 2.71 %  
−Removed: 0.48 %  
−Removed: 0.26 %  
−Removed: 0.29 %  
+Added: 4.27 % 4.00 % 2.71 % 0.48 % 0.26 %
Grant date fair value
−Removed: $ 6.16  
−Removed: $ 5.28  
−Removed: $ 5.69  
−Removed: $ 4.14  
−Removed: $ 2.97  
−Removed: $ 4.61  
−Removed: The expected volatility was based on the historical volatility of the Company stock trading history.
+Added: $ 5.49 $ 6.16 $ 5.28 $ 5.69 $ 4.14
+Added: The expected volatility was based on the historical volatility of the Company stock trading history.
The expected term represents the estimated average period of time that the options remain outstanding.
3 unchanged sentences
Treasury bonds over the expected term of the options.
−Removed: A summary of the status of the Company's stock option plan as of December 31, 2022 
−Removed: and changes during the year ended is presented below:
+Added: A summary of the status of the Company's stock option plan as of December 31, 2023 and changes during the year ended is presented below:
(dollars in thousands, except for shares and per share data)
1 unchanged sentence
Outstanding at beginning of year
−Removed: 943,918  
−Removed: $ 14.66  
−Removed: 40,000  
−Removed: ( 445,308 )  
+Added: 454,610 $ 16.97
+Added: ( 19,403 ) 15.18
Forfeited/cancelled
−Removed: ( 84,000 )  
+Added: ( 67,304 ) 15.04
Outstanding at end of period
−Removed: 454,610  
−Removed: $ 16.97  
−Removed: $ 1,779  
+Added: 397,903 $ 17.61 3.86 $ 703
Options exercisable
−Removed: 327,605  
−Removed: $ 16.23  
−Removed: $ 1,512  
−Removed: 2022 ,  there were 40,000  unvested stock options granted with a weighted-average grant date stock price of $ 21.24  and 54,495  stock options vested with a weighted average grant date stock price of $ 18.11 .
−Removed: During 2022, there were a total of 96,000  stock options forfeited or exercised with weighted average grant date stock price of $ 17.73 , and among those options 66,001  shares were unvested upon forfeiture. 
−Removed: The total fair value of the shares vested was $ 1.1  million, $ 1.2 million, and $ 300,000 in 2022, 2021, and 2020, respectively.
−Removed: The number of unvested stock options were 127,005 , 237,500 , and 147,500  with a weighted average grant date fair value of $ 4.69 , $ 4.28 , and $ 4.43  as of December 31, 2022, 2021  and 2020, respectively.
−Removed: Cash received from the exercise of 445,308  share options was $ 5.5  million for the period ended December 31, 2022. 
−Removed: Cash received from the exercise of 302,744  share options was $ 3.5 million for the period ended December 31, 2021.
−Removed: Cash received from the exercise of 56,498  share options was $ 712,000  for the period ended December 31, 2020.
−Removed: The intrinsic value of options exercised was $ 4.0  million, $ 3.8 million, and $ 278,000  in 2022,  
−Removed: 2021, and 2020.
−Removed: The Company did 
−Removed: not  grant restricted stock in 
−Removed:  The Company granted restricted stock for 
−Removed: 60,000  shares at a closing price of $ 17.74  in 
−Removed:  These restricted stock awards are scheduled to vest over a 
−Removed: three  year period from the 
−Removed: January 21, 2021 
−Removed: grant date. Unvested restricted stock of 
−Removed: 40,000  shares were forfeited and related unrecognized stock-based compensation expense was reversed on 
−Removed: April 8, 2022 ,  due to a former employee's resignation.
−Removed: December 31, 2022, there were 
−Removed: no  outstanding restricted stock awards. 
−Removed: The recorded compensation expense for restricted stock was $ 95,000 , $ 602,000 , and $ 425,000  for the twelve  months ended December 
−Removed: 31, 2022, 2021, and 2020, respectively.
−Removed: Unrecognized stock-based compensation expense related to restricted stock was zero, $ 729,000 , $ 266,000 as of December 31, 2022, 2021, and 2020, respectively. 
−Removed: The following table presents restricted stock activity during the twelve  months ended December 31, 2022. 
−Removed: Outstanding at beginning of year
−Removed: 60,000  
−Removed: $ 17.74  
−Removed: Forfeited/cancelled
−Removed: ( 40,000 )  
−Removed: Outstanding at end of period
−Removed: The Company granted 
−Removed: 39,497  restricted stock units at a closing price of $ 27.16  on 
−Removed: January 19, 
−Removed: 2022 ,  to its directors and executive officers.
−Removed: These restricted stock units are scheduled to vest over a 
−Removed: one  year period for shares granted to directors and a 
−Removed: three  year period for shares granted to executive officers from the grant date.
−Removed: December 31, 2022, there were 
−Removed: 14,786  remaining unvested restricted stock units.
−Removed: The recorded compensation expense for restricted stock units was $ 453,000  and zero  for the years ended 
−Removed: December 31, 2022 
−Removed: 2021, respectively.
−Removed: Unrecognized stock-based compensation expense related to restricted stock units was $ 182,000  and 
−Removed: zero  as of 
−Removed: December 31, 2022 
−Removed: 2021, respectively.
−Removed: December 31, 2022, unrecognized stock-based compensation expense related to restricted stock units is expected to be recognized over the next 
−Removed: 1.5  years.
−Removed: Unvested restricted stock units of 
−Removed: 17,261  shares were forfeited and related unrecognized stock-based compensation expense was reversed during 
−Removed: The following table presents restricted stock unit activity during the 
−Removed: twelve months ended 
−Removed: December 31, 2022. 
+Added: 332,232 $ 17.26 3.05 $ 657
+Added: The total fair value of the shares vested was $ 1.1 million, $ 1.1 million, and $ 1.2 million in 2023, 2022, and 2021, respectively.
+Added: The number of unvested stock options were 65,671 , 127,005 , and 237,500 with a weighted average grant date fair value of $ 4.99 , $ 4.69 , and $ 4.28 as of December 31, 2023, 2022 and 2021, respectively.
+Added: The decrease of unvested stock options during 2023 was due to 56,334 stock options vested with a weighted average grant date stock price of $ 18.40 , 30,000 stock options forfeited with a weighted average grant date stock price of $ 19.87 , 5,000 stock options exercised with a weighted average grant date stock price of $ 17.74 , offset by 30,000 stock options granted with a weighted average grant date stock price of $ 19.87 .
+Added: Cash received from the exercise of 19,403 share options was $ 295,000 for the period ended December 31, 2023.
+Added: Cash received from the exercise of 445,308 share options was $ 5.5 million for the period ended December 31, 2022.
+Added: Cash received from the exercise of 302,744 share options was $ 3.5 million for the period ended December 31, 2021.
+Added: The intrinsic value of options exercised was $ 90,000 , $ 4.0 million, and $ 3.8 million in 2023, 2022, and 2021, respectively.
+Added: Restricted Stock Units
+Added: The Company granted 32,248 restricted stock units at a closing price of $ 20.46 on January 18, 2023 to its directors and executive officers and 16,500 restricted stock units at a closing price of $ 13.93 on July 20, 2023 to its new president.
+Added: These restricted stock units are scheduled to vest over a one year period for shares granted to directors and a three -year period for shares granted to executive officers from the grant date.
+Added: As of December 31, 2023, there were 43,160 remaining unvested restricted stock units.
+Added: The recorded compensation expense for restricted stock units was $ 504,000 and $ 453,000 for the years ended December 31, 2023 and 2022, respectively.
+Added: The Company did not grant restricted stock units in 2021.
+Added: Unrecognized stock-based compensation expense related to restricted stock units was $ 338,000 and $ 182,000 as of December 31, 2023 and 2022, respectively.
+Added: As of December 31, 2023, unrecognized stock-based compensation expense related to restricted stock units is expected to be recognized over the next 1.5 years.
+Added: The following table presents restricted stock unit activity during the twelve months ended December 31, 2023.
Weighted-Average
Outstanding at beginning of year
−Removed: 39,497  
−Removed: ( 7,450 )  
−Removed: Forfeited/cancelled
−Removed: ( 17,261 )  
+Added: 14,786 $ 27.16
+Added: ( 20,374 ) 23.35
Outstanding at end of period
−Removed: 14,786  
−Removed: $ 27.16  
−Removed: NOTE 17  - REGULATORY MATTERS
+Added: 43,160 $ 18.89
+Added: Restricted Stock Awards
+Added: The Company granted restricted stock awards for 60,000 shares at a closing price of $ 17.74 in 2021 .
+Added: These restricted stock awards were scheduled to vest over a three -year period from the January 21, 2021 grant date.
+Added: Unvested restricted stock awards of 40,000 shares were forfeited and the expense related to the forfeited shares was reversed on April 8, 2022 , due to a former employee's resignation.
+Added: As of December 31, 2023, there were no outstanding restricted stock awards.
+Added: The Company did not grant restricted stock awards in 2023 or 2022 .
+Added: The recorded compensation expense for restricted stock awards was zero , $ 95,000 , and $ 602,000 for the years ended December 31, 2023, 2022, and 2021, respectively.
+Added: Unrecognized stock-based compensation expense related to restricted stock awards was zero , zero , and $ 729,000 as of December 31, 2023, 2022, and 2021, respectively.
+Added: NOTE 17 - REGULATORY MATTERS
+Added: Update on Previously Disclosed Regulatory Matters
+Added: As previously disclosed in the Company's Current Report on Form 8 -K filed with the Securities and Exchange Commission (“SEC”) on October 31, 2023 , effective on October 25, 2023 , the Bank entered into a Stipulation to the Issuance of a Consent Order (the “Stipulation”) with the Federal Deposit Insurance Corporation (the “FDIC”) and the California Department of Financial Protection and Innovation (the “DFPI”), consenting to the issuance of a consent order (the “Consent Order”) relating to the Bank’s Anti-Money Laundering/Countering the Financing of Terrorism (“AML/CFT”) compliance program.
+Added: In connection to the issuance of the Consent Order, the Bank did not admit or deny any charges of violating Bank Secrecy Act (“BSA”) and its implementing regulations.
+Added: Regulatory Capital
Holding companies (with assets over $ 3 billion at the beginning of the year) and banks are subject to various regulatory capital requirements administered by the federal banking agencies.
Failure to meet minimum capital requirements can initiate certain mandatory - and possibly additional discretionary - actions by regulators that, if undertaken, could have a direct material effect on the Company's financial statements.
−Removed: In July, 
−Removed: 2013, the federal bank regulatory agencies approved the final rules implementing the Basel Committee on Banking Supervision's capital guidelines for U.S.
+Added: In July 2013, the federal bank regulatory agencies approved the final rules implementing the Basel Committee on Banking Supervision's capital guidelines for U.S.
The new rules became effective on January 1, 2015, with certain of the requirements phased-in over a multi-year schedule.
8 unchanged sentences
Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of total, Tier 1 and CET1 capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital (as defined) to average assets (as defined).
−Removed: As permitted by the regulators for financial institutions that are not deemed to be “advanced approaches”
−Removed: institutions, the Company has elected to opt out of the Basel III requirement to include accumulated other comprehensive income in risk-based capital.
−Removed: Management believes, at December 31, 2022 
−Removed: and December 31, 2021, that the Bank satisfied all capital adequacy requirements to which it is subject.
+Added: As permitted by the regulators for financial institutions that are not deemed to be “advanced approaches” institutions, the Company has elected to opt out of the Basel III requirement to include accumulated other comprehensive income in risk-based capital.
+Added: Management believes, at December 31, 2023 and December 31, 2022, that the Bank satisfied all capital adequacy requirements to which it is subject.
In February 2019, the U.S.
3 unchanged sentences
economy as a result of the novel coronavirus disease 2019 (“COVID- 19” ) pandemic.
−Removed: As a result, entities will have the option to gradually phase in the full effect of CECL on regulatory capital over a five -year transition period.
−Removed: Effective January 1, 2022, the Company adopted ASU 2016 - 13, reflected the full effect of CECL at December 31, 2022, and did not elect the three -year or five -year CECL phase-in options on regulatory capital.
−Removed: As of December 31, 2022 
−Removed: and 2021, the most recent notification from the Federal Deposit Insurance Corporation ("FDIC") categorized the Bank as well-capitalized under the regulatory framework for prompt corrective action (there are no conditions or events since that notification that management believes have changed the Bank's category).
+Added: As a result, entities that adopted CECL in 2020 had the option to gradually phase in the full effect of CECL on regulatory capital over a five -year transition period.
+Added: Effective January 1, 2022, the Company adopted ASU 2016 - 13, reflected the full effect of CECL at December 31, 2022, and did not elect the three -year CECL phase-in options on regulatory capital.
+Added: As of December 31, 2023 and 2022, the most recent notification from the FDIC categorized the Bank as well capitalized under the regulatory framework for prompt corrective action (there are no conditions or events since that notification that management believes have changed the Bank’s category).
To be categorized as well capitalized, the Bank must maintain minimum ratios as set forth in the table below.
−Removed: The following table sets forth RBB Bancorp's consolidated and the Bank's actual capital amounts and ratios and related regulatory requirements for the Bank as of December 31, 2022:
+Added: The following table sets forth Bancorp’s consolidated and the Bank’s actual capital amounts and ratios and related regulatory requirements for the Bank as of December 31, 2023:
Amount of Capital Required
6 unchanged sentences
Tier 1 Leverage Ratio
−Removed: $ 446,776  
−Removed: 11.67 %  
−Removed: $ 153,116  
−Removed: $ 191,395  
−Removed: 569,071  
−Removed: 14.89 %  
−Removed: 152,900  
−Removed: 191,124  
+Added: $ 472,152 11.99 % $ 157,526 4.0 % $ 196,907 5.0 %
+Added: 535,952 13.62 % 157,454 4.0 % 196,818 5.0 %
Common Equity Tier 1 Risk-Based Capital Ratio
−Removed: $ 432,056  
−Removed: 16.03 %  
−Removed: $ 121,291  
−Removed: $ 175,199  
−Removed: 569,071  
−Removed: 21.14 %  
−Removed: 121,110  
−Removed: 174,937  
+Added: $ 457,214 19.07 % $ 107,886 4.5 % $ 155,836 6.5 %
+Added: 535,952 22.41 % 107,598 4.5 % 155,419 6.5 %
Tier 1 Risk-Based Capital Ratio
−Removed: $ 446,776  
−Removed: 16.58 %  
−Removed: $ 161,722  
−Removed: $ 215,629  
−Removed: 569,071  
−Removed: 21.14 %  
−Removed: 161,481  
−Removed: 215,307  
+Added: $ 472,152 19.69 % $ 143,849 6.0 % $ 191,798 8.0 %
+Added: 535,952 22.41 % 143,464 6.0 % 191,285 8.0 %
Total Risk-Based Capital Ratio
−Removed: $ 654,159  
−Removed: 24.27 %  
−Removed: $ 215,629  
−Removed: $ 269,537  
−Removed: 602,819  
−Removed: 22.40 %  
−Removed: 215,307  
−Removed: 269,134  
+Added: $ 621,423 25.92 % $ 191,798 8.0 % $ 239,748 10.0 %
+Added: 565,997 23.67 % 191,285 8.0 % 239,106 10.0 %
( 1 ) These ratios are exclusive of the capital conservation buffer.
−Removed: The following table sets forth RBB Bancorp's consolidated and the Bank's actual capital amounts and ratios and related regulatory requirements for the Bank as of December 31, 2021:
+Added: The following table sets forth Bancorp’s consolidated and the Bank’s actual capital amounts and ratios and related regulatory requirements for the Bank as of December 31, 2022:
Amount of Capital Required
6 unchanged sentences
Tier 1 Leverage Ratio
−Removed: $ 410,134  
−Removed: 10.21 %  
−Removed: $ 160,642  
−Removed: $ 200,803  
−Removed: 499,325  
−Removed: 12.45 %  
−Removed: 160,418  
−Removed: 200,523  
+Added: $ 446,776 11.67 % $ 153,116 4.0 % $ 191,395 5.0 %
+Added: 569,071 14.89 % 152,900 4.0 % 191,124 5.0 %
Common Equity Tier 1 Risk Based Capital Ratio
−Removed: $ 395,632  
−Removed: 14.86 %  
−Removed: $ 119,841  
−Removed: $ 173,104  
−Removed: 499,325  
−Removed: 18.80 %  
−Removed: 119,550  
−Removed: 172,684  
+Added: $ 432,056 16.03 % $ 121,291 4.5 % $ 175,199 6.5 %
+Added: 569,071 21.14 % 121,110 4.5 % 174,937 6.5 %
Tier 1 Risk-Based Capital Ratio
−Removed: $ 410,134  
−Removed: 15.40 %  
−Removed: $ 159,788  
−Removed: $ 213,051  
−Removed: 499,325  
−Removed: 18.80 %  
−Removed: 159,401  
−Removed: 212,534  
+Added: $ 446,776 16.58 % $ 161,722 6.0 % $ 215,629 8.0 %
+Added: 569,071 21.14 % 161,481 6.0 % 215,307 8.0 %
Total Risk-Based Capital Ratio
−Removed: $ 616,440  
−Removed: 23.15 %  
−Removed: $ 213,051  
−Removed: $ 266,314  
−Removed: 532,544  
−Removed: 20.05 %  
−Removed: 212,534  
−Removed: 265,668  
+Added: $ 654,159 24.27 % $ 215,629 8.0 % $ 269,537 10.0 %
+Added: 602,819 22.40 % 215,307 8.0 % 269,134 10.0 %
( 1 ) These ratios are exclusive of the capital conservation buffer.
The California Financial Code generally acts to prohibit banks from making a cash distribution to its shareholders in excess of the lesser of the bank’s undivided profits or the bank's net income for its last three fiscal years less the amount of any distribution made by the bank’s shareholders during the same period.
−Removed: The California general corporation law generally acts to prohibit companies from paying dividends on common stock unless retained earnings, immediately prior to the dividend payment, equals or exceeds the amount of the dividend.
+Added: The California General Corporation Law generally acts to prohibit companies from paying dividends on common stock unless retained earnings, immediately prior to the dividend payment, equals or exceeds the amount of the dividend.
If a company fails this test, then it may still pay dividends if after giving effect to the dividend the company’s assets are at least 125 % of its liabilities.
−Removed: Additionally, the Federal Reserve has issued guidance which requires that they be consulted before payment of a dividend if a bank holding company does not have earnings over the prior four quarters of at least equal to the dividend to be paid, plus other holding company obligations.
−Removed: NOTE 18  - FAIR VALUE MEASUREMENTS
+Added: Additionally, the Federal Reserve has issued guidance, which requires that they be consulted before payment of a dividend if a bank holding company does not have earnings over the prior four quarters of at least equal to the dividend to be paid, plus other holding company obligations.
+Added: NOTE 18 - FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+Added: In accordance with accounting guidance, the Company groups its financial assets and financial liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.
+Added: The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
+Added: The three levels of the fair value hierarchy are described as follows:
+Added: Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
+Added: Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.
+Added: These might include quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, prepayment speeds, volatilities, etc.) or model-based valuation techniques where all significant assumptions are observable, either directly or indirectly, in the market.
+Added: Level 3 - Valuation is generated from model-based techniques where one or more significant inputs are not observable, either directly or indirectly, in the market.
+Added: These unobservable assumptions reflect the Company’s own estimates of assumptions that market participants would use in pricing the asset or liability.
+Added: Valuation techniques may include use of matrix pricing, DCF models, and similar techniques.
The following is a description of valuation methodologies used for assets and liabilities recorded at fair value:
4 unchanged sentences
Fair values are generally based on third party appraisals of the property which are commonly adjusted by management to reflect an expectation of the amount to be ultimately collected and selling costs (Level 3 ).
−Removed: Appraisals for other real estate owned are performed by state licensed appraisers (for commercial properties) or state certified appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. When a Notice of Default is recorded, an appraisal report is ordered. Once received, a member of the credit administration department reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison to independent data sources such as recent market data or industry wide-statistics for residential appraisals. Commercial appraisals are sent to an independent third party to review. The Company also compares the actual selling price of collateral that has been sold to the most recent appraised value to determine what additional adjustments, if any, should be made to the appraisal values on any remaining other real estate owned to arrive at fair value. If the existing appraisal is older than twelve months, a new appraisal report is ordered.
+Added: Appraisals for other real estate owned are performed by state licensed appraisers (for commercial properties) or state certified appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company.
+Added: When a Notice of Default is recorded, an appraisal report is ordered.
+Added: Once received, a member of the credit administration department reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison to independent data sources such as recent market data or industry wide-statistics for residential appraisals.
+Added: Commercial appraisals are sent to an independent third party to review.
+Added: The Company also compares the actual selling price of collateral that has been sold to the most recent appraised value to determine what additional adjustments, if any, should be made to the appraisal values on any remaining other real estate owned to arrive at fair value.
+Added: If the existing appraisal is older than twelve months, a new appraisal report is ordered.
No significant adjustments to appraised values have been made as a result of this comparison process as of December 31, 2023.
Interest Rate Lock Contracts and Forward Mortgage Loan Sale Contracts:
−Removed:  The fair values of interest rate lock contracts and forward mortgage loan sale contracts are determined by loan lock-in rate, loan funded rate, market interest rate, fees to be collected from the borrower, fees and costs associated with the origination of the loan, expiration timing, sale price, and the value of the retained servicing. The company classified these derivatives as level 
−Removed: 3  due to management’s estimate of market rate, cost and expiration timing on these contracts.
−Removed: Collateral-dependent individually evaluated loans : Collateral-dependent individually evaluated loans are carried at fair value when it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the original loan agreement and the loan has been written down to the fair value of its underlying collateral, net of expected disposition costs where applicable.
−Removed: There were no loans of this type as of December 31, 2022 and December 31, 2021.
−Removed: Fair value was estimated in accordance with ASC Topic 825.
−Removed: Fair value estimates were made at specific points in time, based on relevant market information and information about the financial instrument.
−Removed: Because no market exists for a significant portion of the Bank’s financial instruments, fair value estimates were based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors.
−Removed: These estimates were subjective in nature and involved uncertainties and matters of significant judgment and therefore cannot be determined with precision.
−Removed: Changes in assumptions could significantly affect the estimates.
−Removed: The following table provides the hierarchy and fair value for each major category of assets and liabilities measured at fair value at December 31, 2022 
+Added: The fair values of interest rate lock contracts and forward mortgage loan sale contracts are determined by loan lock-in rate, loan funded rate, market interest rate, fees to be collected from the borrower, fees and costs associated with the origination of the loan, expiration timing, sale price, and the value of the retained servicing.
+Added: The company classified these derivatives as level 3 due to management’s estimate of market rate, cost and expiration timing on these contracts.
+Added: Collateral-dependent individually evaluated loans :
+Added: Collateral-dependent individually evaluated loans are carried at fair value when it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the original loan agreement and the loan has been written down to the fair value of its underlying collateral, net of expected disposition costs where applicable.
+Added: The following table provides the hierarchy and fair value for each major category of assets and liabilities measured at fair value at December 31, 2023 and 2022:
(dollars in thousands)
5 unchanged sentences
Government agency securities
−Removed: $ 4,495  
−Removed: $ 4,495  
+Added: $ — $ 8,161 $ — $ 8,161
SBA agency securities
+Added: — 13,217 — 13,217
Mortgage-backed securities
−Removed: 42,928  
−Removed: 42,928  
+Added: — 34,652 — 34,652
Collateralized mortgage obligations
−Removed: 111,593  
−Removed: 111,593  
+Added: — 149,626 — 149,626
Commercial paper
−Removed: 49,537  
−Removed: 49,537  
+Added: — 73,105 — 73,105
Corporate debt securities
−Removed: 37,012  
−Removed: 37,012  
+Added: — 30,691 — 30,691
Municipal securities
+Added: Interest Rate Lock Contracts
Forward Mortgage Loan Sale Contracts
−Removed: $ 256,830  
−Removed: $ 256,848  
+Added: $ — $ 318,961 $ 46 $ 319,007
On a non-recurring basis:
−Removed: Other real estate owned
+Added: Commercial real estate loans - collateral-dependent impaired loans
+Added: $ — $ — $ 10,209 $ 10,209
+Added: SBA loans - collateral-dependent impaired loans
+Added: — — 1,148 1,148
+Added: $ — $ — $ 11,357 $ 11,357
December 31, 2022
3 unchanged sentences
Government agency securities
−Removed: $ 5,610  
−Removed: $ 5,610  
+Added: $ — $ 4,495 $ — $ 4,495
SBA agency securities
+Added: — 2,411 — 2,411
Mortgage-backed securities
−Removed: 55,025  
−Removed: 55,025  
+Added: — 42,928 — 42,928
Collateralized mortgage obligations
−Removed: 119,511  
−Removed: 119,511  
+Added: — 111,593 — 111,593
Commercial paper
−Removed: 129,926  
−Removed: 129,926  
+Added: — 49,537 — 49,537
Corporate debt securities
−Removed: 42,205  
−Removed: 42,205  
+Added: — 37,012 — 37,012
Municipal securities
−Removed: 12,514  
−Removed: 12,514  
−Removed: Interest Rate Lock Contracts
+Added: — 8,854 — 8,854
Forward Mortgage Loan Sale Contracts
−Removed: $ 368,260  
−Removed: $ 368,525  
+Added: $ — $ 256,830 $ 18 $ 256,848
On a non-recurring basis:
Other real estate owned
−Removed: Quantitative information about the Company's OREO non-recurring Level 3 fair value measurements as of December 31, 2022 
−Removed: and 2021  is as follows:
−Removed: OREO consists of two single-family residences with a fair value of $ 577,000 as of December 31, 2022 
−Removed: and one single-family residence with a fair value of $ 293,000 as of December 31, 2021. 
+Added: $ — $ — $ 577 $ 577
+Added: There was a $ 521,000 write-down on collateral-dependent loans that were individually evaluated to the fair value of $ 11.4 million as of December 31, 2023 .
+Added: There was no collateral-dependent loan that was individually evaluated and written down to the fair value as of December 31, 2022 .
+Added: Collateral-dependent individually evaluated loans were evaluated by third party appraisals with unobservable input of management adjustment of 10 % to reflect selling costs.
+Added: Quantitative information about the Company's OREO non-recurring Level 3 fair value measurements as of December 31, 2023 and 2022 is as follows:
+Added: There was no OREO as of December 31, 2023 and there were two single-family residences with a fair value of $ 577,000 as of December 31, 2022.
+Added: During 2023, the Company sold one of the properties with a book value of $ 293,000 for a gain of $ 190,000 and the other property with a book value of $ 284,000 was sold for a loss of $ 57,000 .
OREO was evaluated by third party appraisals with unobservable input of management adjustment in the range of 5 %- 6 % to reflect current conditions and selling costs.
−Removed: No write-downs to OREO were recorded in 2022  or 2021.
−Removed: Interest Rate Lock Commitments: Agreements under which the Company agrees to extend credit to a borrower under certain specified terms and conditions in which the interest rate and the maximum amount of the loan are set prior to funding.
−Removed: Under the agreement, the Company commits to lend funds to a potential borrower (subject to the Company’s approval of the loan) on a fixed or adjustable rate basis, regardless of whether interest rates change in the market, or on a floating rate basis. As such, outstanding IRLCs are subject to interest rate risk and related price risk during the period from the date of issuance through the date of loan funding, cancelling or expiration. Loan commitments generally range between 30 and 90 days;
−Removed: however, the borrower is not obligated to obtain the loan. The Company is subject to fallout risk related to IRLCs, which is realized if approved borrowers choose not to close on the loans within the terms of the IRLCs. The Company uses best efforts commitments to substantially eliminate these risks. Historical commitment-to-closing ratios are considered to estimate the quantity of mortgage loans that will fund within the terms of the IRLCs.
−Removed: The FASB ASC provides that IRLCs on mortgage loans that will be held for resale are derivatives and must be accounted for at fair value on the balance sheet (if material).
−Removed: FASB ASC Topic 820 –
−Removed: Fair Value Measurements and Disclosures specifies how these derivatives are to be valued. Commitments to originate mortgage loans to be held for investment and other types of loans are generally not derivatives.
−Removed: Consequently, the Company has elected to account for these obligations at fair value.
−Removed: Forward Mortgage Loan Sale Contracts: The Company is subject to interest rate and price risk on its mortgage loans held for sale from the loan funding date until the date the loan is sold. Best efforts commitments which fix the forward sales price that will be realized in the secondary market are used to eliminate the interest rate and price risk to the Company. To avoid interest rate risk, the Company will enter into FMLSCs at the time they make an interest rate lock commitment to the buyer.
−Removed: They can enter into mortgage loan sales commitments on a “mandatory”
−Removed: or “best efforts”
−Removed: Mandatory commitments provide that the loan must be delivered or the commitment be “paired off”.
−Removed: In general, best efforts commitments provide that the loan be delivered if and when it closes.
−Removed: The fair value measurement of IRLCs and FMLSCs were primarily based on the buy price from borrowers ranging from 97  to 100 , the sale price to Fannie Mae ranging from 100  to 105 , and the significant unobservable inputs using margin cost rate of 1.50 %.
−Removed: NOTE 19  - FAIR VALUE OF FINANCIAL INSTRUMENTS
+Added: No write-downs to OREO were recorded in 2023 or 2022.
+Added: The fair value measurement of IRLCs and FMLSCs were primarily based on the buy price from borrowers ranging from 99.5 to 100.3 , the sale price to Fannie Mae ranging from 102 to 104 , and the significant unobservable inputs using margin cost rate of ranging from 0.50 % to 1.00 %.
The fair value of a financial instrument is the amount at which the asset or obligation could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
6 unchanged sentences
Additionally, tax consequences related to the realization of the unrealized gains and losses can have a potential effect on fair value estimates and have not been considered in many of the estimates.
−Removed: In accordance with accounting guidance, the Company groups its financial assets and financial liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.
−Removed: The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
−Removed: The three levels of the fair value hierarchy are described as follows:
−Removed: Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
−Removed: Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.
−Removed: These might include quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, prepayment speeds, volatilities, etc.) or model-based valuation techniques where all significant assumptions are observable, either directly or indirectly, in the market.
−Removed: Level 3 - Valuation is generated from model-based techniques where one or more significant inputs are not observable, either directly or indirectly, in the market.
−Removed: These unobservable assumptions reflect the Company’s own estimates of assumptions that market participants would use in pricing the asset or liability.
−Removed: Valuation techniques may include use of matrix pricing, discounted cash flow models, and similar techniques.
−Removed: Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding current economic conditions, risk characteristics of various financial instruments, and other factors.
+Added: Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding current economic conditions, risk characteristics of various financial instruments, and other factors.
These estimates are subjective in nature, and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision.
Changes in assumptions could significantly affect the fair values presented.
−Removed: Management uses its best judgment in estimating the fair value of the Company’s financial instruments;
+Added: Management uses its best judgment in estimating the fair value of the Company’s financial instruments;
however, there are inherent limitations in any estimation technique.
−Removed: A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.
+Added: A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.
Management maximizes the use of observable inputs and attempts to minimize the use of unobservable inputs when determining fair value measurements.
1 unchanged sentence
These estimates are made at a specific point in time based on relevant market data and information about the financial instruments.
−Removed: These estimates do not reflect any premium or discount that could result from offering the Company’s entire holdings of a particular financial instrument for sale at one time, nor do they attempt to estimate the value of anticipated future business related to the instruments.
+Added: These estimates do not reflect any premium or discount that could result from offering the Company’s entire holdings of a particular financial instrument for sale at one time, nor do they attempt to estimate the value of anticipated future business related to the instruments.
In addition, the tax ramifications related to the realization of unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of these estimates.
The following methods and assumptions were used to estimate the fair value of significant financial instruments not previously presented:
−Removed: Cash and Due From Banks -- 
−Removed: The carrying amounts of cash and short-term instruments approximate fair values.
−Removed: Time Deposits in Other Banks -- 
−Removed: Fair values for time deposits with other banks are estimated using discounted cash flow analyses, using interest rates currently being offered with similar terms.
−Removed: Loans -- 
−Removed: For variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying amounts.
−Removed: The fair values for all other loans are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers with similar credit quality.
−Removed: In accordance with the prospective adoption of ASU 2016 - 01, the fair value of loans as of December 31, 2022, and 2021 was measured using an exit price notion. 
−Removed: Mortgage Loans Held for Sale -- 
−Removed: The Company records mortgage loans held for sale at fair value based on the net premium received on recent sales of mortgage loans for identical pools of loans.
−Removed: Equity Securities -- 
−Removed: The fair values of the Company’s equity securities are measured based on unobservable inputs at the reporting date, a Level 3 measurement.
+Added: Cash and Due From Banks -- The carrying amounts of cash and short-term instruments approximate fair values, a Level 1 measurement.
+Added: Time Deposits in Other Banks -- Fair values for time deposits with other banks are estimated using DCF analyses, using interest rates currently being offered with similar terms, a Level 1 measurement.
+Added: Investment securities available for sale and held to maturity -- Fair values are measured by using quoted market prices for similar securities or dealer quotes, a Level 2 measurement.
+Added: Mortgage Loans Held for Sale -- The Company records mortgage loans held for sale at fair value based on the net premium received on recent sales of mortgage loans for identical pools of loans, a Level 2 measurement.
+Added: Loans -- For variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying amounts.
+Added: The fair values for all other loans are estimated using DCF analyses, using interest rates currently being offered for loans with similar terms to borrowers with similar credit quality.
+Added: In accordance with the prospective adoption of ASU 2016 - 01, the fair value of loans as of December 31, 2023, and 2022 was measured using an exit price notion, a Level 3 measurement.
+Added: Equity Securities -- The fair values of the Company’s equity securities are measured based on unobservable inputs at the reporting date, a Level 3 measurement.
Equity securities are comprised of affordable housing investment funds and other restricted stocks.
−Removed: Deposits -- 
−Removed: The fair values disclosed for demand deposits, including interest and non-interest demand accounts, savings, and certain types of money market accounts are, by definition based on carrying value.
−Removed: Fair value for fixed-rate certificates of deposit is estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of aggregate expected monthly maturities on time deposits.
+Added: Servicing Rights -- Mortgage and SBA servicing rights are calculated by discounting scheduled cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate risk inherent in the loan, a Level 3 measurement.
+Added: Accrued Interest Receivable -- Accrued interest receivable includes accrued interest on investment securities (Level 2 ), accrued interest on loans (Level 3 ), accrued interest on due from banks (Level 1 ), and accrued interest on equity securities (Level 3 ).
+Added: Off-Balance Sheet Financial Instruments -- The fair value of commitments to extend credit and standby letters of credit, interest rate lock commitments and forward mortgage loan sales contracts is estimated using the fees currently charged to enter into similar agreements.
+Added: Unobservable inputs that reflect the Company's own assumptions about the assumptions that market participants would use in pricing an asset or liability result in a Level 3 measurement.
+Added: Deposits -- The fair values disclosed for demand deposits, including interest and non-interest demand accounts, savings, and certain types of money market accounts are, by definition based on carrying value.
+Added: Fair value for fixed-rate certificates of deposit is estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of aggregate expected monthly maturities on time deposits, a Level 2 measurement.
Early withdrawal of fixed-rate certificates of deposit is not expected to be significant.
−Removed: FHLB Advances -- 
−Removed: The fair values of the Company’s FHLB Advances are calculated by discounting scheduled cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate risk, a Level 3 measurement.
−Removed: Long-Term Debt -- 
−Removed: The fair values of the Company’s long-term borrowings are calculated by discounting scheduled cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate risk, a Level 3 measurement.
−Removed: Subordinated Debentures -- 
−Removed: The fair values of the Company’s subordinated debentures are calculated by discounting scheduled cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate risk, a Level 3 measurement.
−Removed: Servicing Rights -- 
−Removed: Mortgage and SBA servicing rights are calculated by discounting scheduled cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate risk inherent in the loan, a Level 3  measurement
−Removed: Off-Balance Sheet Financial Instruments -- 
−Removed: The fair value of commitments to extend credit and standby letters of credit, interest rate lock commitments and forward mortgage loan sales contracts is estimated using the fees currently charged to enter into similar agreements.
−Removed: Unobservable inputs that reflect the Company's own assumptions about the assumptions that market participants would use in pricing an asset or liability.
−Removed: The fair value of these financial instruments is not material.
−Removed: The fair value hierarchy level and estimated fair value of significant financial instruments at December 31, 2022 
−Removed: and 2021  are summarized as follows:
+Added: FHLB Advances -- The fair values of the Company’s FHLB Advances are calculated by discounting scheduled cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate risk, a Level 3 measurement.
+Added: Long-Term Debt -- The fair values of the Company’s long-term borrowings are calculated by discounting scheduled cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate risk, a Level 3 measurement.
+Added: Subordinated Debentures -- The fair values of the Company’s subordinated debentures are calculated by discounting scheduled cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate risk, a Level 3 measurement.
+Added: Fair value is estimated in accordance with ASC Topic 825 .
+Added: Fair value estimates are made at specific points in time, based on relevant market information and information about the financial instrument.
+Added: These estimates do not reflect any premium or discount that could result from offering for sale at one time the Bank’s entire holdings of a particular financial instrument.
+Added: Because no market exists for a significant portion of the Bank’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors.
+Added: These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision.
+Added: Changes in assumptions could significantly affect the estimates.
+Added: The fair value hierarchy level and estimated fair value of significant financial instruments at December 31, 2023 and 2022 are summarized as follows:
December 31, 2023
3 unchanged sentences
Cash and due from banks
−Removed: Federal funds sold and other cash equivalents
+Added: $ 431,373 $ 431,373 $ 83,548 $ 83,548
Interest-earning deposits in other financial institutions
+Added: 600 600 600 600
Investment securities - AFS
+Added: 318,961 318,961 256,830 256,830
Investment securities - HTM
+Added: 5,209 5,097 5,729 5,563
Mortgage loans held for sale
+Added: 1,911 1,845 — —
+Added: 2,989,958 2,918,296 3,295,373 3,251,464
Equity securities (1)
+Added: 22,251 22,251 22,238 22,238
Servicing assets
+Added: 8,110 14,883 9,521 21,712
Accrued interest receivable (1)
+Added: 13,743 13,743 14,536 14,536
Derivative assets:
Interest Rate Lock Contracts (1)
+Added: $ 1,255 $ 32 $ — $ —
Forward Mortgage Loan Sale Contracts (1)
+Added: 1,104 14 1,179 18
Financial Liabilities:
+Added: $ 3,174,760 $ 3,181,495 $ 2,977,683 $ 2,960,529
FHLB advances
+Added: 150,000 144,891 220,000 210,470
Long-term debt
+Added: 119,147 83,864 173,585 132,709
Subordinated debentures
+Added: 14,938 14,566 14,720 14,195
Accrued interest payable
−Removed: NOTE 20  - EARNINGS PER SHARE ("EPS")
+Added: 11,671 11,671 3,711 3,711
+Added: ( 1 ) Included in “Accrued interest and other assets” on the consolidated balance sheets.
+Added: NOTE 19 - EARNINGS PER SHARE (“ EPS” )
The following is a reconciliation of net income and shares outstanding to the income and number of shares used to compute EPS:
(dollars in thousands except shares and per share data)
−Removed: Income  
−Removed: Shares  
−Removed: Income  
−Removed: Shares  
−Removed: Income  
−Removed: Shares  
+Added: Income Shares Income Shares Income Shares
Net income as reported
−Removed: $ 64,327  
−Removed: $ 56,906  
−Removed: $ 32,928  
+Added: $ 42,465 $ 64,327 $ 56,906
Earnings allocated to participating securities
−Removed: ( 34 )  
−Removed: ( 192 )  
−Removed: ( 37 )  
+Added: — ( 34 ) ( 192 )
Shares outstanding
−Removed: 18,965,776  
−Removed: 19,455,544  
−Removed: 19,565,921  
+Added: 18,609,179 18,965,776 19,455,544
Impact of weighting shares
−Removed: 133,733  
−Removed: ( 31,995 )  
−Removed: 197,501  
+Added: 356,167 133,733 ( 31,995 )
Used in basic EPS
−Removed: 64,293  
−Removed: 19,099,509  
−Removed: 56,715  
−Removed: 19,423,549  
−Removed: 32,891  
−Removed: 19,763,422  
+Added: 42,465 18,965,346 64,293 19,099,509 56,714 19,423,549
Dilutive effect of outstanding
Stock options
−Removed: 211,477  
−Removed: 410,757  
−Removed: 158,437  
+Added: 15,322 211,477 410,757
Restricted Stock Unit
−Removed: 21,653  
+Added: 4,565 21,653 —
Used in dilutive EPS
−Removed: $ 64,293  
−Removed: 19,332,639  
−Removed: $ 56,715  
−Removed: 19,834,306  
−Removed: $ 32,891  
−Removed: 19,921,859  
+Added: $ 42,465 18,985,233 $ 64,293 19,332,639 $ 56,714 19,834,306
Basic earnings per common share
−Removed: $ 3.37  
−Removed: $ 2.92  
−Removed: $ 1.66  
+Added: $ 2.24 $ 3.37 $ 2.92
Diluted earnings per common share
−Removed: Stock options for zero , zero  and 301,500 shares of common stock were not considered in computing diluted earnings per common share for December 31, 2022, 2021  and 2020, respectively, because they were anti-dilutive.
−Removed: NOTE 21  –
−Removed: REVENUE FROM CONTRACTS WITH CUSTOMERS
+Added: 2.24 3.33 2.86
+Added: Stock options for 332,500 shares of common stock and restricted stock units for 6,012 shares were not considered in computing diluted earnings per common share for December 31, 2023 because they were anti-dilutive.
+Added: Stock options for zero share of common stock and restricted stock units for zero share were not considered in computing diluted earnings per common share for December 31, 2022 and 2021, respectively, because they were anti-dilutive.
+Added: NOTE 20 – REVENUE FROM CONTRACTS WITH CUSTOMERS
The following is a summary of revenue from contracts with customers that are in-scope and not in-scope under Topic 606:
3 unchanged sentences
Fees and service charges on deposit accounts
−Removed: $ 2,051  
−Removed: $ 2,367  
−Removed: $ 1,636  
Other fees (2)
3 unchanged sentences
Non-interest income, not in scope (4)
−Removed: 11,678  
Total non-interest income
−Removed: $ 11,252  
−Removed: $ 18,745  
−Removed: $ 14,040  
There were no adjustments to the Company's financial statements recorded as a result of the adoption of ASC 606.
−Removed: Other fees consists of wealth management fees, miscellaneous loan fees and postage/courier fees.
+Added: Other fees consist of wealth management fees, miscellaneous loan fees and postage/courier fees.
Other income consists of safe deposit box rental income, wire transfer fees, security brokerage fees, annuity sales, insurance activity, and OREO income.
The amounts primarily represent revenue from contracts with customers that are out of scope of ASC 606:
−Removed: Net loan servicing income, letter of credit commissions, import/export commissions, recoveries on purchased loans, BOLI income, and gains (losses) on sales of mortgage loans, loans and investment securities.
+Added: Net loan servicing income, letter of credit commissions, import/export commissions, recoveries on purchased loans, BOLI income, gains (losses) on sales of mortgage loans, loans and investment securities, and CDFI ERP award.
The major revenue streams by fee type that are within the scope of ASC 606 presented in the above tables are described in additional detail below:
4 unchanged sentences
Fees received from deposit clients for the various deposit activities are recognized as revenue once the performance obligations are met.
−Removed: Periodic service charges are generally collected monthly directly from the customer’s deposit account, and at the end of a statement cycle, while transaction based service charges are typically collected at the time of or soon after the service is performed.
+Added: Periodic service charges are generally collected monthly directly from the customer’s deposit account, and at the end of a statement cycle, while transaction based service charges are typically collected at the time of or soon after the service is performed.
The adoption of ASU 2014 - 09 had no impact to the recognition of fees and service charges on deposit accounts.
3 unchanged sentences
The Company recognizes revenue for the services performed at quarter-end based on actual transaction details received from the broker dealer the Company engages.
−Removed: In the Company’s wealth management division, revenue is primarily generated from ( 1 ) securities brokerage accounts, ( 2 ) investment advisor accounts, ( 3 ) full service brokerage implementation fees, and ( 4 ) life insurance and annuity products.
+Added: In the Company’s wealth management division, revenue is primarily generated from ( 1 ) securities brokerage accounts, ( 2 ) investment advisor accounts, ( 3 ) full service brokerage implementation fees, and ( 4 ) life insurance and annuity products.
Gain (loss) on Sales of Other Real Estate Owned and Fixed Assets
3 unchanged sentences
In determining the gain or loss on the sale, the Company adjusts the transaction price and related gain or loss on sale if a significant financing component is present.
−Removed: NOTE 22  –
−Removed: QUALIFIED AFFORDABLE HOUSING PROJECT INVESTMENTS
+Added: NOTE 21 – QUALIFIED AFFORDABLE HOUSING PROJECT INVESTMENTS
The Company began investing in qualified affordable housing projects in 2016.
−Removed: At December 31, 2022 
−Removed: and December 31, 2021, the balance of the investment for qualified affordable housing projects was $ 7.6  million and $ 6.6 million, respectively.
+Added: At December 31, 2023 and December 31, 2022, the balance of the investment for qualified affordable housing projects was $ 6.4 million and $ 7.6 million, respectively.
This balance is reflected in the accrued interest and other assets line on the consolidated balance sheets.
−Removed: Total unfunded commitments related to the investments in qualified affordable housing projects totaled $ 2.6 million and $ 826,000  at December 31, 2022 
−Removed: and December 31, 2021.
−Removed: The Company expects to fulfill these commitments between 2023  and 2038.
−Removed: During the years ended 
−Removed: December 31, 2022, 2021  and 2020, the Company recognized amortization expense of $ 1.1  million, $ 1.0 million, and $ 979,000 , respectively, which was included within income tax expense on the consolidated statements of income.
−Removed: During the years ended December 31, 2022, 2021  and 2020, the Company recognized tax credits from its investment in affordable housing tax credits of $ 991,000 , $ 1.0 million and $ 891,000 , respectively.
−Removed: The Company had no impairment losses during the years ended December 31, 2022, 2021  and 2020.
−Removed: NOTE 23  
−Removed: - PARENT ONLY CONDENSED FINANCIAL INFORMATION
−Removed: The parent company only condensed balance sheet as of December 31, 2022 
−Removed: and 2021, and the related condensed statements of income and condensed statements of cash flows for the years ended December 31, 2022, 2021  and 2020  are presented below:
−Removed: Condensed Balance Sheet
+Added: Total unfunded commitments related to the investments in qualified affordable housing projects totaled $ 2.3 million and $ 2.6 million at December 31, 2023 and December 31, 2022.
+Added: The Company expects to fulfill these commitments between 2024 and 2038.
+Added: During the years ended December 31, 2023, 2022 and 2021, the Company recognized amortization expense of $ 1.1 million, $ 1.1 million, and $ 1.0 million, respectively, which was included within income tax expense on the consolidated statements of income.
+Added: During the years ended December 31, 2023, 2022 and 2021, the Company recognized tax credits from its investment in affordable housing tax credits of $ 1.0 million, $ 991,000 and $ 1.0 million, respectively.
+Added: The Company had no impairment losses during the years ended December 31, 2023, 2022 and 2021.
+Added: NOTE 22 - PARENT ONLY CONDENSED FINANCIAL INFORMATION
+Added: The parent company only condensed balance sheet as of December 31, 2023 and 2022, and the related condensed statements of income and condensed statements of cash flows for the years ended December 31, 2023, 2022 and 2021 are presented below:
+Added: Condensed Balance Sheet
(dollars in thousands)
17 unchanged sentences
Dividend from subsidiaries
−Removed: Interest income
+Added: Interest (reversal)/income
Interest expense
Noninterest expense
−Removed: (Loss)/income before equity in undistributed income of subsidiaries
−Removed: Equity in undistributed income of:
+Added: Income/(loss) before equity in undistributed income of subsidiaries
+Added: (Distributed income in excess of earnings)/undistributed income of:
Income before income taxes
Income tax benefit
−Removed: Other comprehensive (loss)/income
+Added: Other comprehensive income/(loss)
Total comprehensive income
4 unchanged sentences
Provision for deferred income taxes
−Removed: Undistributed income of subsidiaries
+Added: Distributed income in excess of earnings/(undistributed income) of subsidiaries
Change in other assets and liabilities
−Removed: Net cash (used in)/provided by operating activities
+Added: Net cash provided by/(used in) operating activities
Cash flows from investment activities:
−Removed: Net cash acquired in connection with acquisition
Purchase of other equity securities, net
−Removed: Investment in subsidiaries
Net cash used in investing activities
6 unchanged sentences
Net cash (used in)/provided by financing activities
−Removed: (Decrease)/increase in cash and cash equivalents
+Added: Increase/(decrease) in cash and cash equivalents
Cash and cash equivalents beginning of year
Cash and cash equivalents end of year
−Removed: NOTE 24  –
−Removed: SUBSEQUENT EVENTS
−Removed: On January 19, 2023, RBB announced a cash dividend of $ 0.16  per share for the fourth quarter of 2022.
−Removed: The dividend is payable on February 10, 2023  
−Removed: to common shareholders of record as of January 30, 2023 . 
−Removed: NOTE 25  –
−Removed: REPURCHASE OF COMMON STOCK
−Removed: On June 24, 2019, the Board of Directors approved a stock repurchase program to buy back up to an aggregate of 1.0 million shares of our common stock.
−Removed: On April 
−Removed: 22, 2021, March 16, 2022, and June 14, 2022, the Board of Directors approved a stock repurchase program to buy back up to an aggregate of 500,000  shares, 500,000 shares, and 500,000 shares, respectively, of our common stock. In 2021, the Company repurchased 473,122  shares of common stock for a total of $ 10.5  million, at an average cost of $ 22.28 .
−Removed: In 2022, the Company repurchased 902,526  shares of common stock for a total of $ 19.8  million, at an average cost of $ 21.96 .
−Removed: As of December 31, 2022, the Company may repurchase up to 433,124  shares under the repurchase program. 
+Added: NOTE 23 – REPURCHASE OF COMMON STOCK
+Added: On April 22, 2021, March 16, 2022 and June 14, 2022, the Board of Directors approved a stock repurchase program to buy back up to an aggregate of 500,000 shares of Company common stock for each authorization date.
+Added: In 2021, the Company repurchased 473,122 shares of common stock for a total of $ 10.5 million at a weighted average share price of $ 22.28 .
+Added: In 2022, the Company repurchased 902,526 shares of common stock for a total of $ 19.8 million at a weighted average share price of $ 21.96 .
+Added: In 2023, the Company repurchased 396,374 shares of common stock for a total of $ 6.8 million at a weighted average share price of $ 17.02 .
+Added: As of December 31, 2023, the Company may repurchase up to 36,750 shares under the remaining authorized repurchase program.
+Added: NOTE 24 – SUBSEQUENT EVENTS
+Added: On January 18, 2024 , the Company announced the Board of Directors had declared a common stock cash dividend of $ 0.16 per share, payable on February 9, 2024 to common shareholders of record as of January 31, 2024 .
+Added: On February 29, 2024, the Company announced the Board of Directors authorized a stock repurchase plan providing for the repurchase of up to 1 million shares of the Company’s outstanding common stock through March 31, 2026.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.