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Loans | 12 Months Ended
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Dec. 31, 2019
Receivables [Abstract] |
Loans | NOTE 5 - 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, and Las Vegas, Nevada. Although the Company seeks to avoid concentrations of loans to a single industry or based upon a single class of collateral, real estate and real estate associated businesses are among the principal industries in the Company's market area and, as a result, the Company's loan and collateral portfolios are, to some degree, concentrated in those industries. A summary of the changes in the allowance for loan losses as of December 31 follows:
(dollars in thousands) |  | 2019 |  |  | 2018 |  |  | 2017 |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 17,577 |  |  | $ | 13,773 |  |  | $ | 14,162 |
Additions (reductions) to the allowance charged to expense |  |  | 2,390 |  |  |  | 4,469 |  |  |  | (1,053 | )
Recoveries on loans charged-off |  |  | 108 |  |  |  | 36 |  |  |  | 747 |
Less loans charged-off |  |  | (1,259 | ) |  |  | (701 | ) |  |  | (83 | )
Ending balance |  | $ | 18,816 |  |  | $ | 17,577 |  |  | $ | 13,773 |
The following table presents the recorded investment in loans and impairment method as of December 31, 2019, 2018 and 2017 and the activity in the allowance for loan losses for the years then ended, by portfolio segment:
(dollars in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
December 31, 2019 |  | Real Estate |  |  | Commercial |  |  | Other |  |  | Unallocated |  |  | Total |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning of year |  | $ | 13,437 |  |  | $ | 4,140 |  |  | $ | — |  |  | $ | — |  |  | $ | 17,577 |
Provisions |  |  | 1,847 |  |  |  | 433 |  |  |  | 9 |  |  |  | 101 |  |  |  | 2,390 |
Charge-offs |  |  | (166 | ) |  |  | (1,093 | ) |  |  | — |  |  |  | — |  |  |  | (1,259 | )
Recoveries |  |  | — |  |  |  | 108 |  |  |  | — |  |  |  | — |  |  |  | 108 |
|  | $ | 15,118 |  |  | $ | 3,588 |  |  | $ | 9 |  |  | $ | 101 |  |  | $ | 18,816 |
Reserves: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Specific |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
General |  |  | 15,118 |  |  |  | 3,588 |  |  |  | 9 |  |  |  | 101 |  |  |  | 18,816 |
|  | $ | 15,118 |  |  | $ | 3,588 |  |  | $ | 9 |  |  | $ | 101 |  |  | $ | 18,816 |
Loans evaluated for impairment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually |  | $ | 3,795 |  |  | $ | 9,423 |  |  | $ | — |  |  | $ | — |  |  | $ | 13,218 |
Collectively |  |  | 1,842,747 |  |  |  | 340,148 |  |  |  | 821 |  |  |  | — |  |  |  | 2,183,716 |
|  | $ | 1,846,542 |  |  | $ | 349,571 |  |  | $ | 821 |  |  | $ | — |  |  | $ | 2,196,934 |
December 31, 2018 |  | Real Estate |  |  | Commercial |  |  | Unallocated |  |  | Total |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning of year |  | $ | 9,309 |  |  | $ | 4,044 |  |  | $ | 420 |  |  | $ | 13,773 |
Provisions |  |  | 4,128 |  |  |  | 761 |  |  |  | (420 | ) |  |  | 4,469 |
Charge-offs |  |  | — |  |  |  | (701 | ) |  |  | — |  |  |  | (701 | )
Recoveries |  |  | — |  |  |  | 36 |  |  |  | — |  |  |  | 36 |
|  | $ | 13,437 |  |  | $ | 4,140 |  |  | $ | — |  |  | $ | 17,577 |
Reserves: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Specific |  | $ | — |  |  | $ | 44 |  |  | $ | — |  |  | $ | 44 |
General |  |  | 13,393 |  |  |  | 4,140 |  |  |  | — |  |  |  | 17,533 |
Loans acquired with deteriorated credit quality |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
|  | $ | 13,437 |  |  | $ | 4,140 |  |  | $ | — |  |  | $ | 17,577 |
Loans evaluated for impairment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually |  | $ | 2,309 |  |  | $ | 972 |  |  | $ | — |  |  | $ | 3,281 |
Collectively |  |  | 1,750,896 |  |  |  | 387,838 |  |  |  | — |  |  |  | 2,138,734 |
Loans acquired with deteriorated credit quality |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
|  | $ | 1,753,205 |  |  | $ | 388,810 |  |  | $ | — |  |  | $ | 2,142,015 |
December 31, 2017 |  | Real Estate |  |  | Commercial |  |  | Unallocated |  |  | Total |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning of year |  | $ | 8,111 |  |  | $ | 6,051 |  |  | $ | — |  |  | $ | 14,162 |
Provisions |  |  | 1,198 |  |  |  | (2,671 | ) |  |  | 420 |  |  |  | (1,053 | )
Charge-offs |  |  | — |  |  |  | (83 | ) |  |  | — |  |  |  | (83 | )
Recoveries |  |  | — |  |  |  | 747 |  |  |  | — |  |  |  | 747 |
|  | $ | 9,309 |  |  | $ | 4,044 |  |  | $ | 420 |  |  | $ | 13,773 |
Reserves: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Specific |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
General |  |  | 9,309 |  |  |  | 4,044 |  |  |  | 420 |  |  |  | 13,773 |
Loans acquired with deteriorated credit quality |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
|  | $ | 9,309 |  |  | $ | 4,044 |  |  | $ | 420 |  |  | $ | 13,773 |
Loans evaluated for impairment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually |  | $ | 2,420 |  |  | $ | 155 |  |  | $ | — |  |  | $ | 2,575 |
Collectively |  |  | 834,152 |  |  |  | 412,032 |  |  |  | — |  |  |  | 1,246,184 |
Loans acquired with deteriorated credit quality |  |  | 315 |  |  |  | — |  |  |  | — |  |  |  | 315 |
|  | $ | 836,887 |  |  | $ | 412,187 |  |  | $ | — |  |  | $ | 1,249,074 |
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. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis typically includes larger, non-homogeneous loans such as commercial real estate and commercial and industrial loans. This analysis is performed on an ongoing basis as new information is obtained. The Company uses the following definitions for risk ratings: Pass - Loans classified as pass include loans not meeting the risk ratings defined below. Special Mention - Loans classified as special mention have a potential weakness that deserves management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution's credit position at some future date. Substandard - Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Impaired - A loan is considered impaired, when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Additionally, all loans classified as troubled debt restructurings are considered impaired. The risk category of loans by class of loans was as follows as of December 31, 2019 and 2018:
(dollars in thousands) |  |  |  |  |  | Special |  |  |  |  |  |  |  |  |  |  |  |  |
December 31, 2019 |  | Pass |  |  | Mention |  |  | Substandard |  |  | Impaired |  |  | Total |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction and land development |  | $ | 95,756 |  |  | $ | — |  |  | $ | — |  |  | $ | 264 |  |  | $ | 96,020 |
Commercial real estate |  |  | 767,603 |  |  |  | 5,353 |  |  |  | 18,115 |  |  |  | 2,197 |  |  |  | 793,268 |
Single-family residential mortgages |  |  | 955,327 |  |  |  | — |  |  |  | 593 |  |  |  | 1,334 |  |  |  | 957,254 |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | 265,178 |  |  |  | 4,078 |  |  |  | 5,330 |  |  |  | — |  |  |  | 274,586 |
SBA |  |  | 61,496 |  |  |  | 189 |  |  |  | 3,877 |  |  |  | 9,423 |  |  |  | 74,985 |
Other: |  |  | 821 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 821 |
|  | $ | 2,146,181 |  |  | $ | 9,620 |  |  | $ | 27,915 |  |  | $ | 13,218 |  |  | $ | 2,196,934 |
December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction and land development |  | $ | 112,959 |  |  | $ | — |  |  | $ | — |  |  | $ | 276 |  |  | $ | 113,235 |
Commercial real estate |  |  | 743,123 |  |  |  | 7,069 |  |  |  | 6,496 |  |  |  | 2,033 |  |  |  | 758,721 |
Single-family residential mortgages |  |  | 880,860 |  |  |  | — |  |  |  | 389 |  |  |  | — |  |  |  | 881,249 |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | 295,226 |  |  |  | 6,286 |  |  |  | 2,798 |  |  |  | — |  |  |  | 304,310 |
SBA |  |  | 79,057 |  |  |  | — |  |  |  | 4,471 |  |  |  | 972 |  |  |  | 84,500 |
|  | $ | 2,111,225 |  |  | $ | 13,355 |  |  | $ | 14,154 |  |  | $ | 3,281 |  |  | $ | 2,142,015 |
The following table presents the aging of the recorded investment in past-due loans as of December 31, 2019 and 2018 by class of loans:
(dollars in thousands) |  | 30-59 |  |  | 60-89 |  |  | 90 Days |  |  | Total |  |  | Loans Not |  |  |  |  |  |  | Non- Accrual |
December 31, 2019 |  | Days |  |  | Days |  |  | Or More |  |  | Past Due |  |  | Past Due |  |  | Total Loans |  |  | Loans (1) |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction and land development |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 96,020 |  |  | $ | 96,020 |  |  | $ | — |
Commercial real estate |  |  | — |  |  |  | — |  |  |  | 725 |  |  |  | 725 |  |  |  | 792,543 |  |  |  | 793,268 |  |  |  | 725 |
Single-family residential mortgages |  |  | 1,454 |  |  |  | 1,560 |  |  |  | 450 |  |  |  | 3,464 |  |  |  | 953,790 |  |  |  | 957,254 |  |  |  | 1,334 |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 274,586 |  |  |  | 274,586 |  |  |  | — |
SBA |  |  | 2,263 |  |  |  | — |  |  |  | 9,378 |  |  |  | 11,641 |  |  |  | 63,344 |  |  |  | 74,985 |  |  |  | 9,378 |
Other: |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 821 |  |  |  | 821 |  |  |  | — |
|  | $ | 3,717 |  |  | $ | 1,560 |  |  | $ | 10,553 |  |  | $ | 15,830 |  |  | $ | 2,181,104 |  |  | $ | 2,196,934 |  |  | $ | 11,437 |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Single-family residential mortgages held for sale |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 108,194 |  |  | $ | 108,194 |  |  | $ | — |
December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction and land development |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 113,235 |  |  | $ | 113,235 |  |  | $ | — |
Commercial real estate |  |  | — |  |  |  | 678 |  |  |  | — |  |  |  | 678 |  |  |  | 758,043 |  |  |  | 758,721 |  |  |  | — |
Single-family residential mortgages |  |  | 1,548 |  |  |  | 950 |  |  |  | — |  |  |  | 2,498 |  |  |  | 878,751 |  |  |  | 881,249 |  |  |  | — |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 304,310 |  |  |  | 304,310 |  |  |  | — |
SBA |  |  | 957 |  |  |  | — |  |  |  | 914 |  |  |  | 1,871 |  |  |  | 82,629 |  |  |  | 84,500 |  |  |  | 914 |
|  | $ | 2,505 |  |  | $ | 1,628 |  |  | $ | 914 |  |  | $ | 5,047 |  |  | $ | 2,136,968 |  |  | $ | 2,142,015 |  |  | $ | 914 |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Single-family residential mortgages held for sale |  | $ | — |  |  | $ | 458 |  |  | $ | — |  |  | $ | 458 |  |  | $ | 434,064 |  |  | $ | 434,522 |  |  | $ | — |
(1) | Included in total loans
Information relating to individually impaired loans presented by class of loans was as follows as of December 31, 2019, 2018 and 2017:
|  | Unpaid |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(dollars in thousands) |  | Principal |  |  | Recorded |  |  | Average |  |  | Interest |  |  | Related |
December 31, 2019 |  | Balance |  |  | Investment |  |  | Balance |  |  | Income |  |  | Allowance |
With no related allowance recorded |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction and land development |  | $ | 264 |  |  | $ | 264 |  |  | $ | 271 |  |  | $ | 24 |  |  | $ | — |
Commercial real estate |  |  | 2,198 |  |  |  | 2,197 |  |  |  | 2,384 |  |  |  | 100 |  |  |  | — |
Residential mortgage loans |  |  | 1,349 |  |  |  | 1,334 |  |  |  | 1,351 |  |  |  | — |  |  |  | — |
Commercial - SBA |  |  | 9,423 |  |  |  | 9,423 |  |  |  | 10,791 |  |  |  | 4 |  |  |  | — |
With related allowance recorded |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial-SBA |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 13,234 |  |  | $ | 13,218 |  |  | $ | 14,797 |  |  | $ | 128 |  |  | $ | — |
December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
With no related allowance recorded |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction and land development |  | $ | 276 |  |  | $ | 276 |  |  | $ | 283 |  |  | $ | 23 |  |  | $ | — |
Commercial real estate |  |  | 2,033 |  |  |  | 2,033 |  |  |  | 2,126 |  |  |  | 134 |  |  |  | — |
Commercial - SBA |  |  | 797 |  |  |  | 1,498 |  |  |  | 1,377 |  |  |  | 19 |  |  |  | — |
With related allowance recorded |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial-SBA |  |  | 175 |  |  |  | 175 |  |  |  | 193 |  |  |  | 1 |  |  |  | 44 |
Total |  | $ | 3,281 |  |  | $ | 3,982 |  |  | $ | 3,979 |  |  | $ | 177 |  |  | $ | 44 |
December 31, 2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
With no related allowance recorded |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction and land development |  | $ | 289 |  |  | $ | 289 |  |  | $ | 296 |  |  | $ | 16 |  |  | $ | — |
Commercial real estate |  |  | 2,131 |  |  |  | 2,131 |  |  |  | 2,192 |  |  |  | 297 |  |  |  | — |
Commercial - SBA |  |  | 155 |  |  |  | 155 |  |  |  | 78 |  |  |  | 15 |  |  |  | — |
Total |  | $ | 2,575 |  |  | $ | 2,575 |  |  | $ | 2,566 |  |  | $ | 328 |  |  | $ | — |
No interest income was recognized on a cash basis as of December 31, 2019, 2018 and 2017. We did not recognize any interest income on nonaccrual loans during the years ended December 31, 2019 and December 31, 2018 while the loans were in nonaccrual status. We recognized interest income on loans modified under troubled debt restructurings ("TDR's") of $128,000 and $177,000 during the years ended December 31, 2019 and December 31, 2018, respectively. The Company had four loans identified as troubled debt restructurings at December 31, 2019 and 2018, respectively. There were no specific reserves allocated to the loans as of December 31, 2019 and 2018. There were no commitments to lend additional amounts as of December 31, 2019 and 2018, respectively, to customers with outstanding loans that are classified as TDR's. During the year ended December 31, 2019, the terms of certain loans were modified as TDR's. The modification of the terms generally included loans where a moratorium on loan payments was granted. Such moratoriums ranged from three months to six months on the loans restructured in 2019. The following table presents loans by class modified as TDR's that occurred during the year ended December 31, 2019:
|  |  |  |  |  | Pre- |  |  | Post- |
|  |  |  |  |  | Modification |  |  | Modification |
(dollars in thousands) |  | Number of |  |  | Recorded |  |  | Recorded |
December 31, 2019 |  | Loans |  |  | Investment |  |  | Investment |
Commercial real estate |  |  | 1 |  |  | $ | 476 |  |  | $ | 476 |
There were no defaults of TDR’s in 2019 and 2018 where the loan was modified within the prior twelve months. In the past the Company has purchased loans as part of its whole bank acquisitions, for which there was at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The purchased credit-impaired loan fully paid off in September 2018. There were no balances as of December 31, 2019 and 2018. Below is a summary of activity in the accretable yield on purchased credit-impaired loans for 2019, 2018 and 2017:
(dollars in thousands) |  | 2019 |  |  | 2018 |  |  | 2017 |
Beginning balance |  | $ | — |  |  | $ | 7 |  |  | $ | 142 |
Disposals |  |  | — |  |  |  | — |  |  |  | — |
Restructuring as TDR |  |  | — |  |  |  | — |  |  |  | — |
Accretion of income |  |  | — |  |  |  | (7 | ) |  |  | (135 | )
Ending balance |  | $ | — |  |  | $ | — |  |  | $ | 7 |

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- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2196772 + Details
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