California | 95-3629339 | |
(State or other jurisdiction of | (I.R.S. Employer | |
Incorporation or organization) | Identification No.) | |
701 North Haven Ave., Suite 350 | ||
Ontario, California | 91764 | |
(Address of principal executive offices) | (Zip Code) |
(§
Securities registered pursuant to Section 12(b) of the Act:
ITEM 1.CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)5 ITEM 2. 39 39 OVERVIEW39 41 ANALYSIS OF FINANCIAL CONDITION51 68 ITEM 3. 70 ITEM 4.CONTROLS AND PROCEDURES 70PART II –OTHER INFORMATION 71 1. ITEM 1A.RISK FACTORS 72 ITEM 2. 72 ITEM 3. 72 ITEM 4.MINE SAFETY DISCLOSURES 72ITEM 5.OTHER INFORMATION 72 6. 72 73
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March 31, 2019 | December 31, 2018 | |||||||
Assets | ||||||||
Cash and due from banks | $ | 168,877 | $ | 144,008 | ||||
Interest-earning balances due from Federal Reserve | 3,337 | 19,940 | ||||||
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Total cash and cash equivalents | 172,214 | 163,948 | ||||||
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Interest-earning balances due from depository institutions | 7,420 | 7,670 | ||||||
Investment securitiesavailable-for-sale, at fair value (with amortized cost of $1,677,732 at March 31, 2019, and $1,757,666 at December 31, 2018) | 1,673,501 | 1,734,085 | ||||||
Investment securitiesheld-to-maturity (with fair value of $720,651 at March 31, 2019, and $721,537 at December 31, 2018) | 733,464 | 744,440 | ||||||
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Total investment securities | 2,406,965 | 2,478,525 | ||||||
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Investment in stock of Federal Home Loan Bank (FHLB) | 17,688 | 17,688 | ||||||
Loans and lease finance receivables | 7,606,863 | 7,764,611 | ||||||
Allowance for loan losses | (65,201 | ) | (63,613 | ) | ||||
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Net loans and lease finance receivables | 7,541,662 | 7,700,998 | ||||||
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Premises and equipment, net | 55,833 | 58,193 | ||||||
Bank owned life insurance (BOLI) | 222,010 | 220,758 | ||||||
Accrued interest receivable | 30,557 | 30,649 | ||||||
Intangibles | 50,927 | 53,784 | ||||||
Goodwill | 666,539 | 666,539 | ||||||
Other real estate owned (OREO) | 2,275 | 420 | ||||||
Income taxes | 35,833 | 62,174 | ||||||
Other assets | 95,034 | 67,807 | ||||||
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Total assets | $ | 11,304,957 | $ | 11,529,153 | ||||
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Liabilities and Stockholders’ Equity | ||||||||
Liabilities: | ||||||||
Deposits: | ||||||||
Noninterest-bearing | $ | 5,098,822 | $ | 5,204,787 | ||||
Interest-bearing | 3,555,298 | 3,622,703 | ||||||
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Total deposits | 8,654,120 | 8,827,490 | ||||||
Customer repurchase agreements | 462,774 | 442,255 | ||||||
Other borrowings | 153,000 | 280,000 | ||||||
Deferred compensation | 20,860 | 20,033 | ||||||
Junior subordinated debentures | 25,774 | 25,774 | ||||||
Other liabilities | 97,502 | 82,411 | ||||||
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Total liabilities | 9,414,030 | 9,677,963 | ||||||
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Commitments and Contingencies | ||||||||
Stockholders’ Equity | ||||||||
Common stock, authorized, 225,000,000 shares without par; issued and outstanding 140,009,185 at March 31, 2019, and 140,000,017 at December 31, 2018 | 1,294,093 | 1,293,669 | ||||||
Retained earnings | 602,279 | 575,805 | ||||||
Accumulated other comprehensive loss, net of tax | (5,445 | ) | (18,284 | ) | ||||
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Total stockholders’ equity | 1,890,927 | 1,851,190 | ||||||
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Total liabilities and stockholders’ equity | $ | 11,304,957 | $ | 11,529,153 | ||||
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September 30, 2019 | December 31, 2018 | ||||||||
Assets | |||||||||
Cash and due from banks | $ | 222,248 | $ | 144,008 | |||||
Interest-earning balances due from Federal Reserve | 215,300 | 19,940 | |||||||
Total cash and cash equivalents | 437,548 | 163,948 | |||||||
Interest-earning balances due from depository institutions | 5,673 | 7,670 | |||||||
Investment securities available-for-sale, at fair value (with amortized cost of $1,549,406 at September2019, and $1,757,666 at December 31, 2018) | 1,570,406 | 1,734,085 | |||||||
Investment securities held-to-maturity (with fair value of $711,891at September 30, 2019, and $721,537 at December 31, 2018) | 703,953 | 744,440 | |||||||
Total investment securities | 2,274,359 | 2,478,525 | |||||||
Investment in stock of Federal Home Loan Bank (FHLB) | 17,688 | 17,688 | |||||||
Loans and lease finance receivables | 7,494,451 | 7,764,611 | |||||||
Allowance for loan losses | (68,672 | ) | (63,613 | ) | |||||
Net loans and lease finance receivables | 7,425,779 | 7,700,998 | |||||||
Premises and equipment, net | 53,256 | 58,193 | |||||||
Bank owned life insurance (BOLI) | 224,841 | 220,758 | |||||||
Accrued interest receivable | 27,244 | 30,649 | |||||||
Intangibles | 45,446 | 53,784 | |||||||
Goodwill | 663,707 | 666,539 | |||||||
Other real estate owned (OREO) | 9,450 | 420 | |||||||
Income taxes | 44,630 | 62,174 | |||||||
Other assets | 103,141 | 67,807 | |||||||
Total assets | $ | 11,332,762 | $ | 11,529,153 | |||||
Liabilities and Stockholders’ Equity | |||||||||
Liabilities: | |||||||||
Deposits: | |||||||||
Noninterest-bearing | $ | 5,385,104 | $ | 5,204,787 | |||||
Interest-bearing | 3,409,226 | 3,622,703 | |||||||
Total deposits | 8,794,330 | 8,827,490 | |||||||
Customer repurchase agreements | 407,850 | 442,255 | |||||||
Other borrowings | 4,914 | 280,000 | |||||||
Deferred compensation | 22,334 | 20,033 | |||||||
Junior subordinated debentures | 25,774 | 25,774 | |||||||
Other liabilities | 110,667 | 82,411 | |||||||
Total liabilities | 9,365,869 | 9,677,963 | |||||||
Commitments and Contingencies | |||||||||
Stockholders’ Equity | |||||||||
Common stock, authorized, 225,000,000 shares without par; issued and outstanding 140,157,063 at September 30, 2019, and 140,000,017 at December 31, 2018 | 1,298,138 | 1,293,669 | |||||||
Retained earnings | 656,659 | 575,805 | |||||||
Accumulated other comprehensive income (loss), net of tax | 12,096 | (18,284 | ) | ||||||
Total stockholders’ equity | 1,966,893 | 1,851,190 | |||||||
Total liabilities and stockholders’ equity | $ | 11,332,762 | $ | 11,529,153 |
For the Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
Interest income: | ||||||||
Loans and leases, including fees | $ | 99,687 | $ | 55,196 | ||||
Investment securities: | ||||||||
Investment securitiesavailable-for-sale | 10,645 | 11,868 | ||||||
Investment securitiesheld-to-maturity | 4,525 | 4,765 | ||||||
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Total investment income | 15,170 | 16,633 | ||||||
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Dividends from FHLB stock | 332 | 332 | ||||||
Interest-earning deposits with other institutions | 94 | 536 | ||||||
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Total interest income | 115,283 | 72,697 | ||||||
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Interest expense: | ||||||||
Deposits | 3,871 | 1,525 | ||||||
Borrowings and customer repurchase agreements | 1,610 | 453 | ||||||
Junior subordinated debentures | 266 | 198 | ||||||
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Total interest expense | 5,747 | 2,176 | ||||||
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Net interest income before provision for (recapture of) loan losses | 109,536 | 70,521 | ||||||
Provision for (recapture of) loan losses | 1,500 | (1,000 | ) | |||||
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Net interest income after provision for (recapture of) loan losses | 108,036 | 71,521 | ||||||
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Noninterest income: | ||||||||
Service charges on deposit accounts | 5,141 | 4,045 | ||||||
Trust and investment services | 2,182 | 2,157 | ||||||
Bankcard services | 950 | 804 | ||||||
BOLI income | 1,336 | 979 | ||||||
Gain on OREO, net | 105 | 3,540 | ||||||
Gain on sale of building, net | 4,545 | - | ||||||
Other | 2,044 | 1,391 | ||||||
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Total noninterest income | 16,303 | 12,916 | ||||||
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Noninterest expense: | ||||||||
Salaries and employee benefits | 29,302 | 22,314 | ||||||
Occupancy and equipment | 5,615 | 4,192 | ||||||
Professional services | 1,925 | 1,530 | ||||||
Software licenses and maintenance | 2,422 | 1,760 | ||||||
Marketing and promotion | 1,394 | 1,356 | ||||||
Amortization of intangible assets | 2,857 | 331 | ||||||
Acquisition related expenses | 3,149 | 803 | ||||||
Other | 4,940 | 3,660 | ||||||
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Total noninterest expense | 51,604 | 35,946 | ||||||
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Earnings before income taxes | 72,735 | 48,491 | ||||||
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Income taxes | 21,093 | 13,578 | ||||||
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Net earnings | $ | 51,642 | $ | 34,913 | ||||
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Other comprehensive income (loss): | ||||||||
Unrealized gain (loss) on securities arising during the period, before tax | $ | 18,227 | $ | (32,170 | ) | |||
Less: Income tax (expense) benefit related to items of other comprehensive income | (5,388 | ) | 9,511 | |||||
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Other comprehensive income (loss), net of tax | 12,839 | (22,659 | ) | |||||
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Comprehensive income | $ | 64,481 | $ | 12,254 | ||||
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Basic earnings per common share | $ | 0.37 | $ | 0.32 | ||||
Diluted earnings per common share | $ | 0.37 | $ | 0.32 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||
Interest income: | |||||||||||||||||
Loans and leases, including fees | $ | 98,796 | $ | 79,818 | $ | 300,326 | $ | 192,382 | |||||||||
Investment securities: | |||||||||||||||||
Investment securities available-for-sale | 9,222 | 11,521 | 29,985 | 35,086 | |||||||||||||
Investment securities held-to-maturity | 4,298 | 4,666 | 13,249 | 14,238 | |||||||||||||
Total investment income | 13,520 | 16,187 | 43,234 | 49,324 | |||||||||||||
Dividends from FHLB stock | 301 | 329 | 931 | 959 | |||||||||||||
Interest-earning deposits with other institutions | 946 | 304 | 1,140 | 1,475 | |||||||||||||
Total interest income | 113,563 | 96,638 | 345,631 | 244,140 | |||||||||||||
Interest expense: | |||||||||||||||||
Deposits | 4,589 | 2,967 | 12,553 | 6,041 | |||||||||||||
Borrowings and customer repurchase agreements | 568 | 606 | 3,555 | 1,396 | |||||||||||||
Junior subordinated debentures | 247 | 245 | 771 | 674 | |||||||||||||
Total interest expense | 5,404 | 3,818 | 16,879 | 8,111 | |||||||||||||
Net interest income before provision for (recapture of) loan losses | 108,159 | 92,820 | 328,752 | 236,029 | |||||||||||||
Provision for (recapture of) loan losses | 1,500 | 500 | 5,000 | (1,500 | ) | ||||||||||||
Net interest income after provision for (recapture of) loan losses | 106,659 | 92,320 | 323,752 | 237,529 | |||||||||||||
Noninterest income: | |||||||||||||||||
Service charges on deposit accounts | 4,833 | 4,295 | 15,039 | 12,431 | |||||||||||||
Trust and investment services | 2,330 | 2,182 | 6,964 | 6,738 | |||||||||||||
Bankcard services | 637 | 875 | 2,614 | 2,637 | |||||||||||||
BOLI income | 1,797 | 936 | 4,482 | 2,984 | |||||||||||||
Gain on OREO, net | - | - | 129 | 3,540 | |||||||||||||
Gain on sale of building, net | - | - | 4,545 | - | |||||||||||||
Gain on eminent domain condemnation, net | - | - | 5,685 | - | |||||||||||||
Other | 2,297 | 1,824 | 6,944 | 4,393 | |||||||||||||
Total noninterest income | 11,894 | 10,112 | 46,402 | 32,723 | |||||||||||||
Noninterest expense: | |||||||||||||||||
Salaries and employee benefits | 30,122 | 26,319 | 88,286 | 69,684 | |||||||||||||
Occupancy and equipment | 5,092 | 5,324 | 16,348 | 13,834 | |||||||||||||
Professional services | 1,688 | 1,154 | 5,653 | 4,374 | |||||||||||||
Software licenses and maintenance | 2,450 | 2,317 | 7,414 | 5,836 | |||||||||||||
Marketing and promotion | 1,517 | 1,134 | 4,149 | 3,638 | |||||||||||||
Amortization of intangible assets | 2,648 | 1,736 | 8,338 | 2,395 | |||||||||||||
Acquisition related expenses | 244 | 6,645 | 6,005 | 7,942 | |||||||||||||
Other | 3,774 | 4,251 | 13,474 | 11,377 | |||||||||||||
Total noninterest expense | 47,535 | 48,880 | 149,667 | 119,080 | |||||||||||||
Earnings before income taxes | 71,018 | 53,552 | 220,487 | 151,172 | |||||||||||||
Income taxes | 20,595 | 14,994 | 63,941 | 42,328 | |||||||||||||
Net earnings | $ | 50,423 | $ | 38,558 | $ | 156,546 | $ | 108,844 | |||||||||
Other comprehensive income (loss): | |||||||||||||||||
Unrealized gain (loss) on securities arising during the period, before tax | $ | 5,423 | $ | (10,387 | ) | $ | 43,136 | $ | (49,155 | ) | |||||||
Less: Reclassification adjustment for net gain on securities included in net income | (5 | ) | - | (5 | ) | - | |||||||||||
Other comprehensive income (loss), before tax | 5,418 | (10,387 | ) | 43,131 | (49,155 | ) | |||||||||||
Less: Income tax (expense) benefit related to items of other comprehensive income | (1,602 | ) | 3,070 | (12,751 | ) | 14,532 | |||||||||||
Other comprehensive income (loss), net taxof | 3,816 | (7,317 | ) | 30,380 | (34,623 | ) | |||||||||||
Comprehensive income | $ | 54,239 | $ | 31,241 | $ | 186,926 | $ | 74,221 | |||||||||
Basic earnings per common share | $ | 0.36 | $ | 0.30 | $ | 1.12 | $ | 0.94 | |||||||||
Diluted earnings per common share | $ | 0.36 | $ | 0.30 | $ | 1.12 | $ | 0.94 |
Three months ended March 31, 2019 and 2018
Common Shares Outstanding | Common Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total | ||||||||||||||||
Balance, January 1, 2018 | 110,185 | $ | 573,453 | $ | 494,361 | $ | 1,452 | $ | 1,069,266 | |||||||||||
Cumulative adjustment upon adoption of ASU2018-02 | - | - | (356 | ) | 356 | - | ||||||||||||||
Repurchase of common stock | (34 | ) | (792 | ) | - | - | (792 | ) | ||||||||||||
Exercise of stock options | 87 | 828 | - | - | 828 | |||||||||||||||
Shares issued pursuant to stock-based compensation plan | 21 | 736 | - | - | 736 | |||||||||||||||
Cash dividends declared on common stock ($0.14 per share) | - | - | (15,434 | ) | - | (15,434 | ) | |||||||||||||
Net earnings | - | - | 34,913 | - | 34,913 | |||||||||||||||
Other comprehensive loss | - | - | - | (22,659 | ) | (22,659 | ) | |||||||||||||
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Balance, March 31, 2018 | 110,259 | $ | 574,225 | $ | 513,484 | $ | (20,851 | ) | $ | 1,066,858 | ||||||||||
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Balance, January 1, 2019 | 140,000 | $ | 1,293,669 | $ | 575,805 | $ | (18,284 | ) | $ | 1,851,190 | ||||||||||
Repurchase of common stock | (33 | ) | (735 | ) | - | - | (735 | ) | ||||||||||||
Exercise of stock options | 9 | 140 | - | - | 140 | |||||||||||||||
Shares issued pursuant to stock-based compensation plan | 33 | 1,019 | - | - | 1,019 | |||||||||||||||
Cash dividends declared on common stock ($0.18 per share) | - | - | (25,168 | ) | - | (25,168 | ) | |||||||||||||
Net earnings | - | - | 51,642 | - | 51,642 | |||||||||||||||
Other comprehensive income | - | - | - | 12,839 | 12,839 | |||||||||||||||
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Balance, March 31, 2019 | 140,009 | $ | 1,294,093 | $ | 602,279 | $ | (5,445 | ) | $ | 1,890,927 | ||||||||||
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Common Shares Outstanding | Common Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total | |||||||||||||||||
Balance, July 1, 2018 | 110,302 | $ | 575,502 | $ | 533,413 | $ | (25,498 | ) | $ | 1,083,417 | |||||||||||
Repurchase of common stock | (6 | ) | (151 | ) | - | - | (151 | ) | |||||||||||||
Issuance of common stock for acquisition of Community | 29,842 | 722,767 | - | - | 722,767 | ||||||||||||||||
Exercise of stock options | 7 | 87 | - | - | 87 | ||||||||||||||||
Shares issued pursuant to stock-based compensation plan | 190 | 847 | - | - | 847 | ||||||||||||||||
Cash dividends declared on common stock ($0.14 per | - | - | (19,628 | ) | - | (19,628 | ) | ||||||||||||||
Net earnings | - | - | 38,558 | - | 38,558 | ||||||||||||||||
Other comprehensive loss | - | - | - | (7,317 | ) | (7,317 | ) | ||||||||||||||
Balance, September 30, 2018 | 140,335 | $ | 1,299,052 | $ | 552,343 | $ | (32,815 | ) | $ | 1,818,580 | |||||||||||
Balance, July 1, 2019 | 140,142 | $ | 1,296,885 | $ | 631,512 | $ | 8,280 | $ | 1,936,677 | ||||||||||||
Repurchase of common stock | (34 | ) | (723 | ) | - | - | (723 | ) | |||||||||||||
Exercise of stock options | 15 | 155 | - | - | 155 | ||||||||||||||||
Shares issued pursuant to stock-based compensation plan | 34 | 1,821 | - | - | 1,821 | ||||||||||||||||
Cash dividends declared on common stock ($0.18 per | - | - | (25,276 | ) | - | (25,276 | ) | ||||||||||||||
Net earnings | - | - | 50,423 | - | 50,423 | ||||||||||||||||
Other comprehensive income | - | - | - | 3,816 | 3,816 | ||||||||||||||||
Balance, September 30, 2019 | 140,157 | $ | 1,298,138 | $ | 656,659 | $ | 12,096 | $ | 1,966,893 |
For the Nine Months Ended September 30, 2019 | Common Shares Outstanding | Common Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total | ||||||||||||||||
Balance, January 1, 2018 | 110,185 | $ | 573,453 | $ | 494,361 | $ | 1,452 | $ | 1,069,266 | ||||||||||||
Cumulative adjustment upon adoption of ASU 2018-02 | - | - | (356 | ) | 356 | - | |||||||||||||||
Repurchase of common stock | (42 | ) | (988 | ) | - | - | (988 | ) | |||||||||||||
Issuance of common stock for acquisition of Community Bank | 29,842 | 722,767 | - | - | 722,767 | ||||||||||||||||
Exercise of stock options | 145 | 1,504 | - | - | 1,504 | ||||||||||||||||
Shares issued pursuant to stock-based compensation plan | 205 | 2,316 | - | - | 2,316 | ||||||||||||||||
Cash dividends declared on common stock ($0.42 per | - | - | (50,506 | ) | - | (50,506 | ) | ||||||||||||||
Net earnings | - | - | 108,844 | - | 108,844 | ||||||||||||||||
Other comprehensive lo s s | - | - | - | (34,623 | ) | (34,623 | ) | ||||||||||||||
Balance, September 30, 2018 | 140,335 | $ | 1,299,052 | $ | 552,343 | $ | (32,815 | ) | $ | 1,818,580 | |||||||||||
Balance, January 1, 2019 | 140,000 | $ | 1,293,669 | $ | 575,805 | $ | (18,284 | ) | $ | 1,851,190 | |||||||||||
Repurchase of common stock | (70 | ) | (1,535 | ) | - | - | (1,535 | ) | |||||||||||||
Exercise of stock options | 160 | 2,212 | - | - | 2,212 | ||||||||||||||||
Shares issued pursuant to stock-based compensation plan | 67 | 3,792 | - | - | 3,792 | ||||||||||||||||
Cash dividends declared on common stock ($0.54 per | - | - | (75,692 | ) | - | (75,692 | ) | ||||||||||||||
Net earnings | - | - | 156,546 | - | 156,546 | ||||||||||||||||
Other comprehensive income | - | - | - | 30,380 | 30,380 | ||||||||||||||||
Balance, September 30, 2019 | 140,157 | $ | 1,298,138 | $ | 656,659 | $ | 12,096 | $ | 1,966,893 |
For the Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
Cash Flows from Operating Activities | ||||||||
Interest and dividends received | $ | 109,857 | $ | 75,103 | ||||
Service charges and other fees received | 10,247 | 8,414 | ||||||
Interest paid | (5,336 | ) | (2,172 | ) | ||||
Net cash paid to vendors, employees and others | (60,281 | ) | (35,932 | ) | ||||
Income taxes | - | 622 | ||||||
Payments to FDIC, loss share agreement | - | (39 | ) | |||||
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Net cash provided by operating activities | 54,487 | 45,996 | ||||||
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Cash Flows from Investing Activities | ||||||||
Net change in interest-earning balances from depository institutions | 250 | 7,852 | ||||||
Proceeds from repayment of investment securitiesavailable-for-sale | 77,303 | 95,018 | ||||||
Proceeds from maturity of investment securitiesavailable-for-sale | 565 | 9,945 | ||||||
Proceeds from repayment and maturity of investment securitiesheld-to-maturity | 29,598 | 30,273 | ||||||
Purchases of investment securitiesheld-to-maturity | (19,844 | ) | - | |||||
Net increase in equity investments | (2,314 | ) | (5,577 | ) | ||||
Net decrease in loan and lease finance receivables | 163,588 | 39,424 | ||||||
Proceeds from BOLI death benefit | 175 | 882 | ||||||
Proceeds from sale of building, net | 5,487 | - | ||||||
Purchase of premises and equipment | (1,490 | ) | (716 | ) | ||||
Proceeds from sales of other real estate owned | 523 | 8,067 | ||||||
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Net cash provided by investing activities | 253,841 | 185,168 | ||||||
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Cash Flows from Financing Activities | ||||||||
Net (decrease) increase in other deposits | (156,745 | ) | 175,839 | |||||
Net decrease in time deposits | (16,625 | ) | (13,257 | ) | ||||
Net decrease in other borrowings | (127,000 | ) | - | |||||
Net increase (decrease) in customer repurchase agreements | 20,519 | (66,496 | ) | |||||
Cash dividends on common stock | (19,616 | ) | (15,425 | ) | ||||
Repurchase of common stock | (735 | ) | (792 | ) | ||||
Proceeds from exercise of stock options | 140 | 828 | ||||||
|
|
|
|
|
| |||
Net cash (used in) provided by financing activities | (300,062 | ) | 80,697 | |||||
|
|
|
|
|
| |||
Net increase in cash and cash equivalents | 8,266 | 311,861 | ||||||
Cash and cash equivalents, beginning of period | 163,948 | 144,377 | ||||||
|
|
|
|
|
| |||
Cash and cash equivalents, end of period | $ | 172,214 | $ | 456,238 | ||||
|
|
|
|
|
|
For the Nine Months Ended September 30, | |||||||||
2019 | 2018 | ||||||||
Cash Flows from Operating Activities | |||||||||
Interest and dividends received | $ | 331,953 | 245,842 | ||||||
Service charges and other fees received | 31,441 | 26,107 | |||||||
Interest paid | (16,155 | ) | (8,642 | ) | |||||
Net cash paid to vendors, employees and others | (140,482 | ) | (110,799 | ) | |||||
Income taxes | (59,347 | ) | (35,879 | ) | |||||
Payments to FDIC, loss share agreement | - | (65 | ) | ||||||
Net cash provided by operating activities | 147,410 | 116,564 | |||||||
Cash Flows from Investing Activities | |||||||||
Proceeds from redemption of FHLB stock | - | 17,250 | |||||||
Net change in interest-earning balances from depository institutions | 1,997 | 11,934 | |||||||
Proceeds from sale of investment securities held-for-sale | 152,644 | 716,996 | |||||||
Proceeds from repayment of investment securities available-for-sale | 268,766 | 296,922 | |||||||
Proceeds from maturity of investment securities available-for-sale | 6,059 | 20,260 | |||||||
Purchases of investment securities available-for-sale | (225,416 | ) | (98,709 | ) | |||||
Proceeds from repayment and maturity of investment securities held-to-maturity | 81,001 | 67,861 | |||||||
Purchases of investment securities held-to-maturity | (42,917 | ) | - | ||||||
Net increase in equity investments | (3,511 | ) | (24,054 | ) | |||||
Net decrease (increase) in loan and lease finance receivables | 289,490 | (6,806 | ) | ||||||
Proceeds on eminent domain condemnation, net | 5,685 | - | |||||||
Proceeds from sale of building, net | 5,487 | - | |||||||
Purchase of premises and equipment | (3,061 | ) | (3,483 | ) | |||||
Proceeds from BOLI death benefit | 1,509 | 882 | |||||||
Proceeds from sales of other real estate owned | 523 | 8,067 | |||||||
Cash acquired from acquisition, net of cash paid | - | (132,918 | ) | ||||||
Net cash provided by investing activities | 538,256 | 874,202 | |||||||
Cash Flows from Financing Activities | |||||||||
Net increase (decrease) in other deposits | 37,061 | (241,934 | ) | ||||||
Net decrease in time deposits | (70,221 | ) | (65,079 | ) | |||||
Repayment of FHLB advances | - | (297,571 | ) | ||||||
Net decrease in other borrowings | (275,086 | ) | (136,000 | ) | |||||
Net decrease in customer repurchase agreements | (34,405 | ) | (154,296 | ) | |||||
Cash dividends on common stock | (70,092 | ) | (46,304 | ) | |||||
Repurchase of common stock | (1,535 | ) | (988 | ) | |||||
Proceeds from exercise of stock options | 2,212 | 1,504 | |||||||
Net cash used in financing activities | (412,066 | ) | (940,668 | ) | |||||
Net increase in cash and cash equivalents | 273,600 | 50,098 | |||||||
Cash and cash equivalents, beginning of period | 163,948 | 144,377 | |||||||
Cash and cash equivalents, end of period | $ | 437,548 | $ | 194,475 | |||||
For the Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
Reconciliation of Net Earnings to Net Cash Provided by Operating Activities | ||||||||
Net earnings | $ | 51,642 | $ | 34,913 | ||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||
Gain on sale of building, net | (4,545 | ) | - | |||||
Gain on sale of other real estate owned | (105 | ) | (3,540 | ) | ||||
Increase in BOLI | (1,427 | ) | (1,098 | ) | ||||
Net amortization of premiums and discounts on investment securities | 2,498 | 3,839 | ||||||
Accretion of discount for acquired loans, net | (7,200 | ) | (1,012 | ) | ||||
Provision for (recapture of) loan losses | 1,500 | (1,000 | ) | |||||
Payments to FDIC, loss share agreement | - | (39 | ) | |||||
Stock-based compensation | 1,019 | 736 | ||||||
Depreciation and amortization, net | 5,669 | 257 | ||||||
Change in other assets and liabilities | 5,436 | 12,940 | ||||||
|
|
|
|
|
| |||
Total adjustments | 2,845 | 11,083 | ||||||
|
|
|
|
|
| |||
Net cash provided by operating activities | $ | 54,487 | $ | 45,996 | ||||
|
|
|
|
|
| |||
Supplemental Disclosure ofNon-cash Investing Activities | ||||||||
Transfer of loans to other real estate owned | $ | 2,275 | $ | - | ||||
Issuance of common stock for acquisition | $ | - | $ | - |
For the Nine Months Ended September 30, | |||||||||
2019 | 2018 | ||||||||
Reconciliation of Net Earnings to Net Cash Provided by Operating Activities | |||||||||
Net earnings | 156,546 | 108,844 | |||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||||
Gain on sale of investment securities, net | (5 | ) | - | ||||||
Gain on eminent domain condemnation, net | (5,685 | ) | - | ||||||
Gain on sale of building, net | (4,545 | ) | - | ||||||
Gain on sale of other real estate owned | (105 | ) | (3,540 | ) | |||||
Increase in BOLI | (5,592 | ) | (3,053 | ) | |||||
Net amortization of premiums and discounts on investment securities | 7,593 | 10,661 | |||||||
Accretion of discount for acquired loans, net | (22,369 | ) | (6,889 | ) | |||||
Provision for (recapture of) loan losses | 5,000 | (1,500 | ) | ||||||
Payments to FDIC, loss share agreement | - | (65 | ) | ||||||
Stock-based compensation | 3,792 | 2,316 | |||||||
Depreciation and amortization, net | 16,993 | 4,146 | |||||||
Change in other assets and liabilities | (4,213 | ) | 5,644 | ||||||
Total adjustments | (9,136 | ) | 7,720 | ||||||
Net cash provided by operating activities | $ | 147,410 | | 116,564 | |||||
Supplemental Disclosure of Non-cash Investing Activities | |||||||||
Transfer of loans to other real estate owned | $ | 9,450 | $ | 420 | |||||
Issuance of common stock for acquisition | $ | - | $ | 722,767 |
1. | BUSINESS |
2. | BASIS OF PRESENTATION |
3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
4. | BUSINESS COMBINATIONS |
were consolidated. For the first six months of 2019, a total of 10 banking centers were consolidated, including 9 former CB centers.DuringThe consolidation of banking centers was completed during the firstsecond quarter of 2019, six of the former CB banking centers were consolidated into CBBin which 4 These fair values are estimates and are subject to adjustment for up to one year afteracquisition date or when additional information relative tosecond quarter of 2019. closing date fair values becomes available and such information is considered final, whichever is earlier. As the initial estimate of fair value of impaired loans was incomplete as of March 31, 2019, the fair value reflected in the financial statements has been determined provisionally.loans. The application of the acquisition method of accounting resulted in the recognition of goodwill of $550.0$547.1 million and a core deposit intangible (“CDI”) of $52.2 million, or 2.26% of core deposits. Goodwill represents the excess purchase price over the fair value of the net assets acquired. Goodwill is not deductible for income tax purposes. August 10, 2018(Dollars in thousands)Merger Consideration Cash paid $180,719 CVBF common stock issued722,767 $ Assets Acquired Cash and cash equivalents47,802 Investment securities716,996 FHLB stock17,250 Loans2,734,081 Accrued interest receivable7,916 Premises and equipment14,632 BOLI70,904 Core deposit intangible52,200 Other assets54,479 Total assets acquired 3,716,260 Liabilities assumed Deposits2,869,986 FHLB advances297,571 Other borrowings166,000 Other liabilities29,192 Total liabilities assumed 3,362,749 353,511 $ Goodwill $549,975
For the three months ended March 31, 2019 and 2018, the
| ||||
| ||||
| ||||
|
Unaudited Pro Forma | ||||||||
Three Months Ended | Nine Months Ended | |||||||
September 30, 2018 | ||||||||
(Dollars in thousands, except per share amounts) | ||||||||
Total revenues (net interest income plus noninterest income) | $ | 120,467 | $ | 364,846 | ||||
Net income | $ | 44,623 | $ | 138,274 | ||||
Earnings per share - basic | $ | 0.32 | $ | 0.99 | ||||
Earnings per share - diluted | $ | 0.32 | $ | 0.99 |
5. | INVESTMENT SECURITIES |
March 31, 2019 | ||||||||||||||||||||
Amortized Cost | Gross Unrealized Holding Gain |
Gross Unrealized | Fair Value | Total Percent | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Investment securitiesavailable-for-sale: | ||||||||||||||||||||
Residential mortgage-backed securities | $ | 1,424,937 | $ | 6,107 | $ | (8,540) | $ | 1,422,504 | 85.00% | |||||||||||
CMO/REMIC - residential | 206,956 | 470 | (2,301) | 205,125 | 12.26% | |||||||||||||||
Municipal bonds | 45,052 | 421 | (388) | 45,085 | 2.69% | |||||||||||||||
Other securities | 787 | - | - | 787 | 0.05% | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Totalavailable-for-sale securities | $ | 1,677,732 | $ | 6,998 | $ | (11,229) | $ | 1,673,501 | 100.00% | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Investment securitiesheld-to-maturity: | ||||||||||||||||||||
Government agency/GSE | $ | 133,557 | $ | 564 | $ | (2,077) | $ | 132,044 | 18.21% | |||||||||||
Residential mortgage-backed securities | 169,367 | 737 | (999) | 169,105 | 23.09% | |||||||||||||||
CMO | 213,145 | - | (9,998) | 203,147 | 29.06% | |||||||||||||||
Municipal bonds | 217,395 | 1,819 | (2,859) | 216,355 | 29.64% | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Totalheld-to-maturity securities | $ | 733,464 | $ | 3,120 | $ | (15,933) | $ | 720,651 | 100.00% | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
December 31, 2018 | ||||||||||||||||||||
Amortized Cost | Gross Unrealized Holding Gain |
Gross Unrealized | Fair Value | Total Percent | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Investment securitiesavailable-for-sale: | ||||||||||||||||||||
Residential mortgage-backed securities | $ | 1,494,106 | $ | 1,348 | $ | (20,946) | $ | 1,474,508 | 85.03% | |||||||||||
CMO/REMIC - residential | 217,223 | 353 | (3,525) | 214,051 | 12.34% | |||||||||||||||
Municipal bonds | 45,621 | 332 | (1,143) | 44,810 | 2.59% | |||||||||||||||
Other securities | 716 | - | - | 716 | 0.04% | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Totalavailable-for-sale securities | $ | 1,757,666 | $ | 2,033 | $ | (25,614) | $ | 1,734,085 | 100.00% | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Investment securitiesheld-to-maturity: | ||||||||||||||||||||
Government agency/GSE | $ | 138,274 | $ | 572 | $ | (2,622) | $ | 136,224 | 18.57% | |||||||||||
Residential mortgage-backed securities | 153,874 | - | (3,140) | 150,734 | 20.67% | |||||||||||||||
CMO | 215,336 | - | (12,081) | 203,255 | 28.93% | |||||||||||||||
Municipal bonds | 236,956 | 556 | (6,188) | 231,324 | 31.83% | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Totalheld-to-maturity securities | $ | 744,440 | $ | 1,128 | $ | (24,031) | $ | 721,537 | 100.00% | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
Unrealized
Holding
Unrealized
Holding $ $ $ ) $ % ) % ) % % $ $ $ ) $ % $ $ $ ) $ % ) % ) % ) % $ $ $ ) $ %
Cost
Unrealized
Holding
Unrealized
Holding $ $ $ ) $ % ) % ) % % $ $ $ ) $ % $ $ $ ) $ % ) % ) % ) % $ $ $ ) $ %
For the Three Months Ended | ||||||||
March 31, | ||||||||
2019 | 2018 | |||||||
(Dollars in thousands) | ||||||||
Investment securitiesavailable-for-sale: | ||||||||
Taxable | $ | 10,309 | $ | 11,445 | ||||
Tax-advantaged | 336 | 423 | ||||||
|
|
|
|
|
| |||
Total interest income fromavailable-for-sale securities | 10,645 | 11,868 | ||||||
|
|
|
|
|
| |||
Investment securitiesheld-to-maturity: | ||||||||
Taxable | 2,910 | 2,878 | ||||||
Tax-advantaged | 1,615 | 1,887 | ||||||
|
|
|
|
|
| |||
Total interest income fromheld-to-maturity securities | 4,525 | 4,765 | ||||||
|
|
|
|
|
| |||
Total interest income from investment securities | $ | 15,170 | $ | 16,633 | ||||
|
|
|
|
|
|
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Investment securities available-for-sale: | |||||||||||||||||
Taxable | $ | 8,949 | $ | 11,126 | $ | 29,079 | $ | 33,861 | |||||||||
Tax-advantaged | 273 | 395 | 906 | 1,225 | |||||||||||||
Total interest income from available-for-sale securities | 9,222 | 11,521 | 29,985 | 35,086 | |||||||||||||
Investment securities held-to-maturity: | |||||||||||||||||
Taxable | 2,883 | 2,961 | 8,725 | 8,887 | |||||||||||||
Tax-advantaged | 1,415 | 1,705 | 4,524 | 5,351 | |||||||||||||
Total interest income from held-to-maturity securities | 4,298 | 4,666 | 13,249 | 14,238 | |||||||||||||
Total interest income from investment securities | $ | 13,520 | $ | 16,187 | $ | 43,234 | $ | 49,324 | |||||||||
March 31, 2019 | ||||||||||||||||||||||||
Less Than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||
Fair Value | Gross Unrealized Holding Losses | Fair Value |
Gross | Fair Value | Gross Unrealized Holding Losses | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Investment securitiesavailable-for-sale: | ||||||||||||||||||||||||
Residential mortgage-backed securities | $ | - | $ | - | $ | 703,134 | $ | (8,540) | $ | 703,134 | $ | (8,540) | ||||||||||||
CMO/REMIC - residential | 66 | - | 160,926 | (2,301) | 160,992 | (2,301) | ||||||||||||||||||
Municipal bonds | - | - | 16,689 | (388) | 16,689 | (388) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Totalavailable-for-sale securities | $ | 66 | $ | - | $ | 880,749 | $ | (11,229) | $ | 880,815 | $ | (11,229) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Investment securitiesheld-to-maturity: | ||||||||||||||||||||||||
Government agency/GSE | $ | 26,291 | $ | (122) | $ | 60,153 | $ | (1,955) | $ | 86,444 | $ | (2,077) | ||||||||||||
Residential mortgage-backed securities | - | - | 86,568 | (999) | 86,568 | (999) | ||||||||||||||||||
CMO | - | - | 203,148 | (9,998) | 203,148 | (9,998) | ||||||||||||||||||
Municipal bonds | - | - | 64,790 | (2,859) | 64,790 | (2,859) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Totalheld-to-maturity securities | $ | 26,291 | $ | (122) | $ | 414,659 | $ | (15,811) | $ | 440,950 | $ | (15,933) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2019 | |||||||||||||||||||||||||
Less Than 12 Months | 12 Months or Longer | Total | |||||||||||||||||||||||
Fair Value | Gross Unrealized Holding Losses | Fair Value | Gross Unrealized Holding Losses | Fair Value | Gross Unrealized Holding Losses | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
Investment securities available-for-sale: | |||||||||||||||||||||||||
Residential mortgage-backed securities | $ | 2 | $ | - | $ | 127,904 | $ | (1,341 | ) | $ | 127,906 | $ | (1,341 | ) | |||||||||||
CMO/REMIC - residential | 122,595 | (156 | ) | 39,498 | (180 | ) | 162,093 | (336 | ) | ||||||||||||||||
Municipal bonds | - | - | 564 | (1 | ) | 564 | (1 | ) | |||||||||||||||||
Total available-for-sale securities | $ | 122,597 | $ | (156 | ) | $ | 167,966 | $ | (1,522 | ) | $ | 290,563 | $ | (1,678 | ) | ||||||||||
Investment securities held-to-maturity: | |||||||||||||||||||||||||
Government agency/GSE | $ | - | $ | - | $ | 19,923 | $ | (170 | ) | $ | 19,923 | $ | (170 | ) | |||||||||||
Residential mortgage-backed securities | 5,021 | (3 | ) | - | - | 5,021 | (3 | ) | |||||||||||||||||
CMO | - | - | 178,297 | (1,467 | ) | 178,297 | (1,467 | ) | |||||||||||||||||
Municipal bonds | 3,037 | (5 | ) | 32,217 | (553 | ) | 35,254 | (558 | ) | ||||||||||||||||
Total held-to-maturity securities | $ | 8,058 | $ | (8 | ) | $ | 230,437 | $ | (2,190 | ) | $ | 238,495 | $ | (2,198 | ) |
December 31, 2018 | ||||||||||||||||||||||||
Less Than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||
Fair Value | Gross Unrealized Holding Losses | Fair Value |
Gross | Fair Value | Gross Unrealized Holding Losses | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Investment securitiesavailable-for-sale: | ||||||||||||||||||||||||
Residential mortgage-backed securities | $ | 692,311 | $ | (4,864) | $ | 593,367 | $ | (16,082) | $ | 1,285,678 | $ | (20,946) | ||||||||||||
CMO/REMIC - residential | 36,582 | (365) | 135,062 | (3,160) | 171,644 | (3,525) | ||||||||||||||||||
Municipal bonds | 9,568 | (188) | 14,181 | (955) | 23,749 | (1,143) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Totalavailable-for-sale securities | $ | 738,461 | $ | (5,417) | $ | 742,610 | $ | (20,197) | $ | 1,481,071 | $ | (25,614) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Investment securitiesheld-to-maturity: | ||||||||||||||||||||||||
Government agency/GSE | $ | 7,479 | $ | (15) | $ | 54,944 | $ | (2,607) | $ | 62,423 | $ | (2,622) | ||||||||||||
Residential mortgage-backed securities | 59,871 | (484) | 90,863 | (2,656) | 150,734 | (3,140) | ||||||||||||||||||
CMO | - | - | 203,254 | (12,081) | 203,254 | (12,081) | ||||||||||||||||||
Municipal bonds | 70,989 | (778) | 77,723 | (5,410) | 148,712 | (6,188) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Totalheld-to-maturity securities | $ | 138,339 | $ | (1,277) | $ | 426,784 | $ | (22,754) | $ | 565,123 | $ | (24,031) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2018 | |||||||||||||||||||||||
Less Than 12 Months | 12 Months or Longer | Total | |||||||||||||||||||||
Fair Value | Gross Unrealized Holding Losses | Fair Value | Gross Unrealized Holding Losses | Fair Value | Gross Unrealized Holding Losses | ||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Investment securities available-for-sale: | |||||||||||||||||||||||
Residential mortgage-backed securities | $ | 692,311 | $ | (4,864 | ) | $ | 593,367 | $ | (16,082 | ) | $ | 1,285,678 | $ | (20,946 | ) | ||||||||
CMO/REMIC - residential | 36,582 | (365 | ) | 135,062 | (3,160 | ) | 171,644 | (3,525 | ) | ||||||||||||||
Municipal bonds | 9,568 | (188 | ) | 14,181 | (955 | ) | 23,749 | (1,143 | ) | ||||||||||||||
Total available-for-sale securities | $ | 738,461 | $ | (5,417 | ) | $ | 742,610 | $ | (20,197 | ) | $ | 1,481,071 | $ | (25,614 | ) | ||||||||
Investment securities held-to-maturity: | |||||||||||||||||||||||
Government agency/GSE | $ | 7,479 | $ | (15 | ) | $ | 54,944 | $ | (2,607 | ) | $ | 62,423 | $ | (2,622 | ) | ||||||||
Residential mortgage-backed securities | 59,871 | (484 | ) | 90,863 | (2,656 | ) | 150,734 | (3,140 | ) | ||||||||||||||
CMO | - | - | 203,254 | (12,081 | ) | 203,254 | (12,081 | ) | |||||||||||||||
Municipal bonds | 70,989 | (778 | ) | 77,723 | (5,410 | ) | 148,712 | (6,188 | ) | ||||||||||||||
Total held-to-maturity securities | $ | 138,339 | $ | (1,277 | ) | $ | 426,784 | $ | (22,754 | ) | $ | 565,123 | $ | (24,031 | ) | ||||||||
March 31, 2019 | ||||||||||||||||
Available-for-sale | Held-to-maturity | |||||||||||||||
Amortized Cost | Fair Value |
Amortized | Fair Value | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Due in one year or less | $ | 11,947 | $ | 12,113 | $ | 500 | $ | 506 | ||||||||
Due after one year through five years | 1,481,462 | 1,479,161 | 264,136 | 254,886 | ||||||||||||
Due after five years through ten years | 157,640 | 155,816 | 232,213 | 231,964 | ||||||||||||
Due after ten years | 26,683 | 26,411 | 236,615 | 233,295 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total investment securities | $ | 1,677,732 | $ | 1,673,501 | $ | 733,464 | $ | 720,651 | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2019 | |||||||||||||||||
Available-for-sale | Held-to-maturity | ||||||||||||||||
Amortized Cost | Fair Value | Cost | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Due in one year or less | $ | 12,278 | $ | 12,426 | $ | 500 | $ | 500 | |||||||||
Due after one year through five years | 1,345,036 | 1,364,026 | 327,802 | 328,561 | |||||||||||||
Due after five years through ten years | 171,657 | 173,033 | 161,463 | 163,676 | |||||||||||||
Due after ten years | 20,435 | 20,921 | 214,188 | 219,154 | |||||||||||||
Total investment securities | $ | 1,549,406 | $ | 1,570,406 | $ | 703,953 | $ | 711,891 |
6. |
|
FDIC Assisted Acquisition
On
At MarchDecember 31, 2019,2018, the remaining discount associated with the PCI loans was zero. The loss sharing agreementzero and our total gross PCI loan portfolio represented less than 0.2% of total gross loans and leases at September 30, 2019 and December 31, 2018.
The following table provides a summary of PCIand were reflected in total loans and lease finance receivables by type and by internal risk ratings (credit quality indicators) for the periods indicated.
March 31, 2019 | December 31, 2018 | |||||||
(Dollars in thousands) | ||||||||
Commercial and industrial | $ | 616 | $ | 519 | ||||
SBA | 1,235 | 1,258 | ||||||
Real estate: | ||||||||
Commercial real estate | 13,183 | 14,407 | ||||||
Construction | - | - | ||||||
SFR mortgage | 141 | 145 | ||||||
Dairy & livestock and agribusiness | - | 700 | ||||||
Municipal lease finance receivables | - | - | ||||||
Consumer and other loans | 181 | 185 | ||||||
|
|
|
|
|
| |||
Gross PCI loans | 15,356 | 17,214 | ||||||
Less: Purchase accounting discount | - | - | ||||||
|
|
|
|
|
| |||
Gross PCI loans, net of discount | 15,356 | 17,214 | ||||||
Less: Allowance for PCI loan losses | (180 | ) | (204 | ) | ||||
|
|
|
|
|
| |||
Net PCI loans | $ | 15,176 | $ | 17,010 | ||||
|
|
|
|
|
|
Credit Quality Indicators
The following table summarizes gross PCI loans by internal risk ratings for the periods indicated.
March 31, 2019 | December 31, 2018 | |||||||
(Dollars in thousands) | ||||||||
Pass | $ | 13,993 | $ | 15,816 | ||||
Special mention | 1,152 | 1,174 | ||||||
Substandard | 211 | 224 | ||||||
Doubtful & loss | - | - | ||||||
|
|
|
|
|
| |||
Total gross PCI loans | $ | 15,356 | $ | 17,214 | ||||
|
|
|
|
|
|
|
The following table provides a summary of the Company’s total loans and lease finance receivables excluding PCI loans, by type.
March 31, 2019 | December 31, 2018 | |||||||
(Dollars in thousands) | ||||||||
Commercial and industrial | $ | 957,126 | $ | 1,002,209 | ||||
SBA | 337,957 | 350,043 | ||||||
Real estate: | ||||||||
Commercial real estate | 5,388,866 | 5,394,229 | ||||||
Construction | 121,912 | 122,782 | ||||||
SFR mortgage | 285,787 | 296,504 | ||||||
Dairy & livestock and agribusiness | 322,321 | 393,843 | ||||||
Municipal lease finance receivables | 61,249 | 64,186 | ||||||
Consumer and other loans | 120,768 | 128,429 | ||||||
|
|
|
|
|
| |||
Gross loans, excluding PCI loans | 7,595,986 | 7,752,225 | ||||||
Less: Deferred loan fees, net | (4,479 | ) | (4,828 | ) | ||||
|
|
|
|
|
| |||
Gross loans, excluding PCI loans, net of deferred loan fees | 7,591,507 | 7,747,397 | ||||||
Less: Allowance for loan losses | (65,021 | ) | (63,409 | ) | ||||
|
|
|
|
|
| |||
Net loans, excluding PCI loans | 7,526,486 | 7,683,988 | ||||||
|
|
|
|
|
| |||
PCI Loans | 15,356 | 17,214 | ||||||
Discount on PCI loans | - | - | ||||||
Less: Allowance for loan losses | (180 | ) | (204 | ) | ||||
|
|
|
|
|
| |||
PCI loans, net | 15,176 | 17,010 | ||||||
|
|
|
|
|
| |||
Total loans and lease finance receivables | $ | 7,541,662 | $ | 7,700,998 | ||||
|
|
|
|
|
|
September 30, 2019 | December 31, 2018 | |||||||||||||||
Total Loans and Leases | Non-PCI Loansand Leases | PCI Loans | Total Loans and Leases | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Commercial and industrial | $ | 921,678 | $ | 1,002,209 | $ | 519 | 1,002,728 | |||||||||
SBA | 319,571 | 350,043 | 1,258 | 351,301 | ||||||||||||
Real estate: | ||||||||||||||||
Commercial real estate | 5,375,668 | 5,394,229 | 14,407 | 5,408,636 | ||||||||||||
Construction | 119,931 | 122,782 | - | 122,782 | ||||||||||||
SFR mortgage | 278,644 | 296,504 | 145 | 296,649 | ||||||||||||
Dairy & livestock and agribusiness | 311,229 | 393,843 | 700 | 394,543 | ||||||||||||
Municipal lease finance receivables | 54,468 | 64,186 | - | 64,186 | ||||||||||||
Consumer and other loans | 117,128 | 128,429 | 185 | 128,614 | ||||||||||||
Gross loans | 7,498,317 | 7,752,225 | 17,214 | 7,769,439 | ||||||||||||
Less: Deferred loan fees, net | (3,866 | ) | (4,828 | ) | - | (4,828 | ) | |||||||||
Gross loans, net of deferred loan fees | 7,494,451 | 7,747,397 | 17,214 | 7,764,611 | ||||||||||||
Less: Allowance for loan losses | (68,672 | ) | (63,409 | ) | (204 | ) | (63,613 | ) | ||||||||
Total loans and lease finance receivables | $ | 7,425,779 | $ | 7,683,988 | $ | 17,010 | $ | 7,700,998 | ||||||||
Loans are risk rated into the following categories (Credit Quality Indicators): Pass, Special Mention, Substandard, Doubtful and Loss. Each of these groups is assessed for the proper amount to be used in determining the adequacy of our allowance for losses. These categories can be described as follows:
March 31, 2019 | ||||||||||||||||||||
Pass | Special Mention | Substandard (1) | Doubtful & Loss | Total | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Commercial and industrial | $ | 913,059 | $ | 32,685 | $ | 11,382 | $ | - | $ | 957,126 | ||||||||||
SBA | 322,393 | 7,704 | 7,860 | - | 337,957 | |||||||||||||||
Real estate: | ||||||||||||||||||||
Commercial real estate | ||||||||||||||||||||
Owner occupied | 1,986,030 | 96,262 | 16,849 | - | 2,099,141 | |||||||||||||||
Non-owner occupied | 3,279,696 | 9,290 | 739 | - | 3,289,725 | |||||||||||||||
Construction | ||||||||||||||||||||
Speculative | 120,801 | - | - | - | 120,801 | |||||||||||||||
Non-speculative | 1,111 | - | - | - | 1,111 | |||||||||||||||
SFR mortgage | 278,962 | 3,287 | 3,538 | - | 285,787 | |||||||||||||||
Dairy & livestock and agribusiness | 261,438 | 50,451 | 10,432 | - | 322,321 | |||||||||||||||
Municipal lease finance receivables | 60,745 | 504 | - | - | 61,249 | |||||||||||||||
Consumer and other loans | 118,596 | 1,215 | 957 | - | 120,768 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total gross loans, excluding PCI loans | $ | 7,342,831 | $ | 201,398 | $ | 51,757 | $ | - | $ | 7,595,986 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2019 | |||||||||||||||||||||
Pass | Special Mention | Substandard (1) | Doubtful & Loss | Total | |||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Commercial and industrial | $ | 892,865 | $ | 24,456 | $ | 4,357 | $ | - | $ | 921,678 | |||||||||||
SBA | 296,127 | 13,764 | 9,680 | - | 319,571 | ||||||||||||||||
Real estate: | |||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||
Owner occupied | 1,987,168 | 83,305 | 22,618 | - | 2,093,091 | ||||||||||||||||
Non-owner occupied | 3,269,174 | 12,663 | 740 | - | 3,282,577 | ||||||||||||||||
Construction | |||||||||||||||||||||
Speculative | 105,636 | - | - | - | 105,636 | ||||||||||||||||
Non-speculative | 14,295 | - | - | - | 14,295 | ||||||||||||||||
SFR mortgage | 275,069 | 2,053 | 1,522 | - | 278,644 | ||||||||||||||||
Dairy & livestock and agribusiness | 247,554 | 43,585 | 20,090 | - | 311,229 | ||||||||||||||||
Municipal lease finance receivables | 53,998 | 470 | - | - | 54,468 | ||||||||||||||||
Consumer and other loans | 115,242 | 845 | 1,041 | - | 117,128 | ||||||||||||||||
Total gross loans | $ | 7,257,128 | $ | 181,141 | $ | 60,048 | $ | - | $ | 7,498,317 | |||||||||||
(1) | Includes |
December 31, 2018 | ||||||||||||||||||||
Pass | Special Mention | Substandard (1) | Doubtful & Loss | Total | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Commercial and industrial | $ | 961,909 | $ | 29,358 | $ | 10,942 | $ | - | $ | 1,002,209 | ||||||||||
SBA | 336,033 | 7,375 | 6,635 | - | 350,043 | |||||||||||||||
Real estate: | ||||||||||||||||||||
Commercial real estate | ||||||||||||||||||||
Owner occupied | 2,008,169 | 95,841 | 13,980 | - | 2,117,990 | |||||||||||||||
Non-owner occupied | 3,260,822 | 9,938 | 5,479 | - | 3,276,239 | |||||||||||||||
Construction | ||||||||||||||||||||
Speculative | 118,233 | - | - | - | 118,233 | |||||||||||||||
Non-speculative | 4,549 | - | - | - | 4,549 | |||||||||||||||
SFR mortgage | 289,607 | 3,310 | 3,587 | - | 296,504 | |||||||||||||||
Dairy & livestock and agribusiness | 350,044 | 34,586 | 9,213 | - | 393,843 | |||||||||||||||
Municipal lease finance receivables | 63,650 | 536 | - | - | 64,186 | |||||||||||||||
Consumer and other loans | 126,085 | 1,263 | 1,081 | - | 128,429 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total gross loans, excluding PCI loans | $ | 7,519,101 | $ | 182,207 | $ | 50,917 | $ | - | $ | 7,752,225 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2018 (1) | ||||||||||||||||||||
Pass | Special Mention | Substandard (2) | Doubtful & Loss | Total | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Commercial and industrial | $ | 961,909 | 29,358 | 10,942 | $ | - | 1,002,209 | |||||||||||||
SBA | 336,033 | 7,375 | 6,635 | - | 350,043 | |||||||||||||||
Real estate: | ||||||||||||||||||||
Commercial real estate | ||||||||||||||||||||
Owner occupied | 2,008,169 | 95,841 | 13,980 | - | 2,117,990 | |||||||||||||||
Non-owner occupied | 3,260,822 | 9,938 | 5,479 | - | 3,276,239 | |||||||||||||||
Construction | ||||||||||||||||||||
Speculative | 118,233 | - | - | - | 118,233 | |||||||||||||||
Non-speculative | 4,549 | - | - | - | 4,549 | |||||||||||||||
SFR mortgage | 289,607 | 3,310 | 3,587 | - | 296,504 | |||||||||||||||
Dairy & livestock and agribusiness | 350,044 | 34,586 | 9,213 | - | 393,843 | |||||||||||||||
Municipal lease finance receivables | 63,650 | 536 | - | - | 64,186 | |||||||||||||||
Consumer and other loans | 126,085 | 1,263 | 1,081 | - | 128,429 | |||||||||||||||
Total gross loans | $ | 7,519,101 | $ | 182,207 | 50,917 | $ | - | $ | 7,752,225 |
(1) | Excludes PCI loans of $17.2 million as of December 31, 2018, of which $15.8 million were rated pass, $1.2 million were rated special mention, $224,000 were rated substandard, and 0 were rated doubtful & loss. |
(2) | Includes $19.0 million of classified loans acquired from CB in the third quarter of 2018. |
Commercial and industrial SBA Real estate: Commercial real estate Construction SFR mortgage Dairy & livestock and agribusiness Municipal lease finance receivables Consumer and other loans PCI loans Total allowance for loan losses ALLL ALLMarch 31,September 30, 2019 and December 31, 2018. No assurance can be given that economic conditions which adversely affect the Company’s service areas or other circumstances will not be reflected in increased provisions for loan losses in the future. For the Three Months Ended March 31, 2019 Ending Balance
December 31,
2018 Charge-offs Recoveries Provision for
(Recapture of)
Loan Losses Ending Balance
March 31, 2019 (Dollars in thousands) $ 7,520 $ - $ 110 $ (31 ) $ 7,599 1,062 (20 ) 5 232 1,279 - - 44,934 - - 1,144 46,078 981 - 3 (120 ) 864 2,196 - 68 (76 ) 2,188 5,215 (78 ) - 562 5,699 775 - - (37 ) 738 726 (1 ) 1 (150 ) 576 204 - - (24 ) 180 $ 63,613 $ (99 ) $ 187 $ 1,500 $ 65,201
For the Three Months Ended March 31, 2018 | ||||||||||||||||||||
Ending Balance December 31, 2017 | Charge-offs | Recoveries | (Recapture of) Provision for Loan Losses | Ending Balance March 31, 2018 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Commercial and industrial | $ | 7,280 | $ | - | $ | 10 | $ | 209 | $ | 7,499 | ||||||||||
SBA | 869 | - | 5 | 10 | 884 | |||||||||||||||
Real estate: | - | - | ||||||||||||||||||
Commercial real estate | 41,722 | - | - | 141 | 41,863 | |||||||||||||||
Construction | 984 | - | 1,334 | (1,331 | ) | 987 | ||||||||||||||
SFR mortgage | 2,112 | - | - | 90 | 2,202 | |||||||||||||||
Dairy & livestock and agribusiness | 4,647 | - | - | 19 | 4,666 | |||||||||||||||
Municipal lease finance receivables | 851 | - | - | (17 | ) | 834 | ||||||||||||||
Consumer and other loans | 753 | (7 | ) | 8 | (66 | ) | 688 | |||||||||||||
PCI loans | 367 | - | - | (55 | ) | 312 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total allowance for loan losses | $ | 59,585 | $ | (7 | ) | $ | 1,357 | $ | (1,000 | ) | $ | 59,935 | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended September 30, 2019 | |||||||||||||||||||||
Ending Balance June 30, 2019 | Charge-offs | Recoveries | Provision for (Recapture of) Loan Losses | Ending Balance September 30, | |||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Commercial and industrial | $ | 7,857 | $ | - | $ | 94 | $ | 287 | $ | 8,238 | |||||||||||
SBA | 1,119 | (65 | ) | - | 412 | 1,466 | |||||||||||||||
Real estate: | |||||||||||||||||||||
Commercial real estate | 48,287 | - | - | 624 | 48,911 | ||||||||||||||||
Construction | 871 | - | 3 | 55 | 929 | ||||||||||||||||
SFR mortgage | 2,323 | - | 8 | 44 | 2,375 | ||||||||||||||||
Dairy & livestock and agribusiness | 5,341 | - | - | 88 | 5,429 | ||||||||||||||||
Municipal lease finance receivables | 726 | - | - | (64 | ) | 662 | |||||||||||||||
Consumer and other loans | 608 | (3 | ) | 3 | 54 | 662 | |||||||||||||||
Total allowance for loan losses | $ | 67,132 | $ | (68 | ) | $ | 108 | $ | 1,500 | $ | 68,672 |
For the Three Months Ended September 30, 2018 | |||||||||||||||||||||||
Ending Balance June 30, 2018 | Charge-offs | Recoveries | Provision for (Recapture of) Loan Losses | Ending Balance September 30, 2018 | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Commercial and industrial | 6,970 | $ | - | $ | 44 | $ | 477 | $ | 7,491 | ||||||||||||||
SBA | 841 | (257 | ) | 5 | 369 | 958 | |||||||||||||||||
Real estate: | |||||||||||||||||||||||
Commercial real estate | 42,597 | - | - | (1,056 | ) | 41,541 | |||||||||||||||||
Construction | 1,003 | - | 15 | 115 | 1,133 | ||||||||||||||||||
SFR mortgage | 2,155 | - | - | (30 | ) | 2,125 | |||||||||||||||||
Dairy & livestock and | 4,351 | - | - | 673 | 5,024 | ||||||||||||||||||
Municipal lease finance | 808 | - | - | 7 | 815 | ||||||||||||||||||
Consumer and other loans | 642 | (1 | ) | 118 | (44 | ) | 715 | ||||||||||||||||
PCI loans | 216 | - | - | (11 | ) | 205 | |||||||||||||||||
Total allowance for loan | $ | 59,583 | $ | (258 | ) | $ | 182 | $ | 500 | $ | 60,007 | ||||||||||||
For the Nine Months Ended September 30, 2019 | |||||||||||||||||||||||
Ending Balance December 31, 2018 | Charge-offs | Recoveries | Provision for (Recapture of) Loan Losses | Ending Balance September 30, 2019 | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Commercial and industrial | $ | 7,528 | $ | (48 | ) | $ | 253 | $ | 505 | $ | 8,238 | ||||||||||||
SBA | 1,078 | (295 | ) | 9 | 674 | 1,466 | |||||||||||||||||
Real estate: | |||||||||||||||||||||||
Commercial real estate | 45,097 | - | - | 3,814 | 48,911 | ||||||||||||||||||
Construction | 981 | - | 9 | (61 | ) | 929 | |||||||||||||||||
SFR mortgage | 2,197 | - | 191 | (13 | ) | 2,375 | |||||||||||||||||
Dairy & livestock and | 5,225 | (78 | ) | 19 | 263 | 5,429 | |||||||||||||||||
Municipal lease finance receivables | 775 | - | - | (113 | ) | 662 | |||||||||||||||||
Consumer and other loans | 732 | (7 | ) | 6 | (69 | ) | 662 | ||||||||||||||||
Total allowance for loan | $ | 63,613 | $ | (428 | ) | $ | 487 | $ | 5,000 | $ | 68,672 | ||||||||||||
For the Nine Months Ended September 30, 2018 | |||||||||||||||||||||||
Ending Balance December 31, 2017 | Charge-offs | Recoveries | (Recapture of) Provision for Loan Losses | Ending Balance September 30, | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Commercial and industrial | $ | 7,280 | $ | - | $ | 81 | $ | 130 | $ | 7,491 | |||||||||||||
SBA | 869 | (257 | ) | 15 | 331 | 958 | |||||||||||||||||
Real estate: | |||||||||||||||||||||||
Commercial real estate | 41,722 | - | - | (181 | ) | 41,541 | |||||||||||||||||
Construction | 984 | - | 1,945 | (1,796 | ) | 1,133 | |||||||||||||||||
SFR mortgage | 2,112 | - | - | 13 | 2,125 | ||||||||||||||||||
Dairy & livestock and | 4,647 | - | 19 | 358 | 5,024 | ||||||||||||||||||
Municipal lease finance receivables | 851 | - | - | (36 | ) | 815 | |||||||||||||||||
Consumer and other loans | 753 | (10 | ) | 129 | (157 | ) | 715 | ||||||||||||||||
PCI loans | 367 | - | - | (162 | ) | 205 | |||||||||||||||||
Total allowance for loan losses | $ | 59,585 | $ | (267 | ) | $ | 2,189 | $ | (1,500 | ) | $ | 60,007 |
March 31, 2019 | ||||||||||||||||||||||||
Recorded Investment in Loans | Allowance for Loan Losses | |||||||||||||||||||||||
Individually Evaluated for Impairment | Collectively Evaluated for Impairment | Acquired with Deterioriated Credit Quality | Individually Evaluated for Impairment | Collectively Evaluated for Impairment | Acquired with Deterioriated Credit Quality | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Commercial and industrial | $ | 8,512 | $ | 948,614 | $ | - | $ | 117 | $ | 7,482 | $ | - | ||||||||||||
SBA | 4,661 | 333,296 | - | 317 | 962 | - | ||||||||||||||||||
Real estate: | ||||||||||||||||||||||||
Commercial real estate | 1,589 | 5,387,277 | - | - | 46,078 | - | ||||||||||||||||||
Construction | - | 121,912 | - | - | 864 | - | ||||||||||||||||||
SFR mortgage | 5,051 | 280,736 | - | - | 2,188 | - | ||||||||||||||||||
Dairy & livestock and agribusiness | - | 322,321 | - | - | 5,699 | - | ||||||||||||||||||
Municipal lease finance receivables | - | 61,249 | - | - | 738 | - | ||||||||||||||||||
Consumer and other loans | 477 | 120,291 | - | 1 | 575 | - | ||||||||||||||||||
PCI loans | - | - | 15,356 | - | - | 180 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Total | $ | 20,290 | $ | 7,575,696 | $ | 15,356 | $ | 435 | $ | 64,586 | $ | 180 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
March 31, 2018 | ||||||||||||||||||||||||
Recorded Investment in Loans | Allowance for Loan Losses | |||||||||||||||||||||||
Individually Evaluated for Impairment | Collectively Evaluated for Impairment | Acquired with Deterioriated Credit Quality | Individually Evaluated for Impairment | Collectively Evaluated for Impairment | Acquired with Deterioriated Credit Quality | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Commercial and industrial | $ | 432 | $ | 513,797 | $ | - | $ | - | $ | 7,499 | $ | - | ||||||||||||
SBA | 1,201 | 122,231 | - | - | 884 | - | ||||||||||||||||||
Real estate: | ||||||||||||||||||||||||
Commercial real estate | 7,992 | 3,403,224 | - | - | 41,863 | - | ||||||||||||||||||
Construction | - | 79,898 | - | - | 987 | - | ||||||||||||||||||
SFR mortgage | 3,576 | 234,042 | - | - | 2,202 | - | ||||||||||||||||||
Dairy & livestock and agribusiness | 818 | 275,561 | - | - | 4,666 | - | ||||||||||||||||||
Municipal lease finance receivables | - | 67,892 | - | - | 834 | - | ||||||||||||||||||
Consumer and other loans | 438 | 63,721 | - | - | 688 | - | ||||||||||||||||||
PCI loans | - | - | 25,861 | - | - | 312 | ||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Total | $ | 14,457 | $ | 4,760,366 | $ | 25,861 | $ | - | $ | 59,623 | $ | 312 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2019 | ||||||||||||||||
Recorded Investment in Loans | Allowance for Loan Losses | |||||||||||||||
Individually Evaluated for Impairment | Collectively Evaluated for Impairment | Individually Evaluated for Impairment | Collectively Evaluated for Impairment | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Commercial and industrial | $ | 1,638 | $ | 920,040 | $ | 254 | $ | 7,984 | ||||||||
SBA | 3,248 | 316,323 | 286 | 1,180 | ||||||||||||
Real estate: | ||||||||||||||||
Commercial real estate | 1,500 | 5,374,168 | - | 48,911 | ||||||||||||
Construction | - | 119,931 | - | 929 | ||||||||||||
SFR mortgage | 3,009 | 275,635 | - | 2,375 | ||||||||||||
Dairy & livestock and agribusiness | - | 311,229 | - | 5,429 | ||||||||||||
Municipal lease finance receivables | - | 54,468 | - | 662 | ||||||||||||
Consumer and other loans | 385 | 116,743 | - | 662 | ||||||||||||
Total | $ | 9,780 | $ | 7,488,537 | $ | 540 | $ | 68,132 | ||||||||
September 30, 2018 | |||||||||||||||||||||||||
Recorded Investment in Loans | Allowance for Loan Losses | ||||||||||||||||||||||||
Individually Evaluated for Impairment | Collectively Evaluated for Impairment | Acquired with Deterioriated Credit Quality | Individually Evaluated for Impairment | Collectively Evaluated for Impairment | Acquired with Deterioriated Credit Quality | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
Commercial and industrial | $ | 3,168 | $ | 1,018,738 | $ | - | $ | - | $ | 7,491 | $ | - | |||||||||||||
SBA | 3,593 | 353,459 | - | - | 958 | - | |||||||||||||||||||
Real estate: | |||||||||||||||||||||||||
Commercial real estate | 6,348 | 5,262,392 | - | - | 41,541 | - | |||||||||||||||||||
Construction | - | 123,274 | - | - | 1,133 | - | |||||||||||||||||||
SFR mortgage | 5,492 | 287,024 | - | 13 | 2,112 | - | |||||||||||||||||||
Dairy & livestock and agribusiness | 775 | 303,823 | - | - | 5,024 | - | |||||||||||||||||||
Municipal lease finance receivables | - | 67,581 | - | - | 815 | - | |||||||||||||||||||
Consumer and other loans | 807 | 133,989 | - | 70 | 645 | - | |||||||||||||||||||
PCI loans | - | - | 17,260 | - | - | 205 | |||||||||||||||||||
Total | $ | 20,183 | $ | 7,550,280 | $ | 17,260 | $ | 83 | $ | 59,719 | $ | 205 | |||||||||||||
March 31, 2019 | ||||||||||||||||||||||||
30-59 Days Past Due | 60-89 Days Past Due | Total Past Due and Accruing | Nonaccrual (1) (3) | Current | Total Loans and Financing Receivables | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Commercial and industrial | $ | 339 | $ | 30 | $ | 369 | $ | 8,388 | $ | 948,369 | $ | 957,126 | ||||||||||||
SBA | 601 | - | 601 | 4,098 | 333,258 | 337,957 | ||||||||||||||||||
Real estate: | ||||||||||||||||||||||||
Commercial real estate | ||||||||||||||||||||||||
Owner occupied | - | - | - | 519 | 2,098,622 | 2,099,141 | ||||||||||||||||||
Non-owner occupied | 124 | - | 124 | 615 | 3,288,986 | 3,289,725 | ||||||||||||||||||
Construction | ||||||||||||||||||||||||
Speculative (2) | - | - | - | - | 120,801 | 120,801 | ||||||||||||||||||
Non-speculative | - | - | - | - | 1,111 | 1,111 | ||||||||||||||||||
SFR mortgage | - | - | - | 2,894 | 282,893 | 285,787 | ||||||||||||||||||
Dairy & livestock and agribusiness | - | - | - | - | 322,321 | 322,321 | ||||||||||||||||||
Municipal lease finance receivables | - | - | - | - | 61,249 | 61,249 | ||||||||||||||||||
Consumer and other loans | 98 | 3 | 101 | 477 | 120,190 | 120,768 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Total gross loans, excluding PCI loans | $ | 1,162 | $ | 33 | $ | 1,195 | $ | 16,991 | $ | 7,577,800 | $ | 7,595,986 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2019 | |||||||||||||||||||||||||
30-59 DaysPast Due | 60-89 DaysPast Due | and Accruing | Nonaccrual (1) (3) (4) | Current | Total Loans and Financing Receivables | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
Commercial and industrial | $ | 756 | $ | - | $ | 756 | $ | 1,550 | $ | 919,372 | $ | 921,678 | |||||||||||||
SBA | - | 303 | 303 | 2,706 | 316,562 | 319,571 | |||||||||||||||||||
Real estate: | |||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||
Owner occupied | - | - | - | 494 | 2,092,597 | 2,093,091 | |||||||||||||||||||
Non-owner occupied | 368 | - | 368 | 589 | 3,281,620 | 3,282,577 | |||||||||||||||||||
Construction | |||||||||||||||||||||||||
Speculative (2) | - | - | - | - | 105,636 | 105,636 | |||||||||||||||||||
Non-speculative | - | - | - | - | 14,295 | 14,295 | |||||||||||||||||||
- | - | - | 888 | 277,756 | 278,644 | ||||||||||||||||||||
Dairy & livestock and | - | - | - | - | 311,229 | 311,229 | |||||||||||||||||||
Municipal lease finance | - | - | - | - | 54,468 | 54,468 | |||||||||||||||||||
Consumer and other loans | - | - | - | 385 | 116,743 | 117,128 | |||||||||||||||||||
Total gross loans | $ | 1,124 | $ | 303 | $ | 1,427 | $ | 6,612 | $ | 7,490,278 | $ | 7,498,317 |
(1) | As of September 30, 2019, 30-59 days past due, 60-89 days past due, and |
(2) | Speculative construction loans are generally for properties where there is no identified buyer or renter. |
(3) | Includes |
December 31, 2018 | ||||||||||||||||||||||||
30-59 Days Past Due | 60-89 Days Past Due | Total Past Due and Accruing | Nonaccrual (1) (3) | Current | Total Loans and Financing Receivables | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Commercial and industrial | $ | 820 | $ | 89 | $ | 909 | $ | 7,490 | $ | 993,810 | $ | 1,002,209 | ||||||||||||
SBA | 1,172 | 135 | 1,307 | 2,892 | 345,844 | 350,043 | ||||||||||||||||||
Real estate: | ||||||||||||||||||||||||
Commercial real estate | ||||||||||||||||||||||||
Owner occupied | 2,439 | 350 | 2,789 | 589 | 2,114,612 | 2,117,990 | ||||||||||||||||||
Non-owner occupied | - | - | - | 5,479 | 3,270,760 | 3,276,239 | ||||||||||||||||||
Construction | ||||||||||||||||||||||||
Speculative (2) | - | - | - | - | 118,233 | 118,233 | ||||||||||||||||||
Non-speculative | - | - | - | - | 4,549 | 4,549 | ||||||||||||||||||
SFR mortgage | - | 285 | 285 | 2,937 | 293,282 | 296,504 | ||||||||||||||||||
Dairy & livestock and agribusiness | - | - | - | 78 | 393,765 | 393,843 | ||||||||||||||||||
Municipal lease finance receivables | - | - | - | - | 64,186 | 64,186 | ||||||||||||||||||
Consumer and other loans | - | - | - | 486 | 127,943 | 128,429 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Total gross loans, excluding PCI loans | $ | 4,431 | $ | 859 | $ | 5,290 | $ | 19,951 | $ | 7,726,984 | $ | 7,752,225 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) | Excludes $1.6 million of guaranteed portion of nonaccrual SBA loans that are in process of collection. |
December 31, 2018 (1) | |||||||||||||||||||||||||
30-59 DaysPast Due | 60-89 DaysPast Due | Total Past Due and Accruing | Nonaccrual (2) (4) | Current | Total Loans and Financing Receivables | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
Commercial and industrial | $ | 820 | $ | 89 | $ | 909 | $ | 7,490 | $ | 993,810 | $ | 1,002,209 | |||||||||||||
SBA | 1,172 | 135 | 1,307 | 2,892 | 345,844 | 350,043 | |||||||||||||||||||
Real estate: | |||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||
Owner occupied | 2,439 | 350 | 2,789 | 589 | 2,114,612 | 2,117,990 | |||||||||||||||||||
Non-owner occupied | - | - | - | 5,479 | 3,270,760 | 3,276,239 | |||||||||||||||||||
Construction | |||||||||||||||||||||||||
Speculative (3) | - | - | - | - | 118,233 | 118,233 | |||||||||||||||||||
Non-speculative | - | - | - | - | 4,549 | 4,549 | |||||||||||||||||||
SFR mortgage | - | 285 | 285 | 2,937 | 293,282 | 296,504 | |||||||||||||||||||
Dairy & livestock and agribusiness | - | - | - | 78 | 393,765 | 393,843 | |||||||||||||||||||
Municipal lease finance receivables | - | - | - | - | 64,186 | 64,186 | |||||||||||||||||||
Consumer and other loans | - | - | - | 486 | 127,943 | 128,429 | |||||||||||||||||||
$ | 4,431 | $ | 859 | $ | 5,290 | $ | 19,951 | $ | 7,726,984 | $ | 7,752,225 |
(1) | Excludes PCI loans. |
(2) | As of December 31, 2018, $2.3 million of nonaccruing loans were current, $33,000 were 30-59 days past due, $57,000 were60-89 days past due and $17.6 million were 90+ days past due. |
Speculative construction loans are generally for properties where there is no identified buyer or renter. |
Includes $12.3 million of nonaccrual loans acquired from CB in the third quarter of 2018. |
March 31,September 30, 2019, the Company had impaired loans excluding PCI loans, of $20.3$9.8 million. Impaired loans included $8.4 million of nonaccrual commercial and industrial loans, $2.9 million of nonaccrual single-family residential (“SFR”) mortgage loans, $4.1$2.7 million of nonaccrual Small Business Administration (“SBA”) loans, $1.6 million of nonaccrual commercial and industrial loans, $1.1 million of nonaccrual commercial real estate loans, $477,000$385,000 of nonaccrual consumer and other loans. These impaired loans included $3.6$3.4 million of loans whose terms were modified in a troubled debt restructuring, of which $277,000$249,000 were classified as nonaccrual. The remaining balance of $3.3$3.2 million consisted of 12 loans performing according to the restructured terms. The impaired loans had a specific allowance of $435,000$540,000 at March 31,September 30, 2019. At December 31, 2018, the Company had classified as impaired, loans excluding PCI loans, with a balance of $23.5 million with a related allowance of $561,000.
As of and For the Three Months Ended March 31, 2019 | ||||||||||||||||||||
Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Interest Income Recognized | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
With no related allowance recorded: | ||||||||||||||||||||
Commercial and industrial | $ | 8,208 | $ | 12,317 | $ | - | $ | 8,230 | $ | 2 | ||||||||||
SBA | 3,400 | 5,779 | - | 3,511 | 11 | |||||||||||||||
Real estate: | ||||||||||||||||||||
Commercial real estate | ||||||||||||||||||||
Owner occupied | 519 | 618 | - | 521 | - | |||||||||||||||
Non-owner occupied | 1,070 | 1,231 | - | 1,084 | 7 | |||||||||||||||
Construction | ||||||||||||||||||||
Speculative | - | - | - | - | - | |||||||||||||||
Non-speculative | - | - | - | - | - | |||||||||||||||
SFR mortgage | 5,051 | 5,865 | - | 5,082 | 21 | |||||||||||||||
Dairy & livestock and agribusiness | - | - | - | - | - | |||||||||||||||
Municipal lease finance receivables | - | - | - | - | - | |||||||||||||||
Consumer and other loans | 476 | 625 | - | 482 | - | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total | 18,724 | 26,435 | - | 18,910 | 41 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
With a related allowance recorded: | ||||||||||||||||||||
Commercial and industrial | 304 | 309 | 117 | 323 | - | |||||||||||||||
SBA | 1,261 | 1,236 | 317 | 1,261 | - | |||||||||||||||
Real estate: | ||||||||||||||||||||
Commercial real estate | ||||||||||||||||||||
Owner occupied | - | - | - | - | - | |||||||||||||||
Non-owner occupied | - | - | - | - | - | |||||||||||||||
Construction | ||||||||||||||||||||
Speculative | - | - | - | - | - | |||||||||||||||
Non-speculative | - | - | - | - | - | |||||||||||||||
SFR mortgage | - | - | - | - | - | |||||||||||||||
Dairy & livestock and agribusiness | - | - | - | - | - | |||||||||||||||
Municipal lease finance receivables | - | - | - | - | - | |||||||||||||||
Consumer and other loans | 1 | 1 | 1 | 1 | - | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total | 1,566 | 1,546 | 435 | 1,585 | - | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total impaired loans | $ | 20,290 | $ | 27,981 | $ | 435 | $ | 20,495 | $ | 41 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of and For the Three Months Ended March 31, 2018 | ||||||||||||||||||||
Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Interest Income Recognized | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
With no related allowance recorded: | ||||||||||||||||||||
Commercial and industrial | $ | 432 | $ | 986 | $ | - | $ | 461 | $ | 2 | ||||||||||
SBA | 1,201 | 1,327 | - | 1,220 | 12 | |||||||||||||||
Real estate: | ||||||||||||||||||||
Commercial real estate | ||||||||||||||||||||
Owner occupied | 4,332 | 4,755 | - | 4,348 | - | |||||||||||||||
Non-owner occupied | 3,660 | 5,033 | - | 3,715 | 22 | |||||||||||||||
Construction | ||||||||||||||||||||
Speculative | - | - | - | - | - | |||||||||||||||
Non-speculative | - | - | - | - | - | |||||||||||||||
SFR mortgage | 3,576 | 4,236 | - | 3,599 | 25 | |||||||||||||||
Dairy & livestock and agribusiness | 818 | 1,091 | - | 826 | - | |||||||||||||||
Municipal lease finance receivables | - | - | - | - | - | |||||||||||||||
Consumer and other loans | 438 | 640 | - | 519 | - | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total | 14,457 | 18,068 | - | 14,688 | 61 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
With a related allowance recorded: | ||||||||||||||||||||
Commercial and industrial | - | - | - | - | - | |||||||||||||||
SBA | - | - | - | - | - | |||||||||||||||
Real estate: | ||||||||||||||||||||
Commercial real estate | ||||||||||||||||||||
Owner occupied | - | - | - | - | - | |||||||||||||||
Non-owner occupied | - | - | - | - | - | |||||||||||||||
Construction | ||||||||||||||||||||
Speculative | - | - | - | - | - | |||||||||||||||
Non-speculative | - | - | - | - | - | |||||||||||||||
SFR mortgage | - | - | - | - | - | |||||||||||||||
Dairy & livestock and agribusiness | - | - | - | - | - | |||||||||||||||
Municipal lease finance receivables | - | - | - | - | - | |||||||||||||||
Consumer and other loans | - | - | - | - | - | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total | - | - | - | - | - | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total impaired loans | $ | 14,457 | $ | 18,068 | $ | - | $ | 14,688 | $ | 61 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2018 | ||||||||||||
Recorded Investment | Unpaid Principal Balance | Related Allowance | ||||||||||
(Dollars in thousands) | ||||||||||||
With no related allowance recorded: | ||||||||||||
Commercial and industrial | $ | 7,436 | $ | 11,457 | $ | - | ||||||
SBA | 3,467 | 5,746 | - | |||||||||
Real estate: | ||||||||||||
Commercial real estate | ||||||||||||
Owner occupied | 589 | 705 | - | |||||||||
Non-owner occupied | 2,808 | 4,324 | - | |||||||||
Construction | ||||||||||||
Speculative | - | - | - | |||||||||
Non-speculative | - | - | - | |||||||||
SFR mortgage | 5,349 | 6,270 | - | |||||||||
Dairy & livestock and agribusiness | - | - | - | |||||||||
Municipal lease finance receivables | - | - | - | |||||||||
Consumer and other loans | 418 | 526 | - | |||||||||
|
|
|
|
|
|
|
|
| ||||
Total | 20,067 | 29,028 | - | |||||||||
|
|
|
|
|
|
|
|
| ||||
With a related allowance recorded: | ||||||||||||
Commercial and industrial | 189 | 191 | 3 | |||||||||
SBA | - | - | - | |||||||||
Real estate: | ||||||||||||
Commercial real estate | ||||||||||||
Owner occupied | - | - | - | |||||||||
Non-owner occupied | 3,143 | 3,144 | 478 | |||||||||
Construction | ||||||||||||
Speculative | - | - | - | |||||||||
Non-speculative | - | - | - | |||||||||
SFR mortgage | - | - | - | |||||||||
Dairy & livestock and agribusiness | 78 | 78 | 12 | |||||||||
Municipal lease finance receivables | - | - | - | |||||||||
Consumer and other loans | 68 | 100 | 68 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Total | 3,478 | 3,513 | 561 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Total impaired loans | $ | 23,545 | $ | 32,541 | $ | 561 | ||||||
|
|
|
|
|
|
|
|
|
As of and For the Nine Months Ended September 30, 2019 | |||||||||||||||||||||
Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Interest Income Recognized | |||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
With no related allowance recorded: | |||||||||||||||||||||
Commercial and industrial | $ | 1,382 | $ | 1,537 | $ | - | $ | 1,560 | $ | 4 | |||||||||||
SBA | 2,447 | 3,554 | - | 2,606 | 31 | ||||||||||||||||
Real estate: | |||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||
Owner occupied | 494 | 614 | - | 508 | - | ||||||||||||||||
Non-owner occupied | 1,006 | 1,190 | - | 1,052 | 21 | ||||||||||||||||
Construction | |||||||||||||||||||||
Speculative | - | - | - | - | - | ||||||||||||||||
Non-speculative | - | - | - | - | - | ||||||||||||||||
SFR mortgage | 3,009 | 3,338 | - | 3,059 | 62 | ||||||||||||||||
Dairy & livestock and agribusiness | - | - | - | - | - | ||||||||||||||||
Municipal lease finance receivables | - | - | - | - | - | ||||||||||||||||
Consumer and other loans | 385 | 516 | - | 401 | - | ||||||||||||||||
Total | 8,723 | 10,749 | - | 9,186 | 118 | ||||||||||||||||
With a related allowance recorded: | |||||||||||||||||||||
Commercial and industrial | 256 | 345 | 254 | 829 | - | ||||||||||||||||
SBA | 801 | 816 | 286 | 816 | - | ||||||||||||||||
Real estate: | |||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||
Owner occupied | - | - | - | - | - | ||||||||||||||||
Non-owner occupied | - | - | - | - | - | ||||||||||||||||
Construction | |||||||||||||||||||||
Speculative | - | - | - | - | - | ||||||||||||||||
Non-speculative | - | - | - | - | - | ||||||||||||||||
SFR mortgage | - | - | - | - | - | ||||||||||||||||
Dairy & livestock and agribusiness | - | - | - | - | - | ||||||||||||||||
Municipal lease finance receivables | - | - | - | - | - | ||||||||||||||||
Consumer and other loans | - | - | - | - | - | ||||||||||||||||
Total | 1,057 | 1,161 | 540 | 1,645 | - | ||||||||||||||||
Total impaired loans | $ | 9,780 | $ | 11,910 | $ | 540 | $ | 10,831 | $ | 118 | |||||||||||
As of and For the Nine Months Ended September 30, 2018 (1) | |||||||||||||||||||||
Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Interest Income Recognized | |||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
With no related allowance recorded: | |||||||||||||||||||||
Commercial and industrial | $ | 3,168 | $ | 3,829 | $ | - | $ | 3,439 | $ | 6 | |||||||||||
SBA | 3,593 | 5,779 | - | 4,457 | 34 | ||||||||||||||||
Real estate: | |||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||
Owner occupied | 615 | 726 | - | 644 | - | ||||||||||||||||
Non-owner occupied | 5,733 | 6,385 | - | 5,904 | 24 | ||||||||||||||||
Construction | |||||||||||||||||||||
Speculative | - | - | - | - | - | ||||||||||||||||
Non-speculative | - | - | - | - | - | ||||||||||||||||
SFR mortgage | 5,479 | 6,449 | - | 5,679 | 59 | ||||||||||||||||
Dairy & livestock and agribusiness | 775 | 1,091 | - | 808 | - | ||||||||||||||||
Municipal lease finance receivables | - | - | - | - | - | ||||||||||||||||
Consumer and other loans | 737 | 1,025 | - | 867 | - | ||||||||||||||||
Total | 20,100 | 25,284 | - | 21,798 | 123 | ||||||||||||||||
With a related allowance recorded: | |||||||||||||||||||||
Commercial and industrial | - | - | - | - | - | ||||||||||||||||
SBA | - | - | - | - | - | ||||||||||||||||
Real estate: | |||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||
Owner occupied | - | - | - | - | - | ||||||||||||||||
Non-owner occupied | - | - | - | - | - | ||||||||||||||||
Construction | |||||||||||||||||||||
Speculative | - | - | - | - | - | ||||||||||||||||
Non-speculative | - | - | - | - | - | ||||||||||||||||
SFR mortgage | 13 | 13 | 13 | 13 | - | ||||||||||||||||
Dairy & livestock and agribusiness | - | - | - | - | - | ||||||||||||||||
Municipal lease finance receivables | - | - | - | - | - | ||||||||||||||||
Consumer and other loans | 70 | 101 | 70 | 85 | - | ||||||||||||||||
Total | 83 | 114 | 83 | 98 | - | ||||||||||||||||
Total impaired loans | $ | 20,183 | $ | 25,398 | $ | 83 | $ | 21,896 | $ | 123 | |||||||||||
(1) | Excludes PCI loans. |
As of December 31, 2018 (1) | |||||||||||||
Recorded Investment | Unpaid Principal Balance | Related Allowance | |||||||||||
(Dollars in thousands) | |||||||||||||
With no related allowance recorded: | |||||||||||||
Commercial and industrial | $ | 7,436 | $ | 11,457 | $ | - | |||||||
SBA | 3,467 | 5,746 | - | ||||||||||
Real estate: | |||||||||||||
Commercial real estate | |||||||||||||
Owner occupied | 589 | 705 | - | ||||||||||
Non-owner occupied | 2,808 | 4,324 | - | ||||||||||
Construction | |||||||||||||
Speculative | - | - | - | ||||||||||
Non-speculative | - | - | - | ||||||||||
SFR mortgage | 5,349 | 6,270 | - | ||||||||||
Dairy & livestock and agribusiness | - | - | - | ||||||||||
Municipal lease finance receivables | - | - | - | ||||||||||
Consumer and other loans | 418 | 526 | - | ||||||||||
Total | 20,067 | 29,028 | - | ||||||||||
With a related allowance recorded: | |||||||||||||
Commercial and industrial | 189 | 191 | 3 | ||||||||||
SBA | - | - | - | ||||||||||
Real estate: | |||||||||||||
Commercial real estate | |||||||||||||
Owner occupied | - | - | - | ||||||||||
Non-owner occupied | 3,143 | 3,144 | 478 | ||||||||||
Construction | |||||||||||||
Speculative | - | - | - | ||||||||||
Non-speculative | - | - | - | ||||||||||
SFR mortgage | - | - | - | ||||||||||
Dairy & livestock and agribusiness | 78 | 78 | 12 | ||||||||||
Municipal lease finance receivables | - | - | - | ||||||||||
Consumer and other loans | 68 | 100 | 68 | ||||||||||
Total | 3,478 | 3,513 | 561 | ||||||||||
Total impaired loans | $ | 23,545 | $ | 32,541 | $ | 561 | |||||||
(1) | Excludes PCI loans. |
$88,000.
For the Three Months Ended | ||||||||
March 31, | ||||||||
2019 | 2018 | |||||||
(Dollars in thousands) | ||||||||
Performing TDRs: | ||||||||
Beginning balance | $ | 3,594 | $ | 4,809 | ||||
New modifications | - | - | ||||||
Payoffs/payments, net and other | (295 | ) | (524 | ) | ||||
TDRs returned to accrual status | - | - | ||||||
TDRs placed on nonaccrual status | - | - | ||||||
|
|
|
|
|
| |||
Ending balance | $ | 3,299 | $ | 4,285 | ||||
|
|
|
|
|
| |||
Nonperforming TDRs: | ||||||||
Beginning balance | $ | 3,509 | $ | 4,200 | ||||
New modifications | - | - | ||||||
Charge-offs | (78 | ) | - | |||||
Transfer to OREO | (2,275 | ) | - | |||||
Payoffs/payments, net and other | (879 | ) | (291 | ) | ||||
TDRs returned to accrual status | - | - | ||||||
TDRs placed on nonaccrual status | - | - | ||||||
|
|
|
|
|
| |||
Ending balance | $ | 277 | $ | 3,909 | ||||
|
|
|
|
|
| |||
Total TDRs | $ | 3,576 | $ | 8,194 | ||||
|
|
|
|
|
|
presented
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||
Performing TDRs: | ||||||||||||||||
Beginning balance | $ | 3,219 | $ | 4,530 | $ | 3,594 | $ | 4,809 | ||||||||
New modifications | - | - | - | 311 | ||||||||||||
Payoffs/payments, net and other | (51 | ) | (777 | ) | (426 | ) | (1,367 | ) | ||||||||
TDRs returned to accrual status | - | - | - | - | ||||||||||||
TDRs placed on nonaccrual status | - | - | - | - | ||||||||||||
Ending balance | $ | 3,168 | $ | 3,753 | $ | 3,168 | $ | 3,753 | ||||||||
Nonperforming TDRs: | ||||||||||||||||
Beginning balance | $ | 263 | $ | 3,892 | $ | 3,509 | $ | 4,200 | ||||||||
New modifications | - | 278 | - | 316 | ||||||||||||
Charge-offs | - | - | (78 | ) | - | |||||||||||
Transfer to OREO | - | - | (2,275 | ) | - | |||||||||||
Payoffs/payments, net and other | (14 | ) | (650 | ) | (907 | ) | (996 | ) | ||||||||
TDRs returned to accrual status | - | - | - | - | ||||||||||||
TDRs placed on nonaccrual status | - | - | - | - | ||||||||||||
Ending balance | $ | 249 | $ | 3,520 | $ | 249 | $ | 3,520 | ||||||||
Total TDRs | $ | 3,417 | $ | 7,273 | $ | 3,417 | $ | 7,273 |
(1) | Excludes PCI loans. |
AsSeptember 30, 2019.
For the Three Months Ended September 30, 201 8 (2) | |||||||||||||||||||||
Loans | Outstanding Recorded Investment | Outstanding Recorded Investment | Outstanding Recorded Investment at September 30, 2018 | Financial Effect Resulting From Modifications (3) | |||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Commercial and industrial: | |||||||||||||||||||||
Interest rate reduction | - | $ | - | - | - | - | |||||||||||||||
Change in amortization period | - | - | - | - | - | ||||||||||||||||
Real estate: | |||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||
Owner occupied | |||||||||||||||||||||
Interest rate reduction | - | - | - | - | - | ||||||||||||||||
Change in amortization period | - | - | - | - | - | ||||||||||||||||
Non-owner occupied | |||||||||||||||||||||
Interest rate reduction | - | - | - | - | - | ||||||||||||||||
Change in amortization period | - | - | - | - | - | ||||||||||||||||
SFR mortgage: | |||||||||||||||||||||
Interest rate reduction | - | - | - | - | - | ||||||||||||||||
Change in amortization period | - | - | - | - | - | ||||||||||||||||
Consumer: | |||||||||||||||||||||
Interest rate reduction | - | - | - | - | - | ||||||||||||||||
Change in amortization period | 1 | 278 | 278 | 272 | - | ||||||||||||||||
Total loans | 1 | $ | 278 | $ | 278 | $ | 272 | $ | - |
For the Nine Months Ended September 30, 2018 (2) | ||||||||||||||||||||
Number of Loans | Pre-Modification Outstanding Recorded Investment | Post-Modification Outstanding Recorded Investment | Outstanding Recorded Investment at September 30, 2018 | Financial Effect Resulting From Modifications (3) | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Commercial and industrial: | ||||||||||||||||||||
Interest rate reduction | - | $ | - | $ | - | $ | - | $ | - | |||||||||||
Change in amortization period or maturity | 1 | 38 | 38 | 27 | - | |||||||||||||||
Real estate: | ||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||
Owner occupied | ||||||||||||||||||||
Interest rate reduction | - | - | - | - | - | |||||||||||||||
Change in amortization period or maturity | - | - | - | - | - | |||||||||||||||
Non-owner occupied | ||||||||||||||||||||
Interest rate reduction | - | - | - | - | - | |||||||||||||||
Change in amortization period or maturity | - | - | - | - | - | |||||||||||||||
SFR mortgage: | ||||||||||||||||||||
Interest rate reduction | - | - | - | - | - | |||||||||||||||
Change in amortization period or maturity | 1 | 311 | 311 | 304 | - | |||||||||||||||
Consumer: | ||||||||||||||||||||
Interest rate reduction | - | - | - | - | - | |||||||||||||||
Change in amortization period or maturity | 1 | 278 | 278 | 272 | - | |||||||||||||||
Total loans | 3 | $ | 627 | $ | 627 | $ | 603 | $ | - | |||||||||||
(1) | The tables above exclude modified loans that were paid off prior to the end of the period. |
(2) | Excludes PCI loans. |
(3) | Financial effects resulting from modifications represent charge-offs and specific allowance recorded at modification date. |
EARNINGS PER SHARE RECONCILIATION |
For the Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
(In thousands, except per share amounts) | ||||||||
Earnings per common share: | ||||||||
Net earnings | $ | 51,642 | $ | 34,913 | ||||
Less: Net earnings allocated to restricted stock | 141 | 108 | ||||||
|
|
|
|
|
| |||
Net earnings allocated to common shareholders | $ | 51,501 | $ | 34,805 | ||||
|
|
|
|
|
| |||
Weighted average shares outstanding | 139,615 | 109,859 | ||||||
Basic earnings per common share | $ | 0.37 | $ | 0.32 | ||||
|
|
|
|
|
| |||
Diluted earnings per common share: | ||||||||
Net income allocated to common shareholders | 51,501 | 34,805 | ||||||
|
|
|
|
|
| |||
Weighted average shares outstanding | 139,615 | 109,859 | ||||||
Incremental shares from assumed exercise of outstanding options | 216 | 364 | ||||||
|
|
|
|
|
| |||
Diluted weighted average shares outstanding | 139,831 | 110,223 | ||||||
Diluted earnings per common share | $ | 0.37 | $ | 0.32 | ||||
|
|
|
|
|
|
For the Three Months Ended S 30,eptember | For the Nine Months Ended September 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||
Earnings per common share: | ||||||||||||||||
Net earnings | $ | 50,423 | $ | 38,558 | $ | 156,546 | $ | 108,844 | ||||||||
Less: Net earnings allocated to restricted stock | 116 | 96 | 390 | 298 | ||||||||||||
Net earnings allocated to common shareholders | $ | 50,307 | $ | 38,462 | $ | 156,156 | $ | 108,546 | ||||||||
Weighted average shares outstanding | 139,824 | 126,574 | 139,730 | 115,533 | ||||||||||||
Basic earnings per common share | $ | 0.36 | $ | 0.30 | $ | 1.12 | $ | 0.94 | ||||||||
Diluted earnings per common share: | ||||||||||||||||
Net income allocated to common shareholders | 50,307 | 38,462 | 156,156 | 108,546 | ||||||||||||
Weighted average shares outstanding | 139,824 | 126,574 | 139,730 | 115,533 | ||||||||||||
Incremental shares from assumed exercise of outstanding options | 151 | 363 | 217 | 397 | ||||||||||||
Diluted weighted average shares outstanding | 139,975 | 126,937 | 139,947 | 115,930 | ||||||||||||
Diluted earnings per common share | $ | 0.36 | $ | 0.30 | $ | 1.12 | $ | 0.94 | ||||||||
8. | FAIR VALUE INFORMATION |
March 31,September 30, 2019. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels (Level 1, Level 2 and Level 3).·Level 1– Quoted prices in active markets for identical assets or liabilities in active markets that are accessible at the measurement date.·Level 2– Observable inputs other than Level 1, including quoted prices for similar assets and liabilities in active markets, quoted prices in less active markets, or other observable inputs or model derived valuations that can be corroborated by observable market data, either directly or indirectly, for substantially the full term of the financial instrument.·Level 3– Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable. These valuation methodologies generally include pricing models, discounted cash flow models, or a determination of fair value that requires significant management judgment or estimation.no0 transfers in and out of Level 1 and Level 2 during the threenine months ended March 31,September 30, 2019 and 2018.
Carrying Value at March 31, 2019 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Description of assets | ||||||||||||||||
Investment securities - AFS: | ||||||||||||||||
Residential mortgage-backed securities | $ | 1,422,504 | $ | - | $ | 1,422,504 | $ | - | ||||||||
CMO/REMIC - residential | 205,125 | - | 205,125 | - | ||||||||||||
Municipal bonds | 45,085 | - | 45,085 | - | ||||||||||||
Other securities | 787 | - | 787 | - | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||
Total investment securities - AFS | 1,673,501 | - | 1,673,501 | - | ||||||||||||
Interest rate swaps | 4,418 | - | 4,418 | - | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||
Total assets | $ | 1,677,919 | $ | - | $ | 1,677,919 | $ | - | ||||||||
|
|
|
|
|
|
|
|
|
| |||||||
Description of liability | ||||||||||||||||
Interest rate swaps | $ | 4,418 | $ | - | $ | 4,418 | $ | - | ||||||||
|
|
|
|
|
|
|
|
|
| |||||||
Total liabilities | $ | 4,418 | $ | - | $ | 4,418 | $ | - | ||||||||
|
|
|
|
|
|
|
|
|
| |||||||
Carrying Value at December 31, 2018 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Description of assets | ||||||||||||||||
Investment securities - AFS: | ||||||||||||||||
Residential mortgage-backed securities | $ | 1,474,508 | $ | - | $ | 1,474,508 | $ | - | ||||||||
CMO/REMIC - residential | 214,051 | - | 214,051 | - | ||||||||||||
Municipal bonds | 44,810 | - | 44,810 | - | ||||||||||||
Other securities | 716 | - | 716 | - | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||
Total investment securities - AFS | 1,734,085 | - | 1,734,085 | - | ||||||||||||
Interest rate swaps | 1,938 | - | 1,938 | - | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||
Total assets | $ | 1,736,023 | $ | - | $ | 1,736,023 | $ | - | ||||||||
|
|
|
|
|
|
|
|
|
| |||||||
Description of liability | ||||||||||||||||
Interest rate swaps | $ | 1,938 | $ | - | $ | 1,938 | $ | - | ||||||||
|
|
|
|
|
|
|
|
|
| |||||||
Total liabilities | $ | 1,938 | $ | - | $ | 1,938 | $ | - | ||||||||
|
|
|
|
|
|
|
|
|
|
Carrying Value at | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other (Level 2) | Significant (Level 3) | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Description of assets | ||||||||||||||||
Investment securities - AFS: | ||||||||||||||||
Residential mortgage-backed securities | $ | 1,146,159 | $ | - | $ | 1,146,159 | $ | - | ||||||||
CMO/REMIC - residential | 382,928 | - | 382,928 | - | ||||||||||||
Municipal bonds | 40,487 | - | 40,487 | - | ||||||||||||
Other securities | 832 | - | 832 | - | ||||||||||||
1,570,406 | - | 1,570,406 | - | |||||||||||||
Interest rate swaps | 16,180 | - | 16,180 | - | ||||||||||||
Total assets | $ | 1,586,586 | $ | - | $ | 1,586,586 | $ | - | ||||||||
Description of liability | ||||||||||||||||
Interest rate swaps | $ | 16,180 | $ | - | $ | 16,180 | $ | - | ||||||||
Total liabilities | $ | 16,180 | $ | - | $ | 16,180 | $ | - | ||||||||
Carrying Value at December 31, 2018 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Description of assets | ||||||||||||||||
Investment securities - AFS: | ||||||||||||||||
Residential mortgage-backed securities | $ | 1,474,508 | $ | - | $ | 1,474,508 | $ | - | ||||||||
CMO/REMIC - residential | 214,051 | - | 214,051 | - | ||||||||||||
Municipal bonds | 44,810 | - | 44,810 | - | ||||||||||||
Other securities | 716 | - | 716 | - | ||||||||||||
Total investment securities - AFS | 1,734,085 | - | 1,734,085 | - | ||||||||||||
Interest rate swaps | 1,938 | - | 1,938 | - | ||||||||||||
Total assets | $ | 1,736,023 | $ | - | $ | 1,736,023 | $ | - | ||||||||
Description of liability | ||||||||||||||||
Interest rate swaps | $ | 1,938 | $ | - | $ | 1,938 | $ | - | ||||||||
Total liabilities | $ | 1,938 | $ | - | $ | 1,938 | $ | - |
Carrying Value at March 31, 2019 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Losses For the Three Months Ended March 31, 2019 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Description of assets | ||||||||||||||||||||
Impaired loans, excluding PCI loans: | ||||||||||||||||||||
Commercial and industrial | $ | 116 | $ | - | $ | - | $ | 116 | $ | 114 | ||||||||||
SBA | 1,377 | - | - | 1,377 | 338 | |||||||||||||||
Real estate: | ||||||||||||||||||||
Commercial real estate | - | - | - | - | - | |||||||||||||||
Construction | - | - | - | - | - | |||||||||||||||
SFR mortgage | - | - | - | - | - | |||||||||||||||
Dairy & livestock and agribusiness | - | - | - | - | - | |||||||||||||||
Consumer and other loans | - | - | - | - | - | |||||||||||||||
Other real estate owned | - | - | - | - | - | |||||||||||||||
Assetheld-for-sale | - | - | - | - | - | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total assets | $ | 1,493 | $ | - | $ | - | $ | 1,493 | $ | 452 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Carrying Value at December 31, 2018 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Losses For the Year Ended December 31, 2018 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Description of assets | ||||||||||||||||||||
Impaired loans, excluding PCI loans: | ||||||||||||||||||||
Commercial and industrial | $ | 189 | $ | - | $ | - | $ | 189 | $ | 3 | ||||||||||
SBA | - | - | - | - | - | |||||||||||||||
Real estate: | ||||||||||||||||||||
Commercial real estate | 3,143 | - | - | 3,143 | 478 | |||||||||||||||
Construction | - | - | - | - | - | |||||||||||||||
SFR mortgage | - | - | - | - | - | |||||||||||||||
Dairy & livestock and agribusiness | 78 | - | - | 78 | 12 | |||||||||||||||
Consumer and other loans | 68 | - | - | 68 | 68 | |||||||||||||||
Other real estate owned | - | - | - | - | - | |||||||||||||||
Assetheld-for-sale | - | - | - | - | - | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total assets | $ | 3,478 | $ | - | $ | - | $ | 3,478 | $ | 561 | ||||||||||
|
|
|
|
|
|
|
|
|
|
September 30, 2019
Identical Assets
(Level 2)
Unobservable Inputs
For the Nine
Months Ended
September 30, 2019
loans: $ $ $ $ $ $ $ $ $ $
December 31, 2018
Observable Inputs
Unobservable Inputs
loans: $ $ $ $ $ $ $ $ $
March 31, 2019 | ||||||||||||||||||||
Estimated Fair Value | ||||||||||||||||||||
Carrying Amount | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Total cash and cash equivalents | $ | 172,214 | $ | 172,214 | $ | - | $ | - | $ | 172,214 | ||||||||||
Interest-earning balances due from depository | 7,420 | - | 7,228 | - | 7,228 | |||||||||||||||
Investment securitiesavailable-for-sale | 1,673,501 | - | 1,673,501 | - | 1,673,501 | |||||||||||||||
Investment securitiesheld-to-maturity | 733,464 | - | 720,651 | - | 720,651 | |||||||||||||||
Total loans, net of allowance for loan losses | 7,541,662 | - | - | 7,506,350 | 7,506,350 | |||||||||||||||
Swaps | 4,418 | - | 4,418 | - | 4,418 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||
Interest-bearing | $ | 3,555,298 | $ | - | $ | 3,549,970 | $ | - | $ | 3,549,970 | ||||||||||
Borrowings | 615,774 | - | 615,186 | - | 615,186 | |||||||||||||||
Junior subordinated debentures | 25,774 | - | - | 21,016 | 21,016 | |||||||||||||||
Swaps | 4,418 | - | 4,418 | - | 4,418 | |||||||||||||||
December 31, 2018 | ||||||||||||||||||||
Estimated Fair Value | ||||||||||||||||||||
Carrying Amount | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Total cash and due from banks | $ | 163,948 | $ | 163,948 | $ | - | $ | - | $ | 163,948 | ||||||||||
Interest-earning balances due from depository | 7,670 | - | 7,339 | - | 7,339 | |||||||||||||||
Investment securitiesavailable-for-sale | 1,734,085 | - | 1,734,085 | - | 1,734,085 | |||||||||||||||
Investment securitiesheld-to-maturity | 744,440 | - | 721,537 | - | 721,537 | |||||||||||||||
Total loans, net of allowance for loan losses | 7,700,998 | - | - | 7,514,964 | 7,514,964 | |||||||||||||||
Swaps | 1,938 | - | 1,938 | - | 1,938 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||
Interest-bearing | $ | 3,622,703 | $ | - | $ | 3,614,682 | $ | - | $ | 3,614,682 | ||||||||||
Borrowings | 722,255 | - | 721,601 | - | 721,601 | |||||||||||||||
Junior subordinated debentures | 25,774 | - | - | 21,176 | 21,176 | |||||||||||||||
Swaps | 1,938 | - | 1,938 | - | 1,938 |
September 30, 2019 | |||||||||||||||||||||
Estimated Fair Value | |||||||||||||||||||||
Carrying Amount | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Total cash and cash equivalents | $ | 437,548 | $ | 437,548 | $ | - | $ | - | $ | 437,548 | |||||||||||
Interest-earning balances due from depository institutions | 5,673 | - | 5,793 | - | 5,793 | ||||||||||||||||
Investment securities available-for-sale | 1,570,406 | - | 1,570,406 | - | 1,570,406 | ||||||||||||||||
Investment securities held-to-maturity | 703,953 | - | 711,891 | - | 711,891 | ||||||||||||||||
Total loans, net of allowance for loan losses | 7,425,779 | - | - | 7,385,760 | 7,385,760 | ||||||||||||||||
Swaps | 16,180 | - | 16,180 | - | 16,180 | ||||||||||||||||
Liabilities | �� | ||||||||||||||||||||
Deposits: | |||||||||||||||||||||
Interest-bearing | $ | 3,409,226 | $ | - | $ | 3,407,573 | $ | - | $ | 3,407,573 | |||||||||||
Borrowings | 412,764 | - | 412,372 | - | 412,372 | ||||||||||||||||
Junior subordinated debentures | 25,774 | - | - | 20,266 | 20,266 | ||||||||||||||||
Swaps | 16,180 | - | 16,180 | - | 16,180 | ||||||||||||||||
December 31, 2018 | |||||||||||||||||||||
Estimated Fair Value | |||||||||||||||||||||
Carrying Amount | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Total cash and cash equivalents | $ | 163,948 | $ | 163,948 | $ | - | $ | - | $ | 163,948 | |||||||||||
Interest-earning balances due from depository institutions | 7,670 | - | 7,339 | - | 7,339 | ||||||||||||||||
Investment securities available-for-sale | 1,734,085 | - | 1,734,085 | - | 1,734,085 | ||||||||||||||||
Investment securities held-to-maturity | 744,440 | - | 721,537 | - | 721,537 | ||||||||||||||||
Total loans, net of allowance for loan losses | 7,700,998 | - | - | 7,514,964 | 7,514,964 | ||||||||||||||||
Swaps | 1,938 | - | 1,938 | - | 1,938 | ||||||||||||||||
Liabilities | |||||||||||||||||||||
Deposits: | |||||||||||||||||||||
Interest-bearing | $ | 3,622,703 | $ | - | $ | 3,614,682 | $ | - | $ | 3,614,682 | |||||||||||
Borrowings | 722,255 | - | 721,601 | - | 721,601 | ||||||||||||||||
Junior subordinated debentures | 25,774 | - | - | 21,176 | 21,176 | ||||||||||||||||
Swaps | 1,938 | - | 1,938 | - | 1,938 |
9. | DERIVATIVE FINANCIAL INSTRUMENTS |
March 31, 2019 | ||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||
Interest rate swaps | Other assets | $ | 4,418 | Other liabilities | $ | 4,418 | ||||||||||
|
|
|
| |||||||||||||
Total derivatives | $ | 4,418 | $ | 4,418 | ||||||||||||
|
|
|
| |||||||||||||
December 31, 2018 | ||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||
Interest rate swaps | Other assets | $ | 1,938 | Other liabilities | $ | 1,938 | ||||||||||
|
|
|
| |||||||||||||
Total derivatives | $ | 1,938 | $ | 1,938 | ||||||||||||
|
|
|
|
September 30, 2019 | ||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||
Interest rate swaps | Other assets | $ | 16,180 | Other liabilities | $ | 16,180 | ||||||||||
Total derivatives | $ | 16,180 | $ | 16,180 | ||||||||||||
December 31, 2018 | ||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||
Interest rate swaps | Other assets | $ | 1,938 | Other liabilities | $ | 1,938 | ||||||||||
Total derivatives | $ | 1,938 | $ | 1,938 | ||||||||||||
Derivatives Not Designated as Hedging Instruments | Location of Gain Recognized in Income on Derivative Instruments | Amount of Gain Recognized in Income on Derivative Instruments | ||||||||||
For the Three Months Ended March 31, | ||||||||||||
2019 | 2018 | |||||||||||
(Dollars in thousands) | ||||||||||||
Interest rate swaps | Other income | $ | 384 | $ | 116 | |||||||
|
|
|
| |||||||||
Total | $ | 384 | $ | 116 | ||||||||
|
|
|
|
Derivatives Not Designated as Hedging Instruments | Location of Gain Recognized in Instruments | Amount of Gain Recognized in Income on Derivative Instruments | ||||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Interest rate swaps | Other income | $ | 378 | $ | 73 | $ | 1,135 | $ | 340 | |||||||||||
Total | $ | 378 | $ | 73 | $ | 1,135 | $ | 340 | ||||||||||||
OTHER COMPREHENSIVE INCOME |
For the Three Months Ended March 31, | ||||||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||||||
Before-tax | Tax effect | After-tax | Before-tax | Tax effect | After-tax | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Investment securities: | ||||||||||||||||||||||||
Net change in fair value recorded in accumulated OCI | $ | 19,350 | $ | (5,720 | ) | $ | 13,630 | $ | (31,338 | ) | $ | 9,265 | $ | (22,073 | ) | |||||||||
Amortization of unrealized losses on securities transferred fromavailable-for-sale toheld-to-maturity | (1,123 | ) | 332 | (791 | ) | (832 | ) | 246 | (586 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Net change | $ | 18,227 | $ | (5,388 | ) | $ | 12,839 | $ | (32,170 | ) | $ | 9,511 | $ | (22,659 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended September 30, | |||||||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||||||
Before-tax | Tax effect | After-tax | Before-tax | Tax effect | After-tax | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
Investment securities: | |||||||||||||||||||||||||
Net change in fair value recorded in accumulated OCI | $ | 5,672 | $ | (1,677 | ) | $ | 3,995 | $ | (10,235 | ) | $ | 3,025 | $ | (7,210 | ) | ||||||||||
Net realized gain reclassified into earnings (1) | (5) | 1 | (4 | ) | - | - | - | ||||||||||||||||||
Amortization of unrealized losses on securities transferred from available-for-sale toheld-to-maturity | (249 | ) | 74 | (175 | ) | (152) | 45 | (107 | ) | ||||||||||||||||
Net change | $ | 5,418 | $ | (1,602 | ) | $ | 3,816 | $ | (10,387) | $ | 3,070 | $ | (7,317 | ) | |||||||||||
For the Nine Months Ended September 30, | |||||||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||||||
Before-tax | Tax effect | After-tax | Before-tax | Tax effect | After-tax | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
Investment securities: | |||||||||||||||||||||||||
Net change in fair value recorded in accumulated OCI | $ | 44,586 | $ | (13,181 | ) | $ | 31,405 | $ | (47,346 | ) | $ | 13,997 | $ | (33,349 | ) | ||||||||||
Net realized gain reclassified into earnings (1) | (5 | ) | 1 | (4 | ) | - | - | - | |||||||||||||||||
Amortization of unrealized losses on securities transferred from available-for-sale toheld-to-maturity | (1,450 | ) | 429 | (1,021 | ) | (1,809 | ) | 535 | (1,274 | ) | |||||||||||||||
Net change | $ | 43,131 | $ | (12,751 | ) | $ | 30,380 | $ | (49,155 | ) | $ | 14,532 | $ | (34,623 | ) |
(1) | Included in other noninterest income. |
11. | BALANCE SHEET OFFSETTING |
Gross Amounts Recognized in | Gross Amounts Offset in the | Net Amounts of Assets Presented | Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets | |||||||||||||||||||||
the Condensed Consolidated Balance Sheets | Condensed Consolidated Balance Sheets | in the Condensed Consolidated Balance Sheets | Financial Instruments | Collateral Pledged | Net Amount | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
March 31, 2019 | ||||||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||
Derivatives not designated as hedging instruments | $ | 4,418 | $ | - | $ | - | $ | 4,418 | $ | - | $ | 4,418 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Total | $ | 4,418 | $ | - | $ | - | $ | 4,418 | $ | - | $ | 4,418 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Financial liabilities: | ||||||||||||||||||||||||
Derivatives not designated as hedging instruments | $ | 5,221 | $ | (803 | ) | $ | 4,418 | $ | 803 | $ | (7,520 | ) | $ | (2,299 | ) | |||||||||
Repurchase agreements | 462,774 | - | 462,774 | - | (489,984 | ) | (27,210 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Total | $ | 467,995 | $ | (803 | ) | $ | 467,192 | $ | 803 | $ | (497,504 | ) | $ | (29,509 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
December 31, 2018 | ||||||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||
Derivatives not designated as hedging instruments | $ | 1,938 | $ | - | $ | - | $ | 1,938 | $ | - | $ | 1,938 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Total | $ | 1,938 | $ | - | $ | - | $ | 1,938 | $ | - | $ | 1,938 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Financial liabilities: | ||||||||||||||||||||||||
Derivatives not designated as hedging instruments | $ | 4,203 | $ | (2,265 | ) | $ | 1,938 | $ | 2,265 | $ | - | $ | 4,203 | |||||||||||
Repurchase agreements | 442,255 | - | 442,255 | - | (487,607 | ) | (45,352 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Total | $ | 446,458 | $ | (2,265 | ) | $ | 444,193 | $ | 2,265 | $ | (487,607 | ) | $ | (41,149 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Amounts Recognized in the Condensed Consolidated Balance Sheets | Gross Amounts Offset in the Condensed Consolidated Balance Sheets | Net Amounts Presented in the Condensed Consolidated Balance Sheets | Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets | Net Amount | |||||||||||||||||||||
Financial | Collateral Pledged | ||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
September 30, | |||||||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||||
Derivatives not designated as hedging instruments | $ | 16,180 | $ | - | $ | - | $ | 16,180 | $ | - | $ | 16,180 | |||||||||||||
Total | $ | 16,180 | $ | - | $ | - | $ | 16,180 | $ | - | $ | 16,180 | |||||||||||||
Financial liabilities: | |||||||||||||||||||||||||
Derivatives not designated as hedging instruments | $ | 16,182 | $ | (2 | ) | $ | 16,180 | $ | 2 | $ | (22,335 | ) | $ | (6,153 | ) | ||||||||||
Repurchase agreements | 407,850 | - | 407,850 | - | (419,465 | ) | (11,615 | ) | |||||||||||||||||
Total | $ | 424,032 | $ | (2 | ) | $ | 424,030 | $ | 2 | $ | (441,800 | ) | $ | (17,768 | ) | ||||||||||
December 31, 2018 | |||||||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||||
Derivatives not designated as hedging instruments | $ | 1,938 | $ | - | $ | - | $ | 1,938 | $ | - | $ | 1,938 | |||||||||||||
Total | $ | 1,938 | $ | - | $ | - | $ | 1,938 | $ | - | $ | 1,938 | |||||||||||||
Financial liabilities: | |||||||||||||||||||||||||
Derivatives not designated as hedging instruments | $ | 4,203 | $ | (2,265 | ) | $ | 1,938 | $ | 2,265 | $ | - | $ | 4,203 | ||||||||||||
Repurchase agreements | 442,255 | - | 442,255 | - | (487,607 | ) | (45,352 | ) | |||||||||||||||||
Total | $ | 446,458 | $ | (2,265 | ) | $ | $ | $ | ) | $ | (41,149 | ) | |||||||||||||
13. LEASES
12. | LEASES |
As of September 30, 2019 | |||||
(Dollars in thousands) | |||||
Lease Assets and Liabilities | |||||
ROU assets | $ | 17,340 | |||
| |||||
| |||||
Total lease liabilities | |||||
| |||||
| |||||
| |||||
| |||||
| |||||
| |||||
| 20,558 |
|
| ||||
| ||||
|
For the Three Months Ended | For the Nine Months Ended | |||||||
September 30, 2019 | ||||||||
(Dollars in thousands) | ||||||||
Lease Cost | ||||||||
Operating lease expense (1) | $ | 1,628 | $ | 5,634 | ||||
Total lease expense | $ | 1,628 | $ | 5,634 | ||||
(1) Includes short-term leases and variable lease costs, which are immaterial. | ||||||||
Other Information | ||||||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
Operating cash outflows from operating leases, net | $ | 1,640 | $ | 6,499 | ||||
Lease Term and Discount Rate | ||||||||
As of September 30, 2019 | ||||||||
Weighted average remaining lease term (years) | 4.26 | |||||||
Weighted average discount rate | 3.46% |
As of March 31, 2019 | ||||
(Dollars in thousands) | ||||
Year: | ||||
2019 (excluding the three months ended March 31, 2019) | $ | 6,083 | ||
2020 | 6,109 | |||
2021 | 4,360 | |||
2022 | 3,091 | |||
2023 | 1,488 | |||
Thereafter | 1,938 | |||
|
| |||
Total future lease payments | 23,069 | |||
Less: Imputed interest | (1,619) | |||
|
| |||
Present value of lease liabilities | $ | 21,450 | ||
|
|
14. REVENUE RECOGNITION
As of September 30, 2019 | |||||
(Dollars in thousands) | |||||
Year: | |||||
2019 (excluding the nine months endedSeptember 30, 2019) | $ | 1,973 | |||
2020 | 6,941 | ||||
2021 | 5,178 | ||||
2022 | 4,005 | ||||
2023 | 2,336 | ||||
Thereafter | 3,100 | ||||
Total future lease payments | 23,533 | ||||
Less: Imputed interest | (2,975 | ) | |||
Present value of lease liabilities | $ | 20,558 | |||
13. | REVENUE RECOGNITION |
For the Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
(Dollars in thousands) | ||||||||
Noninterest income: | ||||||||
In-scope of Topic 606: | ||||||||
Service charges on deposit accounts | $ | 5,141 | $ | 4,045 | ||||
Trust and investment services | 2,182 | 2,157 | ||||||
Bankcard services | 950 | 804 | ||||||
Gain on OREO, net | 105 | 3,540 | ||||||
Other | 2,044 | 1,391 | ||||||
|
|
|
|
|
| |||
Noninterest Income(in-scope of Topic 606) | 10,422 | 11,937 | ||||||
Noninterest Income(out-of-scope of Topic 606) | 5,881 | 979 | ||||||
|
|
|
|
|
| |||
Total noninterest income | $ | 16,303 | $ | 12,916 | ||||
|
|
|
|
|
|
For the Three Months Ended September 30, | For the Nine Months Months Ended September 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Noninterest income: | ||||||||||||||||
In-scope of Topic 606: | ||||||||||||||||
Service charges on deposit accounts | $ | 4,833 | $ | 4,295 | $ | 15,039 | $ | 12,431 | ||||||||
Trust and investment services | 2,330 | 2,182 | 6,964 | 6,738 | ||||||||||||
Bankcard services | 637 | 875 | 2,614 | 2,637 | ||||||||||||
Gain on OREO, net | - | - | 129 | 3,540 | ||||||||||||
Other | 2,292 | 1,824 | 6,939 | 4,393 | ||||||||||||
Noninterest Income (in-scope of Topic 606) | 10,092 | 9,176 | 31,685 | 29,739 | ||||||||||||
Noninterest Income (out-of-scope of Topic 606) | 1,802 | 936 | 14,717 | 2,984 | ||||||||||||
Total noninterest income | $ | 11,894 | $ | 10,112 | $ | 46,402 | $ | 32,723 |
|
|
|
|
were $37.0 million.
second quarter of 2019. The consolidation of banking centers was completed during the second quarter of 2019, in which four additional banking centers were consolidated into CBB banking centers.
For the Three Months Ended March 31, | Variance | |||||||||||||||
2019 | 2018 | $ | % | |||||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||||||
Net interest income | $ | 109,536 | $ | 70,521 | $ | 39,015 | 55.32% | |||||||||
(Provision for) recapture of provision for loan losses | (1,500 | ) | 1,000 | (2,500) | -250.00% | |||||||||||
Noninterest income | 16,303 | 12,916 | 3,387 | 26.22% | ||||||||||||
Noninterest expense | (51,604 | ) | (35,946 | ) | (15,658) | -43.56% | ||||||||||
Income taxes | (21,093 | ) | (13,578 | ) | (7,515) | -55.35% | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net earnings | $ | 51,642 | $ | 34,913 | $ | 16,729 | 47.92% | |||||||||
|
|
|
|
|
|
|
| |||||||||
Earnings per common share: | ||||||||||||||||
Basic | $ | 0.37 | $ | 0.32 | $ | 0.05 | ||||||||||
Diluted | $ | 0.37 | $ | 0.32 | $ | 0.05 | ||||||||||
Return on average assets | 1.84% | 1.71% | 0.13% | |||||||||||||
Return on average shareholders’ equity | 11.14% | 13.02% | -1.88% | |||||||||||||
Efficiency ratio | 41.01% | 43.08% | -2.07% | |||||||||||||
Noninterest expense to average assets | 1.83% | 1.77% | 0.06% | |||||||||||||
For the Three Months Ended | Variance | |||||||||||||||
March 31, 2019 | December 31, 2018 | $ | % | |||||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||||||
Net interest income | $ | 109,536 | $ | 113,016 | $ | (3,480) | -3.08% | |||||||||
Provision for loan losses | (1,500 | ) | (3,000 | ) | 1,500 | 50.00% | ||||||||||
Noninterest income | 16,303 | 10,758 | 5,545 | 51.54% | ||||||||||||
Noninterest expense | (51,604 | ) | (60,831 | ) | 9,227 | 15.17% | ||||||||||
Income taxes | (21,093 | ) | (16,784 | ) | (4,309) | -25.67% | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net earnings | $ | 51,642 | $ | 43,159 | $ | 8,483 | 19.66% | |||||||||
|
|
|
|
|
|
|
| |||||||||
Earnings per common share: | ||||||||||||||||
Basic | $ | 0.37 | $ | 0.31 | $ | 0.06 | ||||||||||
Diluted | $ | 0.37 | $ | 0.31 | $ | 0.06 | ||||||||||
Return on average assets | 1.84% | 1.49% | 0.35% | |||||||||||||
Return on average shareholders’ equity | 11.14% | 9.29% | 1.85% | |||||||||||||
Efficiency ratio | 41.01% | 49.15% | -8.14% | |||||||||||||
Noninterest expense to average assets | 1.83% | 2.10% | -0.27% |
For the Three Months Ended | Variance | ||||||||||||||||
September 30, 2019 | June 30, 2019 | $ | % | ||||||||||||||
(Dollars in thousands, except per share amounts) | |||||||||||||||||
Net interest income | $ | 108,159 | $ | 111,057 | $ | (2,898) | -2.61% | ||||||||||
Provision for loan losses | (1,500 | ) | (2,000 | ) | 500 | 25.00% | |||||||||||
Noninterest income | 11,894 | 18,205 | (6,311) | -34.67% | |||||||||||||
Noninterest expense | (47,535 | ) | (50,528 | ) | 2,993 | 5.92% | |||||||||||
Income taxes | (20,595 | ) | (22,253 | ) | 1,658 | 7.45% | |||||||||||
Net earnings | $ | 50,423 | $ | 54,481 | $ | (4,058) | -7.45% | ||||||||||
Earnings per common share: | |||||||||||||||||
Basic | $ | 0.36 | $ | 0.39 | $ | (0.03) | |||||||||||
Diluted | $ | 0.36 | $ | 0.39 | $ | (0.03) | |||||||||||
Return on average assets | 1.78% | 1.95% | -0.17% | ||||||||||||||
Return on average shareholders’ equity | 10.18% | 11.38% | -1.20% | ||||||||||||||
Efficiency ratio | 39.60% | 39.09% | 0.51% | ||||||||||||||
Noninterest expense to average assets | 1.68% | 1.81% | -0.13% |
Reconciliations
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||||||
September 30, | Variance | September 30, | Variance | |||||||||||||||||||||||||||||
2019 | 2018 | $ | % | 2019 | 2018 | $ | % | |||||||||||||||||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||||||||||||||||||||||
Net interest income | $ | 108,159 | $ | 92,820 | $ | 15,339 | 16.53% | $ | 328,752 | $ | 236,029 | $ | 92,723 | 39.28% | ||||||||||||||||||
(Provision for) recapture of provision for loan losses | (1,500) | (500) | (1,000) | -200.00% | (5,000) | 1,500 | (6,500) | -433.33% | ||||||||||||||||||||||||
Noninterest income | 11,894 | 10,112 | 1,782 | 17.62% | 46,402 | 32,723 | 13,679 | 41.80% | ||||||||||||||||||||||||
Noninterest expense | (47,535) | (48,880) | 1,345 | 2.75% | (149,667) | (119,080) | (30,587) | -25.69% | ||||||||||||||||||||||||
Income taxes | (20,595) | (14,994) | (5,601) | -37.35% | (63,941) | (42,328) | (21,613) | -51.06% | ||||||||||||||||||||||||
Net earnings | $ | 50,423 | $ | 38,558 | $ | 11,865 | 30.77% | $ | 156,546 | $ | 108,844 | $ | 47,702 | 43.83% | ||||||||||||||||||
Earnings per common share: | ||||||||||||||||||||||||||||||||
Basic | $ | 0.36 | $ | 0.30 | $ | 0.06 | $ | 1.12 | $ | 0.94 | $ | 0.18 | ||||||||||||||||||||
Diluted | $ | 0.36 | $ | 0.30 | $ | 0.06 | $ | 1.12 | $ | 0.94 | $ | 0.18 | ||||||||||||||||||||
Return on average assets | 1.78% | 1.52% | 0.26% | 1.86% | 1.65% | 0.21% | ||||||||||||||||||||||||||
Return on average shareholders’ equity | 10.18% | 10.17% | 0.01% | 10.89% | 11.86% | -0.97% | ||||||||||||||||||||||||||
Efficiency ratio | 39.60% | 47.49% | -7.89% | 39.89% | 44.31% | -4.42% | ||||||||||||||||||||||||||
Noninterest expense to average assets | 1.68% | 1.93% | -0.25% | 1.77% | 1.80% | -0.03% |
Reconciliations of Adjusted Yield on Average Loans, Yield on Average Earning Assets and Net Interest Margin(Non-GAAP)
We use certainnon-GAAP financial measures to provide supplemental information regarding our performance. Net interest income for the three months ended March 31, 2019 and 2018 included a yield adjustment of $7.2 million and $2.3 million, respectively. These yield adjustments relate to discount accretion on acquired loans and nonrecurring nonaccrual interest paid, which are included in the Company’s net interest margin. We believe that presenting net interest income and the net interest margin excluding these yield adjustments provides additional clarity to the users of financial statements regarding core net interest income and net interest margin.
For the Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
(Dollars in thousands) | ||||||||
Yield on Average Loans | ||||||||
Loan interest income | $ | 99,687 | $ | 55,196 | ||||
Less: Discount accretion on acquired loans | (7,200) | (1,523) | ||||||
Less: Nonrecurring nonaccrual interest paid | - | (762) | ||||||
|
|
|
| |||||
Adjusted loan interest income | $ | 92,487 | $ | 52,911 | ||||
|
|
|
| |||||
Average loans and lease finance receivables, net of discount on acquired loans | $ | 7,662,573 | $ | 4,789,943 | ||||
Add: Average discount on acquired loans | 77,625 | 9,168 | ||||||
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|
|
| |||||
Average gross loans and lease finance receivables | $ | 7,740,198 | $ | 4,799,111 | ||||
|
|
|
| |||||
Yield on average loans | 5.27% | 4.67% | ||||||
Adjusted yield on average loans | 4.84% | 4.47% | ||||||
Yield on Average Earning Assets (TE) | ||||||||
Total interest income (TE) | $ | 115,738 | $ | 73,228 | ||||
Less: Discount accretion on acquired loans | (7,200) | (1,523) | ||||||
Less: Nonrecurring nonaccrual interest paid | - | (762) | ||||||
|
|
|
| |||||
Adjusted total interest income (TE) | $ | 108,538 | $ | 70,943 | ||||
|
|
|
| |||||
Average total interest-earning assets | $ | 10,135,176 | $ | 7,792,552 | ||||
Add: Average discount on acquired loans | 77,625 | 9,168 | ||||||
|
|
|
| |||||
Adjusted average total interest-earning assets | $ | 10,212,801 | $ | 7,801,720 | ||||
|
|
|
| |||||
Yield on average earning assets (TE) | 4.62% | 3.80% | ||||||
Adjusted yield on average earning assets (TE) | 4.30% | 3.67% | ||||||
Net Interest Margin (TE) | ||||||||
Net interest income (TE) | $ | 109,991 | $ | 71,052 | ||||
Less: Discount accretion on acquired loans | (7,200) | (1,523) | ||||||
Less: Nonrecurring nonaccrual interest paid | - | (762) | ||||||
|
|
|
| |||||
Adjusted net interest income (TE) | $ | 102,791 | $ | 68,767 | ||||
|
|
|
| |||||
Average total interest-earning assets | $ | 10,135,176 | $ | 7,792,552 | ||||
Add: Average discount on acquired loans | 77,625 | 9,168 | ||||||
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|
|
| |||||
Adjusted average total interest-earning assets | $ | 10,212,801 | $ | 7,801,720 | ||||
|
|
|
| |||||
Net interest margin (TE) | 4.39% | 3.68% | ||||||
Adjusted net interest margin (TE) | 4.07% | 3.56% |
Return on Average Tangible Common Equity Reconciliation
For the Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
(Dollars in thousands) | ||||||||
Net Income | $ | 51,642 | $ | 34,913 | ||||
Add: Amortization of intangible assets | 2,857 | 331 | ||||||
Less: Tax effect of amortization of intangible assets (1) | (845) | (98) | ||||||
|
|
|
| |||||
Tangible net income | 53,654 | 35,146 | ||||||
|
|
|
| |||||
Average stockholders’ equity | $ | 1,879,685 | $ | 1,087,273 | ||||
Less: Average goodwill | (666,539) | (116,564) | ||||||
Less: Average intangible assets | (52,777) | (6,722) | ||||||
|
|
|
| |||||
Average tangible common equity | $ | 1,160,369 | $ | 963,987 | ||||
|
|
|
| |||||
Return on average equity, annualized | 11.14% | 13.02% | ||||||
Return on average tangible common equity, annualized | 18.75% | 14.79% |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Net Income | $ | 50,423 | $ | 38,558 | $ | 156,546 | $ | 108,844 | ||||||||
Add: Amortization of intangible assets | 2,648 | 1,736 | 8,338 | 2,395 | ||||||||||||
Less: Tax effect of amortization of intangible assets (1) | (783) | (513) | (2,465) | (708) | ||||||||||||
Tangible net income | $ | 52,288 | $ | 39,781 | $ | 162,419 | $ | 110,531 | ||||||||
Average stockholders’ equity | $ | 1,965,427 | $ | 1,503,643 | $ | 1,921,981 | $ | 1,226,848 | ||||||||
Less: Average goodwill | (663,707) | (419,418) | (665,470) | (218,625) | ||||||||||||
Less: Average intangible assets | (46,720) | (34,811) | (49,682) | (16,078) | ||||||||||||
Average tangible common equity | $ | 1,255,000 | $ | 1,049,414 | $ | 1,206,829 | $ | 992,145 | ||||||||
Return on average equity, annualized | 10.18 | % | 10.17 | % | 10.89 | % | 11.86 | % | ||||||||
Return on average tangible common equity, annualized | 16.53 | % | 15.04 | % | 17.99 | % | 14.89 | % |
(1) | Tax effected at respective statutory rates. |
March 31,September 30, 2019 and 2018. Our net interest income, interest spread, and net interest margin are sensitive to general business and economic conditions. These conditions include short-term and long-term interest rates, inflation, monetary supply, and the strength of the international, national and state economies, in general, and more specifically, the local economies in which we conduct business. Our ability to manage net interest income during changing interest rate environments will have a significant impact on our overall performance. We manage net interest income through affecting changes in the mix of interest-earning assets as well as the mix of interest-bearing liabilities, changes in the level of interest-bearing liabilities in proportion to interest-earning assets, and in the growth and maturity of earning assets. See Item 2 –
For the Three Months Ended March 31, | ||||||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||||||
Average Balance | Interest | Yield/ Rate | Average Balance | Interest | Yield/ Rate | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
INTEREST-EARNING ASSETS | ||||||||||||||||||||||||
Investment securities (1) | ||||||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||||
Taxable | $ | 1,654,324 | $ | 10,309 | 2.49% | $ | 1,979,056 | $ | 11,445 | 2.31% | ||||||||||||||
Tax-advantaged | 44,380 | 336 | 4.07% | 55,135 | 423 | 4.06% | ||||||||||||||||||
Held-to-maturity securities: | ||||||||||||||||||||||||
Taxable | 509,608 | 2,910 | 2.30% | 554,774 | 2,878 | 2.08% | ||||||||||||||||||
Tax-advantaged | 227,908 | 1,615 | 3.43% | 257,180 | 1,887 | 3.55% | ||||||||||||||||||
Investment in FHLB stock | 17,688 | 332 | 7.61% | 17,688 | 332 | 7.61% | ||||||||||||||||||
Interest-earning deposits with other institutions | 18,695 | 94 | 2.04% | 138,776 | 536 | 1.54% | ||||||||||||||||||
Loans (2) | 7,662,573 | 99,687 | 5.27% | 4,789,943 | 55,196 | 4.67% | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total interest-earning assets | 10,135,176 | 115,283 | 4.62% | 7,792,552 | 72,697 | 3.80% | ||||||||||||||||||
Total noninterest-earning assets | 1,273,078 | 463,828 | ||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Total assets | $ | 11,408,254 | $ | 8,256,380 | ||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
INTEREST-BEARING LIABILITIES | ||||||||||||||||||||||||
Savings deposits (3) | $ | 3,127,839 | 2,685 | 0.35% | $ | 2,291,208 | 1,273 | 0.23% | ||||||||||||||||
Time deposits | 524,822 | 1,186 | 0.92% | 377,352 | 252 | 0.27% | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total interest-bearing deposits | 3,652,661 | 3,871 | 0.43% | 2,668,560 | 1,525 | 0.23% | ||||||||||||||||||
FHLB advances, other borrowings, and customer repurchase agreements | 691,965 | 1,876 | 1.09% | 583,260 | 651 | 0.45% | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Interest-bearing liabilities | 4,344,626 | 5,747 | 0.54% | 3,251,820 | 2,176 | 0.27% | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Noninterest-bearing deposits | 5,085,764 | 3,856,254 | ||||||||||||||||||||||
Other liabilities | 98,179 | 61,033 | ||||||||||||||||||||||
Stockholders’ equity | 1,879,685 | 1,087,273 | ||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 11,408,254 | $ | 8,256,380 | ||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Net interest income | $ | 109,536 | $ | 70,521 | ||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Net interest spread - tax equivalent | 4.08% | 3.53% | ||||||||||||||||||||||
Net interest margin | 4.37% | 3.66% | ||||||||||||||||||||||
Net interest margin - tax equivalent | 4.39% | 3.68% |
For the Three Months Ended September 30, | ||||||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||||||
Average Balance | Interest | Yield/ Rate | Average Balance | Interest | Yield/ Rate | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
INTEREST-EARNING ASSETS | ||||||||||||||||||||||||
Investment securities (1) | ||||||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||||
Taxable | $ | 1,505,087 | $ | 8,949 | 2.38% | $ | 1,863,399 | $ | 11,126 | 2.39% | ||||||||||||||
Tax-advantaged | 40,189 | 273 | 3.75% | 55,020 | 395 | 3.86% | ||||||||||||||||||
Held-to-maturity securities: | ||||||||||||||||||||||||
Taxable | 506,203 | 2,883 | 2.28% | 527,688 | 2,961 | 2.24% | ||||||||||||||||||
Tax-advantaged | 205,996 | 1,415 | 3.32% | 237,933 | 1,705 | 3.47% | ||||||||||||||||||
Investment in FHLB stock | 17,688 | 301 | 6.75% | 24,645 | 329 | 5.30% | ||||||||||||||||||
Interest-earning deposits with other institutions | 174,119 | 946 | 2.16% | 63,572 | 304 | 1.90% | ||||||||||||||||||
Loans (2) | 7,495,289 | 98,796 | 5.23% | 6,350,240 | 79,818 | 4.99% | ||||||||||||||||||
Total interest-earning assets | 9,944,571 | 113,563 | 4.55% | 9,122,497 | 96,638 | 4.23% | ||||||||||||||||||
Total noninterest-earning assets | 1,269,845 | 935,028 | ||||||||||||||||||||||
Total assets | $ | 11,214,416 | $ | 10,057,525 | ||||||||||||||||||||
INTEREST-BEARING LIABILITIES | ||||||||||||||||||||||||
Savings deposits (3) | $ | 2,991,330 | 3,501 | 0.46% | $ | 2,850,169 | 2,101 | 0.29% | ||||||||||||||||
Time deposits | 473,347 | 1,088 | 0.91% | 503,649 | 866 | 0.68% | ||||||||||||||||||
Total interest-bearing deposits | 3,464,677 | 4,589 | 0.53% | 3,353,818 | 2,967 | 0.35% | ||||||||||||||||||
FHLB advances, other borrowings, and customer repurchase agreements | 446,087 | 815 | 0.72% | 478,538 | 851 | 0.70% | ||||||||||||||||||
Interest-bearing liabilities | 3,910,764 | 5,404 | 0.55% | 3,832,356 | 3,818 | 0.39% | ||||||||||||||||||
Noninterest-bearing deposits | 5,227,595 | 4,651,127 | ||||||||||||||||||||||
Other liabilities | 110,630 | 70,399 | ||||||||||||||||||||||
Stockholders’ equity | 1,965,427 | 1,503,643 | ||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 11,214,416 | $ | 10,057,525 | ||||||||||||||||||||
Net interest income | $ | 108,159 | $ | 92,820 | ||||||||||||||||||||
Net interest spread - tax equivalent | 4.00% | 3.84% | ||||||||||||||||||||||
Net interest margin | 4.32% | 4.04% | ||||||||||||||||||||||
Net interest margin - tax equivalent | 4.34% | 4.06% |
(1) | Includes tax equivalent (TE) adjustments utilizing federal statutory rates of 21% in effect for the three months ended |
(2) | Includes loan fees of |
(3) | Includes interest-bearing demand and money market accounts. |
For the Nine Months Ended September 30, | ||||||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||||||
Average Balance | Interest | Yield/ Rate | Average Balance | Interest | Yield/ Rate | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
INTEREST-EARNING ASSETS | ||||||||||||||||||||||||
Investment securities (1) | ||||||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||||
Taxable | $ | 1,582,902 | $ | 29,079 | 2.45% | $ | 1,920,942 | $ | 33,861 | 2.36% | ||||||||||||||
Tax-advantaged | 42,746 | 906 | 3.87% | 54,517 | 1,225 | 3.99% | ||||||||||||||||||
Held-to-maturity securities: | ||||||||||||||||||||||||
Taxable | 509,247 | 8,725 | 2.29% | 540,952 | 8,887 | 2.19% | ||||||||||||||||||
Tax-advantaged | 216,343 | 4,524 | 3.37% | 246,270 | 5,351 | 3.50% | ||||||||||||||||||
Investment in FHLB stock | 17,688 | 931 | 7.04% | 20,032 | 959 | 6.40% | ||||||||||||||||||
Interest-earning deposits with other institutions | 70,848 | 1,140 | 2.15% | 115,200 | 1,475 | 1.71% | ||||||||||||||||||
Loans (2) | 7,571,502 | 300,326 | 5.30% | 5,312,557 | 192,382 | 4.84% | ||||||||||||||||||
Total interest-earning assets | 10,011,276 | 345,631 | 4.63% | 8,210,470 | 244,140 | 4.00% | ||||||||||||||||||
Total noninterest-earning assets | 1,269,160 | 626,966 | ||||||||||||||||||||||
Total assets | $ | 11,280,436 | $ | 8,837,436 | ||||||||||||||||||||
INTEREST-BEARING LIABILITIES | ||||||||||||||||||||||||
Savings deposits (3) | $ | 3,047,444 | 9,159 | 0.40% | $ | 2,460,390 | 4,667 | 0.25% | ||||||||||||||||
Time deposits | 497,370 | 3,394 | 0.91% | 416,754 | 1,374 | 0.44% | ||||||||||||||||||
Total interest-bearing deposits | 3,544,814 | 12,553 | 0.47% | 2,877,144 | 6,041 | 0.28% | ||||||||||||||||||
FHLB advances, other borrowings, and customer repurchase agreements | 573,633 | 4,326 | 1.00% | 507,755 | 2,070 | 0.54% | ||||||||||||||||||
Interest-bearing liabilities | 4,118,447 | 16,879 | 0.55% | 3,384,899 | 8,111 | 0.32% | ||||||||||||||||||
Noninterest-bearing deposits | 5,136,233 | 4,158,365 | ||||||||||||||||||||||
Other liabilities | 103,775 | 67,324 | ||||||||||||||||||||||
Stockholders’ equity | 1,921,981 | 1,226,848 | ||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 11,280,436 | $ | 8,837,436 | ||||||||||||||||||||
Net interest income | $ | 328,752 | $ | 236,029 | ||||||||||||||||||||
Net interest spread - tax equivalent | 4.08% | 3.68% | ||||||||||||||||||||||
Net interest margin | 4.39% | 3.84% | ||||||||||||||||||||||
Net interest margin - tax equivalent | 4.41% | 3.87% |
(1) | Includes tax equivalent (TE) adjustments utilizing federal statutory rates of 21% in effect for the nine months ended September 30, 2019 and 2018. The non TE rates were 2.45% and 2.38% for the nine months ended September 30, 2019 and 2018, respectively. |
(2) | Includes loan fees of $2.3 million and $2.6 million for the nine months ended September 30, 2019 and 2018, respectively. Prepayment penalty fees of $3.4 million and $2.1 million are included in interest income for the nine months ended September 30, 2019 and 2018, respectively. |
(3) | Includes interest-bearing demand and money market accounts. |
Comparison of Three Months Ended March 31,
2019 Compared to 2018
Increase (Decrease) Due to | ||||||||||||||||
Volume | Rate | Rate/ Volume | Total | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Interest income: | ||||||||||||||||
Available-for-sale securities: | ||||||||||||||||
Taxable investment securities | $ | (1,877 | ) | $ | 887 | $ | (146 | ) | $ | (1,136 | ) | |||||
Tax-advantaged investment securities | (81 | ) | (5 | ) | (1 | ) | (87 | ) | ||||||||
Held-to-maturity securities: | ||||||||||||||||
Taxable investment securities | (249 | ) | 308 | (27 | ) | 32 | ||||||||||
Tax-advantaged investment securities | (204 | ) | (61 | ) | (7 | ) | (272 | ) | ||||||||
Investment in FHLB stock | - | - | - | - | ||||||||||||
Interest-earning deposits with other institutions | (465 | ) | 172 | (149 | ) | (442 | ) | |||||||||
Loans | 33,085 | 7,130 | 4,276 | 44,491 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total interest income | 30,209 | �� | 8,431 | 3,946 | 42,586 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Interest expense: | ||||||||||||||||
Savings deposits | 465 | 694 | 253 | 1,412 | ||||||||||||
Time deposits | 98 | 601 | 235 | 934 | ||||||||||||
FHLB advances, other borrowings, and customer repurchase agreements | 123 | 929 | 173 | 1,225 | ||||||||||||
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|
|
|
|
|
|
|
|
|
|
| |||||
Total interest expense | 686 | 2,224 | 661 | 3,571 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net interest income | $ | 29,523 | $ | 6,207 | $ | 3,285 | $ | 39,015 | ||||||||
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|
First
Comparision of Three Months Ended September 30, 2019 Compared to 2018 Increase (Decrease) Due to | |||||||||||||||||
Volume | Rate | Rate/ Volume | Total | ||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Interest income: | |||||||||||||||||
Available-for-sale securities: | |||||||||||||||||
Taxable investment securities | $ | (2,122 | ) | $ | (46 | ) | $ | (9 | ) | $ | (2,177 | ) | |||||
Tax-advantaged investment securities | (98 | ) | (19 | ) | (5 | ) | (122 | ) | |||||||||
Held-to-maturity securities: | |||||||||||||||||
Taxable investment securities | (120 | ) | 44 | (2 | ) | (78 | ) | ||||||||||
Tax-advantaged investment securities | (215 | ) | (66 | ) | (9 | ) | (290 | ) | |||||||||
Investment in FHLB stock | (93 | ) | 91 | (26 | ) | (28 | ) | ||||||||||
Interest-earning deposits with other institutions | 529 | 41 | 72 | 642 | |||||||||||||
Loans | 14,389 | 3,888 | 701 | 18,978 | |||||||||||||
Total interest income | 12,270 | 3,933 | 722 | 16,925 | |||||||||||||
Interest expense: | |||||||||||||||||
Savings deposits | 104 | 1,235 | 61 | 1,400 | |||||||||||||
Time deposits | (52 | ) | 292 | (18 | ) | 222 | |||||||||||
FHLB advances, other borrowings, and customer repurchase agreements | (56 | ) | 21 | (1 | ) | (36 | ) | ||||||||||
Total interest expense | (4 | ) | 1,548 | 42 | 1,586 | ||||||||||||
Net interest income | $ | 12,274 | $ | 2,385 | $ | 680 | $ | 15,339 | |||||||||
Comparision of Nine Months Ended September��30, 2019 Compared to 2018 Increase (Decrease) Due to | |||||||||||||||||
Volume | Rate | Rate/ Volume | Total | ||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Interest income: | |||||||||||||||||
Available-for-sale securities: | |||||||||||||||||
Taxable investment securities | $ | (5,894 | ) | $ | 1,346 | $ | (234 | ) | $ | (4,782 | ) | ||||||
Tax-advantaged investment securities | (264 | ) | (70 | ) | 15 | (319 | ) | ||||||||||
Held-to-maturity securities: | |||||||||||||||||
Taxable investment securities | (583 | ) | 447 | (26 | ) | (162 | ) | ||||||||||
Tax-advantaged investment securities | (651 | ) | (201 | ) | 25 | (827 | ) | ||||||||||
Investment in FHLB stock | (114 | ) | 97 | (11 | ) | (28 | ) | ||||||||||
Interest-earning deposits with other institutions | (567 | ) | 378 | (146 | ) | (335 | ) | ||||||||||
Loans | 81,793 | 18,349 | 7,802 | 107,944 | |||||||||||||
Total interest income | 73,720 | 20,346 | 7,425 | 101,491 | |||||||||||||
Interest expense: | |||||||||||||||||
Savings deposits | 1,113 | 2,728 | 651 | 4,492 | |||||||||||||
Time deposits | 266 | 1,470 | 284 | 2,020 | |||||||||||||
FHLB advances, other borrowings, and customer repurchase agreements | 271 | 1,757 | 228 | 2,256 | |||||||||||||
Total interest expense | 1,650 | 5,955 | 1,163 | 8,768 | |||||||||||||
Net interest income | $ | 72,070 | $ | 14,391 | $ | 6,262 | $ | 92,723 | |||||||||
earning assets. Discount accretion on acquired loans and nonrecurring nonaccrual interest paid was $7.3 million for the third quarter of 2019, compared to $4.9 million for the third quarter of 2018.
Interest income and fees on loans for the firstthird quarter of 2019 of $99.7$98.8 million increased $44.5$19.0 million, or 80.61%23.78%, when compared to the firstthird quarter of 2018 primarily due to loans acquired from CB. Average loans increased $2.87$1.15 billion for the firstthird quarter of 2019 when compared with the same period of 2018. As a result of higher levels of discount accretion on acquired CB loans and nonaccrual interest paid, firstthird quarter interest income increased by $4.9$2.5 million in comparison to the firstthird quarter of 2018. Also contributing to the 6024 basis point increase in loan yield were increases in the rate on loans indexed to variable interest rates, such as the Bank’s Primeprime rate, which increased by 0.75%0.25% when compared to the end of firstthird quarter of 2018. Excluding discount accretion on acquired loans and nonaccrual interest paid, our loan yields grew by 38 basis points over the prior year.
2018.
Average loans increased $2.26 billion for the first nine months of 2019 when compared with the same period of 2018, primarily due to loans acquired from CB. The first nine months of 2019 reflected a $15.5 million increase in discount accretion on acquired loans and nonaccrual interest paid when compared to the same period of 2018. In addition, loan yields increased by 23 basis points from the prior nine month period, primarily due to higher rates on loans indexed to variable interest rates such as the Bank’s prime rate.
For the Three Months Ended March 31, | Variance | |||||||||||||||
2019 | 2018 | $ | % | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Noninterest income: | ||||||||||||||||
Service charges on deposit accounts | $ | 5,141 | $ | 4,045 | $ | 1,096 | 27.10% | |||||||||
Trust and investment services | 2,182 | 2,157 | 25 | 1.16% | ||||||||||||
Bankcard services | 950 | 804 | 146 | 18.16% | ||||||||||||
BOLI income | 1,336 | 979 | 357 | 36.47% | ||||||||||||
Gain on OREO, net | 105 | 3,540 | (3,435 | ) | -97.03% | |||||||||||
Gain on sale of building, net | 4,545 | - | 4,545 | - | ||||||||||||
Other | 2,044 | 1,391 | 653 | 46.94% | ||||||||||||
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|
|
|
|
|
|
|
|
|
|
| |||||
Total noninterest income | $ | 16,303 | $ | 12,916 | $ | 3,387 | 26.22% | |||||||||
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|
|
|
|
|
|
|
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|
|
First
For the Three Months Ended September 30, | Variance | For the Nine Months Ended September 30, | Variance | |||||||||||||||||||||||||||||
2019 | 2018 | $ | % | 2019 | 2018 | $ | % | |||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||
Noninterest income: | ||||||||||||||||||||||||||||||||
Service charges on deposit accounts | $ | 4,833 | $ | 4,295 | $ | 538 | 12.53 | % | $ | 15,039 | $ | 12,431 | $ | 2,608 | 20.98 | % | ||||||||||||||||
Trust and investment services | 2,330 | 2,182 | 148 | 6.78 | % | 6,964 | 6,738 | 226 | 3.35 | % | ||||||||||||||||||||||
Bankcard services | 637 | 875 | (238 | ) | -27.20 | % | 2,614 | 2,637 | (23 | ) | -0.87 | % | ||||||||||||||||||||
BOLI income | 1,797 | 936 | 861 | 91.99 | % | 4,482 | 2,984 | 1,498 | 50.20 | % | ||||||||||||||||||||||
Gain on OREO, net | - | - | - | - | 129 | 3,540 | (3,411 | ) | -96.36 | % | ||||||||||||||||||||||
Gain on sale of building, net | - | - | - | 4,545 | - | 4,545 | - | |||||||||||||||||||||||||
Gain on eminent domain condemnation, net | - | - | - | 5,685 | - | 5,685 | - | |||||||||||||||||||||||||
Other | 2,297 | 1,824 | 473 | 25.93% | 6,944 | 4,393 | 2,551 | 58.07% | ||||||||||||||||||||||||
Total noninterest income | $ | 11,894 | $ | 10,112 | $ | 1,782 | 17.62 | % | $ | 46,402 | $ | 32,723 | $ | 13,679 | 41.80 | % | ||||||||||||||||
2018, due to the growth in assets under management.
For the Three Months Ended March 31, | Variance | |||||||||||||||
2019 | 2018 | $ | % | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Noninterest expense: | ||||||||||||||||
Salaries and employee benefits | $ | 29,302 | $ | 22,314 | $ | 6,988 | 31.32% | |||||||||
Occupancy | 4,407 | 3,332 | 1,075 | 32.26% | ||||||||||||
Equipment | 1,208 | 860 | 348 | 40.47% | ||||||||||||
Professional services | 1,925 | 1,530 | 395 | 25.82% | ||||||||||||
Software licenses and maintenance | 2,422 | 1,760 | 662 | 37.61% | ||||||||||||
Stationery and supplies | 292 | 237 | 55 | 23.21% | ||||||||||||
Telecommunications expense | 758 | 528 | 230 | 43.56% | ||||||||||||
Marketing and promotion | 1,394 | 1,356 | 38 | 2.80% | ||||||||||||
Amortization of intangible assets | 2,857 | 331 | 2,526 | 763.14% | ||||||||||||
Regulatory assessments | 924 | 714 | 210 | 29.41% | ||||||||||||
Insurance | 469 | 423 | 46 | 10.87% | ||||||||||||
Loan expense | 316 | 255 | 61 | 23.92% | ||||||||||||
Directors’ expenses | 287 | 240 | 47 | 19.58% | ||||||||||||
Acquisition related expenses | 3,149 | 803 | 2,346 | 292.15% | ||||||||||||
Other | 1,894 | 1,263 | 631 | 49.96% | ||||||||||||
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|
|
|
|
|
|
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|
|
| ||||||
Total noninterest expense | $ | 51,604 | $ | 35,946 | $ | 15,658 | 43.56% | |||||||||
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|
|
|
|
|
| ||||||
Noninterest expense to average assets | 1.83% | 1.77% | ||||||||||||||
Noninterest expense to average assets, excluding acquisition related expenses | 1.72% | 1.73% | ||||||||||||||
Efficiency ratio (1) | 41.01% | 43.08% | ||||||||||||||
Efficiency ratio, excluding acquisition related expenses (1) | 38.51% | 42.12% |
For the Three Months Ended September 30, | Variance | For the Nine Months Ended September 30, | Variance | |||||||||||||||||||||||||||||
2019 | 2018 | $ | % | 2019 | 2018 | $ | % | |||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||
Noninterest expense: | ||||||||||||||||||||||||||||||||
Salaries and employee benefits | $ | 30,122 | $ | 26,319 | $ | 3,803 | 14.45% | $ | 88,286 | $ | 69,684 | $ | 18,602 | 26.69% | ||||||||||||||||||
Occupancy | 3,976 | 4,168 | (192 | ) | -4.61% | 12,771 | 10,924 | 1,847 | 16.91% | |||||||||||||||||||||||
Equipment | 1,116 | 1,156 | (40 | ) | -3.46% | 3,577 | 2,910 | 667 | 22.92% | |||||||||||||||||||||||
Professional services | 1,688 | 1,154 | 534 | 46.27% | 5,653 | 4,374 | 1,279 | 29.24% | ||||||||||||||||||||||||
Software licenses and maintenance | 2,450 | 2,317 | 133 | 5.74% | 7,414 | 5,836 | 1,578 | 27.04% | ||||||||||||||||||||||||
Marketing and promotion | 1,517 | 1,134 | 383 | 33.77% | 4,149 | 3,638 | 511 | 14.05% | ||||||||||||||||||||||||
Amortization of intangible assets | 2,648 | 1,736 | 912 | 52.53% | 8,338 | 2,395 | 5,943 | 248.14% | ||||||||||||||||||||||||
Telecommunications expense | 656 | 622 | 34 | 5.47% | 2,126 | 1,711 | 415 | 24.25% | ||||||||||||||||||||||||
Regulatory assessments | 147 | 896 | (749 | ) | -83.59% | 1,805 | 2,276 | (471 | ) | -20.69% | ||||||||||||||||||||||
Insurance | 430 | 432 | (2 | ) | -0.46% | 1,368 | 1,278 | 90 | 7.04% | |||||||||||||||||||||||
Loan expense | 308 | 274 | 34 | 12.41% | 1,115 | 678 | 437 | 64.45% | ||||||||||||||||||||||||
Directors’ expenses | 314 | 275 | 39 | 14.18% | 921 | 785 | 136 | 17.32% | ||||||||||||||||||||||||
Stationery and supplies | 259 | 251 | 8 | 3.19% | 867 | 795 | 72 | 9.06% | ||||||||||||||||||||||||
Acquisition related expenses | 244 | 6,645 | (6,401 | ) | -96.33% | 6,005 | 7,942 | (1,937 | ) | -24.39% | ||||||||||||||||||||||
Other | 1,660 | 1,501 | 159 | 10.59% | 5,272 | 3,854 | 1,418 | 36.79% | ||||||||||||||||||||||||
Total noninterest expense | $ | 47,535 | $ | 48,880 | $ | (1,345 | ) | -2.75% | $ | 149,667 | $ | 119,080 | $ | 30,587 | 25.69% | |||||||||||||||||
Noninterest expense to average assets | 1.68% | 1.93% | 1.77% | 1.80% | ||||||||||||||||||||||||||||
Efficiency ratio (1) | 39.60% | 47.49% | 39.89% | 44.31% |
(1) | Noninterest expense divided by net interest income before provision for loan losses plus noninterest income. |
The decrease is primarily the result of lower acquisition expense of $6.4 million.FirstFirstThird Quarter of 2018Excluding acquisition related expenses, noninterestNoninterest expense as a percentage of average assets was 1.72%1.68% for the firstthird quarter of 2019, compared to 1.73%1.93% for the firstthird quarter of 2018.iscan be measured by the efficiency ratio and indicates the percentage of net revenue that is used to cover expenses. Excluding acquisition related expenses, theThe efficiency ratio was 38.51%39.60% for the firstthird quarter of 2019, compared to 42.12%47.49% for the firstthird quarter of 2018.$15.7$1.3 million, or 43.56%2.75%, increasedecrease in noninterest expense for the firstthird quarter of 2019 included a $7.0reflects both the impact of merger related expense in the third quarter of 2018, which was $6.4 million higher than the current quarter, and year-over-year increase in salarysalaries and benefit costs of $3.8 million. Higher expense principallyfor accelerated vesting of stock grants and bonus compensation of approximately $1 million, related to the amended employment agreement and consulting agreement for the Company’s retiring Chief Executive Officer contributed to the increase in compensation costs. Year-over-year growth of approximately $2 million was primarily due to additional compensation related expenses for the former CB employees thatwho were retained post-merger. Amortization of core deposit intangible (“CDI”)after the merger. CDI amortization increased by $2.5 million$912,000 as a result of core deposits assumed from CB. Occupancy and equipment expense increased by $1.4 million due to the banking centers acquired from CB. The firstthird quarter of 2019 also reflected a $780,000 decrease in FDIC assessment expense.
March 31, 2019 | ||||||||||||||||||||
Amortized Cost | Gross Unrealized Holding Gain | Gross Unrealized Holding Loss | Fair Value | Total Percent | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Investment securitiesavailable-for-sale: | ||||||||||||||||||||
Residential mortgage-backed securities | $ | 1,424,937 | $ | 6,107 | $ | (8,540) | $ | 1,422,504 | 85.00% | |||||||||||
CMO/REMIC - residential | 206,956 | 470 | (2,301) | 205,125 | 12.26% | |||||||||||||||
Municipal bonds | 45,052 | 421 | (388) | 45,085 | 2.69% | |||||||||||||||
Other securities | 787 | - | - | 787 | 0.05% | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Totalavailable-for-sale securities | $ | 1,677,732 | $ | 6,998 | $ | (11,229) | $ | 1,673,501 | 100.00% | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Investment securitiesheld-to-maturity: | ||||||||||||||||||||
Government agency/GSE | $ | 133,557 | $ | 564 | $ | (2,077) | $ | 132,044 | 18.21% | |||||||||||
Residential mortgage-backed securities | 169,367 | 737 | (999) | 169,105 | 23.09% | |||||||||||||||
CMO | 213,145 | - | (9,998) | 203,147 | 29.06% | |||||||||||||||
Municipal bonds | 217,395 | 1,819 | (2,859) | 216,355 | 29.64% | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Totalheld-to-maturity securities | $ | 733,464 | $ | 3,120 | $ | (15,933) | $ | 720,651 | 100.00% | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2019 | |||||||||||||||||||||
Amortized Cost | Gross Unrealized Holding Gain | Gross Unrealized Holding Loss | Fair Value | Total Percent | |||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Investment securities available-for-sale: | |||||||||||||||||||||
Residential mortgage-backed securities | $ | 1,127,395 | $ | 20,105 | $ | (1,341) | $ | 1,146,159 | 72.99% | ||||||||||||
CMO/REMIC - residential | 381,615 | 1,649 | (336) | 382,928 | 24.38% | ||||||||||||||||
Municipal bonds | 39,564 | 924 | (1) | 40,487 | 2.58% | ||||||||||||||||
Other securities | 832 | - | - | 832 | 0.05% | ||||||||||||||||
Total available-for-sale securities | $ | 1,549,406 | $ | 22,678 | $ | (1,678) | $ | 1,570,406 | 100.00% | ||||||||||||
Investment securities held-to-maturity: | |||||||||||||||||||||
Government agency/GSE | $ | 123,917 | $ | 3,238 | $ | (170) | $ | 126,985 | 17.60% | ||||||||||||
Residential mortgage-backed securities | 172,919 | 2,624 | (3) | 175,540 | 24.56% | ||||||||||||||||
CMO | 204,263 | 76 | (1,467) | 202,872 | 29.02% | ||||||||||||||||
Municipal bonds | 202,854 | 4,198 | (558) | 206,494 | 28.82% | ||||||||||||||||
Total held-to-maturity securities | $ | 703,953 | $ | 10,136 | $ | (2,198) | $ | 711,891 | 100.00% | ||||||||||||
December 31, 2018 | ||||||||||||||||||||
Amortized Cost | Gross Unrealized Holding Gain | Gross Unrealized Holding Loss | Fair Value | Total Percent | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Investment securitiesavailable-for-sale: | ||||||||||||||||||||
Residential mortgage-backed securities | $ | 1,494,106 | $ | 1,348 | $ | (20,946) | $ | 1,474,508 | 85.03% | |||||||||||
CMO/REMIC - residential | 217,223 | 353 | (3,525) | 214,051 | 12.34% | |||||||||||||||
Municipal bonds | 45,621 | 332 | (1,143) | 44,810 | 2.59% | |||||||||||||||
Other securities | 716 | - | - | 716 | 0.04% | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Totalavailable-for-sale securities | $ | 1,757,666 | $ | 2,033 | $ | (25,614) | $ | 1,734,085 | 100.00% | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Investment securitiesheld-to-maturity: | ||||||||||||||||||||
Government agency/GSE | $ | 138,274 | $ | 572 | $ | (2,622) | $ | 136,224 | 18.57% | |||||||||||
Residential mortgage-backed securities | 153,874 | - | (3,140) | 150,734 | 20.67% | |||||||||||||||
CMO | 215,336 | - | (12,081) | 203,255 | 28.93% | |||||||||||||||
Municipal bonds | 236,956 | 556 | (6,188) | 231,324 | 31.83% | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Totalheld-to-maturity securities | $ | 744,440 | $ | 1,128 | $ | (24,031) | $ | 721,537 | 100.00% | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2018 | |||||||||||||||||||||
Amortized Cost | Gross Unrealized Holding Gain | Gross Unrealized Holding Loss | Fair Value | Total Percent | |||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Investment securities available-for-sale: | |||||||||||||||||||||
Residential mortgage-backed securities | $ | 1,494,106 | $ | 1,348 | $ | (20,946) | $ | 1,474,508 | 85.03% | ||||||||||||
CMO/REMIC - residential | 217,223 | 353 | (3,525) | 214,051 | 12.34% | ||||||||||||||||
Municipal bonds | 45,621 | 332 | (1,143) | 44,810 | 2.59% | ||||||||||||||||
Other securities | 716 | - | - | 716 | 0.04% | ||||||||||||||||
Total available-for-sale securities | $ | 1,757,666 | $ | 2,033 | $ | (25,614) | $ | 1,734,085 | 100.00% | ||||||||||||
Investment securities held-to-maturity: | |||||||||||||||||||||
Government agency/GSE | $ | 138,274 | $ | 572 | $ | (2,622) | $ | 136,224 | 18.57% | ||||||||||||
Residential mortgage-backed securities | 153,874 | - | (3,140) | 150,734 | 20.67% | ||||||||||||||||
CMO | 215,336 | - | (12,081) | 203,255 | 28.93% | ||||||||||||||||
Municipal bonds | 236,956 | 556 | (6,188) | 231,324 | 31.83% | ||||||||||||||||
Total held-to-maturity securities | $ | 744,440 | $ | 1,128 | $ | (24,031) | $ | 721,537 | 100.00% | ||||||||||||
March 31, 2019 | ||||||||||||||||||||||||
Less Than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||
Fair Value | Gross Unrealized Holding Losses | Fair Value | Gross Unrealized Holding Losses | Fair Value | Gross Unrealized Holding Losses | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Investment securitiesavailable-for-sale: | ||||||||||||||||||||||||
Residential mortgage-backed securities | $ | - | $ | - | $ | 703,134 | $ | (8,540 | ) | $ | 703,134 | $ | (8,540 | ) | ||||||||||
CMO/REMIC - residential | 66 | - | 160,926 | (2,301 | ) | 160,992 | (2,301 | ) | ||||||||||||||||
Municipal bonds | - | - | 16,689 | (388 | ) | 16,689 | (388 | ) | ||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Totalavailable-for-sale securities | $ | 66 | $ | - | $ | 880,749 | $ | (11,229 | ) | $ | 880,815 | $ | (11,229 | ) | ||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Investment securitiesheld-to-maturity: | ||||||||||||||||||||||||
Government agency/GSE | $ | 26,291 | $ | (122 | ) | $ | 60,153 | $ | (1,955 | ) | $ | 86,444 | $ | (2,077 | ) | |||||||||
Residential mortgage-backed securities | - | - | 86,568 | (999 | ) | 86,568 | (999 | ) | ||||||||||||||||
CMO | - | - | 203,148 | (9,998 | ) | 203,148 | (9,998 | ) | ||||||||||||||||
Municipal bonds | - | - | 64,790 | (2,859 | ) | 64,790 | (2,859 | ) | ||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Totalheld-to-maturity securities | $ | 26,291 | $ | (122 | ) | $ | 414,659 | $ | (15,811 | ) | $ | 440,950 | $ | (15,933 | ) | |||||||||
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|
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|
|
| |||||||
December 31, 2018 | ||||||||||||||||||||||||
Less Than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||
Fair Value | Gross Unrealized Holding Losses | Fair Value | Gross Unrealized Holding Losses | Fair Value | Gross Unrealized Holding Losses | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Investment securitiesavailable-for-sale: | ||||||||||||||||||||||||
Residential mortgage-backed securities | $ | 692,311 | $ | (4,864 | ) | $ | 593,367 | $ | (16,082 | ) | $ | 1,285,678 | $ | (20,946 | ) | |||||||||
CMO/REMIC - residential | 36,582 | (365 | ) | 135,062 | (3,160 | ) | 171,644 | (3,525 | ) | |||||||||||||||
Municipal bonds | 9,568 | (188 | ) | 14,181 | (955 | ) | 23,749 | (1,143 | ) | |||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Totalavailable-for-sale securities | $ | 738,461 | $ | (5,417 | ) | $ | 742,610 | $ | (20,197 | ) | $ | 1,481,071 | $ | (25,614 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Investment securitiesheld-to-maturity: | ||||||||||||||||||||||||
Government agency/GSE | $ | 7,479 | $ | (15 | ) | $ | 54,944 | $ | (2,607 | ) | $ | 62,423 | $ | (2,622 | ) | |||||||||
Residential mortgage-backed securities | 59,871 | (484 | ) | 90,863 | (2,656 | ) | 150,734 | (3,140 | ) | |||||||||||||||
CMO | - | - | 203,254 | (12,081 | ) | 203,254 | (12,081 | ) | ||||||||||||||||
Municipal bonds | 70,989 | (778 | ) | 77,723 | (5,410 | ) | 148,712 | (6,188 | ) | |||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Totalheld-to-maturity securities | $ | 138,339 | $ | (1,277 | ) | $ | 426,784 | $ | (22,754 | ) | $ | 565,123 | $ | (24,031 | ) | |||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized
Holding
Losses
Unrealized
Holding
Losses
Unrealized
Holding
Losses $ $ $ $ ) $ $ ) ) ) ) ) ) $ $ ) $ $ ) $ $ ) $ $ $ $ ) $ $ ) ) ) ) ) ) ) ) $ $ ) $ $ ) $ $ )
Unrealized
Holding
Losses
Unrealized
Holding
Losses
Unrealized
Holding
Losses $ $ ) $ $ ) $ $ ) ) ) ) ) ) ) $ $ ) $ $ ) $ $ ) $ $ ) $ $ ) $ $ ) ) ) ) ) ) ) ) ) $ $ ) $ $ ) $ $ )
The decline in these loan categories was generally the result of increased competition for new loan originations and higher levels of loan prepayments, including loans acquired from the recent CB merger.
March 31, 2019 | December 31, 2018 | |||||||
(Dollars in thousands) | ||||||||
Commercial and industrial | $ | 957,126 | $ | 1,002,209 | ||||
SBA | 337,957 | 350,043 | ||||||
Real estate: | ||||||||
Commercial real estate | 5,388,866 | 5,394,229 | ||||||
Construction | 121,912 | 122,782 | ||||||
SFR mortgage | 285,787 | 296,504 | ||||||
Dairy & livestock and agribusiness | 322,321 | 393,843 | ||||||
Municipal lease finance receivables | 61,249 | 64,186 | ||||||
Consumer and other loans | 120,768 | 128,429 | ||||||
|
|
|
|
|
| |||
Gross loans, excluding PCI loans | 7,595,986 | 7,752,225 | ||||||
Less: Deferred loan fees, net | (4,479 | ) | (4,828 | ) | ||||
|
|
|
|
|
| |||
Gross loans, excluding PCI loans, net of deferred loan fees | 7,591,507 | 7,747,397 | ||||||
Less: Allowance for loan losses | (65,021 | ) | (63,409 | ) | ||||
|
|
|
|
|
| |||
Net loans, excluding PCI loans | 7,526,486 | 7,683,988 | ||||||
|
|
|
|
|
| |||
PCI Loans | 15,356 | 17,214 | ||||||
Discount on PCI loans | - | - | ||||||
Less: Allowance for loan losses | (180 | ) | (204 | ) | ||||
|
|
|
|
|
| |||
PCI loans, net | 15,176 | 17,010 | ||||||
|
|
|
|
|
| |||
Total loans and lease finance receivables | $ | 7,541,662 | $ | 7,700,998 | ||||
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|
|
|
|
|
September 30, 2019 | December 31, 2018 | ||||||||||||||||
Total Loans and Leases | Non-PCI Loansand Leases | PCI Loans | Total Loans and Leases | ||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Commercial and industrial | $ | 921,678 | $ | 1,002,209 | $ | 519 | $ | 1,002,728 | |||||||||
SBA | 319,571 | 350,043 | 1,258 | 351,301 | |||||||||||||
Real estate: | |||||||||||||||||
Commercial real estate | 5,375,668 | 5,394,229 | 14,407 | 5,408,636 | |||||||||||||
Construction | 119,931 | 122,782 | - | 122,782 | |||||||||||||
SFR mortgage | 278,644 | 296,504 | 145 | 296,649 | |||||||||||||
Dairy & livestock and agribusiness | 311,229 | 393,843 | 700 | 394,543 | |||||||||||||
Municipal lease finance receivables | 54,468 | 64,186 | - | 64,186 | |||||||||||||
Consumer and other loans | 117,128 | 128,429 | 185 | 128,614 | |||||||||||||
Gross loans | 7,498,317 | 7,752,225 | 17,214 | 7,769,439 | |||||||||||||
Less: Deferred loan fees, net | (3,866 | ) | (4,828 | ) | - | (4,828 | ) | ||||||||||
Gross loans, net of deferred loan fees | 7,494,451 | 7,747,397 | 17,214 | 7,764,611 | |||||||||||||
Less: Allowance for loan losses | (68,672 | ) | (63,409 | ) | (204 | ) | (63,613 | ) | |||||||||
Total loans and lease finance receivables | $ | 7,425,779 | $ | 7,683,988 | $ | 17,010 | $ | 7,700,998 | |||||||||
As of March 31,September 30, 2019, the Company had $121.9$119.9 million in construction loans. This represents 1.60% of total gross loans There were no PCI construction loans at March 31, 2019. At March 31, 2019, construction loans consisted of $59.3 million in SFR construction loans and $62.6 million in commercial construction loans. There were no nonperforming construction loans at March 31,September 30, 2019.
PCI Loans from the SJB Acquisition
These PCI loans were acquired from SJB on October 16, 2009 and were subject to a loss sharing agreement with the FDIC. Under the terms of such loss sharing agreement, the FDIC absorbed 80% of losses and shared in 80% of loss recoveries up to $144.0 million in losses with respect to covered assets, after a first loss amount of $26.7 million. The loss sharing agreement covered 5 years for commercial loans and covers 10 years for single-family residential loans from the October 16, 2009 acquisition date and the loss recovery provisions are in effect for 8 and 10 years, respectively, for commercial and single-family residential loans from the acquisition date. The loss sharing agreement for commercial loans expired October 16, 2014. The loss sharing agreement with the FDIC for single-family residential loans, which would have expired on October 16, 2019, was terminated by the Bank on July 20, 2018.
The following table presents PCI loans by type for the periods presented.
March 31, 2019 | December 31, 2018 | |||||||
(Dollars in thousands) | ||||||||
Commercial and industrial | $ | 616 | $ | 519 | ||||
SBA | 1,235 | 1,258 | ||||||
Real estate: | ||||||||
Commercial real estate | 13,183 | 14,407 | ||||||
Construction | - | - | ||||||
SFR mortgage | 141 | 145 | ||||||
Dairy & livestock and agribusiness | - | 700 | ||||||
Municipal lease finance receivables | - | - | ||||||
Consumer and other loans | 181 | 185 | ||||||
|
|
|
|
|
| |||
Gross PCI loans | 15,356 | 17,214 | ||||||
Less: Purchase accounting discount | - | - | ||||||
|
|
|
|
|
| |||
Gross PCI loans, net of discount | 15,356 | 17,214 | ||||||
Less: Allowance for PCI loan losses | (180 | ) | (204 | ) | ||||
|
|
|
|
|
| |||
Net PCI loans | $ | 15,176 | $ | 17,010 | ||||
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|
|
|
|
|
Our loan portfolio is from a variety of areas throughout our marketplace. The following is the breakdown of our total Los Angeles County Central Valley Inland Empire Orange County Central Coast San Diego Other California Out of State commercial real estate loans, excluding PCI loans, by region as of March 31, 2019. March 31, 2019 Total Loans Commercial Real Estate
Loans (Dollars in thousands) $ 3,389,027 44.6% $ 2,321,650 43.1% 1,077,978 14.2% 825,584 15.3% 1,023,654 13.5% 890,703 16.5% 1,015,871 13.4% 662,837 12.3% 421,011 5.5% 340,989 6.4% 216,787 2.9% 124,618 2.3% 155,182 2.0% 66,129 1.2% 296,476 3.9% 156,356 2.9% $ 7,595,986 100.0% $ 5,388,866 100.0% The following is the breakdown of total PCIheld-for-investmentMarch 31,September 30, 2019.
March 31, 2019 | ||||||||||||||||
Total PCI Loans | Commercial Real Estate Loans | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||
Central Valley | $ | 15,356 | 100.0% | $ | 13,183 | 100.0% | ||||||||||
Los Angeles County | - | - | - | - | ||||||||||||
Central Coast | - | - | - | - | ||||||||||||
Other California | - | - | - | - | ||||||||||||
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|
|
|
|
|
|
|
|
|
|
| |||||
$ | 15,356 | 100.0% | $ | 13,183 | 100.0% | |||||||||||
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|
|
|
|
|
|
|
|
|
|
|
September 30, 2019 | ||||||||||||||||
Total Loans | Commercial Real Estate Loans | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||
Los Angeles County | $ | 3,301,874 | 44.0% | $ | 2,267,332 | 42.2% | ||||||||||
Central Valley | 1,112,079 | 14.8% | 879,344 | 16.3% | ||||||||||||
Orange County | 1,008,152 | 13.5% | 665,360 | 12.4% | ||||||||||||
Inland Empire | 976,892 | 13.0% | 853,110 | 15.9% | ||||||||||||
Central Coast | 420,226 | 5.6% | 343,152 | 6.4% | ||||||||||||
San Diego | 227,235 | 3.0% | 129,115 | 2.4% | ||||||||||||
Other California | 140,005 | 1.9% | 70,640 | 1.3% | ||||||||||||
Out of State | 311,854 | 4.2% | 167,615 | 3.1% | ||||||||||||
$ | 7,498,317 | 100.0% | $ | 5,375,668 | 100.0% | |||||||||||
March 31, 2019 | ||||||||||||||||
Loan Balance | Percent | Percent Owner- Occupied (1) | Average Loan Balance | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
SFR mortgage: | ||||||||||||||||
SFR mortgage - Direct | $ | 270,834 | 4.8% | 100.0% | $ | 506 | ||||||||||
SFR mortgage - Mortgage pools | 14,953 | 0.2% | 100.0% | 258 | ||||||||||||
|
|
|
|
|
| |||||||||||
Total SFR mortgage | 285,787 | 5.0% | ||||||||||||||
|
|
|
|
|
| |||||||||||
Commercial real estate: | ||||||||||||||||
Multi-family | 561,129 | 9.9% | 0.6% | 1,626 | ||||||||||||
Industrial | 1,901,673 | 33.5% | 55.6% | 1,431 | ||||||||||||
Office | 918,491 | 16.2% | 27.3% | 1,474 | ||||||||||||
Retail | 832,087 | 14.7% | 12.7% | 1,719 | ||||||||||||
Medical | 274,881 | 4.8% | 46.4% | 1,808 | ||||||||||||
Secured by farmland (2) | 231,109 | 4.1% | 100.0% | 2,101 | ||||||||||||
Other (3) | 669,496 | 11.8% | 48.3% | 1,459 | ||||||||||||
|
|
|
|
|
| |||||||||||
Total commercial real estate | 5,388,866 | 95.0% | ||||||||||||||
|
|
|
|
|
| |||||||||||
Total SFR mortgage and | $ | 5,674,653 | 100.0% | 42.0% | 1,386 | |||||||||||
|
|
|
|
|
|
September 30, 2019 | |||||||||||||||||
Loan Balance | Percent | Percent Owner- Occupied (1) | Average Loan Balance | ||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Commercial real estate: | |||||||||||||||||
Industrial | $ | 1,890,465 | 35.2% | 54.6% | $ | 1,430 | |||||||||||
Office | 921,565 | 17.1% | 26.9% | 1,506 | |||||||||||||
Retail | 800,406 | 14.9% | 13.1% | 1,707 | |||||||||||||
Multi-family | 577,700 | 10.7% | 0.5% | 1,596 | |||||||||||||
Medical | 279,805 | 5.2% | 45.3% | 1,829 | |||||||||||||
Secured by farmland (2) | 245,574 | 4.6% | 100.0% | 2,030 | |||||||||||||
Other (3) | 660,153 | 12.3% | 50.7% | 1,423 | |||||||||||||
Total commercial real estate | $ | 5,375,668 | 100.0% | 39.0% | 1,535 | ||||||||||||
(1) | Represents percentage of reported owner-occupied at origination in each real estate loan category. |
(2) | The loans secured by farmland included |
(3) | Other loans consist of a variety of loan types, none of which exceeds 2.0% of total commercial real estate loans. |
In the table above, SFR mortgage — Direct loans include SFR mortgage loans which are currently generated through an internal loan origination program in our Centers. This program is focused on owner-occupied SFR’s with definedloan-to-value,debt-to-income and other credit criteria, such as FICO credit scores, that we believe are appropriate for loans which are primarily intended for retention in our Bank’s loan portfolio. We originated loan volume in the aggregate principal amount
In addition, we previously purchased pools of owner-occupied single-family loans from real estate lenders, which are reflected in the table above in SFR mortgage — Mortgage Pools, with a remaining balance totaling $15.0 million at March 31, 2019. These loans were originally purchased with average FICO scores predominantly ranging from 700 to over 800 and original overallloan-to-value ratios of 60% to 80%. We have not purchased any mortgage pools since August 2007.
The table below breaks down our PCI real estate portfolio.
March 31, 2019 | ||||||||||||||||
Loan Balance | Percent | Percent Owner- Occupied (1) | Average Loan Balance | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
SFR mortgage | ||||||||||||||||
SFR mortgage - Direct | $ | 141 | 1.1% | 100.0% | $ | 141 | ||||||||||
SFR mortgage - Mortgage pools | - | - | - | - | ||||||||||||
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|
|
|
| |||||||||||
Total SFR mortgage | 141 | 1.1% | ||||||||||||||
Commercial real estate: | ||||||||||||||||
Multi-family | 544 | 4.1% | - | 544 | ||||||||||||
Industrial | 2,315 | 17.4% | 76.9% | 331 | ||||||||||||
Office | 1,230 | 9.2% | 100.0% | 410 | ||||||||||||
Retail | 1,359 | 10.2% | - | 340 | ||||||||||||
Medical | 1,882 | 14.1% | 100.0% | 627 | ||||||||||||
Secured by farmland | 366 | 2.7% | 100.0% | 183 | ||||||||||||
Other (2) | 5,487 | 41.2% | 76.2% | 457 | ||||||||||||
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|
|
| |||||||||||
Total commercial real estate | 13,183 | 98.9% | ||||||||||||||
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|
|
| |||||||||||
Total SFR mortgage and | $ | 13,324 | 100.0% | 71.9% | 404 | |||||||||||
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Contents
March 31, 2019 | December 31, 2018 | |||||||
(Dollars in thousands) | ||||||||
Nonaccrual loans | $ | 16,714 | $ | 16,442 | ||||
Troubled debt restructured loans (nonperforming) | 277 | 3,509 | ||||||
OREO, net | 2,275 | 420 | ||||||
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|
| |||||
Total nonperforming assets | $ | 19,266 | $ | 20,371 | ||||
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|
|
| |||||
Troubled debt restructured performing loans | $ | 3,299 | $ | 3,594 | ||||
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|
|
| |||||
Percentage of nonperforming assets to total loans outstanding, net of deferred fees, and OREO | 0.25% | 0.26% | ||||||
Percentage of nonperforming assets to total assets | 0.17% | 0.18% |
September 30, 2019 | December 31, 2018 | |||||||
(Dollars in thousands) | ||||||||
Nonaccrual loans | $ | 6,363 | $ | 16,442 | ||||
Troubled debt restructured loans (nonperforming) | 249 | 3,509 | ||||||
OREO, net | 9,450 | 420 | ||||||
Total nonperforming assets | $ | 16,062 | $ | 20,371 | ||||
Troubled debt restructured performing loans | $ | 3,168 | $ | 3,594 | ||||
Percentage of nonperforming assets to total loans outstanding, net of deferred fees, and OREO | 0.21% | 0.26% | ||||||
Percentage of nonperforming assets to total assets | 0.14% | 0.18% |
(1) | Excludes PCI loans. |
Of the $20.3$9.8 million total impaired loans as of March 31,September 30, 2019, $17.9$6.9 million were considered collateral dependent and measured using the fair value of the collateral based on current appraisals (obtained within one year). The amount of impaired loans measured using the present value of expected future cash flows discounted at the loans effective rate was $2.4$2.9 million.
(“TDRs”)
March 31, 2019 | December 31, 2018 | |||||||||||||||
Balance | Number of Loans | Balance | Number of Loans | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Performing TDRs: | ||||||||||||||||
Commercial and industrial | $ | 124 | 2 | $ | 135 | 2 | ||||||||||
SBA | 563 | 1 | 575 | 1 | ||||||||||||
Real Estate: | ||||||||||||||||
Commercial real estate | 455 | 1 | 472 | 1 | ||||||||||||
Construction | - | - | - | - | ||||||||||||
SFR mortgage | 2,157 | 8 | 2,412 | 9 | ||||||||||||
Dairy & livestock and agribusiness | - | - | - | - | ||||||||||||
Consumer and other | - | - | - | - | ||||||||||||
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|
|
|
|
|
|
|
|
|
|
| |||||
Total performing TDRs | $ | 3,299 | 12 | $ | 3,594 | 13 | ||||||||||
|
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|
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|
|
|
|
|
| |||||
Nonperforming TDRs: | ||||||||||||||||
Commercial and industrial | $ | 15 | 1 | $ | 21 | 1 | ||||||||||
SBA | - | - | - | - | ||||||||||||
Real Estate: | ||||||||||||||||
Commercial real estate | - | - | 3,143 | 1 | ||||||||||||
Construction | - | - | - | - | ||||||||||||
SFR mortgage | - | - | - | - | ||||||||||||
Dairy & livestock and agribusiness | - | - | 78 | 1 | ||||||||||||
Consumer and other | 262 | 1 | 267 | 1 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total nonperforming TDRs | $ | 277 | 2 | $ | 3,509 | 4 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total TDRs | $ | 3,576 | 14 | $ | 7,103 | 17 | ||||||||||
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|
|
September 30, 2019 | December 31, 2018 | ||||||||||||||||
Balance | Number of Loans | Balance | Number of Loans | ||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Performing TDRs: | |||||||||||||||||
Commercial and industrial | $ | 88 | 2 | $ | 135 | 2 | |||||||||||
SBA | 542 | 1 | 575 | 1 | |||||||||||||
Real Estate: | |||||||||||||||||
Commercial real estate | 417 | 1 | 472 | 1 | |||||||||||||
Construction | - | - | - | - | |||||||||||||
SFR mortgage | 2,121 | 8 | 2,412 | 9 | |||||||||||||
Dairy & livestock and agribusiness | - | - | - | - | |||||||||||||
Consumer and other | - | - | - | - | |||||||||||||
Total performing TDRs | $ | 3,168 | 12 | $ | 3,594 | 13 | |||||||||||
Nonperforming TDRs: | |||||||||||||||||
Commercial and industrial | $ | 1 | 1 | $ | 21 | 1 | |||||||||||
SBA | - | - | - | - | |||||||||||||
Real Estate: | |||||||||||||||||
Commercial real estate | - | - | 3,143 | 1 | |||||||||||||
Construction | - | - | - | - | |||||||||||||
SFR mortgage | - | - | - | - | |||||||||||||
Dairy & livestock and agribusiness | - | - | 78 | 1 | |||||||||||||
Consumer and other | 248 | 1 | 267 | 1 | |||||||||||||
Total nonperforming TDRs | $ | 249 | 2 | $ | 3,509 | 4 | |||||||||||
Total TDRs | $ | 3,417 | 14 | $ | 7,103 | 17 | |||||||||||
March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Nonperforming loans: | ||||||||||||||||||||
Commercial and industrial | $ | 8,388 | $ | 7,490 | $ | 3,026 | $ | 204 | $ | 272 | ||||||||||
SBA | 4,098 | 2,892 | 3,005 | 574 | 589 | |||||||||||||||
Real estate: | ||||||||||||||||||||
Commercial real estate | 1,134 | 6,068 | 5,856 | 6,517 | 6,746 | |||||||||||||||
Construction | - | - | - | - | - | |||||||||||||||
SFR mortgage | 2,894 | 2,937 | 2,961 | 1,578 | 1,309 | |||||||||||||||
Dairy & livestock and agribusiness | - | 78 | 775 | 800 | 818 | |||||||||||||||
Consumer and other loans | 477 | 486 | 807 | 509 | 438 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total | $ | 16,991 | $ | 19,951 | $ | 16,430 | $ | 10,182 | $ | 10,172 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
% of Total gross loans | 0.22% | 0.26% | 0.22% | 0.21% | 0.21% | |||||||||||||||
Past due30-89 days: | ||||||||||||||||||||
Commercial and industrial | $ | 369 | $ | 909 | $ | 274 | $ | - | $ | - | ||||||||||
SBA | 601 | 1,307 | 123 | - | - | |||||||||||||||
Real estate: | ||||||||||||||||||||
Commercial real estate | 124 | 2,789 | - | - | - | |||||||||||||||
Construction | - | - | - | - | - | |||||||||||||||
SFR mortgage | - | 285 | - | - | 680 | |||||||||||||||
Dairy & livestock and agribusiness | - | - | - | - | - | |||||||||||||||
Consumer and other loans | 101 | - | 98 | 47 | 63 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total | $ | 1,195 | $ | 5,290 | $ | 495 | $ | 47 | $ | 743 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
% of Total gross loans | 0.02% | 0.07% | 0.01% | 0.001% | 0.02% | |||||||||||||||
OREO: | ||||||||||||||||||||
Real estate: | ||||||||||||||||||||
Commercial real estate | $ | 2,275 | $ | - | $ | - | $ | - | $ | - | ||||||||||
Construction | - | - | - | - | - | |||||||||||||||
SFR mortgage | - | 420 | 420 | - | - | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total | $ | 2,275 | $ | 420 | $ | 420 | $ | - | $ | - | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total nonperforming, past due, and OREO | $ | 20,461 | $ | 25,661 | $ | 17,345 | $ | 10,229 | $ | 10,915 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
% of Total gross loans | 0.27% | 0.33% | 0.23% | 0.21% | 0.23% |
September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | September 30, 2018 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Nonperforming loans: | ||||||||||||||||||||
Commercial and industrial | $ | 1,550 | $ | 1,993 | $ | 8,388 | $ | 7,490 | $ | 3,026 | ||||||||||
SBA | 2,706 | 5,082 | 4,098 | 2,892 | 3,005 | |||||||||||||||
Real estate: | ||||||||||||||||||||
Commercial real estate | 1,083 | 1,095 | 1,134 | 6,068 | 5,856 | |||||||||||||||
Construction | - | - | - | - | - | |||||||||||||||
SFR mortgage | 888 | 2,720 | 2,894 | 2,937 | 2,961 | |||||||||||||||
Dairy & livestock and agribusiness | - | - | - | 78 | 775 | |||||||||||||||
Consumer and other loans | 385 | 397 | 477 | 486 | 807 | |||||||||||||||
Total | $ | 6,612 | $ | 11,287 | $ | 16,991 | $ | 19,951 | $ | 16,430 | ||||||||||
% of Total gross loans | 0.09% | 0.15% | 0.22% | 0.26% | 0.22% | |||||||||||||||
Past due 30-89 days: | ||||||||||||||||||||
Commercial and industrial | $ | 756 | $ | 310 | $ | 369 | $ | 909 | $ | 274 | ||||||||||
SBA | 303 | - | 601 | 1,307 | 123 | |||||||||||||||
Real estate: | ||||||||||||||||||||
Commercial real estate | 368 | - | 124 | 2,789 | - | |||||||||||||||
Construction | - | - | - | - | - | |||||||||||||||
SFR mortgage | - | - | - | 285 | - | |||||||||||||||
Dairy & livestock and agribusiness | - | - | - | - | - | |||||||||||||||
Consumer and other loans | - | 22 | 101 | - | 98 | |||||||||||||||
Total | $ | 1,427 | $ | 332 | $ | 1,195 | $ | 5,290 | $ | 495 | ||||||||||
% of Total gross loans | 0.02% | 0.004% | 0.02% | 0.07% | 0.01% | |||||||||||||||
OREO: | ||||||||||||||||||||
SBA | $ | 444 | $ | - | $ | - | $ | - | $ | - | ||||||||||
Real estate: | ||||||||||||||||||||
Commercial real estate | 2,275 | 2,275 | 2,275 | - | - | |||||||||||||||
SFR mortgage | 6,731 | - | - | 420 | 420 | |||||||||||||||
Total | $ | 9,450 | $ | 2,275 | $ | 2,275 | $ | 420 | $ | 420 | ||||||||||
Total nonperforming, past due, and OREO | $ | 17,489 | $ | 13,894 | $ | 20,461 | $ | 25,661 | $ | 17,345 | ||||||||||
% of Total gross loans | 0.23% | 0.18% | 0.27% | 0.33% | 0.23% |
Acquired SJB Assets
Loans acquired through the SJB acquisition are accounted for under ASC Topic310-30,Loans and Debt Securities Acquired with Deteriorated Credit Quality (“ASC310-30”). PCI loans accounted for under ASC310-30 are generally considered accruing and performing loans as the loans accrete interest income over the estimated life
As of and For the Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
(Dollars in thousands) | ||||||||
Allowance for loan losses at beginning of period | $ | 63,613 | $ | 59,585 | ||||
Charge-offs: | ||||||||
Commercial and industrial | - | - | ||||||
SBA | (20) | - | ||||||
Commercial real estate | - | - | ||||||
Construction | - | - | ||||||
SFR mortgage | - | - | ||||||
Dairy & livestock and agribusiness | (78) | - | ||||||
Consumer and other loans | (1) | (7) | ||||||
|
|
|
| |||||
Total charge-offs | (99) | (7) | ||||||
|
|
|
| |||||
Recoveries: | ||||||||
Commercial and industrial | 110 | 10 | ||||||
SBA | 5 | 5 | ||||||
Commercial real estate | - | - | ||||||
Construction | 3 | 1,334 | ||||||
SFR mortgage | 68 | - | ||||||
Dairy & livestock and agribusiness | - | - | ||||||
Consumer and other loans | 1 | 8 | ||||||
|
|
|
| |||||
Total recoveries | 187 | 1,357 | ||||||
|
|
|
| |||||
Net recoveries | 88 | 1,350 | ||||||
Provision for (recapture of) loan losses | 1,500 | (1,000) | ||||||
|
|
|
| |||||
Allowance for loan losses at end of period | $ | 65,201 | $ | 59,935 | ||||
|
|
|
| |||||
Summary of reserve for unfunded loan commitments: | ||||||||
Reserve for unfunded loan commitments at beginning of period | $ | 8,959 | $ | 6,306 | ||||
Provision for unfunded loan commitments | - | - | ||||||
|
|
|
| |||||
Reserve for unfunded loan commitments at end of period | $ | 8,959 | $ | 6,306 | ||||
|
|
|
| |||||
Reserve for unfunded loan commitments to total unfunded loan commitments | 0.54% | 0.61% | ||||||
Amount of total loans at end of period (1) | $ | 7,606,863 | $ | 4,794,983 | ||||
Average total loans outstanding (1) | $ | 7,662,573 | $ | 4,789,943 | ||||
Net recoveries to average total loans | 0.00% | 0.03% | ||||||
Net recoveries to total loans at end of period | 0.00% | 0.03% | ||||||
Allowance for loan losses to average total loans | 0.85% | 1.25% | ||||||
Allowance for loan losses to total loans at end of period | 0.86% | 1.25% | ||||||
Net recoveries to allowance for loan losses | 0.13% | 2.25% | ||||||
Net recoveries to provision for (recapture of) loan losses | 5.87% | -135.00% |
As of and For the Nine Months Ended September 30, | ||||
2019 | 2018 | |||
(Dollars in thousands) | ||||
Allowance for loan losses at beginning of period | $ 63,613 | $ 59,585 | ||
Charge-offs: | ||||
Commercial and industrial | (48) | - | ||
SBA | (295) | (257) | ||
Commercial real estate | - | - | ||
Construction | - | - | ||
SFR mortgage | - | - | ||
Dairy & livestock and agribusiness | (78) | - | ||
Consumer and other loans | (7) | (10) | ||
Total charge-offs | (428) | (267) | ||
Recoveries: | ||||
Commercial and industrial | 253 | 81 | ||
SBA | 9 | 15 | ||
Commercial real estate | - | - | ||
Construction | 9 | 1,945 | ||
SFR mortgage | 191 | - | ||
Dairy & livestock and agribusiness | 19 | 19 | ||
Consumer and other loans | 6 | 129 | ||
Total recoveries | 487 | 2,189 | ||
Net recoveries | 59 | 1,922 | ||
Provision for (recapture of) loan losses | 5,000 | (1,500) | ||
Allowance for loan losses at end of period | $ 68,672 | $ 60,007 | ||
Summary of reserve for unfunded loan commitments: | ||||
Reserve for unfunded loan commitments at beginning of period | $ 8,959 | $ 6,306 | ||
Estimated fair value of reserve for unfunded loan commitment assumed from Community Bank | - | 2,903 | ||
Provision for unfunded loan commitments | - | - | ||
Reserve for unfunded loan commitments at end of period | $ 8,959 | $ 9,209 | ||
Reserve for unfunded loan commitments to total unfunded loan commitments | 0.55% | 0.54% | ||
Amount of total loans at end of period (1) | $ 7,494,451 | $ 7,582,459 | ||
Average total loans outstanding (1) | $ 7,571,502 | $ 5,312,558 | ||
Net recoveries to average total loans | 0.00% | 0.04% | ||
Net recoveries to total loans at end of period | 0.00% | 0.03% | ||
Allowance for loan losses to average total loans | 0.91% | 1.13% | ||
Allowance for loan losses to total loans at end of period | 0.92% | 0.79% | ||
Net recoveries to allowance for loan losses | 0.09% | 3.20% | ||
Net recoveries to provision for (recapture of) loan losses | 1.18% | -128.13% |
(1) | Includes PCI loans and is net of deferred loan origination fees, costs and discounts. |
The ALLL balance also increased as a result of reserve requirements for acquired loan portfolios that exceeded remaining unaccreted fair value credit discounts.
March 31, 2019 | December 31, 2018 | |||||||||||||||
|
|
|
|
|
| |||||||||||
Balance | Percent | Balance | Percent | |||||||||||||
|
|
|
|
|
| |||||||||||
(Dollars in thousands) | ||||||||||||||||
Noninterest-bearing deposits | $ | 5,098,822 | 58.92% | $ | 5,204,787 | 58.96% | ||||||||||
Interest-bearing deposits | ||||||||||||||||
Investment checking | 426,983 | 4.93% | 460,972 | 5.22% | ||||||||||||
Money market | 2,218,360 | 25.63% | 2,236,018 | 25.33% | ||||||||||||
Savings | 394,636 | 4.57% | 393,769 | 4.46% | ||||||||||||
Time deposits | 515,319 | 5.95% | 531,944 | 6.03% | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total deposits | $ | 8,654,120 | 100.00% | $ | 8,827,490 | 100.00% | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2019 | December 31, 2018 | ||||||||||||||||
Balance | Percent | Balance | Percent | ||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Noninterest-bearing deposits | $ | 5,385,104 | 61.23% | $ | 5,204,787 | 58.96% | |||||||||||
Interest-bearing deposits | |||||||||||||||||
Investment checking | 433,615 | 4.93% | 460,972 | 5.22% | |||||||||||||
Money market | 2,110,780 | 24.00% | 2,236,018 | 25.33% | |||||||||||||
Savings | 403,108 | 4.59% | 393,769 | 4.46% | |||||||||||||
Time deposits | 461,723 | 5.25% | 531,944 | 6.03% | |||||||||||||
Total deposits | $ | 8,794,330 | 100.00% | $ | 8,827,490 | 100.00% | |||||||||||
Maturity by Period | ||||||||||||||||||||
Total | Less Than One Year | One Year Through Three Years | Four Years Through Five Years | Over Five Years | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Deposits (1) | $ | 8,654,120 | $ | 8,528,341 | $ | 110,675 | $ | 6,716 | $ | 8,388 | ||||||||||
Customer repurchase agreements (1) | 462,774 | 462,774 | - | - | - | |||||||||||||||
Junior subordinated debentures (1) | 25,774 | - | - | - | 25,774 | |||||||||||||||
Deferred compensation | 20,860 | 784 | 1,303 | 881 | 17,892 | |||||||||||||||
Operating leases | 23,069 | 7,784 | 9,637 | 3,898 | 1,750 | |||||||||||||||
Affordable housing investment | 6,736 | 4,379 | 1,711 | 605 | 41 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total | $ | 9,193,333 | $ | 9,004,062 | $ | 123,326 | $ | 12,100 | $ | 53,845 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maturity by Period | ||||||||||||||||||||
Total | Less Than One Year | One Year Through Three Years | Four Years Through Five Years | Over Five Years | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Deposits (1) | $ | 8,794,330 | $ | 8,674,968 | $ | 107,752 | $ | 3,251 | $ | 8,359 | ||||||||||
Customer repurchase agreements (1) | 407,850 | 407,850 | - | - | - | |||||||||||||||
Junior subordinated debentures (1) | 25,774 | - | - | - | 25,774 | |||||||||||||||
Deferred compensation | 23,305 | 723 | 1,356 | 807 | 20,419 | |||||||||||||||
Operating leases | 23,533 | 7,349 | 9,905 | 4,297 | 1,982 | |||||||||||||||
Affordable housing investment | 6,242 | 4,167 | 1,984 | 55 | 36 | |||||||||||||||
Total | $ | 9,281,034 | $ | 9,095,057 | $ | 120,997 | $ | 8,410 | $ | 56,570 | ||||||||||
(1) | Amounts exclude accrued interest. |
Maturity by Period | ||||||||||||||||||||
Total | Less Than One Year | One Year to Three Years | Four Years to Five Years | After Five Years | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Commitment to extend credit: | ||||||||||||||||||||
Commercial and industrial | $ | 943,765 | $ | 672,586 | $ | 206,082 | $ | 14,993 | $ | 50,104 | ||||||||||
SBA | 628 | - | 4 | - | 624 | |||||||||||||||
Real estate: | ||||||||||||||||||||
Commercial real estate | 251,053 | 83,727 | 72,488 | 80,088 | 14,750 | |||||||||||||||
Construction | 92,655 | 65,429 | 24,026 | - | 3,200 | |||||||||||||||
SFR Mortgage | 8,836 | 2,106 | 3,500 | - | 3,230 | |||||||||||||||
Dairy & livestock and agribusiness (1) | 162,388 | 141,685 | 20,303 | 400 | - | |||||||||||||||
Consumer and other loans | 152,924 | 14,447 | 9,066 | 4,790 | 124,621 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total commitment to extend credit | 1,612,249 | 979,980 | 335,469 | 100,271 | 196,529 | |||||||||||||||
Obligations under letters of credit | 52,066 | 45,462 | 6,356 | 248 | - | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total | $ | 1,664,315 | $ | 1,025,442 | $ | 341,825 | $ | 100,519 | $ | 196,529 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maturity by Period | ||||||||||||||||||||
Total | Less Than One Year | One Year to Three Years | Four Years to Five Years | After Five Years | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Commitment to extend credit: | ||||||||||||||||||||
Commercial and industrial | $ | 951,334 | $ | 695,927 | $ | 160,214 | $ | 7,333 | $ | 87,860 | ||||||||||
SBA | 410 | 60 | 4 | - | 346 | |||||||||||||||
Real estate: | ||||||||||||||||||||
Commercial real estate | 253,648 | 48,533 | 86,165 | 100,747 | 18,203 | |||||||||||||||
Construction | 80,342 | 63,445 | 13,697 | - | 3,200 | |||||||||||||||
SFR Mortgage | 6,998 | 5,006 | - | - | 1,992 | |||||||||||||||
Dairy & livestock and agribusiness (1) | 151,947 | 81,488 | 70,254 | 205 | - | |||||||||||||||
Consumer and other loans | 139,059 | 17,430 | 7,036 | 4,894 | 109,699 | |||||||||||||||
Total commitment to extend credit | 1,583,738 | 911,889 | 337,370 | 113,179 | 221,300 | |||||||||||||||
Obligations under letters of credit | 50,244 | 41,383 | 8,613 | 248 | - | |||||||||||||||
Total | $ | 1,633,982 | $ | 953,272 | $ | 345,983 | $ | 113,427 | $ | 221,300 | ||||||||||
(1) | Total commitments to extend credit to agribusiness were |
March 31, 2019 | December 31, 2018 | |||||||||||||||||||||||||||||
Capital Ratios | Adequately Capitalized Ratios | Well Capitalized Ratios | CVB Financial Corp. Consolidated | Citizens Business Bank | CVB Financial Corp. Consolidated | Citizens Business Bank | ||||||||||||||||||||||||
Tier 1 leverage capital ratio | 4.00 | % | 5.00 | % | 11.38 | % | 11.27 | % | 10.98 | % | 10.90 | % | ||||||||||||||||||
Common equity Tier I capital ratio | 4.50 | % | 6.50 | % | 13.76 | % | 13.90 | % | 13.04 | % | 13.22 | % | ||||||||||||||||||
Tier 1 risk-based capital ratio | 6.00 | % | 8.00 | % | 14.05 | % | 13.90 | % | 13.32 | % | 13.22 | % | ||||||||||||||||||
Total risk-based capital ratio | 8.00 | % | 10.00 | % | 14.90 | % | 14.76 | % | 14.13 | % | 14.03 | % |
September 30, 2019 | December 31, 2018 | |||||||||||||||||||||||
Capital Ratios | Adequately Capitalized Ratios | Well Capitalized Ratios | CVB Financial Corp. Consolidated | Citizens Business Bank | CVB Financial Corp. Consolidated | Citizens Business Bank | ||||||||||||||||||
Tier 1 leverage capital ratio | 4.00% | 5.00% | 12.23% | 12.09% | 10.98% | 10.90% | ||||||||||||||||||
Common equity Tier I capital ratio | 4.50% | 6.50% | 14.64% | 14.75% | 13.04% | 13.22% | ||||||||||||||||||
Tier 1 risk-based capital ratio | 6.00% | 8.00% | 14.93% | 14.75% | 13.32% | 13.22% | ||||||||||||||||||
Total risk-based capital ratio | 8.00% | 10.00% | 15.83% | 15.65% | 14.13% | 14.03% |
Equity | Tier 1 | Total | Leverage | |||||
Tier 1 Ratio | Capital Ratio | Capital Ratio | Ratio | |||||
Regulatory minimum ratio | 4.5% | 6.0% | 8.0% | 4.0% | ||||
Plus: Capital conservation buffer requirement | 2.5% | 2.5% | 2.5% | - | ||||
Regulatory minimum ratio plus capital conservation buffer | 7.0% | 8.5% | 10.5% | 4.0% |
Equity Tier 1 Ratio | Tier 1 Capital Ratio | Total Capital Ratio | Leverage Ratio | |||||||||||||
Regulatory minimum ratio | 4.5% | 6.0% | 8.0% | 4.0% | ||||||||||||
Plus: Capital conservation buffer requirement | 2.5% | 2.5% | 2.5% | - | ||||||||||||
Regulatory minimum ratio plus capital conservation buffer | 7.0% | 8.5% | 10.5% | 4.0% |
For the Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
(Dollars in thousands) | ||||||||
Average cash and cash equivalents | $ | 186,473 | $ | 250,316 | ||||
Percentage of total average assets | 1.63% | 3.03% | ||||||
Net cash provided by operating activities | $ | 54,487 | $ | 45,996 | ||||
Net cash provided by investing activities | 253,841 | 185,168 | ||||||
Net cash (used in) provided by financing activities | (300,062) | 80,697 | ||||||
|
|
|
| |||||
Net increase in cash and cash equivalents | $ | 8,266 | $ | 311,861 | ||||
|
|
|
|
For the Nine Months Ended September 30, | ||||||||
2019 | 2018 | |||||||
(Dollars in thousands) | ||||||||
Average cash and cash equivalents | $ | 237,244 | $ | 237,817 | ||||
Percentage of total average assets | 2.10% | 2.69% | ||||||
Net cash provided by operating activities | $ | 147,410 | $ | 116,564 | ||||
Net cash provided by investing activities | 538,256 | 874,202 | ||||||
Net cash used in financing activities | (412,066) | (940,668) | ||||||
Net increase in cash and cash equivalents | $ | 273,600 | $ | 50,098 | ||||
Estimated Net Interest Income Sensitivity (1) | ||||||||||
March 31, 2019 | December 31, 2018 | |||||||||
24-month Period | 24-month Period | |||||||||
Interest Rate Scenario | 12-month Period | (Cumulative) | Interest Rate Scenario | 12-month Period | (Cumulative) | |||||
+ 200 basis points | 3.71% | 7.22% | + 200 basis points | 3.80% | 7.40% | |||||
- 200 basis points | -4.93% | -9.84% | - 200 basis points | -5.29% | -10.26% |
Estimated Net Interest Income Sensitivity (1) | ||||||||||||||||||||
September 30, 2019 | December 31, 2018 | |||||||||||||||||||
Interest Rate Scenario | 12-month Period | 24-month Period(Cumulative) | Interest Rate Scenario | 12-month Period | 24-month Period(Cumulative) | |||||||||||||||
+ 200 basis points | 4.50% | 8.70% | + 200 basis points | 3.80% | 7.40% | |||||||||||||||
- 100 basis points | -2.30% | -5.00% | - 200 basis points | -5.29% | -10.26% |
(1) | Percentage change from base. |
Instantaneous Rate Change | March 31, 2019 | December 31, 2018 | ||||
200 bp decrease in interest rates | -27.3% | -24.4% | ||||
100 bp decrease in interest rates | -11.2% | -10.2% | ||||
100 bp increase in interest rates | 6.6% | 5.8% | ||||
200 bp increase in interest rates | 11.6% | 10.3% | ||||
300 bp increase in interest rates | 15.5% | 13.8% | ||||
400 bp increase in interest rates | 18.5% | 16.6% |
Instantaneous Rate Change | September 30, 2019 | December 31, 2018 | ||||||||||
100 bp decrease in interest rates | -19.6% | -10.2% | ||||||||||
100 bp increase in interest rates | 13.3% | 5.8% | ||||||||||
200 bp increase in interest rates | 23.3% | 10.3% | ||||||||||
300 bp increase in interest rates | 31.0% | 13.8% | ||||||||||
400 bp increase in interest rates | 37.1% | 16.6% |
The Company is a defendant and cross-complainant in an action entitled Edward A. Dunagan et al v. Citizens Business Bank, as successor to American Security Bank (ASB), Case No. CVDS1408287, filed in the Superior Court for San Bernardino County. The complaint was initially filed in May, 2014 against ASB, which was acquired during the same month by CBB, and a Second Amended Complaint (SAC) was filed on September 9, 2015, naming CBB as the primary defendant. The case arises out of a number of defaulted commercial real estate loans originally made by ASB to the Dunagans and various entities owned by the Dunagans (Dunagan Parties), and the SAC included claims by the Dunagans (1) contesting their liabilities under their personal guarantees for deficiencies on certain of the defaulted loans, (2) attacking the validity of ASB’s foreclosures on certain properties owned by the Dunagan Parties, and (3) claiming emotional distress caused by ASB’s allegedly wrongful actions in connection with such foreclosures. A bench trial on the Dunagans’ claims took place in late July and early August, 2018.
On February 11, 2019, the Court issued a final statement of decision and judgment finding in favor of the Dunagans and against Citizens Business Bank/ASB on all three claims made by the plaintiffs enumerated above, and awarding damages and attorney’s fees and costs to the Dunagans in an aggregate amount of approximately $1.34 million. The Company intends to vigorously appeal this decision and filed a notice of appeal on February 22, 2019. The Company also believes that the bankers professional liability insurance policy previously obtained by ASB (which provides for a $5 million per claim limit subject to a $100,000 deductible) may cover all or a substantial portion of any final monetary award to the plaintiffs. The Company continues to believe that this adverse decision and any monetary award ultimately payable to the plaintiffs are not expected to have a material adverse impact on the Company’s results of operations, financial condition or cash flows.
Period | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Average Price Paid Per Share | Maximum Number of Shares Available for Repurchase Under the Plans or Programs | |||||||||
July 1 - 31, 2019 | - | $ | - | 9,577,917 | ||||||||
August 1 - 31, 2019 | 584 | 20.03 | 9,577,333 | |||||||||
September 1 - 30, 2019 | 321 | 20.03 | 9,577,012 | |||||||||
Total | 905 | 20.03 | 9,577,012 | |||||||||
| ||||
Exhibit No. | Description of Exhibits | |||
| ||||
10.1 | ||||
10.2 | ||||
31.1 | ||||
31.2 | ||||
32.1 | ||||
32.2 | ||||
101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||
101.SCH | XBRL Taxonomy Extension Schema Document | |||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |||
104 | The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, has been formatted in Inline XBRL. |
† | Indicates a management contract or compensation plan. |
(1) | Incorporated herein by reference to Exhibit 10.1 to our Form 8-K filed with the SEC on July 19, 2019. |
(2) | Incorporated herein by reference to Exhibit 10.2 to our Form 8-K filed with the SEC on July 19, 2019. |
| ||||
(Registrant) | ||||
Date: | ||||
| ||||
E. Allen Nicholson | ||||
Executive Vice President and Chief Financial Officer | ||||
(Principal Financial Officer) |
73