Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 01, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | ENTERPRISE BANCORP INC /MA/ | |
Entity Central Index Key | 1,018,399 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 11,421,740 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Cash and cash equivalents: | ||
Cash and due from banks | $ 99,013 | $ 32,318 |
Interest-earning deposits | 42,849 | 19,177 |
Total cash and cash equivalents | 141,862 | 51,495 |
Investment securities at fair value | 319,503 | 300,358 |
Federal Home Loan Bank stock | 1,879 | 3,050 |
Loans held for sale | 1,971 | 1,709 |
Loans, less allowance for loan losses of $30,345 at June 30, 2016 and $29,008 at December 31, 2015 | 1,868,841 | 1,830,954 |
Premises and equipment, net | 34,140 | 30,553 |
Accrued interest receivable | 7,838 | 7,790 |
Deferred income taxes, net | 11,506 | 14,111 |
Bank-owned life insurance | 28,400 | 28,018 |
Prepaid income taxes | 776 | 57 |
Prepaid expenses and other assets | 10,681 | 11,780 |
Goodwill | 5,656 | 5,656 |
Total assets | 2,433,053 | 2,285,531 |
Liabilities | ||
Deposits | 2,184,430 | 2,018,148 |
Borrowed Funds | 671 | 53,671 |
Subordinated debt | 14,828 | 14,822 |
Accrued expenses and other liabilities | 20,374 | 18,287 |
Accrued interest payable | 252 | 276 |
Total liabilities | 2,220,555 | 2,105,204 |
Commitments and Contingencies | ||
Stockholders' Equity | ||
Preferred stock, $0.01 par value per share; 1,000,000 shares authorized; no shares issued | 0 | 0 |
Common stock $0.01 par value per share; 20,000,000 shares authorized; 11,420,426 shares issued and outstanding at June 30, 2016 (including 143,671 shares of unvested participating restricted awards), 10,377,787 shares issued and outstanding at December 31, 2015 (including 144,717 shares of unvested participating restricted awards) | 114 | 104 |
Additional paid-in-capital | 82,387 | 61,008 |
Retained earnings | 123,313 | 116,941 |
Accumulated other comprehensive income | 6,684 | 2,274 |
Total stockholders' equity | 212,498 | 180,327 |
Total liabilities and stockholders' equity | $ 2,433,053 | $ 2,285,531 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Allowance for loan losses | $ 30,345 | $ 29,008 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 11,420,426 | 10,377,787 |
Common stock, shares outstanding | 11,420,426 | 10,377,787 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Unvested participating restricted stock awards | 143,671 | 144,717 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Interest and dividend income: | ||||
Loans and loans held for sale | $ 21,032 | $ 19,171 | $ 41,913 | $ 37,753 |
Investment securities | 1,551 | 1,223 | 3,091 | 2,448 |
Other interest-earning assets | 49 | 43 | 93 | 75 |
Total interest and dividend income | 22,632 | 20,437 | 45,097 | 40,276 |
Interest expense: | ||||
Deposits | 1,099 | 1,019 | 2,187 | 2,011 |
Borrowed funds | 14 | 1 | 77 | 22 |
Subordinated debt | 230 | 233 | 461 | 605 |
Total interest expense | 1,343 | 1,253 | 2,725 | 2,638 |
Net interest income | 21,289 | 19,184 | 42,372 | 37,638 |
Provision for loan losses | 267 | 1,225 | 1,117 | 1,850 |
Net interest income after provision for loan losses | 21,022 | 17,959 | 41,255 | 35,788 |
Non-interest income: | ||||
Investment advisory fees | 1,327 | 1,209 | 2,431 | 2,386 |
Deposit and interchange fees | 1,276 | 1,214 | 2,518 | 2,368 |
Income on bank-owned life insurance,net | 191 | 101 | 382 | 201 |
Net gains on sales of investment securities | 63 | 456 | 65 | 1,356 |
Gains on sales of loans | 105 | 128 | 194 | 284 |
Other income | 620 | 570 | 1,198 | 1,108 |
Total non-interest income | 3,582 | 3,678 | 6,788 | 7,703 |
Non-interest expense: | ||||
Salaries and employee benefits | 11,025 | 10,098 | 21,510 | 19,679 |
Occupancy and equipment expenses | 1,781 | 1,749 | 3,594 | 3,709 |
Technology and telecommunications expenses | 1,548 | 1,378 | 2,971 | 2,795 |
Advertising and public relations expenses | 817 | 809 | 1,496 | 1,539 |
Audit, legal and other professional fees | 408 | 382 | 896 | 741 |
Deposit insurance premiums | 324 | 297 | 650 | 590 |
Supplies and postage expenses | 258 | 252 | 487 | 510 |
Investment advisory and custodial expenses | 87 | 89 | 176 | 135 |
Other operating expenses | 1,294 | 1,213 | 2,631 | 2,779 |
Total non-interest expense | 17,542 | 16,267 | 34,411 | 32,477 |
Income before income taxes | 7,062 | 5,370 | 13,632 | 11,014 |
Provision for income taxes | 2,291 | 1,855 | 4,548 | 3,879 |
Net income | $ 4,771 | $ 3,515 | $ 9,084 | $ 7,135 |
Basic earnings per share | $ 0.45 | $ 0.34 | $ 0.87 | $ 0.69 |
Diluted earnings per share | $ 0.45 | $ 0.34 | $ 0.86 | $ 0.69 |
Basic weighted average common shares outstanding | 10,561,680 | 10,331,485 | 10,483,396 | 10,287,509 |
Diluted weighted average common shares outstanding | 10,629,900 | 10,394,496 | 10,550,842 | 10,352,730 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 4,771 | $ 3,515 | $ 9,084 | $ 7,135 |
Other comprehensive income, net of taxes: | ||||
Gross change in unrealized holding gains (losses) on investments arising during the period | 4,054 | (2,938) | 7,080 | (831) |
Income tax (expense) benefit | (1,479) | 1,042 | (2,629) | 318 |
Net unrealized holding gains (losses), net of tax | 2,575 | (1,896) | 4,451 | (513) |
Less: Reclassification adjustment for net gains included in net income | ||||
Net realized gains on sales of securities during the period | 63 | 456 | 65 | 1,356 |
Income tax expense | (23) | (159) | (24) | (473) |
Reclassification adjustment for gains realized, net of tax | 40 | 297 | 41 | 883 |
Total other comprehensive income | 2,535 | (2,193) | 4,410 | (1,396) |
Comprehensive income | $ 7,306 | $ 1,322 | $ 13,494 | $ 5,739 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Equity - 6 months ended Jun. 30, 2016 - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income |
Balance, beginning at Dec. 31, 2015 | $ 180,327 | $ 104 | $ 61,008 | $ 116,941 | $ 2,274 |
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 9,084 | 9,084 | |||
Other comprehensive income, net | 4,410 | 4,410 | |||
Common stock dividend paid ($0.26 per share) | (2,712) | (2,712) | |||
Common stock issued under dividend reinvestment plan | 673 | 0 | 673 | ||
Common stock issued other | 19,772 | 9 | 19,763 | ||
Stock-based compensation, net | 733 | 1 | 732 | ||
Stock options exercised, net | 211 | 0 | 211 | ||
Balance, ending at Jun. 30, 2016 | $ 212,498 | $ 114 | $ 82,387 | $ 123,313 | $ 6,684 |
Consolidated Statement of Chan7
Consolidated Statement of Changes in Stockholders' Equity (Parenthetical) | 6 Months Ended |
Jun. 30, 2016$ / shares | |
Statement of Stockholders' Equity [Abstract] | |
Common stock dividend paid, per share | $ 0.26 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Cash flows from operating activities | |||||
Net income | $ 4,771,000 | $ 3,515,000 | $ 9,084,000 | $ 7,135,000 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Provision for loan losses | 267,000 | 1,225,000 | 1,117,000 | 1,850,000 | |
Depreciation and amortization | 2,873,000 | 2,759,000 | |||
Stock-based compensation expense | 462,000 | 466,000 | 905,000 | 954,000 | |
Mortgage loans originated for sale | (10,682,000) | (13,326,000) | |||
Proceeds from mortgage loans sold | 10,614,000 | 14,656,000 | |||
Net gains on sales of loans | (194,000) | (284,000) | |||
Net gains on sales of OREO | 0 | (154,000) | |||
Net gains on sales of investments | (63,000) | (456,000) | (65,000) | (1,356,000) | |
Income on bank-owned life insurance,net | (191,000) | (101,000) | (382,000) | (201,000) | |
Changes in: | |||||
Accrued interest receivable | (48,000) | (147,000) | |||
Prepaid expenses and other assets | 266,000 | 6,291,000 | |||
Deferred income taxes | 0 | 74,000 | |||
Accrued expenses and other liabilities | (1,633,000) | 2,195,000 | |||
Subordinated debt issuance costs | 6,000 | (190,000) | |||
Accrued interest payable | (24,000) | (313,000) | |||
Net cash provided by operating activities | 11,837,000 | 19,943,000 | |||
Cash flows from investing activities: | |||||
Proceeds from sales of investment securities available for sale | 1,829,000 | 12,097,000 | |||
Net proceeds (purchases) from FHLB capital stock | 1,171,000 | (882,000) | |||
Proceeds from maturities, calls and pay-downs of investment securities | 9,824,000 | 14,087,000 | |||
Purchase of investment securities | (20,957,000) | (40,069,000) | |||
Net increase in loans | (39,004,000) | (64,751,000) | |||
Additions to premises and equipment, net | (5,964,000) | (2,036,000) | |||
Proceeds from OREO sales and payments | 0 | 1,015,000 | |||
Proceeds from bank-owned life insurance | 405,000 | 0 | |||
Net cash used in investing activities | (52,696,000) | (80,539,000) | |||
Cash flows from financing activities: | |||||
Net increase in deposits | 166,282,000 | 190,952,000 | |||
Net decrease in borrowed funds | (53,000,000) | (57,584,000) | |||
Repayment of subordinated debt | 0 | (10,825,000) | |||
Proceeds from issuance of subordinated debt | 0 | 15,000,000 | |||
Cash dividends paid | (2,712,000) | (2,569,000) | |||
Proceeds from issuance of common stock | 20,445,000 | 730,000 | |||
Exercise of stock options, net of repurchases for tax withholdings and tax benefit on stock options and restricted stock | 211,000 | 407,000 | |||
Net cash provided by financing activities | 131,226,000 | 136,111,000 | |||
Net increase in cash and cash equivalents | 90,367,000 | 75,515,000 | |||
Cash and cash equivalents at beginning of period | 51,495,000 | 40,146,000 | $ 40,146,000 | ||
Cash and cash equivalents at end of period | $ 141,862,000 | $ 115,661,000 | 141,862,000 | 115,661,000 | $ 51,495,000 |
Supplemental financial data: | |||||
Cash Paid For: Interest | 2,749,000 | 2,951,000 | |||
Cash Paid For: Income Taxes | 5,241,000 | 3,840,000 | |||
Supplemental schedule of non-cash investing activity: | |||||
Net purchases of investment securities not yet settled | 5,793,000 | 5,787,000 | |||
Capital expenditures incurred not yet paid | $ 257,000 | $ 180,000 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies (a) Organization of Holding Company and Basis of Presentation The accompanying unaudited consolidated interim financial statements and these notes should be read in conjunction with the December 31, 2015 audited consolidated financial statements and notes thereto contained in the 2015 Annual Report on Form 10-K of Enterprise Bancorp, Inc. (the "Company" or "Enterprise"), a Massachusetts corporation, as filed with the Securities and Exchange Commission (the "SEC") on March 15, 2016 (the "2015 Annual Report on Form 10k"). The Company has not changed its accounting policies from those disclosed in its 2015 Annual Report on Form 10-K. The Company's unaudited consolidated interim financial statements include the accounts of the Company and its wholly owned subsidiary, Enterprise Bank and Trust Company (the "Bank"). The Bank is a Massachusetts trust company organized in 1989. Substantially all of the Company's operations are conducted through the Bank and its subsidiaries. The Bank's subsidiaries include Enterprise Insurance Services, LLC and Enterprise Investment Services, LLC, organized under the laws of the State of Delaware for the purposes of engaging in insurance sales activities and offering non-deposit investment products and services, respectively. In addition, the Bank has the following subsidiaries that are incorporated in the Commonwealth of Massachusetts and classified as security corporations in accordance with applicable Massachusetts General Laws: Enterprise Security Corporation; Enterprise Security Corporation II; and Enterprise Security Corporation III. The security corporations, which hold various types of qualifying securities, are limited to conducting securities investment activities that the Bank itself would be allowed to conduct under applicable laws. At June 30, 2016 , the Company had 22 full service branches serving the greater Merrimack Valley and North Central regions of Massachusetts and Southern New Hampshire. In early July 2016, the Company's 23 rd branch, on Route 101A, in Nashua, NH, opened, and the Company recently announced the anticipated opening of the Company's 24 th office, in Windham, NH, in 2017. Through the Bank and its subsidiaries, the Company offers a range of commercial and consumer loan products, and deposit and cash management services. The Company also offers investment advisory and wealth management, trust and insurance services. The services offered through the Bank and its subsidiaries are managed as one strategic unit and represent the Company's only reportable operating segment. The Federal Deposit Insurance Corporation (the "FDIC") and the Massachusetts Division of Banks (the "Division") have regulatory authority over the Bank. The Bank is also subject to certain regulatory requirements of the Board of Governors of the Federal Reserve System (the "Federal Reserve Board") and, with respect to its New Hampshire branch operations, the New Hampshire Banking Department. The business and operations of the Company are subject to the regulatory oversight of the Federal Reserve Board. The Division also retains supervisory jurisdiction over the Company. The accompanying unaudited consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and the instructions for Form 10-Q through the rules and interpretive releases of the SEC under federal securities law. In the opinion of management, the accompanying unaudited consolidated interim financial statements reflect all necessary adjustments consisting of normal recurring accruals for a fair presentation. All significant intercompany balances and transactions have been eliminated in the accompanying unaudited consolidated interim financial statements. Certain previous years' amounts in the consolidated financial statements, and notes thereto, have been reclassified to conform to the current year's presentation. Interim results are not necessarily indicative of results to be expected for the entire year. The Company has evaluated subsequent events and transactions from June 30, 2016 through August 5, 2016 for potential recognition or disclosure as required by GAAP. (b) Critical Accounting Estimates In preparing the unaudited consolidated interim financial statements in conformity with GAAP, management is required to exercise judgment in determining many of the methodologies, assumptions and estimates to be utilized. These assumptions and estimates affect the reported values of assets and liabilities as of the balance sheet date and income and expenses for the period then ended. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates should the assumptions and estimates used change over time due to changes in circumstances. Changes in those estimates resulting from continuing change in the economic environment and other factors will be reflected in the financial statements and results of operations in future periods. As discussed in the Company's 2015 Annual Report on Form 10-K, the three most significant areas in which management applies critical assumptions and estimates that are particularly susceptible to change relate to the determination of the allowance for loan losses, impairment review of investment securities and the impairment review of goodwill. Refer to Note 1, "Summary of Significant Accounting Policies," to the Company's consolidated financial statements included in the Company's 2015 Annual Report on Form 10-K for significant accounting policies. The Company has not changed its significant accounting policies from those disclosed in its 2015 Annual Report on Form 10-K. (c) Reporting Comprehensive Income Comprehensive income is defined as all changes to stockholders' equity except investments by and distributions to stockholders. Net income is one component of comprehensive income, with other components referred to in the aggregate as other comprehensive income. The Company's only other comprehensive income component is the net unrealized holding gains or losses on investments available-for-sale, net of deferred income taxes. Pursuant to Accounting Standards Update ("ASU") No. 2013-02, Comprehensive Income (Topic 220): Reporting Amounts Reclassified Out of Accumulated Other Comprehensive Income, the Company initially excludes these unrealized holding gains and losses from net income; however, they are later reported as reclassifications out of accumulated other comprehensive income into net income when the securities are sold. When securities are sold, the reclassification of realized gains and losses on available-for-sale securities are included on the Consolidated Statements of Income under the "non-interest income" subheading on the line item "net gains on sales of investment securities" and the related income tax expense is included in the line item "provision for income taxes," both of which are also detailed on the Consolidated Statements of Comprehensive Income under the subheading "reclassification adjustment for net gains included in net income." (d) Restricted Investments As a member of the Federal Home Loan Bank of Boston ("FHLB"), the Company is required to purchase certain levels of FHLB capital stock at par value in association with the Company's borrowing relationship from the FHLB. From time-to-time the FHLB may initiate the repurchase at par value of "excess" levels capital stock held by member banks. This stock is classified as a restricted investment and carried at cost, which management believes approximates fair value. FHLB stock represents the only restricted investment held by the Company. In conjunction with the other-than-temporary-impairment ("OTTI") review on available-for-sale investments (See Note 2, "Investments," for additional information), management also regularly reviews its holdings of FHLB stock for OTTI. Based on management's periodic review, the Company has not recorded any OTTI charges on this investment to date. If it was determined that a write-down of FHLB stock was required, impairment would be recognized through a charge to earnings. (e) Income Taxes The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax attributable to differences between the financial statement carrying amounts and the tax basis of assets and liabilities. The deferred tax assets and liabilities are reflected at currently enacted income tax rates applicable to the period in which the deferred tax assets or liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities will be adjusted accordingly through the provision for income taxes. The Company's policy is to classify interest resulting from underpayment of income taxes as income tax expense in the first period the interest would begin accruing according to the provisions of the relevant tax law. The Company classifies penalties resulting from underpayment of income taxes as income tax expense in the period for which the Company claims or expects to claim an uncertain tax position or in the period in which the Company's judgment changes regarding an uncertain tax position. The income tax provisions will differ from the expense that would result from applying the federal statutory rate to income before taxes, due primarily to the impact of tax exempt interest from certain investment securities, loans and bank-owned life insurance. The Company did not have any unrecognized tax benefits accrued as income tax liabilities or receivables or as deferred tax items at June 30, 2016 . The Company is subject to U.S. federal and state income tax examinations by taxing authorities for the 2012 through 2015 tax years. (f) Capital Raised In the second quarter of 2016, the Company completed a combined shareholder subscription rights offering and supplemental community offering, at an offering price of $21.50 , under its existing SEC shelf registration statement. The Company issued 930 thousand shares of common stock and received gross proceeds of $20.0 million ( $19.7 million , net of offering costs). The Company contributed the net proceeds to the Bank to support future asset growth and for general corporate purposes. (g) Recent Accounting Pronouncements Accounting pronouncements adopted by the Company In April 2015, the Financial Accounting Standards Board ("FASB") issued ASU No. 2015-03, Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. Entities are required to apply the new guidance on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. For public business entities, the amendments are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption of the amendments is permitted for financial statements that have not been previously issued. The Company early adopted this ASU as of January 1, 2015 in relation to the Company's Fixed-to-Floating Rate Subordinated Notes issued in January 2015. This adoption did not have a material impact on the Company's financial statements or results of operations. In January 2015, the FASB issued Accounting Standards Update (ASU) 2015-01, "Income Statement-Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items." This ASU will align more closely GAAP income statement presentation guidance with International Audit Standards (IAS) 1, Presentation of Financial Statements, which prohibits the presentation and disclosure of extraordinary items. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The adoption of this standard did not have an impact on the Company's financial statements. Accounting pronouncements not yet adopted by the Company In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU is intended to create a single source of revenue guidance which is more principles based than current revenue guidance. The guidance affects any entity that either enters into contracts with customers to transfer goods or services, or enters into contracts for the transfer of non-financial assets, unless those contracts are within the scope of other standards. In August 2015, the FASB issued ASU 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date" to amend the effective date of ASU 2014-09. The amendments in ASU 2014-09 are effective for annual and interim periods within fiscal years beginning after December 15, 2017. Earlier adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The FASB has since issued additional related ASUs amendments intended to clarify certain aspects and improve understanding of the implementation guidance of Topic 606 but do not change the core principles of the guidance in Topic 606. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements of Topic 606. The Company is currently evaluating the potential impact of the ASU and its amendments on the Company's financial statements and results of operations. In January 2016, the FASB issued ASU No. 2016-01, "Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities," which updates certain aspects of recognition, measurement, presentation and disclosure of financial instruments. Among other things, the new guidance: • Requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; • Requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; • Requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements. The new guidance is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently evaluating the effects of this ASU on the Company's financial statements and results of operations. In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)," which supersedes previous leasing guidance in Topic 840, Leases. Under the new guidance, lessees are required to recognize lease assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is currently evaluating the effects of this ASU on the Company's financial statements and results of operations. In March 2016, the FASB issued ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718): Improvement to Employee Share-Based Payment Accounting." The amendments are intended to improve the accounting for employee share-based payments and affect all organizations that issue share-based payment awards to their employees. Several aspects of the accounting are simplified including, generally: a) income tax consequences; b) classification of awards as either equity or liabilities; c) accounting for forfeitures; and d) classification on the statement of cash flows. Among the changes, the amendment allows for entities to partially settle awards in cash up to the maximum individual statutory tax rate in the applicable jurisdiction and still qualify for equity classification; all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) will be recognized as income tax expense or benefit in the income statement; in addition, an entity can make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest (current GAAP) or account for forfeitures when they occur; among other changes. The new standard is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company is currently evaluating the potential impact of the ASU on the Company's financial statements and results of operations. In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses (Topic 326)." The amendments in this Update require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. Previously, when credit losses were measured under GAAP, an entity generally only considered past events and current conditions in measuring the incurred loss and generally recognition of the full amount of credit losses was delayed until the loss was probable of occurring. The amendments in this Update eliminate the probable initial recognition threshold in current GAAP and, instead, reflect an entity’s current estimate of all expected credit losses. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. The income statement reflects the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. Credit losses on available-for-sale debt securities should be measured in a manner similar to current GAAP. However, the amendments in this Update require that credit losses be presented as an allowance rather than as a write-down. Unlike current GAAP the Update provides for reversals of credit losses in future period net income in situations where the estimate of loss declines. An entity will apply the amendments in this Update through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach). For public business entities that are SEC filers, such as the Company, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently evaluating the potential impact of the ASU on the Company's financial statements and results of operations. |
Investments
Investments | 6 Months Ended |
Jun. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments The amortized cost and carrying values of investment securities at the dates specified are summarized as follows: June 30, 2016 (Dollars in thousands) Amortized cost Unrealized gains Unrealized losses Fair Value Federal agency obligations (1) $ 78,653 $ 1,748 $ — $ 80,401 Residential federal agency MBS (1) 73,926 1,383 65 75,244 Commercial federal agency MBS (1) 31,410 815 — 32,225 Municipal securities 101,537 4,722 — 106,259 Corporate bonds 10,966 267 2 11,231 Certificates of deposits (2) 950 29 — 979 Total fixed income securities 297,442 8,964 67 306,339 Equity investments 11,569 1,973 378 13,164 Total available-for-sale securities, at fair value $ 309,011 $ 10,937 $ 445 $ 319,503 December 31, 2015 (Dollars in thousands) Amortized cost Unrealized gains Unrealized losses Fair Value Federal agency obligations (1) $ 78,626 $ 352 $ 153 $ 78,825 Residential federal agency MBS (1) 75,105 406 648 74,863 Commercial federal agency MBS (1) 23,908 — 363 23,545 Municipal securities 96,189 2,357 35 98,511 Corporate bonds 10,257 44 95 10,206 Certificates of deposits (2) 2,753 — 2 2,751 Total fixed income securities 286,838 3,159 1,296 288,701 Equity investments 10,043 1,966 352 11,657 Total available-for-sale securities, at fair value $ 296,881 $ 5,125 $ 1,648 $ 300,358 __________________________________________ (1) These categories may include investments issued or guaranteed by government sponsored enterprises such as Fannie Mae ("FNMA"), Freddie Mac ("FHLMC"), Federal Farm Credit Bank ("FFCB"), or one of several Federal Home Loan Banks, as well as, investments guaranteed by Ginnie Mae ("GNMA"), a wholly-owned government entity. (2) Certificates of deposits ("CDs") represent term deposits issued by banks that are subject to FDIC insurance and purchased on the open market. Included in the residential federal agency MBS category were collateralized mortgage obligations (“CMOs”) totaling $24.5 million and $20.8 million at June 30, 2016 and December 31, 2015 respectively. All of the commercial MBS investments held by the Company were CMOs. At June 30, 2016 , the equity portfolio consisted primarily of investments in a diversified group of mutual funds, with a portion of the portfolio (approximately 15% ) invested in individual common stock of entities in the financial services industry. Net unrealized appreciation and depreciation on investments available-for-sale, net of applicable income taxes, are reflected as a component of accumulated other comprehensive income (loss). The net unrealized gain or loss in the Company's fixed income portfolio fluctuates as market interest rates rise and fall. Due to the fixed rate nature of this portfolio, as market rates fall, the value of the portfolio rises, and as market rates rise, the value of the portfolio declines. The unrealized gains or losses on fixed income investments will also decline as the securities approach maturity, or if the issuer is credit impaired. Unrealized gains or losses will be recognized in the statements of income if the securities are sold. However, if an unrealized loss on a fixed income investment is deemed to be other than temporary, the credit loss portion is charged to earnings and the noncredit portion is recognized in accumulated other comprehensive income. The net unrealized gain or loss on equity securities will fluctuate based on changes in the market value of the mutual funds and individual securities held in the portfolio. Unrealized gains or losses will be recognized in the statements of income if the securities are sold. However, if an unrealized loss on an equity security is deemed to be other than temporary prior to a sale, the loss is charged to earnings. The following tables summarize investments having temporary impairment, due to the fair market values having declined below the amortized costs of the individual investments, and the period that the investments have been temporarily impaired at June 30, 2016 and December 31, 2015 . June 30, 2016 Less than 12 months 12 months or longer Total (Dollars in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses # of holdings Federal agency obligations $ — $ — $ — $ — $ — $ — 0 Residential federal agency MBS — — 9,184 65 9,184 65 3 Commercial federal agency MBS — — — — — — — Municipal securities — — — — — — — Corporate bonds 616 1 110 1 726 2 8 Certificates of deposit — — — — — — — Equity investments 1,131 179 1,447 199 2,578 378 3 Total temporarily impaired investments $ 1,747 $ 180 $ 10,741 $ 265 $ 12,488 $ 445 14 December 31, 2015 Less than 12 months 12 months or longer Total (Dollars in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses # of holdings Federal agency obligations $ 27,420 $ 153 $ — $ — $ 27,420 $ 153 8 Residential federal agency MBS 20,517 275 10,935 373 31,452 648 14 Commercial federal agency MBS 23,545 363 — — 23,545 363 9 Municipal securities 6,988 33 261 2 7,249 35 13 Corporate bonds 4,574 78 419 17 4,993 95 37 Certificates of deposit 1,976 2 — — 1,976 2 10 Equity investments 4,204 351 24 1 4,228 352 5 Total temporarily impaired investments $ 89,224 $ 1,255 $ 11,639 $ 393 $ 100,863 $ 1,648 96 Management regularly reviews the portfolio for securities with unrealized losses that could be other-than-temporarily impaired. During the six months ended June 30, 2016 and 2015 , the Company did not record any fair value impairment charges on its investments. Management attributes these unrealized losses at June 30, 2016 primarily to the impact of market value fluctuations on the equity portion of our portfolio. Management does not consider these investments to be other-than-temporarily impaired at June 30, 2016 , because (1) the decline in market value is not attributable to credit quality for fixed income securities or a fundamental deterioration in the equity fund or issuers, and (2) the Company does not intend to, and it is more likely than not that it will not be required to, sell those investments prior to a market price recovery or maturity. In assessing the Company's investments in federal agency mortgage-backed securities and federal agency obligations, the contractual cash flows of these investments are guaranteed by the respective government sponsored enterprise (FHLMC, FNMA, FFCB, or FHLB) or wholly-owned government corporation (GNMA). Accordingly, it is expected that the securities would not be settled at a price less than the par value of the Company's investments. Management's assessment of other fixed income investments within the portfolio includes reviews of market pricing, ongoing credit quality evaluations, assessment of the investments' materiality, and duration of the investments' unrealized loss position. In addition, the Company utilizes an outside registered investment adviser to manage the corporate and municipal bond portfolios, within prescribed guidelines set by management, and to provide assistance in assessing the credit risk of those portfolios. At June 30, 2016 , the Company's corporate and municipal bond portfolios did not contain any securities below investment grade, as reported by major credit rating agencies. For equities and funds, management's assessment includes the severity of the declines, whether it is unlikely that the security or fund will completely recover its unrealized loss within a reasonable time period and if the equity security or fund exhibits fundamental deterioration. The contractual maturity distribution at June 30, 2016 of total fixed income investments was as follows: (Dollars in thousands) Amortized Cost Fair Value Due in one year or less $ 14,516 $ 14,571 Due after one, but within five years 100,723 103,123 Due after five, but within ten years 81,558 84,974 Due after ten years 100,645 103,671 Total fixed income securities $ 297,442 $ 306,339 Scheduled contractual maturities shown above may not reflect the actual maturities of the investments. The actual MBS/CMO cash flows likely will be faster than presented above due to prepayments and amortization. Similarly, included in the carrying value of fixed income investments above are callable securities, comprised of municipal securities and corporate bonds totaling $50.0 million , which can be redeemed by the issuer prior to the maturity presented above. Management considers these factors when evaluating the interest rate risk in the Company's asset-liability management program. From time to time, the Company may pledge securities as collateral for deposit account balances of municipal deposit customers, and for borrowing capacity with the FHLB and the Federal Reserve Bank of Boston (the "FRB"). The fair value of securities pledged as collateral for these purposes was $ 299.6 million at June 30, 2016 . Sales of investments, including pending trades, for the three and six months ended June 30, 2016 and June 30, 2015 are summarized as follows: Three months ended June 30, Six months ended June 30, (Dollars in thousands) 2016 2015 2016 2015 Amortized cost of investments sold $ 1,460 $ 1,607 $ 1,764 $ 10,858 Gross realized gains on sales 63 456 65 1,514 Gross realized losses on sales — — — (158 ) Total proceeds from sales of investments $ 1,523 $ 2,063 $ 1,829 $ 12,214 See Note 11, "Fair Value Measurements," below for further information regarding the Company's fair value measurements for available-for-sale securities. |
Loans
Loans | 6 Months Ended |
Jun. 30, 2016 | |
Receivables [Abstract] | |
Loans | Loans The Company specializes in lending to business entities, non-profit organizations, professionals and individuals. The Company's primary lending focus is on the development of high quality commercial relationships achieved through active business development efforts, long-term relationships with established commercial developers, strong community involvement and focused marketing strategies. Loans made to businesses include commercial mortgage loans, construction and land development loans, secured and unsecured commercial loans and lines of credit, and standby letters of credit. The Company also originates equipment lease financing for businesses. Loans made to individuals include conventional residential mortgage loans, home equity loans and lines, residential construction loans on primary and secondary residences, and secured and unsecured personal loans and lines of credit. The Company manages its loan portfolio to avoid concentration by industry and loan size to lessen its credit risk exposure. See Note 4, "Allowance for Loan Losses," for information on the Company's credit risk management, non-accrual, impaired and troubled debt restructured loans and the allowance for loan losses. Major classifications of loans at the periods indicated were as follows: (Dollars in thousands) June 30, December 31, Commercial real estate $ 958,053 $ 936,921 Commercial and industrial 466,893 458,553 Commercial construction 209,563 202,993 Total commercial loans 1,634,509 1,598,467 Residential mortgages 169,588 169,188 Home equity loans and lines 85,926 83,373 Consumer 10,770 10,747 Total retail loans 266,284 263,308 Gross loans 1,900,793 1,861,775 Deferred loan origination fees, net (1,607 ) (1,813 ) Total loans 1,899,186 1,859,962 Allowance for loan losses (30,345 ) (29,008 ) Net loans $ 1,868,841 $ 1,830,954 Loan Categories - Commercial loans: Commercial real estate loans include loans secured by both owner-use and non-owner occupied real estate. These loans are typically secured by a variety of commercial and industrial property types, including one-to-four and multi-family apartment buildings, office or mixed-use facilities, strip shopping centers, or other commercial properties, and are generally guaranteed by the principals of the borrower. Commercial real estate loans generally have repayment periods of approximately fifteen to twenty-five years. Variable interest rate loans have a variety of adjustment terms and underlying interest rate indices, and are generally fixed for an initial period before periodic rate adjustments begin. Commercial and industrial loans include seasonal revolving lines of credit, working capital loans, equipment financing (including equipment leases), and term loans. Also included in commercial and industrial loans are loans partially guaranteed by the U.S. Small Business Administration ("SBA"), and loans under various programs and agencies. Commercial and industrial credits may be unsecured loans and lines to financially strong borrowers, loans secured in whole or in part by real estate unrelated to the principal purpose of the loan or secured by inventories, equipment, or receivables, and are generally guaranteed by the principals of the borrower. Variable rate loans and lines in this portfolio have interest rates that are periodically adjusted, with loans generally having fixed initial periods. Commercial and industrial loans have average repayment periods of one to seven years. Commercial construction loans include the development of residential housing and condominium projects, the development of commercial and industrial use property, and loans for the purchase and improvement of raw land. These loans are secured in whole or in part by underlying real estate collateral and are generally guaranteed by the principals of the borrowers. Construction lenders work to cultivate long-term relationships with established commercial developers. The Company limits the amount of financing provided to any single developer for the construction of properties built on a speculative basis. Funds for construction projects are disbursed as pre-specified stages of construction are completed. Regular site inspections are performed, prior to advancing additional funds, at each construction phase, either by experienced construction lenders on staff or by independent outside inspection companies. Commercial construction loans generally are variable rate loans and lines with interest rates that are periodically adjusted and generally have terms of one to three years. From time to time, the Company participates with other banks in the financing of certain commercial projects. Participating loans with other institutions provide banks the opportunity to retain customer relationships and reduce credit risk exposure among each participating bank, while providing customers with larger credit vehicles than the individual bank might be willing or able to offer independently. In some cases, the Company may act as the lead lender, originating and servicing the loans, but participating out a portion of the funding to other banks. In other cases, the Company may participate in loans originated by other institutions. In each case, the participating bank funds a percentage of the loan commitment and takes on the related pro-rata risk. In each case in which the Company participates in a loan, the rights and obligations of each participating bank are divided proportionately among the participating banks in an amount equal to their share of ownership and with equal priority among all banks. The balances participated out to other institutions are not carried as assets on the Company's financial statements. Loans originated by other banks in which the Company is a participating institution are carried in the loan portfolio at the Company's pro rata share of ownership. The Company performs an independent credit analysis of each commitment and a review of the participating institution prior to participation in the loan. Loans originated by other banks in which the Company is a participating institution amounted to $71.1 million at June 30, 2016 and $62.3 million at December 31, 2015 . Standby letters of credit are conditional commitments issued by the Company to guarantee the financial obligation or performance of a customer to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. If the letter of credit is drawn upon, a loan is created for the customer, generally a commercial loan, with the same criteria associated with similar commercial loans. - Residential loans: Enterprise originates conventional mortgage loans on one-to-four family residential properties. These properties may serve as the borrower's primary residence, or be vacation homes or investment properties. Loan to value limits vary, generally from 75% for multi-family, owner-occupied properties, up to 97% for single family, owner-occupied properties, with mortgage insurance coverage required for loan-to-value ratios greater than 80% based on program parameters. In addition, financing is provided for the construction of owner-occupied primary and secondary residences. Residential mortgage loans may have terms of up to 30 years at either fixed or adjustable rates of interest. Fixed and adjustable rate residential mortgage loans are generally originated using secondary market underwriting and documentation standards. Depending on the current interest rate environment, management projections of future interest rates and the overall asset-liability management program of the Company, management may elect to sell those fixed and adjustable rate residential mortgage loans which are eligible for sale in the secondary market, or hold some or all of this residential loan production for the Company's portfolio. Mortgage loans are generally not pooled for sale, but instead sold on an individual basis. The Company may retain or sell the servicing when selling the loans. Loans sold are subject to standard secondary market underwriting and eligibility representations and warranties over the life of the loan and are subject to an early payment default period covering the first four payments for certain loan sales. Loans classified as held for sale are carried as a separate line item on the balance sheet. - Home equity loans and lines of credit: Home equity term loans are originated for one-to-four family residential properties with maximum original loan to value ratios generally up to 80% of the assessed or appraised value of the property securing the loan. Home equity loan payments consist of monthly principal and interest based on amortization ranging from three to fifteen years. The rates may also be fixed for three to fifteen years. The Company originates home equity revolving lines of credit for one-to-four family residential properties with maximum original loan to value ratios generally up to 80% of the appraised value of the property securing the loan. Home equity lines generally have interest rates that adjust monthly based on changes in the Prime Rate, although minimum rates may be applicable. Some home equity line rates may be fixed for a period of time and then adjusted monthly thereafter. The payment schedule for home equity lines requires interest only payments for the first ten years of the lines. Generally at the end of ten years, the line may be frozen to future advances, and principal plus interest payments are collected over a fifteen -year amortization schedule or, for eligible borrowers meeting certain requirements, the line availability may be extended for an additional interest only period. - Consumer loans: Consumer loans consist primarily of secured or unsecured personal loans, loans under energy efficiency financing programs in conjunction with Massachusetts public utilities, and overdraft protection lines on checking accounts extended to individual customers. The aggregate amount of overdrawn deposit accounts are reclassified as loan balances. Loans serviced for others At June 30, 2016 and December 31, 2015 , the Company was servicing residential mortgage loans owned by investors amounting to $18.1 million and $18.5 million , respectively. Additionally, the Company was servicing commercial loans participated out to various other institutions amounting to $59.5 million and $52.7 million at June 30, 2016 and December 31, 2015 , respectively. See the discussion above for further information regarding commercial participations. Loans serving as collateral Loans designated as qualified collateral and pledged to the FHLB for borrowing capacity are summarized below: (Dollars in thousands) June 30, December 31, Commercial real estate $ 277,056 $ 281,802 Residential mortgages 122,744 118,855 Home equity 13,349 13,972 Total loans pledged to FHLB $ 413,149 $ 414,629 |
Allowance For Loan Loss
Allowance For Loan Loss | 6 Months Ended |
Jun. 30, 2016 | |
Receivables [Abstract] | |
Allowance for Loan Loss | Allowance for Loan Losses Inherent in the lending process is the risk of loss due to customer non-payment, or "credit risk." The Company seeks lessen its credit risk exposure by managing its loan portfolio to avoid concentration by industry and loan size, and through sound underwriting practices and the risk management function; however, management recognizes that loan losses will occur and that the amount of these losses will fluctuate depending on the risk characteristics of the loan portfolio and economic conditions. The allowance for loan losses is an estimate of probable credit risk inherent in the loan portfolio as of the specified balance sheet dates. The Company maintains the allowance at a level that it deems adequate to absorb all reasonably anticipated probable losses from specifically known and other credit risks associated with the portfolio. In making its assessment on the adequacy of the allowance, management considers several quantitative and qualitative factors that could have an effect on the credit quality of the portfolio, including individual assessment of larger and high risk credits, delinquency trends and the level of non-performing loans, impaired and restructured loans, net charge-offs, the growth and composition of the loan portfolio, expansion in the geographic market area, the experience level of lenders and changes in underwriting criteria, and the strength of the local and national economies, among other factors. Allowance for probable loan losses methodology On a quarterly basis, management prepares an estimate of the allowance necessary to cover estimated probable credit losses. The Company uses a systematic methodology to measure the amount of estimated loan loss exposure inherent in the portfolio for purposes of establishing a sufficient allowance for loan losses. The methodology makes use of specific reserves for loans individually evaluated and deemed impaired, and general reserves for larger groups of homogeneous loans, which are collectively evaluated relying on a combination of qualitative and quantitative factors that may affect credit quality of the pool. There have been no material changes to the Company's underwriting practices, credit risk management system, or to the allowance assessment methodology used to estimate loan loss exposure as reported in the 2015 Annual Report on Form 10-K. Refer to heading "Allowance for probable loan losses methodology" contained in Note 4 "Allowance For Loan Losses," to the Company's consolidated financial statements contained in the 2015 Annual Report on Form 10-K for further discussion of management's methodology used to estimate the loan loss exposure inherent in the portfolio for purposes of establishing a sufficient allowance. The balances of loans as of June 30, 2016 by segment and evaluation method are summarized as follows: (Dollars in thousands) Loans individually evaluated for impairment Loans collectively evaluated for impairment Gross Loans Commercial real estate $ 14,494 $ 943,559 $ 958,053 Commercial and industrial 8,854 458,039 466,893 Commercial construction 3,140 206,423 209,563 Residential mortgages 302 169,286 169,588 Home equity loans and lines 304 85,622 85,926 Consumer 18 10,752 10,770 Total gross loans $ 27,112 $ 1,873,681 $ 1,900,793 The balances of loans as of December 31, 2015 by segment and evaluation method are summarized as follows: (Dollars in thousands) Loans individually evaluated for impairment Loans collectively evaluated for impairment Gross Loans Commercial real estate $ 12,287 $ 924,634 $ 936,921 Commercial and industrial 7,810 450,743 458,553 Commercial construction 3,032 199,961 202,993 Residential mortgages 366 168,822 169,188 Home equity loans and lines 169 83,204 83,373 Consumer 24 10,723 10,747 Total gross loans $ 23,688 $ 1,838,087 $ 1,861,775 Credit quality indicators Early detection of credit issues is critical to minimize credit losses. Accordingly, management regularly monitors internal credit quality indicators such as the risk classification of individual loans, adversely classified loans, past due and non-accrual loans, impaired and restructured loans, and the level of foreclosure activity, as well as trends in the general levels of these indicators. However, despite prudent loan underwriting and ongoing credit risk management, adverse changes within the Company's market area or deterioration in the local, regional or national economic conditions could negatively impact the portfolio's credit risk profile and the Company's asset quality in the future. Adversely classified loans The Company's loan risk rating system classifies loans depending on risk of loss characteristics. The classifications range from "substantially risk free" for the highest quality loans and loans that are secured by cash collateral, through a satisfactory range of "minimal," "moderate," "better than average," and "average" risk, to the regulatory problem-asset classifications of "criticized," for loans that may need additional monitoring, and the more severe adverse classifications of "substandard," "doubtful," and "loss" based on criteria established under banking regulations. Loans classified as substandard include those loans characterized by the distinct possibility that the Company will sustain some loss if deficiencies are not corrected. These loans are inadequately protected by the sound net worth and paying capacity of the borrower; repayment has become increasingly reliant on collateral liquidation or reliance on guarantees; credit weaknesses are well-defined; and borrower cash flow is insufficient to meet required debt service specified in loan terms and to meet other obligations, such as trade debt and tax payments. Loans classified as doubtful have all the weaknesses inherent in a substandard rated loan with the added characteristic that the weaknesses make collection or full payment from liquidation, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The probability of loss is extremely high, but because of certain important and reasonably specific pending factors which may work to the advantage and strengthening of the loan, its classification as an estimated loss is deferred until more exact status may be determined. Loans classified as loss are generally considered uncollectible at present, although long-term recovery of part or all of loan proceeds may be possible. These "loss" loans would require a specific loss reserve or charge-off. Adversely classified loans may be accruing or in non-accrual status and may be additionally designated as impaired or restructured, or some combination thereof. Loans which are evaluated to be of weaker credit quality are reviewed on a more frequent basis by management. The following tables present the Company's credit risk profile for each class of loan in its portfolio by internally assigned risk rating category at the periods indicated. June 30, 2016 Adversely Classified Not Adversely (Dollars in thousands) Substandard Doubtful Loss Classified Gross Loans Commercial real estate $ 19,055 $ — $ — $ 938,998 $ 958,053 Commercial and industrial 9,109 98 3 457,683 466,893 Commercial construction 1,715 — — 207,848 209,563 Residential mortgages 1,201 — — 168,387 169,588 Home equity loans and lines 685 — — 85,241 85,926 Consumer 31 14 — 10,725 10,770 Total gross loans $ 31,796 $ 112 $ 3 $ 1,868,882 $ 1,900,793 December 31, 2015 Adversely Classified Not Adversely (Dollars in thousands) Substandard Doubtful Loss Classified Gross Loans Commercial real estate $ 12,487 $ — $ — $ 924,434 $ 936,921 Commercial and industrial 8,670 — 3 449,880 458,553 Commercial construction 1,776 — — 201,217 202,993 Residential mortgages 1,278 — — 167,910 169,188 Home equity loans and lines 503 — 5 82,865 83,373 Consumer 38 11 — 10,698 10,747 Total gross loans $ 24,752 $ 11 $ 8 $ 1,837,004 $ 1,861,775 Total adversely classified loans amounted to 1.68% of total loans at June 30, 2016 , as compared to 1.33% at December 31, 2015 . At June 30, 2016 , as compared to December 31, 2015 , adversely classified balances increased, due primarily to three larger commercial relationships downgraded during the period with a net carrying value of approximately $12.2 million , partially offset by payoffs and principal payments. Past due and non-accrual loans Loans on which the accrual of interest has been discontinued are designated as non-accrual and the classified portions are credit downgraded to one of the adversely classified categories noted above. Accrual of interest on loans is generally discontinued when a loan becomes contractually past due, with respect to interest or principal, by 90 days, or when reasonable doubt exists as to the full and timely collection of interest or principal. When a loan is placed on non-accrual status, all interest previously accrued but not collected is reversed against current period interest income. Interest payments received on loans in a non-accrual status are generally applied to principal on the books of the Company. Interest accruals are resumed on such loans only when payments are brought current and have remained current for a period of 180 days and when, in the judgment of management, the collectability of both principal and interest is reasonably assured. Additionally, deposit accounts overdrawn for 90 or more days are included in the consumer non-accrual balances below. The following tables present age analysis of past due loans as of the dates indicated. Balance at June 30, 2016 (Dollars in thousands) Loans 30-59 Days Past Due Loans 60-89 Days Past Due Loans Past Due 90 days or more Total Past Due Loans Current Loans Gross Loans Non-accrual Loans Commercial real estate $ 2,374 $ 1,486 $ 1,465 $ 5,325 $ 952,728 $ 958,053 $ 5,895 Commercial and industrial 1,399 511 1,559 3,469 463,424 466,893 3,354 Commercial construction 1,490 581 — 2,071 207,492 209,563 280 Residential mortgages 177 96 104 377 169,211 169,588 302 Home equity loans and lines 150 — 137 287 85,639 85,926 417 Consumer 44 10 18 72 10,698 10,770 23 Total gross loans $ 5,634 $ 2,684 $ 3,283 $ 11,601 $ 1,889,192 $ 1,900,793 $ 10,271 Balance at December 31, 2015 (Dollars in thousands) Loans 30-59 Days Past Due Loans 60-89 Days Past Due Loans Past Due 90 days or more Total Past Due Loans Current Loans Gross Loans Non-accrual Loans Commercial real estate $ 1,641 $ 1,532 $ 3,256 $ 6,429 $ 930,492 $ 936,921 $ 8,506 Commercial and industrial 1,332 693 2,125 4,150 454,403 458,553 4,323 Commercial construction 581 — 7 588 202,405 202,993 335 Residential mortgages 354 280 57 691 168,497 169,188 366 Home equity loans and lines 634 9 73 716 82,657 83,373 288 Consumer 36 15 7 58 10,689 10,747 27 Total gross loans $ 4,578 $ 2,529 $ 5,525 $ 12,632 $ 1,849,143 $ 1,861,775 $ 13,845 The past due figures above may include those loans that have also been designated as non-accrual despite their payment due status. At June 30, 2016 and December 31, 2015 , all loans 90 days or more past due were carried as non-accrual. Non-accrual loans that were not adversely classified amounted to $329 thousand at June 30, 2016 and $402 thousand at December 31, 2015 . These balances primarily represented the guaranteed portions of non-performing SBA loans. The majority of the non-accrual loan balances were also carried as impaired loans during the periods noted, and are discussed further below. The ratio of non-accrual loans to total loans amounted to 0.54% at June 30, 2016 , 0.74% at December 31, 2015 , and 0.92% at June 30, 2015 . Non-accrual loan balances decreased due primarily to several larger commercial loan payoffs and principal payments, partially offset by additional loans added to non-accrual status during the period. The Company's obligation to fulfill the additional funding commitments on non-accrual loans is generally contingent on the borrower's compliance with the terms of the credit agreement. If the borrower is not in compliance, additional funding commitments may or may not be made at the Company's discretion. Impaired loans Impaired loans are individually significant loans for which management considers it probable that not all amounts due (principal and interest) in accordance with the original contractual terms will be collected. The majority of impaired loans are included within the non-accrual balances; however, not every loan on non-accrual status has been designated as impaired. Impaired loans include loans that have been modified in a troubled debt restructuring (or "TDR," see below). Impaired loans exclude large groups of smaller-balance homogeneous loans, such as residential mortgage loans and consumer loans, which are collectively evaluated for impairment, and loans that are measured at fair value, unless the loan is amended in a TDR. Management does not set any minimum delay of payments as a factor in reviewing for impaired classification. Management considers the individual payment status, net worth and earnings potential of the borrower, and the value and cash flow of the collateral as factors to determine if a loan will be paid in accordance with its contractual terms. An impaired or TDR loan classification will be considered for upgrade based on the borrower's sustained performance over time and their improving financial condition. Consistent with the criteria for returning non-accrual loans to accrual status, the borrower must demonstrate the ability to continue to service the loan in accordance with the original or modified terms and, in the judgment of management, the collectability of the remaining balances, both principal and interest, are reasonably assured. In the case of TDR loans having had a modified interest rate, that rate must be at, or greater than, a market rate for a similar credit at the time of modification for an upgrade to be considered. Impaired loans are individually evaluated for credit loss and a specific allowance reserve is assigned for the amount of the estimated probable credit loss. Refer to heading "Allowance for probable loan losses methodology" contained in Note 4 "Allowance For Loan Losses," to the Company's consolidated financial statements contained in the 2015 Annual Report on Form 10-K for further discussion of management's methodology used to estimate specific reserves for impaired loans. The carrying value of impaired loans amounted to $27.1 million and $23.7 million at June 30, 2016 and December 31, 2015 , respectively. Total accruing impaired loans amounted to $17.0 million and $10.1 million at June 30, 2016 and December 31, 2015 , respectively, while non-accrual impaired loans amounted to $10.1 million and $13.6 million as of June 30, 2016 and December 31, 2015 , respectively. In the current period, among other downgrades to impaired status, the credit rating of one larger commercial relationship with a net carrying value of approximately $6.3 million was downgraded to adverse risk rating and also designated as accruing-impaired based on a review of the individual business circumstances. These downgrades were partially offset by principal pay-downs, credit upgrades, and charge-offs during the period. The following tables set forth the recorded investment in impaired loans and the related specific allowance allocated as of the dates indicated. Balance at June 30, 2016 (Dollars in thousands) Unpaid contractual principal balance Total recorded investment in impaired loans Recorded investment with no allowance Recorded investment with allowance Related specific allowance Commercial real estate $ 16,408 $ 14,494 $ 12,468 $ 2,026 $ 541 Commercial and industrial 9,720 8,854 6,075 2,779 990 Commercial construction 3,177 3,140 1,637 1,503 550 Residential mortgages 393 302 302 — — Home equity loans and lines 447 304 304 — — Consumer 21 18 — 18 18 Total $ 30,166 $ 27,112 $ 20,786 $ 6,326 $ 2,099 Balance at December 31, 2015 (Dollars in thousands) Unpaid contractual principal balance Total recorded investment in impaired loans Recorded investment with no allowance Recorded investment with allowance Related specific allowance Commercial real estate $ 14,903 $ 12,287 $ 11,734 $ 553 $ 186 Commercial and industrial 9,816 7,810 5,253 2,557 1,078 Commercial construction 3,147 3,032 1,583 1,449 499 Residential mortgages 453 366 366 — — Home equity loans and lines 308 169 164 5 5 Consumer 25 24 — 24 24 Total $ 28,652 $ 23,688 $ 19,100 $ 4,588 $ 1,792 The following table presents the average recorded investment in impaired loans and the related interest recognized during the three months indicated: Three Months Ended June 30, 2016 Three Months Ended June 30, 2015 (Dollars in thousands) Average recorded investment Interest income recognized Average recorded investment Interest income recognized Commercial real estate $ 12,700 $ 64 $ 13,992 $ 52 Commercial and industrial 8,090 39 9,819 24 Commercial construction 3,089 37 1,968 16 Residential mortgages 304 — 445 — Home equity loans and lines 306 — 178 — Consumer 20 — 48 — Total $ 24,509 $ 140 $ 26,450 $ 92 The following table presents the average recorded investment in impaired loans and the related interest recognized during the six month periods indicated: Six Months Ended June 30, 2016 Six Months Ended June 30, 2015 (Dollars in thousands) Average recorded investment Interest income recognized Average recorded investment Interest income recognized Commercial real estate $ 11,184 $ 107 $ 14,735 $ 97 Commercial and industrial 8,257 65 10,537 58 Commercial construction 3,032 74 2,296 42 Residential mortgages 306 — 453 — Home equity loans and lines 276 (2 ) 178 1 Consumer 21 — 48 — Total $ 23,076 $ 244 $ 28,247 $ 198 At June 30, 2016 , additional funding commitments for impaired loans totaled $383 thousand . The Company's obligation to fulfill the additional funding commitments on impaired loans is generally contingent on the borrower's compliance with the terms of the credit agreement. If the borrower is not in compliance, additional funding commitments may or may not be made at the Company's discretion. Troubled debt restructurings Loans are designated as a TDR when, as part of an agreement to modify the original contractual terms of the loan as a result of financial difficulties of the borrower, the Bank grants the borrower a concession on the terms, that would not otherwise be considered. Typically, such concessions may consist of a reduction in interest rate to a below market rate, taking into account the credit quality of the note, or a deferment or reduction of payments (principal or interest) which materially alters the Bank's position or significantly extends the note's maturity date, such that the present value of cash flows to be received is materially less than those contractually established at the loan's origination. All loans that are modified are reviewed by the Company to identify if a TDR has occurred. TDR loans are included in the impaired loan category and, as such, these loans are individually evaluated and a specific reserve is assigned for the amount of the estimated probable credit loss. Total TDR loans, included in the impaired loan balances above, as of June 30, 2016 and December 31, 2015 , were $22.2 million and $17.1 million , respectively. TDR loans on accrual status amounted to $17.0 million and $10.1 million at June 30, 2016 and December 31, 2015 , respectively. TDR loans included in non-performing loans amounted to $5.2 million and $7.1 million at June 30, 2016 and December 31, 2015 , respectively. The Company continues to work with commercial relationships and enters into loan modifications to the extent deemed to be necessary or appropriate while attempting to achieve the best mutual outcome given the current economic environment. At June 30, 2016 , additional funding commitments for TDR loans totaled $382 thousand . The Company's obligation to fulfill the additional funding commitments on TDR loans is generally contingent on the borrower's compliance with the terms of the credit agreement. If the borrower is not in compliance, additional funding commitments may or may not be made at the Company's discretion. The following tables present certain information regarding loan modifications classified as troubled debt restructurings. Loans modified as troubled debt restructurings during the three -month period ended June 30, 2016 are detailed below. Three months ended June 30, 2016 (Dollars in thousands) Number of restructurings Pre-modification outstanding recorded investment Post-modification outstanding recorded investment Commercial real estate 4 $ 5,093 $ 5,059 Commercial and industrial 5 1,794 1,810 Commercial construction — — — Residential mortgages — — — Home equity loans and lines — — — Consumer — — — Total 9 $ 6,887 $ 6,869 Loans modified as troubled debt restructurings within the preceding twelve month period for which there was a subsequent payment default during the period noted are detailed below. Three months ended June 30, 2016 (Dollars in thousands) Number of TDRs that defaulted Post- modification outstanding recorded investment Commercial real estate — $ — Commercial and industrial 2 417 Commercial construction — — Residential mortgages — — Home equity loans and lines — — Consumer — — Total 2 $ 417 Loans modified as troubled debt restructurings during the six months ended June 30, 2016 are detailed below. Six months ended June 30, 2016 (Dollars in thousands) Number of restructurings Pre-modification outstanding recorded investment Post-modification outstanding recorded investment Commercial real estate 4 $ 5,093 $ 5,059 Commercial and industrial 6 2,058 2,073 Commercial construction — — — Residential mortgages — — — Home equity loans and lines — — — Consumer — — — Total 10 $ 7,151 $ 7,132 Loans modified as troubled debt restructurings within the preceding twelve month period for which there was a subsequent payment default during the period noted are detailed below. Six months ended June 30, 2016 (Dollars in thousands) Number of TDRs that defaulted Post- modification outstanding recorded investment Commercial real estate — $ — Commercial and industrial 2 417 Commercial construction — — Residential mortgages — — Home equity loans and lines — — Consumer — — Total 2 $ 417 There were no subsequent charge-offs associated with the TDRs noted in the table above during the six months ended June 30, 2016 . At June 30, 2016 , there were $169 thousand specific reserves allocated to the TDRs entered into during the 2016 period as management considered it likely that the unreserved principal will ultimately be collected. Interest payments received on non-accruing TDRs in the table above which were applied to principal and not recognized in interest income during the six months ended June 30, 2016 were not material. Loans modified as troubled debt restructurings during the three -month period ended June 30, 2015 are detailed below. Three months ended June 30, 2015 (Dollars in thousands) Number of restructurings Pre-modification outstanding recorded investment Post-modification outstanding recorded investment Commercial real estate 3 $ 269 $ 319 Commercial and industrial — — — Commercial construction — — — Residential mortgages — — — Home equity loans and lines — — — Consumer 1 4 4 Total 4 $ 273 $ 323 Loans modified as troubled debt restructurings during the six month period ended June 30, 2015 are detailed below. Six months ended June 30, 2015 (Dollars in thousands) Number of restructurings Pre-modification outstanding recorded investment Post-modification outstanding recorded investment Commercial real estate 3 $ 269 $ 319 Commercial and industrial 4 869 854 Commercial construction — — — Residential mortgages — — — Home equity loans and lines — — — Consumer 1 4 4 Total 8 $ 1,142 $ 1,177 There were no loans modified as troubled debt restructurings within the twelve month period previous to June 30, 2015 for which there was a subsequent payment default during the six months ended June 30, 2015 . At June 30, 2015 , there were specific reserves of $88 thousand allocated to the TDRs entered into during the 2015 period as management considered it likely that the unreserved principal would ultimately be collected. Interest payments received on non-accruing TDRs in the table above which were applied to principal and not recognized in interest income during the six months ended amounted to $11 thousand . There were no subsequent charge-offs associated with the TDRs noted in the table above during the six months ended June 30, 2015 . Other real estate owned ( " OREO " ) Real estate acquired by the Company through foreclosure proceedings or the acceptance of a deed in lieu of foreclosure is classified as OREO. When property is acquired, it is generally recorded at the lesser of the loan's remaining principal balance, net of any unamortized deferred fees, or the estimated fair value of the property acquired, less estimated costs to sell, establishing a new cost basis. The estimated fair value is based on market appraisals and the Company's internal analysis. Any loan balance in excess of the estimated realizable fair value on the date of transfer is charged to the allowance for loan losses on that date. All costs incurred thereafter in maintaining the property, as well as subsequent declines in fair value, are charged to non-interest expense. The Company carried no OREO at either June 30, 2016 or December 31, 2015 . There were no sales on OREO during the six months ended June 30, 2016 ; there were also no additions to OREO, or subsequent impairment write-downs during the period. During the six months ended June 30, 2015 , the Company recorded $154 thousand of net gains on OREO sales; there were no subsequent write-downs of OREO during that period. At June 30, 2016 , the Company had consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process according to local requirements of the applicable jurisdictions totaling $125 thousand compared with none at December 31, 2015 . Allowance for loan loss activity The allowance for loan losses is established through a provision for loan losses, a direct charge to earnings. Loan losses are charged against the allowance when management believes that the collectability of the loan principal is unlikely. Recoveries on loans previously charged-off are credited to the allowance. The allowance for loan losses amounted to $30.3 million at June 30, 2016 , compared to $29.0 million at December 31, 2015 , and $28.2 million at June 30, 2015 . For the six months ended June 30, 2016 and June 30, 2015 , the provision for loan losses amounted to $1.1 million and $1.9 million , respectively. The decrease in the provision for 2016 was due primarily to improving credit quality, a lower level of charge-offs, and the lower level of loan growth during the 2016 period, as compared to the 2015 period. In determining the provision to the allowance for loan losses, management takes into consideration the level of loan growth and an estimate of credit risk, which includes such items as adversely classified and non-performing loans, the estimated specific reserves needed for impaired loans, the level of net charge-offs, and the estimated impact of current economic conditions on credit quality. Loan growth for the six months ended June 30, 2016 was $39.2 million compared to $63.9 million during the six months ended June 30, 2015 . Total non-performing loans as a percentage of total loans declined to 0.54% at June 30, 2016 , compared to 0.92% at June 30, 2015 . The balance of the allowance for loan losses allocated to impaired loans amounted to $2.1 million at June 30, 2016 , compared to $2.6 million at June 30, 2015 . The balance of the allowance for loan losses allocated to non-impaired classified loans amounted to $2.0 million at June 30, 2016 , compared to $1.2 million at June 30, 2015 . The Company recorded net recoveries of $220 thousand for the six months ended June 30, 2016 , compared to net charge-offs of $809 thousand for the six months ended June 30, 2015 . The allowance for loan losses to total loans ratio was 1.60% at June 30, 2016 , 1.56% at December 31, 2015 and 1.62% at June 30, 2015 . The decline in the allowance ratio from June 30, 2015 reflects the generally improving credit quality of the loan portfolio due, in part, to improved economic conditions. However, for the six months ended June 30, 2016 , the credit ratings of three larger commercial relationships were downgraded to "criticized" or "adverse" risk-ratings, based on a review of their individual business circumstances, requiring higher levels of reserves in the current period which increased the allowance to total loan ratio compared to December 31, 2015 . Based on management's judgment as to the existing credit risks inherent in the loan portfolio, as discussed above under the heading "Credit Quality Indicators," management believes that the Company's allowance for loan losses is adequate to absorb probable losses from specifically known and other credit risks associated with the portfolio as of June 30, 2016 . Changes in the allowance for loan losses by portfolio segment for the three months ended June 30, 2016 are presented below: (Dollars in thousands) Cmml Real Estate Cmml and Industrial Cmml Constr Resid. Mortgage Home Equity Consumer Total Beginning Balance at March 31, 2016 $ 13,827 $ 10,278 $ 3,964 $ 1,077 $ 541 $ 223 $ 29,910 Provision 865 (714 ) 92 8 9 7 267 Recoveries 1 480 — — 2 1 484 Less: Charge offs 179 131 — — — 6 316 Ending Balance at June 30, 2016 $ 14,514 $ 9,913 $ 4,056 $ 1,085 $ 552 $ 225 $ 30,345 Changes in the allowance for loan losses by segment for the six months ended June 30, 2016 are presented below: (Dollars in thousands) Cmml Real Estate Cmml and Industrial Cmml Constr Resid. Mortgage Home Equity Consumer Total Beginning Balance at December 31, 2015 $ 13,514 $ 9,758 $ 3,905 $ 1,061 $ 540 $ 230 $ 29,008 Provision 1,159 (251 ) 156 24 15 14 1,117 Recoveries 20 609 — — 2 3 634 Less: Charge offs 179 203 5 — 5 22 414 Ending Balance at June 30, 2016 $ 14,514 $ 9,913 $ 4,056 $ 1,085 $ 552 $ 225 $ 30,345 Ending allowance balance: Allotted to loans individually evaluated for impairment $ 541 $ 990 $ 550 $ — $ — $ 18 $ 2,099 Allotted to loans collectively evaluated for impairment $ 13,973 $ 8,923 $ 3,506 $ 1,085 $ 552 $ 207 $ 28,246 Changes in the allowance for loan losses by segment for the three months ended June 30, 2015 are presented below: (Dollars in thousands) Cmml Real Estate Cmml and Industrial Cmml Constr Resid. Mortgage Home Equity Consumer Total Beginning Balance at March 31, 2015 $ 12,747 $ 9,842 $ 3,408 $ 960 $ 615 $ 231 $ 27,803 Provision 117 1,049 27 62 (54 ) 24 1,225 Recoveries — 83 12 — 14 4 113 Less: Charge offs — 952 — — — 27 979 Ending Balance at June 30, 2015 $ 12,864 $ 10,022 $ 3,447 $ 1,022 $ 575 $ 232 $ 28,162 Changes in the allowance for loan losses by segment for the six months ended June 30, 2015 are presented below: (Dollars in thousands) Cmml Real Estate Cmml and Industrial Cmml Constr Resid. Mortgage Home Equity Consumer Total Beginning Balance at December 31, 2014 $ 12,664 $ 9,245 $ 3,384 $ 989 $ 608 $ 231 $ 27,121 Provision 195 1,579 38 33 (47 ) 52 1,850 Recoveries 5 167 25 — 14 12 223 Less: Charge offs — 969 — — — 63 1,032 Ending Balance at June 30, 2015 $ 12,864 $ 10,022 $ 3,447 $ 1,022 $ 575 $ 232 $ 28,162 Ending allowance balance: Allotted to loans individually evaluated for impairment $ 200 $ 1,822 $ 524 $ — $ 19 $ 45 $ 2,610 Allotted to loans collectively evaluated for impairment $ 12,664 $ 8,200 $ 2,923 $ 1,022 $ 556 $ 187 $ 25,552 |
Deposits
Deposits | 6 Months Ended |
Jun. 30, 2016 | |
Deposits [Abstract] | |
Deposits | Deposits are summarized as follows: (Dollars in thousands) June 30, 2016 December 31, 2015 Non-interest bearing demand deposits $ 652,073 $ 570,589 Interest bearing checking 357,139 313,674 Savings 185,896 167,304 Money market 744,165 692,114 Certificates of deposit $250,000 or less 126,733 129,993 Certificates of deposit more than $250,000 44,108 37,704 Total non-brokered deposits (1) 2,110,114 1,911,378 Brokered deposits (2) 74,316 106,770 Total deposits $ 2,184,430 $ 2,018,148 (1) Includes reciprocal money market deposits and CDs received from participating banks in nationwide networks as a result of our customers electing to participate in programs to obtain full FDIC insurance. Essentially, the equivalent of the original deposit comes back to the Company as non-brokered deposits within the appropriate category under total deposits on the balance sheet. (2) Primarily brokered CDs $250,000 and under. |
Borrowed Funds and Subordinated
Borrowed Funds and Subordinated Debt | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Borrowed Funds and Subordinated Debt | Borrowed Funds and Subordinated Debt Borrowed funds amounted to $671 thousand at June 30, 2016 , compared to $53.7 million at December 31, 2015 . At June 30, 2016 borrowed funds consisted of FHLB borrowings only. At December 31, 2015 , the borrowed funds balance was comprised of FHLB borrowings of $40.7 million and an overnight borrowing with a correspondent bank, totaling $13.0 million . The Company also carried subordinated debt of $14.8 million at both June 30, 2016 and December 31, 2015 , which consisted of $15.0 million in aggregate principal amount of Fixed-to-Floating Rate Subordinated Notes (the "Notes"), issued in January 2015 , in a private placement to an accredited investor. The Notes, which are intended to qualify as Tier 2 capital for regulatory purposes, mature on January 30, 2030 (the "Maturity Date") and are callable by the Company, subject to regulatory approval, at a premium beginning January 30, 2020 , and at par beginning January 30, 2025 . The Notes pay interest at a fixed rate of 6.00% per annum through January 30, 2025 , and beginning on January 31, 2025 through the Maturity Date, or any early redemption date, the interest rate on the Notes will adjust monthly at an interest rate of 3.90% plus 30-day LIBOR. Original note issuance costs were $190 thousand and have been netted against the subordinated debt on the balance sheet in accordance with accounting guidance that the Company adopted in the first quarter of 2015. These costs are being amortized over the life of the Notes. In March 2015 , the Company used proceeds from the issuance of the Notes to payoff $10.8 million of outstanding Junior Subordinated debentures that originated in 2000, from the sale of trust preferred securities by Enterprise Capital Trust (the "Trust"), a former subsidiary of the Company. The pay down of this debt allowed the trust preferred securities to be redeemed in full and the Trust to subsequently be dissolved in April 2015. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities | Derivatives and Hedging Activities Interest rate lock commitments related to the origination of mortgage loans that will be sold are considered derivative instruments. The commitments to sell loans are also considered derivative instruments. The Company generally does not pool mortgage loans for sale, but instead, sells the loans on an individual basis. To reduce the net interest rate exposure arising from its loan sale activity, the Company enters into the commitment to sell these loans at essentially the same time that the interest rate lock commitment is quoted on the origination of the loan. The Company estimates the fair value of these derivatives based on current secondary mortgage market prices. At June 30, 2016 and 2015 , the estimated fair values of these derivative instruments were considered to be immaterial. The Company may use interest-rate swap agreements as part of its interest-rate risk management strategy. Interest-rate swap agreements are entered into as hedges against future interest-rate fluctuations on specifically identified assets or liabilities. The Company did not have derivative fair value hedges or derivative cash flow hedges at June 30, 2016 or 2015 . Beginning in the fourth quarter of 2015, the Company implemented a “Back-to-Back Swap” program whereby the Bank enters into an interest rate swap with a qualified commercial banking customer and simultaneously enters into an equal and opposite interest rate swap with a counterparty. The transaction structure effectively minimizes the Bank’s net risk exposure resulting from such transactions. The customer interest-rate swap agreement allows commercial banking customers to convert a floating-rate loan payment to fixed-rate loan payment. Back-to-Back Swaps are not speculative but rather, result from a service the Company provides to certain customers. Back-to-Back Swaps do not meet hedge accounting requirements and therefore changes in the fair value of both the customer swaps and the counterparty swaps, which have an offsetting inverse relationship, are recognized directly in earnings. The Company had two interest-rate swaps at both June 30, 2016 and December 31, 2015 with an aggregate notional amount of $10.1 million at the end of both periods. Asset derivatives and liability derivatives are included in prepaid expenses and other assets and accrued expenses and other liabilities on the consolidated balance sheets, respectively. The table below presents the fair value and classification of the Company’s derivative financial instruments for the periods presented: As of June 30, 2016 As of December 31, 2015 (Dollars in thousands) Asset Derivatives Liability Derivatives Asset Derivatives Liability Derivatives Back-to-Back Swaps $ 335 $ 335 $ 16 $ 16 There was no gain or loss recognized in income on derivatives during the three months ended June 30, 2016 . By using derivative financial instruments, the Company exposes itself to credit risk. Credit risk is the risk of failure by the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, which creates credit risk for the Company. When the fair value of a derivative is negative, the Company owes the counterparty and, therefore, it does not possess credit risk. The credit risk in derivative instruments is mitigated by entering into transactions with highly-rated counterparties that management believes to be creditworthy. As the swaps are subject to master netting agreements, the Company had limited exposure relating to interest rate swaps with institutional counterparties at June 30, 2016 . The Company did not have any credit risk exposure for derivative financial instruments at June 30, 2016 . Certain derivative agreements contain provisions that require the Company to post collateral if the derivative exposure exceeds a threshold amount. See the table below for amounts held at each period presented. The table below also presents the offsetting of derivatives and amounts subject to master netting agreements not offset in the consolidated balance sheet at the dates indicated. June 30, 2016 Gross Amounts of Recognized Asset/Liabilities Gross Amounts Offset in the Statement of Financial Position Net Amounts of Assets Presented in the Statement of Financial Position Gross amounts not offset in the Statement of Financial Position (Dollars in thousands) Financial Instruments Cash collateral (Received)/Posted Net Amount Asset Derivatives Back-to-Back Swaps $ 335 $ — $ 335 $ — $ — $ 335 Liability Derivatives Back-to-Back Swaps $ 335 $ — $ 335 $ — $ 360 $ (25 ) December 31, 2015 Gross Amounts of Recognized Asset/Liabilities Gross Amounts Offset in the Statement of Financial Position Net Amounts of Assets Presented in the Statement of Financial Position Gross amounts not offset in the Statement of Financial Position (Dollars in thousands) Financial Instruments Cash collateral (Received)/Posted Net Amount Asset Derivatives Back-to-Back Swaps $ 16 $ — $ 16 $ — $ — $ 16 Liability Derivatives Back-to-Back Swaps $ 16 $ — $ 16 $ — $ — $ 16 The Company has agreements with certain derivative counterparties that contain credit-risk-related contingent provisions. These provisions provide the counterparty with the right to terminate its derivative positions and require the Company to settle its obligations under the agreements if the Company defaults on certain of its indebtedness. |
Supplemental Retirement Plan an
Supplemental Retirement Plan and Other Postretirement Benefit Obligations | 6 Months Ended |
Jun. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Supplemental Retirement Plan and Other Postretirement Benefit Obligations | Supplemental Retirement Plan and Other Postretirement Benefit Obligations Supplemental Employee Retirement Plan ("SERP") The Company has salary continuation agreements with two of its current executive officers and one former executive officer. These agreements provide for predetermined fixed-cash supplemental retirement benefits to be provided for a period of 20 years after each individual reaches a defined "benefit age." The individuals covered under the SERP have reached the defined benefit age and are receiving payments under the plan. Additionally, the Company has not recognized service costs in the current or prior year as each officer had previously attained their individually defined benefit age and was fully vested under the plan. This non-qualified plan represents a direct liability of the Company, and as such has no specific assets set aside to settle the benefit obligation. The funded status is the aggregate amount accrued, or the "accumulated benefit obligation," which is equal to the present value of the benefits to be provided to the employee or any beneficiary. Because the Company's benefit obligations provide for predetermined fixed-cash payments, the Company does not have any unrecognized costs to be included as a component of accumulated other comprehensive income. Total net periodic benefit costs, comprised of interest costs only, were $31 thousand and $62 thousand for both the three and six months ended June 30, 2016 , compared to $32 thousand and $63 thousand for the three and six months ended June 30, 2015 . Benefits paid amounted to $69 thousand and $138 thousand for both the three and six months ended June 30, 2016 and June 30, 2015 . The Company anticipates accruing an additional $62 thousand to the SERP during the remainder of 2016 . Supplemental Life Insurance The Company has provided supplemental life insurance through split-dollar life insurance arrangements for certain executive and senior officers on whom the Bank owns bank-owned life insurance ("BOLI"). These arrangements provide a death benefit to the officer's designated beneficiaries that extend to postretirement periods for some of the supplemental life insurance plans. The Company has recognized a liability for these future postretirement benefits. These non-qualified plans represent a direct liability of the Company, and as such has no specific assets set aside to settle the benefit obligation. The funded status is the aggregate amount accrued, or the "accumulated postretirement benefit obligation," which is the present value of the post-retirement benefits associated with this arrangement. The following table illustrates the net periodic post-retirement benefit cost for the supplemental life insurance plans for the periods indicated: Three months ended June 30, Six Months Ended June 30, (Dollars in thousands) 2016 2015 2016 2015 Service Cost $ (3 ) $ (2 ) $ (5 ) $ (2 ) Interest Cost 21 21 42 39 Net periodic post-retirement benefit cost $ 18 $ 19 $ 37 $ 37 |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Company currently has three individual stock incentive plans: the 2003 plan as amended in 2009, the 2009 plan as amended in 2015 and the 2016 plan. The 2016 plan which was approved by the Company's stockholders at the May 2016 annual meeting, has essentially the same terms as the 2003 and 2009 plans. The plans permit the Board of Directors to grant, under various terms, both incentive and non-qualified stock options (for the purchase of newly issued shares of common stock), restricted stock, restricted stock units and stock appreciation rights to officers and other employees, directors and consultants. These plans also allow for newly issued shares of common stock to be issued without restrictions to officers and other employees, directors and consultants. As of June 30, 2016 , an aggregate of 457,413 shares remain available for future grants under the 2009 and 2016 plans. The 2003 plan is closed to future grants, although several awards previously granted under this plan remain outstanding and may be exercised in the future. The Company's stock-based compensation expense includes stock options and stock awards to officers and other employees included in salary and benefits expense, and stock awards and stock compensation in lieu of cash fees to non-employee directors included in other operating expenses. Total stock-based compensation expense was $462 thousand and $905 thousand for the three and six months ended June 30, 2016 , compared to $466 thousand and $954 thousand for the three and six months ended June 30, 2015 . Stock Option Awards The Company recognized stock-based compensation expense related to stock option awards of $63 thousand and $142 thousand for the three and six months ended June 30, 2016 , compared to $79 thousand and $176 thousand for the three and six months ended June 30, 2015 . The Company utilizes the Black-Scholes option valuation model in order to determine the per share grant date fair value of option grants. The table below provides a summary of the options granted in 2016 and 2015 . Six Months Ended June 30, 2016 2015 Options granted 31,047 27,376 Term in years 10 10 Weighted average assumptions used in the fair value model: Expected volatility 42 % 47 % Expected dividend yield 3.02 % 2.90 % Expected life in years 7 7 Risk-free interest rate 1.91 % 1.95 % Weighted average market price on date of grants $ 21.91 $ 21.03 Per share weighted average fair value $ 7.91 $ 8.51 Fair value as a percentage of market value at grant date 36 % 40 % Options granted during the first six months of 2016 and 2015 generally vest 50% in year two and 50% in year four, on the anniversary date of the awards. Vested options are only exercisable while the employee remains employed with the Bank and for a limited time thereafter. If a grantee’s employment or other service relationship, such as service as a director, is terminated for any reason, then any stock options granted that have not vested as of the time of such termination generally must be forfeited, unless the Compensation Committee or the Board of Directors, as the case may be, waives such forfeiture requirement. Refer to Note 11 "Stock-Based Compensation Plans" in the Company's 2015 Annual Report on Form 10-K for a further description of the assumptions used in the valuation model. Stock Awards Stock-based compensation expense recognized in association with stock awards amounted to $323 thousand and $617 thousand for the three and six months ended June 30, 2016 , compared to $324 thousand and $633 thousand for the three and six months ended June 30, 2015 . Restricted stock awards are granted at the market price on the date of the grant. Employee awards generally vest over four years in equal portions beginning on or about the first anniversary date of the award or are performance based awards that vest upon the Company achieving certain predefined performance objectives. Non-employee director awards generally vest over two years in equal portions beginning on or about the first anniversary date of the award. The table below provides a summary of restricted stock awards granted in 2016 and 2015 . Six Months Ended June 30, Restricted Stock Awards 2016 2015 Two Year Vesting 9,060 7,276 Four Year Vesting 18,298 17,775 Performance-Based Vesting 35,071 30,262 Total Restricted Stock Awards 62,429 55,313 Weighted average grant date fair value $ 21.90 $ 21.03 If a grantee's employment or other service relationship, such as service as a director, is terminated for any reason, then any shares of restricted stock granted that have not vested as of the time of such termination generally must be forfeited, unless the Compensation Committee or the Board of Directors, as the case may be, waives such forfeiture requirement. The restricted stock awards allow for the receipt of dividends, and the voting of all shares, whether or not vested, throughout the vesting periods at the same proportional level as common shares outstanding. Upon vesting, restricted stock awards may be net share-settled to cover payment for employee tax obligations, resulting in shares of common stock being reacquired by the Company. In accordance with Chapter 156D of the Massachusetts General Laws, a statute known as the Massachusetts Business Corporation Act, which applies to Massachusetts corporations such as the Company, eliminates the concept of “treasury stock” and provides that shares a Massachusetts company reacquires will be treated as authorized but unissued shares. Any shares that are returned to the Company prior to vesting or as payment for employee tax obligations upon vesting shall remain available for issuance under such plan, while the plan is still open. Stock in Lieu of Directors' Fees In addition to restricted stock awards discussed above, the non-employee members of the Company's Board of Directors may opt to receive newly issued shares of the Company's common stock in lieu of cash compensation for attendance at Board and Board Committee meetings. Stock-based compensation expense related to these directors' fees amounted to $76 thousand and $146 thousand for the three and six months ended June 30, 2016 , compared to $63 thousand and $145 thousand for the three and six months ended June 30, 2015 , and is included in other operating expenses. In January 2016 , non-employee directors were issued 10,657 shares of common stock in lieu of 2015 annual cash fees of $254 thousand at a market value price of $23.86 per share, the market value of the common stock on the opt-in measurement date of January 2, 2015 . |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings per share Basic earnings per share are calculated by dividing net income available to common stockholders by the weighted average number of common shares outstanding (including participating securities) during the year. The Company's only participating securities are unvested restricted stock awards that contain non-forfeitable rights to dividends. Diluted earnings per share reflects the effect on weighted average shares outstanding of the number of additional shares outstanding if dilutive stock options were converted into common stock using the treasury stock method. The table below presents the increase in average shares outstanding, using the treasury stock method, for the diluted earnings per share calculation for the periods indicated: Three months ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Basic weighted average common shares outstanding 10,561,680 10,331,485 10,483,396 10,287,509 Dilutive shares 68,220 63,011 67,446 65,221 Diluted weighted average common shares outstanding 10,629,900 10,394,496 10,550,842 10,352,730 For the six months ended June 30, 2016 , there were 434 shares excluded from the calculations of diluted earnings per share, due to the exercise price exceeding the average market price of the Company’s common stock. These options, which were not dilutive at that date, may potentially dilute earnings per share in the future. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The FASB defines the fair value of an asset or liability to be the price which a seller would receive in an orderly transaction between market participants (an exit price) and also establishes a fair value hierarchy segregating fair value measurements using three levels of inputs: (Level 1) quoted market prices in active markets for identical assets or liabilities; (Level 2) significant other observable inputs, including quoted prices for similar items in active markets, quoted prices for identical or similar items in markets that are not active, inputs such as interest rates and yield curves, volatilities, prepayment speeds, credit risks and default rates which provide a reasonable basis for fair value determination or inputs derived principally from observed market data; and (Level 3) significant unobservable inputs for situations in which there is little, if any, market activity for the asset or liability. Unobservable inputs must reflect reasonable assumptions that market participants would use in pricing the asset or liability, which are developed on the basis of the best information available under the circumstances. The following tables summarize significant assets and liabilities carried at fair value and placement in the fair value hierarchy at the dates specified: June 30, 2016 Fair Value Measurements using: (Dollars in thousands) Fair Value (level 1) (level 2) (level 3) Assets measured on a recurring basis: Fixed income securities $ 306,339 $ — $ 306,339 $ — Equity securities 13,164 13,164 — — FHLB stock 1,879 — — 1,879 Interest-rate swaps 335 — 335 — Assets measured on a non-recurring basis: Impaired loans (collateral dependent) 4,181 — — 4,181 Liabilities measured on a recurring basis: Interest-rate swaps 335 — 335 — December 31, Fair Value Measurements using: (Dollars in thousands) Fair Value (level 1) (level 2) (level 3) Assets measured on a recurring basis: Fixed income securities $ 288,701 $ — $ 288,701 $ — Equity securities 11,657 11,657 — — FHLB stock 3,050 — — 3,050 Interest-rate swaps 16 — 16 — Assets measured on a non-recurring basis: Impaired loans (collateral dependent) 2,516 — — 2,516 Liabilities measured on a recurring basis: Interest-rate swaps 16 — 16 — The Company did not have cause to transfer any assets between the fair value measurement levels during the six months ended June 30, 2016 or the year ended December 31, 2015 . All of the Company's fixed income investments and equity securities that are considered "available-for-sale" are carried at fair value. The fixed income category above includes federal agency obligations, commercial and residential federal agency MBS, municipal securities, corporate bonds and certificates of deposits, as held at those dates. The Company utilizes third-party pricing vendors to provide valuations on its fixed income securities. Fair values provided by the vendors were generally determined based upon pricing matrices utilizing observable market data inputs for similar or benchmark securities in active markets and/or based on a matrix pricing methodology which employs The Bond Market Association's standard calculations for cash flow and price/yield analysis, live benchmark bond pricing and terms/condition data available from major pricing sources. Therefore, management regards the inputs and methods used by third-party pricing vendors to be "Level 2 inputs and methods" as defined in the "fair value hierarchy." The Company periodically obtains a second price from an impartial third party on fixed income securities to assess the reasonableness of prices provided by the primary independent pricing vendor. The Company's equity portfolio fair value is measured based on quoted market prices for the shares; therefore, these securities are categorized as Level 1 within the fair value hierarchy. The Bank is required to purchase FHLB stock at par value in association with advances from the FHLB; this stock is classified as a restricted investment and carried at cost which management believes approximates fair value; therefore, these securities are categorized as Level 3 measures. See Note 1, "Summary of Significant Accounting Policies," Item (d) for further information regarding the Company's fair value assessment of FHLB capital stock. Impaired loan balances in the table above represent those collateral dependent impaired commercial loans where management has estimated the credit loss by comparing the loan's carrying value against the expected realizable fair value of the collateral (appraised value, or internal analysis less estimated cost to sell, adjusted as necessary for changes in relevant valuation factors subsequent to the measurement date). Certain inputs used in these assessments, and possible subsequent adjustments, are not always observable, and therefore, collateral dependent impaired loans are categorized as Level 3 within the fair value hierarchy. A specific allowance is assigned to the collateral dependent impaired loan for the amount of management's estimated probable credit loss. The specific allowances assigned to the collateral dependent impaired loans amounted to $1.4 million at both June 30, 2016 and December 31, 2015 . When OREO property is acquired, it is generally recorded at the lesser of the loan's remaining principal balance, net of unamortized deferred fees, or the estimated fair value of the property acquired, less estimated costs to sell. The estimated fair value is based on market appraisals and the Company's internal analysis. Certain inputs used in appraisals or the Company's internal analysis are not always observable and therefore, OREO may be categorized as Level 3 within the fair value hierarchy. The Company carried no OREO at either June 30, 2016 or December 31, 2015 . The fair values for the interest-rate swap assets and liabilities represent a FASB Level 2 measurement and are based on settlement values adjusted for credit risks associated with the counterparties and the Company and observable market interest rate curves. The settlement values are based on discounted cash flow analysis, a widely accepted valuation technique, reflecting the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves. Credit risk adjustments consider factors such as the likelihood of default by the Company and its counterparties, its net exposures and remaining contractual life. The change in value of interest-rate swap assets and liabilities attributable to credit risk was not significant during the reported periods. Refer also to Note 7, "Derivatives and Hedging Activities," for additional information on the Company's interest-rate swaps. Standby letters of credit are conditional commitments issued by the Company to guarantee the financial obligation or performance of a customer to a third party. The fair value of these commitments was estimated to be the fees charged to enter into similar agreements, and accordingly these fair value measures are deemed to be FASB Level 2 measurements. In accordance with the FASB, the estimated fair values of these commitments are carried on the balance sheet as a liability and amortized to income over the life of the letters of credit, which are typically one year. The estimated fair value of these commitments carried on the balance sheet at June 30, 2016 and December 31, 2015 were deemed immaterial. Interest rate lock commitments related to the origination of mortgage loans that will be sold are considered derivative instruments. The commitments to sell loans are also considered derivative instruments. The Company generally does not pool mortgage loans for sale, but instead sells the loans on an individual basis. To reduce the net interest rate exposure arising from its loan sale activity, the Company enters into the commitment to sell these loans at essentially the same time that the interest rate lock commitment is quoted on the origination of the loan. The Company estimates the fair value of these derivatives based on current secondary mortgage market prices. These commitments are accounted for in accordance with FASB guidance. The fair values of the Company's derivative instruments are deemed to be FASB Level 2 measurements. At June 30, 2016 and December 31, 2015 , the estimated fair value of the Company's derivative instruments was considered to be immaterial. The following table presents additional quantitative information about assets measured at fair value on a recurring and non-recurring basis for which the Company utilized Level 3 inputs (significant unobservable inputs for situations in which there is little, if any, market activity for the asset or liability) to determine fair value as of June 30, 2016 : (Dollars in thousands) Fair Value Valuation Technique Unobservable Input Unobservable Input Value or Range Assets measured on a recurring basis: FHLB stock $ 1,879 FHLB Stated Par Value N/A N/A Assets measured on a non-recurring basis: Impaired loans (collateral dependent) $ 4,181 Appraisal of collateral Appraisal adjustments (1) 5% - 50% (1) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. Estimated Fair Values of Assets and Liabilities In addition to disclosures regarding the measurement of assets and liabilities carried at fair value on the balance sheet, the Company is also required to disclose fair value information about financial instruments for which it is practicable to estimate that value, whether or not recognized on the balance sheet. The carrying values, estimated fair values and placement in the fair value hierarchy of the Company's financial instruments for which fair value is only disclosed but not recognized on the balance sheet at the dates indicated are summarized as follows: June 30, 2016 Fair value measurement (Dollars in thousands) Carrying Amount Fair Value Level 1 inputs Level 2 Inputs Level 3 Inputs Financial assets: Loans held for sale $ 1,971 $ 1,988 $ — $ 1,988 $ — Loans, net 1,868,841 1,884,603 — — 1,884,603 Financial liabilities: Certificates of deposit (including brokered) 245,157 245,715 — 245,715 — Borrowed funds 671 672 — 672 — Subordinated debt 14,828 15,123 — — 15,123 December 31, 2015 Fair value measurement (Dollars in thousands) Carrying Amount Fair Value Level 1 inputs Level 2 Inputs Level 3 Inputs Financial assets: Loans held for sale $ 1,709 $ 1,709 $ — $ 1,709 $ — Loans, net 1,830,954 1,845,009 — — 1,845,009 Financial liabilities: Certificates of deposit (including brokered) 274,467 273,419 — 273,419 — Borrowed funds 53,671 53,670 — 53,670 — Subordinated debt 14,822 13,961 — — 13,961 Excluded from the tables above are certain financial instruments with carrying values that approximated their fair value at the dates indicated, as they were short-term in nature or payable on demand. These include cash and cash equivalents, accrued interest receivable, non-term deposit accounts, and accrued interest payable. The respective carrying values of these instruments would all be considered to be classified within Level 1 of their fair value hierarchy. Also excluded from these tables are the fair values of commitments for unused portion of lines of credit and letters of credit, which were estimated to be the fees currently charged to enter into similar agreements and are deemed to be immaterial, as well as commitments to originate non-mortgage loans which were short-term, at current market rates and estimated to have no significant change in fair value. When determining fair values noted in the tables above, in cases where quoted fair values are not available, fair values are based upon estimates using various valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. The following methods and assumptions were used by the Company in estimating fair values of its financial instruments: Loans held for sale: Loans held for sale are recorded at the lower of aggregate amortized cost or market value. The fair value is based on comparable market prices for loans with similar rates and terms. Loans: The fair value of loans was determined using discounted cash flow analysis, using interest rates currently being offered by the Company. The incremental credit risk for adversely classified loans was considered in the determination of the fair value of the loans. This method of estimating fair value does not incorporate the exit price concept of fair value. Financial liabilities: The fair values of certificates of deposit and borrowings were estimated using discounted cash flow analysis using rates offered by the Bank or advance rates offered by the FHLB on June 30, 2016 and December 31, 2015 for similar instruments. The fair value of subordinated debt was estimated using discounted cash flow analysis using a market rate of interest at June 30, 2016 and December 31, 2015 . Limitations: The estimates of fair value of financial instruments were based on information available at June 30, 2016 and December 31, 2015 and are not indicative of the fair market value of those instruments as of the date of this Quarterly Report on Form 10-Q. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company's entire holdings of a particular financial instrument. The fair value of the Company's time deposit liabilities do not take into consideration the value of the Company's long-term relationships with depositors, which may have significant value. Because no active market exists for a portion of the Company's financial instruments, fair value estimates were based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Fair value estimates were based on existing on- and off-balance sheet financial instruments without an attempt to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments, including premises and equipment and foreclosed real estate. In addition, the tax ramifications related to the realization of the unrealized appreciation and depreciation can have a significant effect on fair value estimates and have not been considered in any of the estimates. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | The accompanying unaudited consolidated interim financial statements and these notes should be read in conjunction with the December 31, 2015 audited consolidated financial statements and notes thereto contained in the 2015 Annual Report on Form 10-K of Enterprise Bancorp, Inc. (the "Company" or "Enterprise"), a Massachusetts corporation, as filed with the Securities and Exchange Commission (the "SEC") on March 15, 2016 (the "2015 Annual Report on Form 10k"). The Company has not changed its accounting policies from those disclosed in its 2015 Annual Report on Form 10-K. The Company's unaudited consolidated interim financial statements include the accounts of the Company and its wholly owned subsidiary, Enterprise Bank and Trust Company (the "Bank"). The Bank is a Massachusetts trust company organized in 1989. Substantially all of the Company's operations are conducted through the Bank and its subsidiaries. The Bank's subsidiaries include Enterprise Insurance Services, LLC and Enterprise Investment Services, LLC, organized under the laws of the State of Delaware for the purposes of engaging in insurance sales activities and offering non-deposit investment products and services, respectively. In addition, the Bank has the following subsidiaries that are incorporated in the Commonwealth of Massachusetts and classified as security corporations in accordance with applicable Massachusetts General Laws: Enterprise Security Corporation; Enterprise Security Corporation II; and Enterprise Security Corporation III. The security corporations, which hold various types of qualifying securities, are limited to conducting securities investment activities that the Bank itself would be allowed to conduct under applicable laws. At June 30, 2016 , the Company had 22 full service branches serving the greater Merrimack Valley and North Central regions of Massachusetts and Southern New Hampshire. In early July 2016, the Company's 23 rd branch, on Route 101A, in Nashua, NH, opened, and the Company recently announced the anticipated opening of the Company's 24 th office, in Windham, NH, in 2017. Through the Bank and its subsidiaries, the Company offers a range of commercial and consumer loan products, and deposit and cash management services. The Company also offers investment advisory and wealth management, trust and insurance services. The services offered through the Bank and its subsidiaries are managed as one strategic unit and represent the Company's only reportable operating segment. The Federal Deposit Insurance Corporation (the "FDIC") and the Massachusetts Division of Banks (the "Division") have regulatory authority over the Bank. The Bank is also subject to certain regulatory requirements of the Board of Governors of the Federal Reserve System (the "Federal Reserve Board") and, with respect to its New Hampshire branch operations, the New Hampshire Banking Department. The business and operations of the Company are subject to the regulatory oversight of the Federal Reserve Board. The Division also retains supervisory jurisdiction over the Company. |
Basis of Accounting | The accompanying unaudited consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and the instructions for Form 10-Q through the rules and interpretive releases of the SEC under federal securities law. In the opinion of management, the accompanying unaudited consolidated interim financial statements reflect all necessary adjustments consisting of normal recurring accruals for a fair presentation. All significant intercompany balances and transactions have been eliminated in the accompanying unaudited consolidated interim financial statements. Interim results are not necessarily indicative of results to be expected for the entire year. |
Reclassifications | Certain previous years' amounts in the consolidated financial statements, and notes thereto, have been reclassified to conform to the current year's presentation. |
Subsequent events | The Company has evaluated subsequent events and transactions from June 30, 2016 through August 5, 2016 for potential recognition or disclosure as required by GAAP. |
Critical Accounting Estimates | Critical Accounting Estimates In preparing the unaudited consolidated interim financial statements in conformity with GAAP, management is required to exercise judgment in determining many of the methodologies, assumptions and estimates to be utilized. These assumptions and estimates affect the reported values of assets and liabilities as of the balance sheet date and income and expenses for the period then ended. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates should the assumptions and estimates used change over time due to changes in circumstances. Changes in those estimates resulting from continuing change in the economic environment and other factors will be reflected in the financial statements and results of operations in future periods. As discussed in the Company's 2015 Annual Report on Form 10-K, the three most significant areas in which management applies critical assumptions and estimates that are particularly susceptible to change relate to the determination of the allowance for loan losses, impairment review of investment securities and the impairment review of goodwill. Refer to Note 1, "Summary of Significant Accounting Policies," to the Company's consolidated financial statements included in the Company's 2015 Annual Report on Form 10-K for significant accounting policies. The Company has not changed its significant accounting policies from those disclosed in its 2015 Annual Report on Form 10-K. |
Reporting Comprehensive Income | Reporting Comprehensive Income Comprehensive income is defined as all changes to stockholders' equity except investments by and distributions to stockholders. Net income is one component of comprehensive income, with other components referred to in the aggregate as other comprehensive income. The Company's only other comprehensive income component is the net unrealized holding gains or losses on investments available-for-sale, net of deferred income taxes. Pursuant to Accounting Standards Update ("ASU") No. 2013-02, Comprehensive Income (Topic 220): Reporting Amounts Reclassified Out of Accumulated Other Comprehensive Income, the Company initially excludes these unrealized holding gains and losses from net income; however, they are later reported as reclassifications out of accumulated other comprehensive income into net income when the securities are sold. When securities are sold, the reclassification of realized gains and losses on available-for-sale securities are included on the Consolidated Statements of Income under the "non-interest income" subheading on the line item "net gains on sales of investment securities" and the related income tax expense is included in the line item "provision for income taxes," both of which are also detailed on the Consolidated Statements of Comprehensive Income under the subheading "reclassification adjustment for net gains included in net income." |
Restricted Investments | Restricted Investments As a member of the Federal Home Loan Bank of Boston ("FHLB"), the Company is required to purchase certain levels of FHLB capital stock at par value in association with the Company's borrowing relationship from the FHLB. From time-to-time the FHLB may initiate the repurchase at par value of "excess" levels capital stock held by member banks. This stock is classified as a restricted investment and carried at cost, which management believes approximates fair value. FHLB stock represents the only restricted investment held by the Company. In conjunction with the other-than-temporary-impairment ("OTTI") review on available-for-sale investments (See Note 2, "Investments," for additional information), management also regularly reviews its holdings of FHLB stock for OTTI. Based on management's periodic review, the Company has not recorded any OTTI charges on this investment to date. If it was determined that a write-down of FHLB stock was required, impairment would be recognized through a charge to earnings. |
Income Taxes | Income Taxes The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax attributable to differences between the financial statement carrying amounts and the tax basis of assets and liabilities. The deferred tax assets and liabilities are reflected at currently enacted income tax rates applicable to the period in which the deferred tax assets or liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities will be adjusted accordingly through the provision for income taxes. The Company's policy is to classify interest resulting from underpayment of income taxes as income tax expense in the first period the interest would begin accruing according to the provisions of the relevant tax law. The Company classifies penalties resulting from underpayment of income taxes as income tax expense in the period for which the Company claims or expects to claim an uncertain tax position or in the period in which the Company's judgment changes regarding an uncertain tax position. The income tax provisions will differ from the expense that would result from applying the federal statutory rate to income before taxes, due primarily to the impact of tax exempt interest from certain investment securities, loans and bank-owned life insurance. The Company did not have any unrecognized tax benefits accrued as income tax liabilities or receivables or as deferred tax items at June 30, 2016 . The Company is subject to U.S. federal and state income tax examinations by taxing authorities for the 2012 through 2015 tax years. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting pronouncements adopted by the Company In April 2015, the Financial Accounting Standards Board ("FASB") issued ASU No. 2015-03, Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. Entities are required to apply the new guidance on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. For public business entities, the amendments are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption of the amendments is permitted for financial statements that have not been previously issued. The Company early adopted this ASU as of January 1, 2015 in relation to the Company's Fixed-to-Floating Rate Subordinated Notes issued in January 2015. This adoption did not have a material impact on the Company's financial statements or results of operations. In January 2015, the FASB issued Accounting Standards Update (ASU) 2015-01, "Income Statement-Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items." This ASU will align more closely GAAP income statement presentation guidance with International Audit Standards (IAS) 1, Presentation of Financial Statements, which prohibits the presentation and disclosure of extraordinary items. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The adoption of this standard did not have an impact on the Company's financial statements. Accounting pronouncements not yet adopted by the Company In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU is intended to create a single source of revenue guidance which is more principles based than current revenue guidance. The guidance affects any entity that either enters into contracts with customers to transfer goods or services, or enters into contracts for the transfer of non-financial assets, unless those contracts are within the scope of other standards. In August 2015, the FASB issued ASU 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date" to amend the effective date of ASU 2014-09. The amendments in ASU 2014-09 are effective for annual and interim periods within fiscal years beginning after December 15, 2017. Earlier adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The FASB has since issued additional related ASUs amendments intended to clarify certain aspects and improve understanding of the implementation guidance of Topic 606 but do not change the core principles of the guidance in Topic 606. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements of Topic 606. The Company is currently evaluating the potential impact of the ASU and its amendments on the Company's financial statements and results of operations. In January 2016, the FASB issued ASU No. 2016-01, "Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities," which updates certain aspects of recognition, measurement, presentation and disclosure of financial instruments. Among other things, the new guidance: • Requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; • Requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; • Requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements. The new guidance is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently evaluating the effects of this ASU on the Company's financial statements and results of operations. In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)," which supersedes previous leasing guidance in Topic 840, Leases. Under the new guidance, lessees are required to recognize lease assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is currently evaluating the effects of this ASU on the Company's financial statements and results of operations. In March 2016, the FASB issued ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718): Improvement to Employee Share-Based Payment Accounting." The amendments are intended to improve the accounting for employee share-based payments and affect all organizations that issue share-based payment awards to their employees. Several aspects of the accounting are simplified including, generally: a) income tax consequences; b) classification of awards as either equity or liabilities; c) accounting for forfeitures; and d) classification on the statement of cash flows. Among the changes, the amendment allows for entities to partially settle awards in cash up to the maximum individual statutory tax rate in the applicable jurisdiction and still qualify for equity classification; all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) will be recognized as income tax expense or benefit in the income statement; in addition, an entity can make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest (current GAAP) or account for forfeitures when they occur; among other changes. The new standard is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company is currently evaluating the potential impact of the ASU on the Company's financial statements and results of operations. In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses (Topic 326)." The amendments in this Update require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. Previously, when credit losses were measured under GAAP, an entity generally only considered past events and current conditions in measuring the incurred loss and generally recognition of the full amount of credit losses was delayed until the loss was probable of occurring. The amendments in this Update eliminate the probable initial recognition threshold in current GAAP and, instead, reflect an entity’s current estimate of all expected credit losses. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. The income statement reflects the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. Credit losses on available-for-sale debt securities should be measured in a manner similar to current GAAP. However, the amendments in this Update require that credit losses be presented as an allowance rather than as a write-down. Unlike current GAAP the Update provides for reversals of credit losses in future period net income in situations where the estimate of loss declines. An entity will apply the amendments in this Update through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach). For public business entities that are SEC filers, such as the Company, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently evaluating the potential impact of the ASU on the Company's financial statements and results of operations. |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Available-for-sale Securities Reconciliation | The amortized cost and carrying values of investment securities at the dates specified are summarized as follows: June 30, 2016 (Dollars in thousands) Amortized cost Unrealized gains Unrealized losses Fair Value Federal agency obligations (1) $ 78,653 $ 1,748 $ — $ 80,401 Residential federal agency MBS (1) 73,926 1,383 65 75,244 Commercial federal agency MBS (1) 31,410 815 — 32,225 Municipal securities 101,537 4,722 — 106,259 Corporate bonds 10,966 267 2 11,231 Certificates of deposits (2) 950 29 — 979 Total fixed income securities 297,442 8,964 67 306,339 Equity investments 11,569 1,973 378 13,164 Total available-for-sale securities, at fair value $ 309,011 $ 10,937 $ 445 $ 319,503 December 31, 2015 (Dollars in thousands) Amortized cost Unrealized gains Unrealized losses Fair Value Federal agency obligations (1) $ 78,626 $ 352 $ 153 $ 78,825 Residential federal agency MBS (1) 75,105 406 648 74,863 Commercial federal agency MBS (1) 23,908 — 363 23,545 Municipal securities 96,189 2,357 35 98,511 Corporate bonds 10,257 44 95 10,206 Certificates of deposits (2) 2,753 — 2 2,751 Total fixed income securities 286,838 3,159 1,296 288,701 Equity investments 10,043 1,966 352 11,657 Total available-for-sale securities, at fair value $ 296,881 $ 5,125 $ 1,648 $ 300,358 __________________________________________ (1) These categories may include investments issued or guaranteed by government sponsored enterprises such as Fannie Mae ("FNMA"), Freddie Mac ("FHLMC"), Federal Farm Credit Bank ("FFCB"), or one of several Federal Home Loan Banks, as well as, investments guaranteed by Ginnie Mae ("GNMA"), a wholly-owned government entity. (2) Certificates of deposits ("CDs") represent term deposits issued by banks that are subject to FDIC insurance and purchased on the open market. |
Schedule of Unrealized Loss on Investments | The following tables summarize investments having temporary impairment, due to the fair market values having declined below the amortized costs of the individual investments, and the period that the investments have been temporarily impaired at June 30, 2016 and December 31, 2015 . June 30, 2016 Less than 12 months 12 months or longer Total (Dollars in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses # of holdings Federal agency obligations $ — $ — $ — $ — $ — $ — 0 Residential federal agency MBS — — 9,184 65 9,184 65 3 Commercial federal agency MBS — — — — — — — Municipal securities — — — — — — — Corporate bonds 616 1 110 1 726 2 8 Certificates of deposit — — — — — — — Equity investments 1,131 179 1,447 199 2,578 378 3 Total temporarily impaired investments $ 1,747 $ 180 $ 10,741 $ 265 $ 12,488 $ 445 14 December 31, 2015 Less than 12 months 12 months or longer Total (Dollars in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses # of holdings Federal agency obligations $ 27,420 $ 153 $ — $ — $ 27,420 $ 153 8 Residential federal agency MBS 20,517 275 10,935 373 31,452 648 14 Commercial federal agency MBS 23,545 363 — — 23,545 363 9 Municipal securities 6,988 33 261 2 7,249 35 13 Corporate bonds 4,574 78 419 17 4,993 95 37 Certificates of deposit 1,976 2 — — 1,976 2 10 Equity investments 4,204 351 24 1 4,228 352 5 Total temporarily impaired investments $ 89,224 $ 1,255 $ 11,639 $ 393 $ 100,863 $ 1,648 96 |
Investments Classified by Contractual Maturity Date | The contractual maturity distribution at June 30, 2016 of total fixed income investments was as follows: (Dollars in thousands) Amortized Cost Fair Value Due in one year or less $ 14,516 $ 14,571 Due after one, but within five years 100,723 103,123 Due after five, but within ten years 81,558 84,974 Due after ten years 100,645 103,671 Total fixed income securities $ 297,442 $ 306,339 |
Schedule of Realized Gain (Loss) on Sales of Investments | Sales of investments, including pending trades, for the three and six months ended June 30, 2016 and June 30, 2015 are summarized as follows: Three months ended June 30, Six months ended June 30, (Dollars in thousands) 2016 2015 2016 2015 Amortized cost of investments sold $ 1,460 $ 1,607 $ 1,764 $ 10,858 Gross realized gains on sales 63 456 65 1,514 Gross realized losses on sales — — — (158 ) Total proceeds from sales of investments $ 1,523 $ 2,063 $ 1,829 $ 12,214 |
Loans (Tables)
Loans (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Receivables [Abstract] | |
Schedule of Loans by Loan Classification | Major classifications of loans at the periods indicated were as follows: (Dollars in thousands) June 30, December 31, Commercial real estate $ 958,053 $ 936,921 Commercial and industrial 466,893 458,553 Commercial construction 209,563 202,993 Total commercial loans 1,634,509 1,598,467 Residential mortgages 169,588 169,188 Home equity loans and lines 85,926 83,373 Consumer 10,770 10,747 Total retail loans 266,284 263,308 Gross loans 1,900,793 1,861,775 Deferred loan origination fees, net (1,607 ) (1,813 ) Total loans 1,899,186 1,859,962 Allowance for loan losses (30,345 ) (29,008 ) Net loans $ 1,868,841 $ 1,830,954 |
Schedule of Loans Pledged as Collateral | Loans designated as qualified collateral and pledged to the FHLB for borrowing capacity are summarized below: (Dollars in thousands) June 30, December 31, Commercial real estate $ 277,056 $ 281,802 Residential mortgages 122,744 118,855 Home equity 13,349 13,972 Total loans pledged to FHLB $ 413,149 $ 414,629 |
Allowance For Loan Loss (Tables
Allowance For Loan Loss (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Receivables [Abstract] | |
Financing Receivables by Evaluation Method | The balances of loans as of June 30, 2016 by segment and evaluation method are summarized as follows: (Dollars in thousands) Loans individually evaluated for impairment Loans collectively evaluated for impairment Gross Loans Commercial real estate $ 14,494 $ 943,559 $ 958,053 Commercial and industrial 8,854 458,039 466,893 Commercial construction 3,140 206,423 209,563 Residential mortgages 302 169,286 169,588 Home equity loans and lines 304 85,622 85,926 Consumer 18 10,752 10,770 Total gross loans $ 27,112 $ 1,873,681 $ 1,900,793 The balances of loans as of December 31, 2015 by segment and evaluation method are summarized as follows: (Dollars in thousands) Loans individually evaluated for impairment Loans collectively evaluated for impairment Gross Loans Commercial real estate $ 12,287 $ 924,634 $ 936,921 Commercial and industrial 7,810 450,743 458,553 Commercial construction 3,032 199,961 202,993 Residential mortgages 366 168,822 169,188 Home equity loans and lines 169 83,204 83,373 Consumer 24 10,723 10,747 Total gross loans $ 23,688 $ 1,838,087 $ 1,861,775 |
Financing Receivable Credit Quality Indicators | The following tables present the Company's credit risk profile for each class of loan in its portfolio by internally assigned risk rating category at the periods indicated. June 30, 2016 Adversely Classified Not Adversely (Dollars in thousands) Substandard Doubtful Loss Classified Gross Loans Commercial real estate $ 19,055 $ — $ — $ 938,998 $ 958,053 Commercial and industrial 9,109 98 3 457,683 466,893 Commercial construction 1,715 — — 207,848 209,563 Residential mortgages 1,201 — — 168,387 169,588 Home equity loans and lines 685 — — 85,241 85,926 Consumer 31 14 — 10,725 10,770 Total gross loans $ 31,796 $ 112 $ 3 $ 1,868,882 $ 1,900,793 December 31, 2015 Adversely Classified Not Adversely (Dollars in thousands) Substandard Doubtful Loss Classified Gross Loans Commercial real estate $ 12,487 $ — $ — $ 924,434 $ 936,921 Commercial and industrial 8,670 — 3 449,880 458,553 Commercial construction 1,776 — — 201,217 202,993 Residential mortgages 1,278 — — 167,910 169,188 Home equity loans and lines 503 — 5 82,865 83,373 Consumer 38 11 — 10,698 10,747 Total gross loans $ 24,752 $ 11 $ 8 $ 1,837,004 $ 1,861,775 |
Past Due Financing Receivables | The following tables present age analysis of past due loans as of the dates indicated. Balance at June 30, 2016 (Dollars in thousands) Loans 30-59 Days Past Due Loans 60-89 Days Past Due Loans Past Due 90 days or more Total Past Due Loans Current Loans Gross Loans Non-accrual Loans Commercial real estate $ 2,374 $ 1,486 $ 1,465 $ 5,325 $ 952,728 $ 958,053 $ 5,895 Commercial and industrial 1,399 511 1,559 3,469 463,424 466,893 3,354 Commercial construction 1,490 581 — 2,071 207,492 209,563 280 Residential mortgages 177 96 104 377 169,211 169,588 302 Home equity loans and lines 150 — 137 287 85,639 85,926 417 Consumer 44 10 18 72 10,698 10,770 23 Total gross loans $ 5,634 $ 2,684 $ 3,283 $ 11,601 $ 1,889,192 $ 1,900,793 $ 10,271 Balance at December 31, 2015 (Dollars in thousands) Loans 30-59 Days Past Due Loans 60-89 Days Past Due Loans Past Due 90 days or more Total Past Due Loans Current Loans Gross Loans Non-accrual Loans Commercial real estate $ 1,641 $ 1,532 $ 3,256 $ 6,429 $ 930,492 $ 936,921 $ 8,506 Commercial and industrial 1,332 693 2,125 4,150 454,403 458,553 4,323 Commercial construction 581 — 7 588 202,405 202,993 335 Residential mortgages 354 280 57 691 168,497 169,188 366 Home equity loans and lines 634 9 73 716 82,657 83,373 288 Consumer 36 15 7 58 10,689 10,747 27 Total gross loans $ 4,578 $ 2,529 $ 5,525 $ 12,632 $ 1,849,143 $ 1,861,775 $ 13,845 |
Impaired Financing Receivables | The following tables set forth the recorded investment in impaired loans and the related specific allowance allocated as of the dates indicated. Balance at June 30, 2016 (Dollars in thousands) Unpaid contractual principal balance Total recorded investment in impaired loans Recorded investment with no allowance Recorded investment with allowance Related specific allowance Commercial real estate $ 16,408 $ 14,494 $ 12,468 $ 2,026 $ 541 Commercial and industrial 9,720 8,854 6,075 2,779 990 Commercial construction 3,177 3,140 1,637 1,503 550 Residential mortgages 393 302 302 — — Home equity loans and lines 447 304 304 — — Consumer 21 18 — 18 18 Total $ 30,166 $ 27,112 $ 20,786 $ 6,326 $ 2,099 Balance at December 31, 2015 (Dollars in thousands) Unpaid contractual principal balance Total recorded investment in impaired loans Recorded investment with no allowance Recorded investment with allowance Related specific allowance Commercial real estate $ 14,903 $ 12,287 $ 11,734 $ 553 $ 186 Commercial and industrial 9,816 7,810 5,253 2,557 1,078 Commercial construction 3,147 3,032 1,583 1,449 499 Residential mortgages 453 366 366 — — Home equity loans and lines 308 169 164 5 5 Consumer 25 24 — 24 24 Total $ 28,652 $ 23,688 $ 19,100 $ 4,588 $ 1,792 The following table presents the average recorded investment in impaired loans and the related interest recognized during the three months indicated: Three Months Ended June 30, 2016 Three Months Ended June 30, 2015 (Dollars in thousands) Average recorded investment Interest income recognized Average recorded investment Interest income recognized Commercial real estate $ 12,700 $ 64 $ 13,992 $ 52 Commercial and industrial 8,090 39 9,819 24 Commercial construction 3,089 37 1,968 16 Residential mortgages 304 — 445 — Home equity loans and lines 306 — 178 — Consumer 20 — 48 — Total $ 24,509 $ 140 $ 26,450 $ 92 The following table presents the average recorded investment in impaired loans and the related interest recognized during the six month periods indicated: Six Months Ended June 30, 2016 Six Months Ended June 30, 2015 (Dollars in thousands) Average recorded investment Interest income recognized Average recorded investment Interest income recognized Commercial real estate $ 11,184 $ 107 $ 14,735 $ 97 Commercial and industrial 8,257 65 10,537 58 Commercial construction 3,032 74 2,296 42 Residential mortgages 306 — 453 — Home equity loans and lines 276 (2 ) 178 1 Consumer 21 — 48 — Total $ 23,076 $ 244 $ 28,247 $ 198 |
Troubled Debt Restructurings on Financing Receivables | Loans modified as troubled debt restructurings during the three -month period ended June 30, 2015 are detailed below. Three months ended June 30, 2015 (Dollars in thousands) Number of restructurings Pre-modification outstanding recorded investment Post-modification outstanding recorded investment Commercial real estate 3 $ 269 $ 319 Commercial and industrial — — — Commercial construction — — — Residential mortgages — — — Home equity loans and lines — — — Consumer 1 4 4 Total 4 $ 273 $ 323 Loans modified as troubled debt restructurings during the six month period ended June 30, 2015 are detailed below. Six months ended June 30, 2015 (Dollars in thousands) Number of restructurings Pre-modification outstanding recorded investment Post-modification outstanding recorded investment Commercial real estate 3 $ 269 $ 319 Commercial and industrial 4 869 854 Commercial construction — — — Residential mortgages — — — Home equity loans and lines — — — Consumer 1 4 4 Total 8 $ 1,142 $ 1,177 The following tables present certain information regarding loan modifications classified as troubled debt restructurings. Loans modified as troubled debt restructurings during the three -month period ended June 30, 2016 are detailed below. Three months ended June 30, 2016 (Dollars in thousands) Number of restructurings Pre-modification outstanding recorded investment Post-modification outstanding recorded investment Commercial real estate 4 $ 5,093 $ 5,059 Commercial and industrial 5 1,794 1,810 Commercial construction — — — Residential mortgages — — — Home equity loans and lines — — — Consumer — — — Total 9 $ 6,887 $ 6,869 Loans modified as troubled debt restructurings within the preceding twelve month period for which there was a subsequent payment default during the period noted are detailed below. Three months ended June 30, 2016 (Dollars in thousands) Number of TDRs that defaulted Post- modification outstanding recorded investment Commercial real estate — $ — Commercial and industrial 2 417 Commercial construction — — Residential mortgages — — Home equity loans and lines — — Consumer — — Total 2 $ 417 Loans modified as troubled debt restructurings during the six months ended June 30, 2016 are detailed below. Six months ended June 30, 2016 (Dollars in thousands) Number of restructurings Pre-modification outstanding recorded investment Post-modification outstanding recorded investment Commercial real estate 4 $ 5,093 $ 5,059 Commercial and industrial 6 2,058 2,073 Commercial construction — — — Residential mortgages — — — Home equity loans and lines — — — Consumer — — — Total 10 $ 7,151 $ 7,132 Loans modified as troubled debt restructurings within the preceding twelve month period for which there was a subsequent payment default during the period noted are detailed below. Six months ended June 30, 2016 (Dollars in thousands) Number of TDRs that defaulted Post- modification outstanding recorded investment Commercial real estate — $ — Commercial and industrial 2 417 Commercial construction — — Residential mortgages — — Home equity loans and lines — — Consumer — — Total 2 $ 417 |
Allowance for Credit Losses on Financing Receivables | Changes in the allowance for loan losses by portfolio segment for the three months ended June 30, 2016 are presented below: (Dollars in thousands) Cmml Real Estate Cmml and Industrial Cmml Constr Resid. Mortgage Home Equity Consumer Total Beginning Balance at March 31, 2016 $ 13,827 $ 10,278 $ 3,964 $ 1,077 $ 541 $ 223 $ 29,910 Provision 865 (714 ) 92 8 9 7 267 Recoveries 1 480 — — 2 1 484 Less: Charge offs 179 131 — — — 6 316 Ending Balance at June 30, 2016 $ 14,514 $ 9,913 $ 4,056 $ 1,085 $ 552 $ 225 $ 30,345 Changes in the allowance for loan losses by segment for the six months ended June 30, 2016 are presented below: (Dollars in thousands) Cmml Real Estate Cmml and Industrial Cmml Constr Resid. Mortgage Home Equity Consumer Total Beginning Balance at December 31, 2015 $ 13,514 $ 9,758 $ 3,905 $ 1,061 $ 540 $ 230 $ 29,008 Provision 1,159 (251 ) 156 24 15 14 1,117 Recoveries 20 609 — — 2 3 634 Less: Charge offs 179 203 5 — 5 22 414 Ending Balance at June 30, 2016 $ 14,514 $ 9,913 $ 4,056 $ 1,085 $ 552 $ 225 $ 30,345 Ending allowance balance: Allotted to loans individually evaluated for impairment $ 541 $ 990 $ 550 $ — $ — $ 18 $ 2,099 Allotted to loans collectively evaluated for impairment $ 13,973 $ 8,923 $ 3,506 $ 1,085 $ 552 $ 207 $ 28,246 Changes in the allowance for loan losses by segment for the three months ended June 30, 2015 are presented below: (Dollars in thousands) Cmml Real Estate Cmml and Industrial Cmml Constr Resid. Mortgage Home Equity Consumer Total Beginning Balance at March 31, 2015 $ 12,747 $ 9,842 $ 3,408 $ 960 $ 615 $ 231 $ 27,803 Provision 117 1,049 27 62 (54 ) 24 1,225 Recoveries — 83 12 — 14 4 113 Less: Charge offs — 952 — — — 27 979 Ending Balance at June 30, 2015 $ 12,864 $ 10,022 $ 3,447 $ 1,022 $ 575 $ 232 $ 28,162 Changes in the allowance for loan losses by segment for the six months ended June 30, 2015 are presented below: (Dollars in thousands) Cmml Real Estate Cmml and Industrial Cmml Constr Resid. Mortgage Home Equity Consumer Total Beginning Balance at December 31, 2014 $ 12,664 $ 9,245 $ 3,384 $ 989 $ 608 $ 231 $ 27,121 Provision 195 1,579 38 33 (47 ) 52 1,850 Recoveries 5 167 25 — 14 12 223 Less: Charge offs — 969 — — — 63 1,032 Ending Balance at June 30, 2015 $ 12,864 $ 10,022 $ 3,447 $ 1,022 $ 575 $ 232 $ 28,162 Ending allowance balance: Allotted to loans individually evaluated for impairment $ 200 $ 1,822 $ 524 $ — $ 19 $ 45 $ 2,610 Allotted to loans collectively evaluated for impairment $ 12,664 $ 8,200 $ 2,923 $ 1,022 $ 556 $ 187 $ 25,552 |
Deposits (Tables)
Deposits (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Deposits [Abstract] | |
Schedule of Deposit Liabilities | Deposits are summarized as follows: (Dollars in thousands) June 30, 2016 December 31, 2015 Non-interest bearing demand deposits $ 652,073 $ 570,589 Interest bearing checking 357,139 313,674 Savings 185,896 167,304 Money market 744,165 692,114 Certificates of deposit $250,000 or less 126,733 129,993 Certificates of deposit more than $250,000 44,108 37,704 Total non-brokered deposits (1) 2,110,114 1,911,378 Brokered deposits (2) 74,316 106,770 Total deposits $ 2,184,430 $ 2,018,148 (1) Includes reciprocal money market deposits and CDs received from participating banks in nationwide networks as a result of our customers electing to participate in programs to obtain full FDIC insurance. Essentially, the equivalent of the original deposit comes back to the Company as non-brokered deposits within the appropriate category under total deposits on the balance sheet. (2) Primarily brokered CDs $250,000 and under. |
Derivatives and Hedging Activ25
Derivatives and Hedging Activities (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivatives, Fair Value and Classification | The table below presents the fair value and classification of the Company’s derivative financial instruments for the periods presented: As of June 30, 2016 As of December 31, 2015 (Dollars in thousands) Asset Derivatives Liability Derivatives Asset Derivatives Liability Derivatives Back-to-Back Swaps $ 335 $ 335 $ 16 $ 16 |
Schedule of Derivatives- Offsetting Assets and Liabilities | The table below also presents the offsetting of derivatives and amounts subject to master netting agreements not offset in the consolidated balance sheet at the dates indicated. June 30, 2016 Gross Amounts of Recognized Asset/Liabilities Gross Amounts Offset in the Statement of Financial Position Net Amounts of Assets Presented in the Statement of Financial Position Gross amounts not offset in the Statement of Financial Position (Dollars in thousands) Financial Instruments Cash collateral (Received)/Posted Net Amount Asset Derivatives Back-to-Back Swaps $ 335 $ — $ 335 $ — $ — $ 335 Liability Derivatives Back-to-Back Swaps $ 335 $ — $ 335 $ — $ 360 $ (25 ) December 31, 2015 Gross Amounts of Recognized Asset/Liabilities Gross Amounts Offset in the Statement of Financial Position Net Amounts of Assets Presented in the Statement of Financial Position Gross amounts not offset in the Statement of Financial Position (Dollars in thousands) Financial Instruments Cash collateral (Received)/Posted Net Amount Asset Derivatives Back-to-Back Swaps $ 16 $ — $ 16 $ — $ — $ 16 Liability Derivatives Back-to-Back Swaps $ 16 $ — $ 16 $ — $ — $ 16 |
Supplemental Retirement Plan 26
Supplemental Retirement Plan and Other Postretirement Benefit Obligations Supplemental Life Insurance (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Supplemental Life Insurance | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Schedule of Net Benefit Costs | The following table illustrates the net periodic post-retirement benefit cost for the supplemental life insurance plans for the periods indicated: Three months ended June 30, Six Months Ended June 30, (Dollars in thousands) 2016 2015 2016 2015 Service Cost $ (3 ) $ (2 ) $ (5 ) $ (2 ) Interest Cost 21 21 42 39 Net periodic post-retirement benefit cost $ 18 $ 19 $ 37 $ 37 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The table below provides a summary of the options granted in 2016 and 2015 . Six Months Ended June 30, 2016 2015 Options granted 31,047 27,376 Term in years 10 10 Weighted average assumptions used in the fair value model: Expected volatility 42 % 47 % Expected dividend yield 3.02 % 2.90 % Expected life in years 7 7 Risk-free interest rate 1.91 % 1.95 % Weighted average market price on date of grants $ 21.91 $ 21.03 Per share weighted average fair value $ 7.91 $ 8.51 Fair value as a percentage of market value at grant date 36 % 40 % |
Schedule of Restricted Stock Awards Granted | The table below provides a summary of restricted stock awards granted in 2016 and 2015 . Six Months Ended June 30, Restricted Stock Awards 2016 2015 Two Year Vesting 9,060 7,276 Four Year Vesting 18,298 17,775 Performance-Based Vesting 35,071 30,262 Total Restricted Stock Awards 62,429 55,313 Weighted average grant date fair value $ 21.90 $ 21.03 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Weighted Average Number of Shares | The table below presents the increase in average shares outstanding, using the treasury stock method, for the diluted earnings per share calculation for the periods indicated: Three months ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Basic weighted average common shares outstanding 10,561,680 10,331,485 10,483,396 10,287,509 Dilutive shares 68,220 63,011 67,446 65,221 Diluted weighted average common shares outstanding 10,629,900 10,394,496 10,550,842 10,352,730 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets Measured on Recurring and Nonrecurring Basis | The following tables summarize significant assets and liabilities carried at fair value and placement in the fair value hierarchy at the dates specified: June 30, 2016 Fair Value Measurements using: (Dollars in thousands) Fair Value (level 1) (level 2) (level 3) Assets measured on a recurring basis: Fixed income securities $ 306,339 $ — $ 306,339 $ — Equity securities 13,164 13,164 — — FHLB stock 1,879 — — 1,879 Interest-rate swaps 335 — 335 — Assets measured on a non-recurring basis: Impaired loans (collateral dependent) 4,181 — — 4,181 Liabilities measured on a recurring basis: Interest-rate swaps 335 — 335 — December 31, Fair Value Measurements using: (Dollars in thousands) Fair Value (level 1) (level 2) (level 3) Assets measured on a recurring basis: Fixed income securities $ 288,701 $ — $ 288,701 $ — Equity securities 11,657 11,657 — — FHLB stock 3,050 — — 3,050 Interest-rate swaps 16 — 16 — Assets measured on a non-recurring basis: Impaired loans (collateral dependent) 2,516 — — 2,516 Liabilities measured on a recurring basis: Interest-rate swaps 16 — 16 — |
Quantitative Information About Significant Unobservable Inputs for Fair Value Measurements | The following table presents additional quantitative information about assets measured at fair value on a recurring and non-recurring basis for which the Company utilized Level 3 inputs (significant unobservable inputs for situations in which there is little, if any, market activity for the asset or liability) to determine fair value as of June 30, 2016 : (Dollars in thousands) Fair Value Valuation Technique Unobservable Input Unobservable Input Value or Range Assets measured on a recurring basis: FHLB stock $ 1,879 FHLB Stated Par Value N/A N/A Assets measured on a non-recurring basis: Impaired loans (collateral dependent) $ 4,181 Appraisal of collateral Appraisal adjustments (1) 5% - 50% (1) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. |
Fair Value, by Balance Sheet Grouping | The carrying values, estimated fair values and placement in the fair value hierarchy of the Company's financial instruments for which fair value is only disclosed but not recognized on the balance sheet at the dates indicated are summarized as follows: June 30, 2016 Fair value measurement (Dollars in thousands) Carrying Amount Fair Value Level 1 inputs Level 2 Inputs Level 3 Inputs Financial assets: Loans held for sale $ 1,971 $ 1,988 $ — $ 1,988 $ — Loans, net 1,868,841 1,884,603 — — 1,884,603 Financial liabilities: Certificates of deposit (including brokered) 245,157 245,715 — 245,715 — Borrowed funds 671 672 — 672 — Subordinated debt 14,828 15,123 — — 15,123 December 31, 2015 Fair value measurement (Dollars in thousands) Carrying Amount Fair Value Level 1 inputs Level 2 Inputs Level 3 Inputs Financial assets: Loans held for sale $ 1,709 $ 1,709 $ — $ 1,709 $ — Loans, net 1,830,954 1,845,009 — — 1,845,009 Financial liabilities: Certificates of deposit (including brokered) 274,467 273,419 — 273,419 — Borrowed funds 53,671 53,670 — 53,670 — Subordinated debt 14,822 13,961 — — 13,961 |
Summary of Significant Accoun30
Summary of Significant Accounting Policies (Details) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2016USD ($)branches$ / sharesshares | Jun. 30, 2016branchessegment | |
Summary of Significant Accounting Policies [Line Items] | ||
Number of branches | branches | 22 | 22 |
Reportable operating segments | segment | 1 | |
Shares issued in shareholder subscription rights and community offering | shares | 930 | |
Gross proceeds from shareholder subscription rights and community offering | $ 20 | |
Shareholder subscription rights and community offering, price per share | $ / shares | $ 21.50 | |
Net proceeds from shareholder subscription rights offering and community offering, net | $ 19.7 |
Investments Available-for-sale
Investments Available-for-sale (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | |
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract] | |||
Fair Value | $ 319,503 | $ 300,358 | |
Securities pledged as collateral | 299,600 | ||
Total fixed income securities | |||
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract] | |||
Amortized cost | 297,442 | 286,838 | |
Unrealized gains | 8,964 | 3,159 | |
Unrealized losses | 67 | 1,296 | |
Fair Value | 306,339 | 288,701 | |
Federal Agency Obligations | |||
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract] | |||
Amortized cost | [1] | 78,653 | 78,626 |
Unrealized gains | [1] | 1,748 | 352 |
Unrealized losses | [1] | 0 | 153 |
Fair Value | [1] | 80,401 | 78,825 |
Residential federal agency MBS | |||
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract] | |||
Amortized cost | [1] | 73,926 | 75,105 |
Unrealized gains | [1] | 1,383 | 406 |
Unrealized losses | [1] | 65 | 648 |
Fair Value | [1] | 75,244 | 74,863 |
Collateralized Mortgage Obligations | |||
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract] | |||
Fair Value | 24,500 | 20,800 | |
Commercial federal agency MBS | |||
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract] | |||
Amortized cost | [1] | 31,410 | 23,908 |
Unrealized gains | [1] | 815 | 0 |
Unrealized losses | [1] | 0 | 363 |
Fair Value | [1] | 32,225 | 23,545 |
Municipal securities | |||
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract] | |||
Amortized cost | 101,537 | 96,189 | |
Unrealized gains | 4,722 | 2,357 | |
Unrealized losses | 0 | 35 | |
Fair Value | 106,259 | 98,511 | |
Corporate bonds | |||
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract] | |||
Amortized cost | 10,966 | 10,257 | |
Unrealized gains | 267 | 44 | |
Unrealized losses | 2 | 95 | |
Fair Value | 11,231 | 10,206 | |
Certificates of Deposit | |||
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract] | |||
Amortized cost | [2] | 950 | 2,753 |
Unrealized gains | [2] | 29 | 0 |
Unrealized losses | [2] | 0 | 2 |
Fair Value | [2] | 979 | 2,751 |
Equity investments | |||
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract] | |||
Amortized cost | 11,569 | 10,043 | |
Unrealized gains | 1,973 | 1,966 | |
Unrealized losses | 378 | 352 | |
Fair Value | $ 13,164 | 11,657 | |
Percent of portfolio invested in financial services | 15.00% | ||
Total available for sale securities, at fair value | |||
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract] | |||
Amortized cost | $ 309,011 | 296,881 | |
Unrealized gains | 10,937 | 5,125 | |
Unrealized losses | 445 | 1,648 | |
Fair Value | $ 319,503 | $ 300,358 | |
[1] | These categories may include investments issued or guaranteed by government sponsored enterprises such as Fannie Mae ("FNMA"), Freddie Mac ("FHLMC"), Federal Farm Credit Bank ("FFCB"), or one of several Federal Home Loan Banks, as well as, investments guaranteed by Ginnie Mae ("GNMA"), a wholly-owned government entity. | ||
[2] | Certificates of deposits ("CDs") represent term deposits issued by banks that are subject to FDIC insurance and purchased on the open market. |
Investments Continuous loss pos
Investments Continuous loss position (Details) $ in Thousands | Jun. 30, 2016USD ($)investments | Dec. 31, 2015USD ($)investments |
Schedule of Available-for-sale Securities [Line Items] | ||
Investments temporarily impaired, less than 12 months, fair value | $ 1,747 | $ 89,224 |
Investments temporarily impaired, less than 12 months, unrealized losses | 180 | 1,255 |
Investments temporarily impaired, 12 months or more, fair value | 10,741 | 11,639 |
Investments temporarily impaired, 12 months or longer, Unrealized Losses | 265 | 393 |
Investments Temporarily Impaired, Fair Value | 12,488 | 100,863 |
investments temporarily impaired unrealized losses | $ 445 | $ 1,648 |
Number of securities in loss position | investments | 14 | 96 |
Federal agency obligations | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Investments temporarily impaired, less than 12 months, fair value | $ 0 | $ 27,420 |
Investments temporarily impaired, less than 12 months, unrealized losses | 0 | 153 |
Investments temporarily impaired, 12 months or more, fair value | 0 | 0 |
Investments temporarily impaired, 12 months or longer, Unrealized Losses | 0 | 0 |
Investments Temporarily Impaired, Fair Value | 0 | 27,420 |
investments temporarily impaired unrealized losses | $ 0 | $ 153 |
Number of securities in loss position | investments | 0 | 8 |
Residential federal agency MBS | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Investments temporarily impaired, less than 12 months, fair value | $ 0 | $ 20,517 |
Investments temporarily impaired, less than 12 months, unrealized losses | 0 | 275 |
Investments temporarily impaired, 12 months or more, fair value | 9,184 | 10,935 |
Investments temporarily impaired, 12 months or longer, Unrealized Losses | 65 | 373 |
Investments Temporarily Impaired, Fair Value | 9,184 | 31,452 |
investments temporarily impaired unrealized losses | $ 65 | $ 648 |
Number of securities in loss position | investments | 3 | 14 |
Commercial federal agency MBS | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Investments temporarily impaired, less than 12 months, fair value | $ 0 | $ 23,545 |
Investments temporarily impaired, less than 12 months, unrealized losses | 0 | 363 |
Investments temporarily impaired, 12 months or more, fair value | 0 | 0 |
Investments temporarily impaired, 12 months or longer, Unrealized Losses | 0 | 0 |
Investments Temporarily Impaired, Fair Value | 0 | 23,545 |
investments temporarily impaired unrealized losses | $ 0 | $ 363 |
Number of securities in loss position | investments | 0 | 9 |
Municipal securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Investments temporarily impaired, less than 12 months, fair value | $ 0 | $ 6,988 |
Investments temporarily impaired, less than 12 months, unrealized losses | 0 | 33 |
Investments temporarily impaired, 12 months or more, fair value | 0 | 261 |
Investments temporarily impaired, 12 months or longer, Unrealized Losses | 0 | 2 |
Investments Temporarily Impaired, Fair Value | 0 | 7,249 |
investments temporarily impaired unrealized losses | $ 0 | $ 35 |
Number of securities in loss position | investments | 0 | 13 |
Corporate bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Investments temporarily impaired, less than 12 months, fair value | $ 616 | $ 4,574 |
Investments temporarily impaired, less than 12 months, unrealized losses | 1 | 78 |
Investments temporarily impaired, 12 months or more, fair value | 110 | 419 |
Investments temporarily impaired, 12 months or longer, Unrealized Losses | 1 | 17 |
Investments Temporarily Impaired, Fair Value | 726 | 4,993 |
investments temporarily impaired unrealized losses | $ 2 | $ 95 |
Number of securities in loss position | investments | 8 | 37 |
Certificates of Deposit | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Investments temporarily impaired, less than 12 months, fair value | $ 0 | $ 1,976 |
Investments temporarily impaired, less than 12 months, unrealized losses | 0 | 2 |
Investments temporarily impaired, 12 months or more, fair value | 0 | 0 |
Investments temporarily impaired, 12 months or longer, Unrealized Losses | 0 | 0 |
Investments Temporarily Impaired, Fair Value | 0 | 1,976 |
investments temporarily impaired unrealized losses | $ 0 | $ 2 |
Number of securities in loss position | investments | 0 | 10 |
Equity investments | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Investments temporarily impaired, less than 12 months, fair value | $ 1,131 | $ 4,204 |
Investments temporarily impaired, less than 12 months, unrealized losses | 179 | 351 |
Investments temporarily impaired, 12 months or more, fair value | 1,447 | 24 |
Investments temporarily impaired, 12 months or longer, Unrealized Losses | 199 | 1 |
Investments Temporarily Impaired, Fair Value | 2,578 | 4,228 |
investments temporarily impaired unrealized losses | $ 378 | $ 352 |
Number of securities in loss position | investments | 3 | 5 |
Investments Maturities (Details
Investments Maturities (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
Investment securities at fair value | $ 319,503 | $ 300,358 |
Callable securities, fair value | 50,000 | |
Total fixed income securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost, Within One Year | 14,516 | |
Fair Value, Within One Year | 14,571 | |
Amortized Cost Basis, After One, But Within Five Years | 100,723 | |
Fair Value, After One, But Within Five Years | 103,123 | |
Amortized Cost, After Five, But Within Ten Years | 81,558 | |
Fair Value, after Five but Within Ten Years | 84,974 | |
Amortized Cost Basis, After Ten Years | 100,645 | |
Fair Value, After Ten Years | 103,671 | |
Amortized cost | 297,442 | 286,838 |
Investment securities at fair value | $ 306,339 | $ 288,701 |
Investments Sales (Details)
Investments Sales (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Amortized cost of investments sold, including pending trades | $ 1,460 | $ 1,607 | $ 1,764 | $ 10,858 |
Available-for-sale Securities, Gross Realized Gains | 63 | 456 | 65 | 1,514 |
Available-for-sale Securities, Gross Realized Losses | 0 | 0 | 0 | (158) |
Proceeds from sale of investment securities, including pending trades | $ 1,523 | $ 2,063 | $ 1,829 | $ 12,214 |
Loans - Balance by Class of Loa
Loans - Balance by Class of Loans (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 |
Schedule of Loans by Loan Classification [Line Items] | ||||||
Gross loans | $ 1,900,793 | $ 1,861,775 | ||||
Deferred loan origination fees, net | (1,607) | (1,813) | ||||
Total loans | 1,899,186 | 1,859,962 | ||||
Allowance for loan losses | (30,345) | $ (29,910) | (29,008) | $ (28,162) | $ (27,803) | $ (27,121) |
Net Loans | 1,868,841 | 1,830,954 | ||||
Commercial | ||||||
Schedule of Loans by Loan Classification [Line Items] | ||||||
Gross loans | 1,634,509 | 1,598,467 | ||||
Commercial real estate | ||||||
Schedule of Loans by Loan Classification [Line Items] | ||||||
Gross loans | 958,053 | 936,921 | ||||
Allowance for loan losses | (14,514) | (13,827) | (13,514) | (12,864) | (12,747) | (12,664) |
Commercial and industrial | ||||||
Schedule of Loans by Loan Classification [Line Items] | ||||||
Gross loans | 466,893 | 458,553 | ||||
Allowance for loan losses | (9,913) | (10,278) | (9,758) | (10,022) | (9,842) | (9,245) |
Commercial construction | ||||||
Schedule of Loans by Loan Classification [Line Items] | ||||||
Gross loans | 209,563 | 202,993 | ||||
Allowance for loan losses | (4,056) | (3,964) | (3,905) | (3,447) | (3,408) | (3,384) |
Retail | ||||||
Schedule of Loans by Loan Classification [Line Items] | ||||||
Gross loans | 266,284 | 263,308 | ||||
Residential | ||||||
Schedule of Loans by Loan Classification [Line Items] | ||||||
Gross loans | 169,588 | 169,188 | ||||
Allowance for loan losses | (1,085) | (1,077) | (1,061) | (1,022) | (960) | (989) |
Home Equity | ||||||
Schedule of Loans by Loan Classification [Line Items] | ||||||
Gross loans | 85,926 | 83,373 | ||||
Allowance for loan losses | (552) | (541) | (540) | (575) | (615) | (608) |
Consumer | ||||||
Schedule of Loans by Loan Classification [Line Items] | ||||||
Gross loans | 10,770 | 10,747 | ||||
Allowance for loan losses | $ (225) | $ (223) | $ (230) | $ (232) | $ (231) | $ (231) |
Loans - Loan Categories Narrati
Loans - Loan Categories Narrative (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2016USD ($)payment | Dec. 31, 2015USD ($) | |
Commercial | ||
Schedule of Loans by Loan Classification [Line Items] | ||
Participation loans amount | $ 71.1 | $ 62.3 |
Participations loans sold that are still serviced amount | $ 59.5 | 52.7 |
Commercial real estate | Minimum | ||
Schedule of Loans by Loan Classification [Line Items] | ||
Repayment period, term of loan | 15 years | |
Commercial real estate | Maximum | ||
Schedule of Loans by Loan Classification [Line Items] | ||
Repayment period, term of loan | 25 years | |
Commercial and industrial | Minimum | ||
Schedule of Loans by Loan Classification [Line Items] | ||
Repayment period, term of loan | 1 year | |
Commercial and industrial | Maximum | ||
Schedule of Loans by Loan Classification [Line Items] | ||
Repayment period, term of loan | 7 years | |
Commercial construction | Minimum | ||
Schedule of Loans by Loan Classification [Line Items] | ||
Repayment period, term of loan | 1 year | |
Commercial construction | Maximum | ||
Schedule of Loans by Loan Classification [Line Items] | ||
Repayment period, term of loan | 3 years | |
Residential | ||
Schedule of Loans by Loan Classification [Line Items] | ||
Early Payment Default Period | payment | 4 | |
Amount of loans serviced for others | $ 18.1 | $ 18.5 |
Residential | Maximum | ||
Schedule of Loans by Loan Classification [Line Items] | ||
Repayment period, term of loan | 30 years | |
Home Equity | Maximum | ||
Schedule of Loans by Loan Classification [Line Items] | ||
Loan-to-value ratio | 80.00% | |
Home Equity Loans | Minimum | ||
Schedule of Loans by Loan Classification [Line Items] | ||
Repayment period, term of loan | 3 years | |
Period a loan has a fixed rate | 3 years | |
Home Equity Loans | Maximum | ||
Schedule of Loans by Loan Classification [Line Items] | ||
Repayment period, term of loan | 15 years | |
Period a loan has a fixed rate | 15 years | |
Home equity lines of credit | ||
Schedule of Loans by Loan Classification [Line Items] | ||
Term of interest only payments | 10 years | |
Term of Principal and Interest Payments after Interest only term | 15 years | |
Multi-family owner occupied residential property | Minimum | ||
Schedule of Loans by Loan Classification [Line Items] | ||
Loan-to-value ratio | 75.00% | |
Single family owner occupied residential property | Maximum | ||
Schedule of Loans by Loan Classification [Line Items] | ||
Loan-to-value ratio | 97.00% |
Loans - Loans Serving as Collat
Loans - Loans Serving as Collateral (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Loans pledged to the FHLB for borrowing capacity | $ 413,149 | $ 414,629 |
Commercial real estate | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Loans pledged to the FHLB for borrowing capacity | 277,056 | 281,802 |
Residential | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Loans pledged to the FHLB for borrowing capacity | 122,744 | 118,855 |
Home Equity | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Loans pledged to the FHLB for borrowing capacity | $ 13,349 | $ 13,972 |
Allowance For Loan Loss - Evalu
Allowance For Loan Loss - Evaluation Method (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Schedule of Financing Receivable by Evaluation Method [Line Items] | ||
Loans individually evaluated for impairment | $ 27,112 | $ 23,688 |
Loans collectively evaluated for impairment | 1,873,681 | 1,838,087 |
Gross loans | 1,900,793 | 1,861,775 |
Commercial real estate | ||
Schedule of Financing Receivable by Evaluation Method [Line Items] | ||
Loans individually evaluated for impairment | 14,494 | 12,287 |
Loans collectively evaluated for impairment | 943,559 | 924,634 |
Gross loans | 958,053 | 936,921 |
Commercial and industrial | ||
Schedule of Financing Receivable by Evaluation Method [Line Items] | ||
Loans individually evaluated for impairment | 8,854 | 7,810 |
Loans collectively evaluated for impairment | 458,039 | 450,743 |
Gross loans | 466,893 | 458,553 |
Commercial construction | ||
Schedule of Financing Receivable by Evaluation Method [Line Items] | ||
Loans individually evaluated for impairment | 3,140 | 3,032 |
Loans collectively evaluated for impairment | 206,423 | 199,961 |
Gross loans | 209,563 | 202,993 |
Residential | ||
Schedule of Financing Receivable by Evaluation Method [Line Items] | ||
Loans individually evaluated for impairment | 302 | 366 |
Loans collectively evaluated for impairment | 169,286 | 168,822 |
Gross loans | 169,588 | 169,188 |
Home Equity | ||
Schedule of Financing Receivable by Evaluation Method [Line Items] | ||
Loans individually evaluated for impairment | 304 | 169 |
Loans collectively evaluated for impairment | 85,622 | 83,204 |
Gross loans | 85,926 | 83,373 |
Consumer | ||
Schedule of Financing Receivable by Evaluation Method [Line Items] | ||
Loans individually evaluated for impairment | 18 | 24 |
Loans collectively evaluated for impairment | 10,752 | 10,723 |
Gross loans | $ 10,770 | $ 10,747 |
Allowance For Loan Loss - Adver
Allowance For Loan Loss - Adversely Classified Loans (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016USD ($)relationship | Dec. 31, 2015USD ($) | |
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | $ 1,900,793 | $ 1,861,775 |
Adversely classified loans to total loans | 1.68% | 1.33% |
Commercial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | $ 1,634,509 | $ 1,598,467 |
Larger commercial relationship downgraded in period, net carry value | $ 12,200 | |
Larger commercial relationships downgraded in the period | relationship | 3 | |
Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | $ 958,053 | 936,921 |
Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 466,893 | 458,553 |
Commercial construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 209,563 | 202,993 |
Residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 169,588 | 169,188 |
Home Equity | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 85,926 | 83,373 |
Consumer | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 10,770 | 10,747 |
Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 31,796 | 24,752 |
Substandard | Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 19,055 | 12,487 |
Substandard | Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 9,109 | 8,670 |
Substandard | Commercial construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 1,715 | 1,776 |
Substandard | Residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 1,201 | 1,278 |
Substandard | Home Equity | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 685 | 503 |
Substandard | Consumer | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 31 | 38 |
Doubtful | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 112 | 11 |
Doubtful | Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 0 | 0 |
Doubtful | Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 98 | 0 |
Doubtful | Commercial construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 0 | 0 |
Doubtful | Residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 0 | 0 |
Doubtful | Home Equity | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 0 | 0 |
Doubtful | Consumer | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 14 | 11 |
Loss | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 3 | 8 |
Loss | Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 0 | 0 |
Loss | Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 3 | 3 |
Loss | Commercial construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 0 | 0 |
Loss | Residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 0 | 0 |
Loss | Home Equity | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 0 | 5 |
Loss | Consumer | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 0 | 0 |
Not Adversely Classified | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 1,868,882 | 1,837,004 |
Not Adversely Classified | Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 938,998 | 924,434 |
Not Adversely Classified | Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 457,683 | 449,880 |
Not Adversely Classified | Commercial construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 207,848 | 201,217 |
Not Adversely Classified | Residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 168,387 | 167,910 |
Not Adversely Classified | Home Equity | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | 85,241 | 82,865 |
Not Adversely Classified | Consumer | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Gross loans | $ 10,725 | $ 10,698 |
Allowance For Loan Loss - Past
Allowance For Loan Loss - Past Due and Non-Accrual Loans (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | |
Schedule of Aging of Financing Receivables [Line Items] | |||
Number of days a loan must be paid current before accrual of interest is resumed | 180 days | ||
Non-accrual loans | $ 10,271 | $ 13,845 | |
Total Past Due Loans | 11,601 | 12,632 | |
Current Loans | 1,889,192 | 1,849,143 | |
Gross loans | $ 1,900,793 | $ 1,861,775 | |
The ratio of non-accrual loans to total loans | 0.54% | 0.74% | 0.92% |
Commercial real estate | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Non-accrual loans | $ 5,895 | $ 8,506 | |
Total Past Due Loans | 5,325 | 6,429 | |
Current Loans | 952,728 | 930,492 | |
Gross loans | 958,053 | 936,921 | |
Commercial and industrial | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Non-accrual loans | 3,354 | 4,323 | |
Total Past Due Loans | 3,469 | 4,150 | |
Current Loans | 463,424 | 454,403 | |
Gross loans | 466,893 | 458,553 | |
Commercial construction | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Non-accrual loans | 280 | 335 | |
Total Past Due Loans | 2,071 | 588 | |
Current Loans | 207,492 | 202,405 | |
Gross loans | 209,563 | 202,993 | |
Residential | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Non-accrual loans | 302 | 366 | |
Total Past Due Loans | 377 | 691 | |
Current Loans | 169,211 | 168,497 | |
Gross loans | 169,588 | 169,188 | |
Home Equity | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Non-accrual loans | 417 | 288 | |
Total Past Due Loans | 287 | 716 | |
Current Loans | 85,639 | 82,657 | |
Gross loans | 85,926 | 83,373 | |
Consumer | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Non-accrual loans | 23 | 27 | |
Total Past Due Loans | 72 | 58 | |
Current Loans | 10,698 | 10,689 | |
Gross loans | 10,770 | 10,747 | |
Loans 30 to 59 Days Past Due | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Gross loans | 5,634 | 4,578 | |
Loans 30 to 59 Days Past Due | Commercial real estate | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Gross loans | 2,374 | 1,641 | |
Loans 30 to 59 Days Past Due | Commercial and industrial | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Gross loans | 1,399 | 1,332 | |
Loans 30 to 59 Days Past Due | Commercial construction | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Gross loans | 1,490 | 581 | |
Loans 30 to 59 Days Past Due | Residential | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Gross loans | 177 | 354 | |
Loans 30 to 59 Days Past Due | Home Equity | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Gross loans | 150 | 634 | |
Loans 30 to 59 Days Past Due | Consumer | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Gross loans | 44 | 36 | |
Loans 60 to 89 Days Past Due | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Gross loans | 2,684 | 2,529 | |
Loans 60 to 89 Days Past Due | Commercial real estate | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Gross loans | 1,486 | 1,532 | |
Loans 60 to 89 Days Past Due | Commercial and industrial | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Gross loans | 511 | 693 | |
Loans 60 to 89 Days Past Due | Commercial construction | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Gross loans | 581 | 0 | |
Loans 60 to 89 Days Past Due | Residential | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Gross loans | 96 | 280 | |
Loans 60 to 89 Days Past Due | Home Equity | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Gross loans | 0 | 9 | |
Loans 60 to 89 Days Past Due | Consumer | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Gross loans | 10 | 15 | |
Loans Equal to Greater than 90 Days Past Due | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Gross loans | 3,283 | 5,525 | |
Loans Equal to Greater than 90 Days Past Due | Commercial real estate | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Gross loans | 1,465 | 3,256 | |
Loans Equal to Greater than 90 Days Past Due | Commercial and industrial | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Gross loans | 1,559 | 2,125 | |
Loans Equal to Greater than 90 Days Past Due | Commercial construction | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Gross loans | 0 | 7 | |
Loans Equal to Greater than 90 Days Past Due | Residential | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Gross loans | 104 | 57 | |
Loans Equal to Greater than 90 Days Past Due | Home Equity | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Gross loans | 137 | 73 | |
Loans Equal to Greater than 90 Days Past Due | Consumer | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Gross loans | 18 | 7 | |
Not Adversely Classified | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Gross loans | 1,868,882 | 1,837,004 | |
Non-accrual loans not adversely classified | 329 | 402 | |
Not Adversely Classified | Commercial real estate | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Gross loans | 938,998 | 924,434 | |
Not Adversely Classified | Commercial and industrial | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Gross loans | 457,683 | 449,880 | |
Not Adversely Classified | Commercial construction | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Gross loans | 207,848 | 201,217 | |
Not Adversely Classified | Residential | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Gross loans | 168,387 | 167,910 | |
Not Adversely Classified | Home Equity | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Gross loans | 85,241 | 82,865 | |
Not Adversely Classified | Consumer | |||
Schedule of Aging of Financing Receivables [Line Items] | |||
Gross loans | $ 10,725 | $ 10,698 |
Allowance For Loan Loss - Impai
Allowance For Loan Loss - Impaired Loans (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016USD ($)relationship | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($)relationship | Jun. 30, 2015USD ($) | Dec. 31, 2015USD ($) | |
Financing Receivable, Impaired [Line Items] | |||||
Total recorded investment in impaired loans | $ 27,112 | $ 27,112 | $ 23,688 | ||
Total accruing impaired loans | 17,000 | 17,000 | 10,100 | ||
Impaired non-accrual loans | 10,100 | 10,100 | 13,600 | ||
Unpaid contractual principal balance | 30,166 | 30,166 | 28,652 | ||
Recorded investment with no allowance | 20,786 | 20,786 | 19,100 | ||
Recorded investment with allowance | 6,326 | 6,326 | 4,588 | ||
Related allowance | 2,099 | $ 2,600 | 2,099 | $ 2,600 | 1,792 |
Average recorded investment | 24,509 | 26,450 | 23,076 | 28,247 | |
Interest income recognized | 140 | 92 | 244 | 198 | |
Additional funding commitments on impaired loans | $ 383 | $ 383 | |||
Commercial | |||||
Financing Receivable, Impaired [Line Items] | |||||
Larger accruing-impaired commercial relationship downgraded in period | relationship | 1 | 1 | |||
Larger accruing-impaired commercial relationship downgraded in period, net carry value | $ 6,300 | $ 6,300 | |||
Commercial real estate | |||||
Financing Receivable, Impaired [Line Items] | |||||
Total recorded investment in impaired loans | 14,494 | 14,494 | 12,287 | ||
Unpaid contractual principal balance | 16,408 | 16,408 | 14,903 | ||
Recorded investment with no allowance | 12,468 | 12,468 | 11,734 | ||
Recorded investment with allowance | 2,026 | 2,026 | 553 | ||
Related allowance | 541 | 541 | 186 | ||
Average recorded investment | 12,700 | 13,992 | 11,184 | 14,735 | |
Interest income recognized | 64 | 52 | 107 | 97 | |
Commercial and industrial | |||||
Financing Receivable, Impaired [Line Items] | |||||
Total recorded investment in impaired loans | 8,854 | 8,854 | 7,810 | ||
Unpaid contractual principal balance | 9,720 | 9,720 | 9,816 | ||
Recorded investment with no allowance | 6,075 | 6,075 | 5,253 | ||
Recorded investment with allowance | 2,779 | 2,779 | 2,557 | ||
Related allowance | 990 | 990 | 1,078 | ||
Average recorded investment | 8,090 | 9,819 | 8,257 | 10,537 | |
Interest income recognized | 39 | 24 | 65 | 58 | |
Commercial construction | |||||
Financing Receivable, Impaired [Line Items] | |||||
Total recorded investment in impaired loans | 3,140 | 3,140 | 3,032 | ||
Unpaid contractual principal balance | 3,177 | 3,177 | 3,147 | ||
Recorded investment with no allowance | 1,637 | 1,637 | 1,583 | ||
Recorded investment with allowance | 1,503 | 1,503 | 1,449 | ||
Related allowance | 550 | 550 | 499 | ||
Average recorded investment | 3,089 | 1,968 | 3,032 | 2,296 | |
Interest income recognized | 37 | 16 | 74 | 42 | |
Residential | |||||
Financing Receivable, Impaired [Line Items] | |||||
Total recorded investment in impaired loans | 302 | 302 | 366 | ||
Unpaid contractual principal balance | 393 | 393 | 453 | ||
Recorded investment with no allowance | 302 | 302 | 366 | ||
Recorded investment with allowance | 0 | 0 | 0 | ||
Related allowance | 0 | 0 | 0 | ||
Average recorded investment | 304 | 445 | 306 | 453 | |
Interest income recognized | 0 | 0 | 0 | 0 | |
Home Equity | |||||
Financing Receivable, Impaired [Line Items] | |||||
Total recorded investment in impaired loans | 304 | 304 | 169 | ||
Unpaid contractual principal balance | 447 | 447 | 308 | ||
Recorded investment with no allowance | 304 | 304 | 164 | ||
Recorded investment with allowance | 0 | 0 | 5 | ||
Related allowance | 0 | 0 | 5 | ||
Average recorded investment | 306 | 178 | 276 | 178 | |
Interest income recognized | 0 | 0 | (2) | 1 | |
Consumer | |||||
Financing Receivable, Impaired [Line Items] | |||||
Total recorded investment in impaired loans | 18 | 18 | 24 | ||
Unpaid contractual principal balance | 21 | 21 | 25 | ||
Recorded investment with no allowance | 0 | 0 | 0 | ||
Recorded investment with allowance | 18 | 18 | 24 | ||
Related allowance | 18 | 18 | $ 24 | ||
Average recorded investment | 20 | 48 | 21 | 48 | |
Interest income recognized | $ 0 | $ 0 | $ 0 | $ 0 |
Allowance For Loan Loss - Troub
Allowance For Loan Loss - Troubled Debt Restructures (Details) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016USD ($)restructuring | Jun. 30, 2015USD ($)restructuring | Jun. 30, 2016USD ($)restructuring | Jun. 30, 2015USD ($)restructuring | Dec. 31, 2015USD ($) | |
Financing Receivable, Modifications [Line Items] | |||||
Total Troubled Debt Restructure (TDR) loans | $ 22,200,000 | $ 22,200,000 | $ 17,100,000 | ||
TDR loans on accrual status | 17,000,000 | 17,000,000 | 10,100,000 | ||
TDR loans included in non-performing loans | 5,200,000 | 5,200,000 | $ 7,100,000 | ||
Additional Funding Commitments on TDR loans | $ 382,000 | $ 382,000 | |||
Number of restructurings | restructuring | 9 | 4 | 10 | 8 | |
Pre-modification outstanding recorded investment | $ 6,887,000 | $ 273,000 | $ 7,151,000 | $ 1,142,000 | |
Post-modification outstanding recorded investment | $ 6,869,000 | 323,000 | $ 7,132,000 | $ 1,177,000 | |
Number of TDRs that defaulted | restructuring | 2 | 2 | 0 | ||
Financing Receivable, Modifications, Subsequent Default, Recorded Investment | $ 417,000 | $ 417,000 | |||
Charge-offs associated with TDRs | 0 | $ 0 | |||
Specific reserves allocated to TDRs | $ 169,000 | $ 88,000 | $ 169,000 | 88,000 | |
Interest payments received on nonaccruing TDR loans excluded from income | $ 11,000 | ||||
Commercial real estate | |||||
Financing Receivable, Modifications [Line Items] | |||||
Number of restructurings | restructuring | 4 | 3 | 4 | 3 | |
Pre-modification outstanding recorded investment | $ 5,093,000 | $ 269,000 | $ 5,093,000 | $ 269,000 | |
Post-modification outstanding recorded investment | $ 5,059,000 | $ 319,000 | $ 5,059,000 | $ 319,000 | |
Number of TDRs that defaulted | restructuring | 0 | 0 | |||
Financing Receivable, Modifications, Subsequent Default, Recorded Investment | $ 0 | $ 0 | |||
Commercial and industrial | |||||
Financing Receivable, Modifications [Line Items] | |||||
Number of restructurings | restructuring | 5 | 0 | 6 | 4 | |
Pre-modification outstanding recorded investment | $ 1,794,000 | $ 0 | $ 2,058,000 | $ 869,000 | |
Post-modification outstanding recorded investment | $ 1,810,000 | $ 0 | $ 2,073,000 | $ 854,000 | |
Number of TDRs that defaulted | restructuring | 2 | 2 | |||
Financing Receivable, Modifications, Subsequent Default, Recorded Investment | $ 417,000 | $ 417,000 | |||
Commercial construction | |||||
Financing Receivable, Modifications [Line Items] | |||||
Number of restructurings | restructuring | 0 | 0 | 0 | 0 | |
Pre-modification outstanding recorded investment | $ 0 | $ 0 | $ 0 | $ 0 | |
Post-modification outstanding recorded investment | $ 0 | $ 0 | $ 0 | $ 0 | |
Number of TDRs that defaulted | restructuring | 0 | 0 | |||
Financing Receivable, Modifications, Subsequent Default, Recorded Investment | $ 0 | $ 0 | |||
Residential | |||||
Financing Receivable, Modifications [Line Items] | |||||
Number of restructurings | restructuring | 0 | 0 | 0 | 0 | |
Pre-modification outstanding recorded investment | $ 0 | $ 0 | $ 0 | $ 0 | |
Post-modification outstanding recorded investment | $ 0 | $ 0 | $ 0 | $ 0 | |
Number of TDRs that defaulted | restructuring | 0 | 0 | |||
Financing Receivable, Modifications, Subsequent Default, Recorded Investment | $ 0 | $ 0 | |||
Home Equity | |||||
Financing Receivable, Modifications [Line Items] | |||||
Number of restructurings | restructuring | 0 | 0 | 0 | 0 | |
Pre-modification outstanding recorded investment | $ 0 | $ 0 | $ 0 | $ 0 | |
Post-modification outstanding recorded investment | $ 0 | $ 0 | $ 0 | $ 0 | |
Number of TDRs that defaulted | restructuring | 0 | 0 | |||
Financing Receivable, Modifications, Subsequent Default, Recorded Investment | $ 0 | $ 0 | |||
Consumer | |||||
Financing Receivable, Modifications [Line Items] | |||||
Number of restructurings | restructuring | 0 | 1 | 0 | 1 | |
Pre-modification outstanding recorded investment | $ 0 | $ 4,000 | $ 0 | $ 4,000 | |
Post-modification outstanding recorded investment | $ 0 | $ 4,000 | $ 0 | $ 4,000 | |
Number of TDRs that defaulted | restructuring | 0 | 0 | |||
Financing Receivable, Modifications, Subsequent Default, Recorded Investment | $ 0 | $ 0 |
Allowance For Loan Loss - Other
Allowance For Loan Loss - Other Real Estate Owned (Details) | 6 Months Ended | ||
Jun. 30, 2016USD ($)property | Jun. 30, 2015USD ($) | Dec. 31, 2015USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Carry value of OREO | $ 0 | $ 0 | |
Net gains on sales of OREO | 0 | $ 154,000 | |
Consumer mortgage loans in process of foreclosure, value | $ 125,000 | $ 0 | |
Other real estate owned | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of OREO properties added | property | 0 | ||
OREO fair value adjustment | $ 0 | $ 0 |
Allowance For Loan Loss - Allow
Allowance For Loan Loss - Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||
Increase (Decrease) in Loans | $ 39,200 | $ 63,900 | |||
The ratio of non-accrual loans to total loans | 0.54% | 0.92% | 0.54% | 0.92% | 0.74% |
Allowance for loan losses on impaired loans | $ 2,099 | $ 2,600 | $ 2,099 | $ 2,600 | $ 1,792 |
Allowance for loan losses on non-impaired classified loans | $ 2,000 | $ 1,200 | 2,000 | 1,200 | |
Net charge-offs (recoveries) | $ (220) | $ 809 | |||
Allowance for loan losses to total loans ratio | 1.60% | 1.62% | 1.60% | 1.62% | 1.56% |
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Beginning Balance | $ 29,910 | $ 27,803 | $ 29,008 | $ 27,121 | |
Provision for loan losses | 267 | 1,225 | 1,117 | 1,850 | |
Recoveries | 484 | 113 | 634 | 223 | |
Less: Charge offs | 316 | 979 | 414 | 1,032 | |
Ending Balance | 30,345 | 28,162 | 30,345 | 28,162 | |
Allotted to loans individually evaluated for impairment | 2,099 | 2,610 | 2,099 | 2,610 | |
Allotted to loans collectively evaluated for impairment | 28,246 | 25,552 | 28,246 | 25,552 | |
Commercial real estate | |||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||
Allowance for loan losses on impaired loans | 541 | 541 | $ 186 | ||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Beginning Balance | 13,827 | 12,747 | 13,514 | 12,664 | |
Provision for loan losses | 865 | 117 | 1,159 | 195 | |
Recoveries | 1 | 0 | 20 | 5 | |
Less: Charge offs | 179 | 0 | 179 | 0 | |
Ending Balance | 14,514 | 12,864 | 14,514 | 12,864 | |
Allotted to loans individually evaluated for impairment | 541 | 200 | 541 | 200 | |
Allotted to loans collectively evaluated for impairment | 13,973 | 12,664 | 13,973 | 12,664 | |
Commercial and industrial | |||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||
Allowance for loan losses on impaired loans | 990 | 990 | 1,078 | ||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Beginning Balance | 10,278 | 9,842 | 9,758 | 9,245 | |
Provision for loan losses | (714) | 1,049 | (251) | 1,579 | |
Recoveries | 480 | 83 | 609 | 167 | |
Less: Charge offs | 131 | 952 | 203 | 969 | |
Ending Balance | 9,913 | 10,022 | 9,913 | 10,022 | |
Allotted to loans individually evaluated for impairment | 990 | 1,822 | 990 | 1,822 | |
Allotted to loans collectively evaluated for impairment | 8,923 | 8,200 | 8,923 | 8,200 | |
Commercial construction | |||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||
Allowance for loan losses on impaired loans | 550 | 550 | 499 | ||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Beginning Balance | 3,964 | 3,408 | 3,905 | 3,384 | |
Provision for loan losses | 92 | 27 | 156 | 38 | |
Recoveries | 0 | 12 | 0 | 25 | |
Less: Charge offs | 0 | 0 | 5 | 0 | |
Ending Balance | 4,056 | 3,447 | 4,056 | 3,447 | |
Allotted to loans individually evaluated for impairment | 550 | 524 | 550 | 524 | |
Allotted to loans collectively evaluated for impairment | 3,506 | 2,923 | 3,506 | 2,923 | |
Residential | |||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||
Allowance for loan losses on impaired loans | 0 | 0 | 0 | ||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Beginning Balance | 1,077 | 960 | 1,061 | 989 | |
Provision for loan losses | 8 | 62 | 24 | 33 | |
Recoveries | 0 | 0 | 0 | 0 | |
Less: Charge offs | 0 | 0 | 0 | 0 | |
Ending Balance | 1,085 | 1,022 | 1,085 | 1,022 | |
Allotted to loans individually evaluated for impairment | 0 | 0 | 0 | 0 | |
Allotted to loans collectively evaluated for impairment | 1,085 | 1,022 | 1,085 | 1,022 | |
Home Equity | |||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||
Allowance for loan losses on impaired loans | 0 | 0 | 5 | ||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Beginning Balance | 541 | 615 | 540 | 608 | |
Provision for loan losses | 9 | (54) | 15 | (47) | |
Recoveries | 2 | 14 | 2 | 14 | |
Less: Charge offs | 0 | 0 | 5 | 0 | |
Ending Balance | 552 | 575 | 552 | 575 | |
Allotted to loans individually evaluated for impairment | 0 | 19 | 0 | 19 | |
Allotted to loans collectively evaluated for impairment | 552 | 556 | 552 | 556 | |
Consumer | |||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||
Allowance for loan losses on impaired loans | 18 | 18 | $ 24 | ||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Beginning Balance | 223 | 231 | 230 | 231 | |
Provision for loan losses | 7 | 24 | 14 | 52 | |
Recoveries | 1 | 4 | 3 | 12 | |
Less: Charge offs | 6 | 27 | 22 | 63 | |
Ending Balance | 225 | 232 | 225 | 232 | |
Allotted to loans individually evaluated for impairment | 18 | 45 | 18 | 45 | |
Allotted to loans collectively evaluated for impairment | $ 207 | $ 187 | $ 207 | $ 187 |
Deposits (Details)
Deposits (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | |
Deposits [Abstract] | |||
Noninterest-bearing demand deposits | $ 652,073 | $ 570,589 | |
Interest bearing checking | 357,139 | 313,674 | |
Savings | 185,896 | 167,304 | |
Money markets | 744,165 | 692,114 | |
Certificates of deposit, $250,000 or Less, | 126,733 | 129,993 | |
Certificates of deposit more than $250,000 | 44,108 | 37,704 | |
Total non-brokered deposits | [1] | 2,110,114 | 1,911,378 |
Brokered deposits | [2] | 74,316 | 106,770 |
Deposits | $ 2,184,430 | $ 2,018,148 | |
[1] | Includes reciprocal money market deposits and CDs received from participating banks in nationwide networks as a result of our customers electing to participate in programs to obtain full FDIC insurance. Essentially, the equivalent of the original deposit comes back to the Company as non-brokered deposits within the appropriate category under total deposits on the balance sheet. | ||
[2] | Primarily brokered CDs $250,000 and under. |
Borrowed Funds and Subordinat46
Borrowed Funds and Subordinated Debt (Details) - USD ($) | 1 Months Ended | 6 Months Ended | ||
Jan. 31, 2015 | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2000 | |
Debt Instrument [Line Items] | ||||
Borrowed Funds | $ 671,000 | $ 53,671,000 | ||
Advances from Federal Home Loan Banks | 40,700,000 | |||
Other Borrowings | 13,000,000 | |||
Subordinated debt | $ 14,828,000 | $ 14,822,000 | ||
Junior subordinated debt, amount | $ 10,800,000 | |||
Fixed-to Floating Rate Subordinated Notes | ||||
Debt Instrument [Line Items] | ||||
Subordinated debt | $ 15,000,000 | |||
Subordinated debt, rate | 6.00% | |||
Original debt issuance costs | $ 190,000 | |||
London Interbank Offered Rate (LIBOR) | Fixed-to Floating Rate Subordinated Notes | ||||
Debt Instrument [Line Items] | ||||
Fixed to Floating Rate Conversion Date | Jan. 31, 2025 | |||
Spread over LIBOR fixed-to floating rate note, rate | 3.90% |
Derivatives and Hedging Activ47
Derivatives and Hedging Activities (Details) - Interest rate swap | 6 Months Ended | |
Jun. 30, 2016USD ($)instrument | Dec. 31, 2015USD ($)instrument | |
Derivative [Line Items] | ||
Number of Interest Rate Swaps | instrument | 2 | 2 |
Aggregate notional value of interest-rate swaps | $ 10,100,000 | |
Fair Value of Interest-Rate Swap Assets | 335,000 | $ 16,000 |
Fair Value of Interest-Rate Swap Liability | 335,000 | 16,000 |
Gain (Loss) on Interest Rate Swaps | 0 | |
Gross Amount Interest Rate Swap Asset Recognized | 335,000 | 16,000 |
Net Asset Amount, Interest Rate Swap | 335,000 | 16,000 |
Gross Amount Interest Rate Swap Liability Recognized | 335,000 | 16,000 |
Collateral posted | 360,000 | 0 |
Net Liability Amount, Interest Rate Swap | $ (25,000) | $ 16,000 |
Supplemental Retirement Plan 48
Supplemental Retirement Plan and Other Postretirement Benefit Obligations (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016USD ($)officer | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($)officer | Jun. 30, 2015USD ($) | |
Supplemental Employee Retirement Plan | ||||
Defined Benefit Plan Disclosures [Line Items] | ||||
Number of Active Executive Officers under Plan | officer | 2 | 2 | ||
Number of Former Executive Officers under Plan | officer | 1 | 1 | ||
Term of SERP benefits | 20 years | |||
Net Periodic Benefit Cost | $ 31 | $ 32 | $ 62 | $ 63 |
Benefits Paid | (69) | (69) | (138) | (138) |
Remaining accrual for benefit obligation in current year | 62 | |||
Supplemental Life Insurance | ||||
Defined Benefit Plan Disclosures [Line Items] | ||||
Service Cost | (3) | (2) | (5) | (2) |
Interest Cost | 21 | 21 | 42 | 39 |
Net Periodic Benefit Cost | $ 18 | $ 19 | $ 37 | $ 37 |
Stock-Based Compensation Summar
Stock-Based Compensation Summary Information for Options Granted (Details) - $ / shares | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock option awards granted | 31,047 | 27,376 |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Term in years | 10 years | 10 years |
Expected volatility | 42.00% | 47.00% |
Market price on date of grant | $ 21.91 | $ 21.03 |
Per share weighted average fair value | $ 7.91 | $ 8.51 |
Weighted Average | Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected dividend yield | 3.02% | 2.90% |
Expected life in years | 7 years | 7 years |
Risk-free interest rate | 1.91% | 1.95% |
Fair Value as a percentage of market value at grant date | 36.00% | 40.00% |
Stock-Based Compensation Stock
Stock-Based Compensation Stock Options, Stock Awards, and Stock in Lieu of Directors' Fees (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jan. 31, 2016shares | Jun. 30, 2016USD ($)plansshares | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($)plansshares | Jun. 30, 2015USD ($) | Dec. 31, 2015USD ($) | Jan. 02, 2015$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of Individual Stock Incentive Plans | plans | 3 | 3 | |||||
Shares remaining available for future grants | shares | 457,413 | 457,413 | |||||
Stock-based compensation expense | $ 462 | $ 466 | $ 905 | $ 954 | |||
Number of shares issued in lieu of cash to directors | shares | 10,657 | ||||||
Fair market share price | $ / shares | $ 23.86 | ||||||
Stock options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation expense | 63 | 79 | $ 142 | 176 | |||
Restricted stock | Employee | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 4 years | ||||||
Restricted stock | Director | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 2 years | ||||||
Restricted stock and common stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation expense | 323 | 324 | $ 617 | 633 | |||
Common stock in lieu of cash | Director | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation expense | $ 76 | $ 63 | $ 146 | $ 145 | $ 254 | ||
Vesting, Year Two | Stock options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options granted, vesting percentage | 50.00% | 50.00% | |||||
Vesting, Year Four | Stock options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options granted, vesting percentage | 50.00% | 50.00% |
Stock-Based Compensation Restri
Stock-Based Compensation Restricted Stock Grants (Details) - Restricted stock - $ / shares | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock awards in period | 62,429 | 55,313 |
Weighted Average Grant Date Fair Value, Stock Awards | $ 21.90 | $ 21.03 |
Director | Two year vesting | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock awards in period | 9,060 | 7,276 |
Employee | Four year vesting | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock awards in period | 18,298 | 17,775 |
Employee | Performance-based vesting | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock awards in period | 35,071 | 30,262 |
Earnings Per Share Earnings Per
Earnings Per Share Earnings Per Share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Basic weighted average common shares outstanding | 10,561,680 | 10,331,485 | 10,483,396 | 10,287,509 |
Dilutive shares | 68,220 | 63,011 | 67,446 | 65,221 |
Diluted weighted average common shares outstanding | 10,629,900 | 10,394,496 | 10,550,842 | 10,352,730 |
Antidilutive Shares Excluded from EPS | 434 |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring and Nonrecurring Basis (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Specific allowance for collateral dependent impaired loans | $ 1,400,000 | $ 1,400,000 |
Carry value of OREO | $ 0 | 0 |
Financial Standby Letter of Credit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amortization period of estimated fair value on standby letters of credit | 1 year | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Interest rate swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of liabilities | $ 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Fixed income securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of assets | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of assets | 13,164,000 | 11,657,000 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | FHLB Stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of assets | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Interest rate swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of assets | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Interest rate swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of liabilities | 335,000 | 16,000 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Fixed income securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of assets | 306,339,000 | 288,701,000 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of assets | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | FHLB Stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of assets | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Interest rate swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of assets | 335,000 | 16,000 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Interest rate swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Fixed income securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of assets | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of assets | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | FHLB Stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of assets | 1,879,000 | 3,050,000 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Interest rate swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of assets | 0 | 0 |
Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans (collateral dependent), Fair Value | 0 | 0 |
Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans (collateral dependent), Fair Value | 0 | 0 |
Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans (collateral dependent), Fair Value | 4,181,000 | 2,516,000 |
Fair Value | Fair Value, Measurements, Recurring | Interest rate swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of liabilities | 335,000 | 16,000 |
Fair Value | Fair Value, Measurements, Recurring | Fixed income securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of assets | 306,339,000 | 288,701,000 |
Fair Value | Fair Value, Measurements, Recurring | Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of assets | 13,164,000 | 11,657,000 |
Fair Value | Fair Value, Measurements, Recurring | FHLB Stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of assets | 1,879,000 | 3,050,000 |
Fair Value | Fair Value, Measurements, Recurring | Interest rate swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of assets | 335,000 | 16,000 |
Fair Value | Fair Value, Measurements, Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans (collateral dependent), Fair Value | $ 4,181,000 | $ 2,516,000 |
Fair Value Measurements - Quant
Fair Value Measurements - Quantitative (Details) - Fair Value, Inputs, Level 3 - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2016 | Dec. 31, 2015 | ||
Fair Value, Measurements, Recurring | FHLB Stock | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Fair value of assets | $ 1,879 | $ 3,050 | |
Fair Value, Measurements, Recurring | FHLB Stock | FHLB par stated value | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Fair value of assets | 1,879 | ||
Fair Value, Measurements, Nonrecurring | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Impaired loans (collateral dependent), Fair Value | 4,181 | $ 2,516 | |
Fair Value, Measurements, Nonrecurring | Impaired loans (collateral dependent) | Appraisal of collateral | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Impaired loans (collateral dependent), Fair Value | [1] | $ 4,181 | |
Fair Value, Measurements, Nonrecurring | Impaired loans (collateral dependent) | Appraisal of collateral | Minimum | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Unobservable Input Value or Range | 5.00% | ||
Fair Value, Measurements, Nonrecurring | Impaired loans (collateral dependent) | Appraisal of collateral | Maximum | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Unobservable Input Value or Range | 50.00% | ||
[1] | Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. |
Fair Value Measurements - Balan
Fair Value Measurements - Balance Sheet Grouping (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Carrying Amount | ||
Financial assets: | ||
Loans held for sale | $ 1,971 | $ 1,709 |
Loans, net | 1,868,841 | 1,830,954 |
Financial liabilities: | ||
Borrowed Funds | 671 | 53,671 |
Subordinated debt | 14,828 | 14,822 |
Carrying Amount | Certificates of Deposit | ||
Financial liabilities: | ||
Certificates of deposit | 245,157 | 274,467 |
Fair Value | ||
Financial assets: | ||
Loans held for sale | 1,988 | 1,709 |
Loans, net | 1,884,603 | 1,845,009 |
Financial liabilities: | ||
Borrowed Funds | 672 | 53,670 |
Subordinated debt | 15,123 | 13,961 |
Fair Value | Certificates of Deposit | ||
Financial liabilities: | ||
Certificates of deposit | 245,715 | 273,419 |
Fair Value, Inputs, Level 1 | ||
Financial assets: | ||
Loans held for sale | 0 | 0 |
Loans, net | 0 | 0 |
Financial liabilities: | ||
Borrowed Funds | 0 | 0 |
Subordinated debt | 0 | 0 |
Fair Value, Inputs, Level 1 | Certificates of Deposit | ||
Financial liabilities: | ||
Certificates of deposit | 0 | 0 |
Fair Value, Inputs, Level 2 | ||
Financial assets: | ||
Loans held for sale | 1,988 | 1,709 |
Loans, net | 0 | 0 |
Financial liabilities: | ||
Borrowed Funds | 672 | 53,670 |
Subordinated debt | 0 | 0 |
Fair Value, Inputs, Level 2 | Certificates of Deposit | ||
Financial liabilities: | ||
Certificates of deposit | 245,715 | 273,419 |
Fair Value, Inputs, Level 3 | ||
Financial assets: | ||
Loans held for sale | 0 | 0 |
Loans, net | 1,884,603 | 1,845,009 |
Financial liabilities: | ||
Borrowed Funds | 0 | 0 |
Subordinated debt | 15,123 | 13,961 |
Fair Value, Inputs, Level 3 | Certificates of Deposit | ||
Financial liabilities: | ||
Certificates of deposit | $ 0 | $ 0 |