Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 30, 2020 | |
Document And Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity Registrant Name | Eagle Bancorp, Inc | |
Entity File Number | 0-25923 | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 52-2061461 | |
Entity Address, State or Province | MD | |
Entity Address, Address Line One | 7830 Old Georgetown Road | |
Entity Address, Address Line Two | Third Floor | |
Entity Address, City or Town | Bethesda | |
Entity Address, Postal Zip Code | 20814 | |
City Area Code | 301 | |
Local Phone Number | 986-1800 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | EGBN | |
Security Exchange Name | NASDAQ | |
Entity's Reporting Status Current | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 32,225,151 | |
Entity Central Index Key | 0001050441 | |
Current Fiscal Year End Date | --03-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and due from banks | $ 7,177 | $ 7,539 |
Federal funds sold | 28,277 | 38,987 |
Interest bearing deposits with banks and other short-term investments | 904,160 | 195,447 |
Investment securities available-for-sale, at fair value | 858,916 | 843,363 |
Federal Reserve and Federal Home Loan Bank stock | 39,988 | 35,194 |
Loans held for sale | 60,036 | 56,707 |
Loans | 7,840,873 | 7,545,748 |
Less allowance for credit losses | (96,336) | (73,658) |
Loans, net | 7,744,537 | 7,472,090 |
Premises and equipment, net | 13,687 | 14,622 |
Operating lease right-of-use assets | 25,655 | 27,372 |
Deferred income taxes | 30,366 | 29,804 |
Bank owned life insurance | 76,139 | 75,724 |
Intangible assets, net | 104,695 | 104,739 |
Other real estate owned | 8,237 | 1,487 |
Other assets | 90,349 | 85,644 |
Total Assets | 9,992,219 | 8,988,719 |
Deposits: | ||
Noninterest bearing demand | 1,994,209 | 2,064,367 |
Interest bearing transaction, balance | 931,597 | 863,856 |
Savings and money market | 3,950,495 | 3,013,129 |
Time, $100,000 or more | 608,355 | 663,987 |
Other time | 656,912 | 619,052 |
Total deposits | 8,141,568 | 7,224,391 |
Customer repurchase agreements | 31,377 | 30,980 |
Other short-term borrowings | 300,000 | 250,000 |
Long-term borrowings | 267,784 | 217,687 |
Operating lease liabilities | 28,242 | 29,959 |
Reserve for unfunded commitments | 6,230 | |
Other liabilities | 54,240 | 45,021 |
Total Liabilities | 8,829,441 | 7,798,038 |
Shareholders' Equity | ||
Common stock, par value $.01 per share; shares authorized 100,000,000, shares issued and outstanding 32,197,258 and 33,241,496, respectively | 320 | 331 |
Additional paid in capital | 439,321 | 482,286 |
Retained earnings | 710,072 | 705,105 |
Accumulated other comprehensive income | 13,065 | 2,959 |
Total Shareholders' Equity | 1,162,778 | 1,190,681 |
Total Liabilities and Shareholders' Equity | $ 9,992,219 | $ 8,988,719 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Consolidated Balance Sheets | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized | 100,000,000 | 100,000,000 |
Common stock, issued | 32,197,258 | 33,241,496 |
Common stock, outstanding | 32,197,258 | 33,241,496 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Interest Income | ||
Interest and fees on loans | $ 96,755 | $ 97,821 |
Interest and dividends on investment securities | 5,427 | 5,598 |
Interest on balances with other banks and short-term investments | 1,559 | 1,666 |
Interest on federal funds sold | 60 | 49 |
Total interest income | 103,801 | 105,134 |
Interest Expense | ||
Interest on deposits | 20,546 | 20,900 |
Interest on customer repurchase agreements | 87 | 98 |
Interest on short-term borrowings | 357 | 140 |
Interest on long-term borrowings | 3,067 | 2,979 |
Total interest expense | 24,057 | 24,117 |
Net interest income | 79,744 | 81,017 |
Provision for Credit Losses | 14,310 | 3,360 |
Provision for Unfunded Commitments | 2,112 | |
Net Interest Income After Provision For Credit Losses | 63,322 | 77,657 |
Noninterest Income | ||
Service charges on deposits | 1,425 | 1,694 |
Gain on sale of loans | 944 | 1,388 |
Gain on sale of investment securities | 822 | 912 |
Increase in the cash surrender value of bank owned life insurance | 414 | 425 |
Other income | 1,865 | 1,872 |
Total noninterest income | 5,470 | 6,291 |
Noninterest Expense | ||
Salaries and employee benefits | 17,797 | 23,644 |
Premises and equipment expenses | 3,821 | 3,852 |
Marketing and advertising | 1,078 | 1,148 |
Data processing | 2,496 | 2,375 |
Legal, accounting and professional fees | 6,988 | 1,709 |
FDIC insurance | 1,424 | 1,116 |
Other expenses | 3,743 | 4,460 |
Total noninterest expense | 37,347 | 38,304 |
Income Before Income Tax Expense | 31,445 | 45,644 |
Income Tax Expense | 8,322 | 11,895 |
Net Income | $ 23,123 | $ 33,749 |
Earnings Per Common Share | ||
Basic (in dollars per share) | $ 0.70 | $ 0.98 |
Diluted (in dollars per share) | $ 0.70 | $ 0.98 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Consolidated Statements of Comprehensive Income | ||
Net Income | $ 23,123 | $ 33,749 |
Other comprehensive income (loss), net of tax: | ||
Unrealized gain (loss) on securities available for sale | 12,104 | 5,440 |
Reclassification adjustment for net gains included in net income | (604) | (61) |
Total unrealized gain (loss) on investment securities | 11,500 | 5,379 |
Unrealized (loss) gain on derivatives | (1,325) | (1,154) |
Reclassification adjustment for amounts included in net income | (69) | (942) |
Total unrealized (loss) gain on derivatives | (1,394) | (2,096) |
Other comprehensive income (loss) | 10,106 | 3,283 |
Comprehensive Income | $ 33,229 | $ 37,032 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total |
Beginning balance at Dec. 31, 2018 | $ 342 | $ 528,380 | $ 584,494 | $ (4,275) | $ 1,108,941 |
Beginning balance (in shares) at Dec. 31, 2018 | 34,387,919 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 33,749 | 33,749 | |||
Other comprehensive income, net of tax | 3,283 | 3,283 | |||
Stock-based compensation expense | 2,029 | 2,029 | |||
Issuance of common stock related to options exercised, net of shares withheld for payroll taxes | 296 | 296 | |||
Issuance of common stock related to options exercised, net of shares withheld for payroll taxes (in shares) | 26,034 | ||||
Vesting of time based stock awards issued at date of grant, net of shares withheld for payroll taxes | $ 1 | (1) | |||
Vesting of time based stock awards issued at date of grant, net of shares withheld for payroll taxes (in shares) | (10,944) | ||||
Vesting of performance based stock awards, net of shares withheld for payroll taxes (in shares) | 17,655 | ||||
Time based stock awards granted (in shares) | 112,636 | ||||
Issuance of common stock related to employee stock purchase plan | 190 | 190 | |||
Issuance of common stock related to employee stock purchase plan (in shares) | 3,893 | ||||
Ending balance at Mar. 31, 2019 | $ 343 | 530,894 | 618,243 | (992) | 1,148,488 |
Ending balance (in shares) at Mar. 31, 2019 | 34,537,193 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cumulative effect adjustment due to the adoption of ASC 326, net of tax | 10,614 | ||||
Beginning balance at Dec. 31, 2019 | $ 331 | 482,286 | 705,105 | 2,959 | $ 1,190,681 |
Beginning balance (in shares) at Dec. 31, 2019 | 33,241,496 | 33,241,496 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 23,123 | $ 23,123 | |||
Other comprehensive income, net of tax | 10,106 | 10,106 | |||
Stock-based compensation expense | 996 | 996 | |||
Vesting of time based stock awards issued at date of grant, net of shares withheld for payroll taxes (in shares) | (22,183) | ||||
Vesting of performance based stock awards, net of shares withheld for payroll taxes (in shares) | 4,126 | ||||
Time based stock awards granted (in shares) | 152,184 | ||||
Issuance of common stock related to employee stock purchase plan | 196 | 196 | |||
Issuance of common stock related to employee stock purchase plan (in shares) | 4,476 | ||||
Cash dividends declared ($0.22 per share) | (7,225) | (7,225) | |||
Common stock repurchased | $ (11) | (44,157) | (44,168) | ||
Common stock repurchased (in shares) | (1,182,841) | ||||
Ending balance at Mar. 31, 2020 | $ 320 | $ 439,321 | 710,072 | $ 13,065 | $ 1,162,778 |
Ending balance (in shares) at Mar. 31, 2020 | 32,197,258 | 32,197,258 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cumulative effect adjustment due to the adoption of ASC 326, net of tax | $ (10,931) | $ (10,931) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash Flows From Operating Activities: | ||
Net Income | $ 23,123 | $ 33,749 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for credit losses | 14,310 | 3,360 |
Provision for unfunded commitments | 2,112 | |
Depreciation and amortization | 1,171 | 1,672 |
Amortization of operating lease right-of-use assets | 646 | |
Gains on sale of loans | (944) | (1,388) |
Gains on sale of GNMA loans | (55) | |
Securities premium amortization (discount accretion), net | 1,513 | 1,371 |
Origination of loans held for sale | (187,338) | (91,736) |
Proceeds from sale of loans held for sale | 184,953 | 92,165 |
Net increase in cash surrender value of BOLI | (414) | (425) |
Deferred income tax (benefit) expense | (562) | 1,264 |
Net gain on sale of investment securities | (822) | (912) |
Stock-based compensation expense | 996 | 2,029 |
Net tax (expense) benefits from stock compensation | (312) | 10 |
(Increase) decrease in other assets | (15,337) | 9,897 |
Increase (decrease) in other liabilities | 13,337 | (23,943) |
Net cash provided by operating activities | 35,786 | 27,704 |
Cash Flows From Investing Activities: | ||
Purchases of available-for-sale investment securities | (138,594) | (34,748) |
Proceeds from maturities of available-for-sale securities | 54,426 | 26,674 |
Proceeds from sale/call of available-for-sale securities | 78,030 | 22,808 |
Purchases of Federal Reserve and Federal Home Loan Bank stock | (9,044) | (16,164) |
Proceeds from redemption of Federal Reserve and Federal Home Loan Bank stock | 4,250 | 4,675 |
Net increase in loans | (293,507) | (184,972) |
Increase in premises and equipment | (83) | (876) |
Net cash used in investing activities | (304,522) | (182,603) |
Cash Flows From Financing Activities: | ||
Increase (decrease) in deposits | 917,177 | (291,366) |
Increase (decrease) in customer repurchase agreements | 397 | (3,995) |
Increase in short-term borrowings | 50,000 | 250,000 |
Increase in long-term borrowings | 50,000 | |
Proceeds from exercise of equity compensation plans | 296 | |
Proceeds from employee stock purchase plan | 196 | 190 |
Common stock repurchased | (44,168) | |
Cash dividends paid | (7,225) | |
Net cash provided (used in) by financing activities | 966,377 | (44,875) |
Net Increase (Decrease) In Cash and Cash Equivalents | 697,641 | (199,774) |
Cash and Cash Equivalents at Beginning of Period | 241,973 | 321,864 |
Cash and Cash Equivalents at End of Period | 939,614 | 122,090 |
Supplemental Cash Flows Information: | ||
Interest paid | 26,483 | 26,749 |
Income taxes paid | 17,950 | |
Non-Cash Investing Activities | ||
Initial recognition of operating lease right-of-use assets | $ 29,574 | |
Transfers from loans to other real estate owned | $ 6,750 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 1. Summary of Significant Accounting Policies Basis of Presentation The Consolidated Financial Statements include the accounts of Eagle Bancorp, Inc. and its subsidiaries (the “Company”). Active subsidiaries include: EagleBank (the “Bank”), Eagle Insurance Services, LLC, Bethesda Leasing, LLC, and Landroval Municipal Finance, Inc., with all significant intercompany transactions eliminated. The Consolidated Financial Statements of the Company included herein are unaudited. The Consolidated Financial Statements reflect all adjustments, consisting of normal recurring accruals that in the opinion of management, are necessary to present fairly the results for the periods presented. The amounts as of and for the year ended December 31, 2019 were derived from audited Consolidated Financial Statements. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. In addition to the “Critical Accounting Policies” impacted by the new Current Expected Credit Loss (“CECL”) standard described below, the Company applies the accounting policies contained in Note 1 to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The Company believes that the disclosures are adequate to make the information presented not misleading. Certain reclassifications have been made to amounts previously reported to conform to the current period presentation. Nature of Operations The Company, through the Bank, conducts a full service community banking business, primarily in Northern Virginia, Suburban Maryland, and Washington, D.C. The primary financial services offered by the Bank include real estate, commercial and consumer lending, as well as traditional deposit and repurchase agreement products. The Bank is also active in the origination and sale of residential mortgage loans, the origination of small business loans, and the origination, securitization and sale of multifamily Federal Housing Administration (“FHA”) loans. The guaranteed portion of small business loans, guaranteed by the Small Business Administration (“SBA”), is typically sold to third party investors in a transaction apart from the loan’s origination. The Bank offers its products and services through twenty banking offices, five lending centers and various electronic capabilities, including remote deposit services and digital banking services. Eagle Insurance Services, LLC, a subsidiary of the Bank, offers access to insurance products and services through a referral program with a third party insurance broker. Landroval Municipal Finance, Inc., a subsidiary of the Bank, focuses on lending to municipalities by buying debt on the public market as well as direct purchase issuance. Bethesda Leasing, a subsidiary of the Bank, holds title to repossessed real estate. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. The allowance for credit losses, the fair value of financial instruments and the status of contingencies are particularly susceptible to significant change. Risks and Uncertainties The outbreak of COVID-19 has adversely impacted a broad range of industries in which the Company’s customers operate and could impair their ability to fulfill their financial obligations to the Company. The World Health Organization has declared COVID-19 to be a global pandemic indicating that almost all public commerce and related business activities must be, to varying degrees, curtailed with the goal of decreasing the rate of new infections. The spread of the outbreak has caused significant disruptions in the U.S. economy and has disrupted banking and other financial activity in the areas in which the Company operates. While there has been no material impact to the Company’s employees to date, COVID-19 could also potentially create widespread business continuity issues for the Company. Congress, the President, and the Federal Reserve have taken several actions designed to cushion the economic fallout. Most notably, the Coronavirus Aid, Relief and Economic Security (“CARES”) Act was signed into law at the end of March 2020 as a $2 trillion legislative package. The goal of the CARES Act is to prevent a severe economic downturn through various measures, including direct financial aid to American families and economic stimulus to significantly impacted industry sectors. The package also includes extensive emergency funding for hospitals and providers. In addition to the general impact of COVID-19, certain provisions of the CARES Act as well as other recent legislative and regulatory relief efforts are expected to have a material impact on the Company’s operations. The Company’s business is dependent upon the willingness and ability of its employees and customers to conduct banking and other financial transactions. If the global response to contain COVID-19 escalates further or is unsuccessful, the Company could experience a material adverse effect on its business, financial condition, results of operations and cash flows. While it is not possible to know the full universe or extent that the impact of COVID-19, and resulting measures to curtail its spread, will have on the Company’s operations, the Company is disclosing potentially material items of which it is aware. Financial position and results of operations The Company’s fee income could be reduced due to COVID-19. In keeping with guidance from regulators, the Company is actively working with COVID-19 affected customers to waive fees from a variety of sources, such as, but not limited to, insufficient funds and overdraft fees, ATM fees, account maintenance fees, etc. These reductions in fees are thought, at this time, to be temporary in conjunction with the length of the expected COVID-19 related economic crisis. At this time, the Company is unable to project the materiality of such an impact, but recognize the breadth of the economic impact is likely to impact its fee income in future periods. The Company’s interest income could be reduced due to COVID-19. In keeping with guidance from regulators, the Company is actively working with COVID-19 affected borrowers to defer their payments, interest, and fees. While interest and fees will still accrue to income, through normal GAAP accounting, should eventual credit losses on these deferred payments emerge, interest income and fees accrued would need to be reversed. In such a scenario, interest income in future periods could be negatively impacted. At this time the Company is unable to project the materiality of such an impact, but recognizes the breadth of the economic impact may affect its borrowers’ ability to repay in future periods. Capital and liquidity While the Company believes that it has sufficient capital to withstand an extended economic recession brought about by COVID-19, its reported and regulatory capital ratios could be adversely impacted by further credit losses. The Company maintains access to multiple sources of liquidity. Wholesale funding markets have remained open to us, but rates for short term funding have recently been volatile. If funding costs are elevated for an extended period of time, it could have an adverse effect on the Company’s net interest margin. If an extended recession caused large numbers of the Company’s customers to withdraw their funds, the Company might become more reliant on volatile or more expensive sources of funding. Asset valuation Currently, the Company does not expect COVID-19 to affect its ability to account timely for the assets on its balance sheet; however, this could change in future periods. While certain valuation assumptions and judgments will change to account for pandemic-related circumstances such as widening credit spreads, the Company does not anticipate significant changes in methodology used to determine the fair value of assets measured in accordance with GAAP. COVID-19 could cause a further and sustained decline in the Company’s stock price or the occurrence of what management would deem to be a triggering event that could, under certain circumstances, cause us to perform a goodwill impairment test and result in an impairment charge being recorded for that period. In the event that the Company concludes that all or a portion of its goodwill is impaired, a non-cash charge for the amount of such impairment would be recorded to earnings. Such a charge would have no impact on tangible capital or regulatory capital. Business Continuity Plan The Company has implemented a remote working strategy for many of its employees. The Company does not anticipate incurring additional material cost related to its continued deployment of the remote working strategy. No material operational or internal control challenges or risks have been identified to date. The Company does not anticipate significant challenges to its ability to maintain its systems and controls in light of the measures the Company has taken to prevent the spread of COVID-19. The Company does not currently face any material resource constraint through the implementation of its business continuity plans. Lending operations and accommodations to borrowers In response to the COVID-19 pandemic, we have also implemented a short-term loan modification program to provide temporary payment relief to certain borrowers who meet the program's qualifications. Modifications under this program have predominately been for a period of 90 days. The deferred payments along with interest accrued during the deferral period are due and payable on the maturity date of the existing loan. As of March 31, 2020, we granted temporary modifications on approximately 32 loans representing approximately $45 million in outstanding exposure. Through April 30, 2020, we granted approximately 382 temporary modifications representing approximately $576 million in outstanding exposure. None With the passage of the Paycheck Protection Program (“PPP”), administered by the Small Business Administration (“SBA”), the Company is actively participating in assisting its customers with applications for resources through the program. PPP loans have a two-year term and earn interest at 1%. The Company believes that the majority of these loans will ultimately be forgiven by the SBA in accordance with the terms of the program. As of April 30, 2020, principal outstanding on PPP loans totaled $444.8 million across 1,090 borrowers. As of April 30, 2020 the Company had approved 1,233 applications totaling $449.7 million in PPP loans. The Company understands that loans funded through the PPP program are fully guaranteed by the U.S. government. Should those circumstances change, the Company could be required to establish additional allowance for credit loss through additional credit loss expense charged to earnings. Credit The Company is working with customers directly affected by COVID-19. The Company is prepared to offer short-term assistance in accordance with regulatory guidelines. As a result of the current economic environment caused by the COVID-19 virus, the Company is engaging in more frequent communication with borrowers to better understand their situation and the challenges faced, allowing it to respond proactively as needs and issues arise. Should economic conditions worsen, the Company could experience further increases in its required allowance for credit losses (“ACL”) and record additional provision for credit losses. It is possible that the Company’s asset quality measures could worsen at future measurement periods if the effects of COVID-19 are prolonged. Allowance for Credit Losses On January 1, 2020, we adopted ASU 2016-13 “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which replaces the incurred loss methodology for determining our provision for credit losses and ACL with an expected loss methodology that is referred to as the Current Expected Credit Loss model. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loans receivable and held-to-maturity (“HTM”) debt securities. It also applies to off-balance sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments in leases recognized by a lessor in accordance with ASU 2016-02 "Leases (Topic 842)" ("ASU 2016-02"). In addition, ASU 2016-13 made changes to the accounting for available-for-sale (“AFS”) debt securities. One such change is to require credit-related impairments to be recognized as an allowance for credit losses rather than as a write-down of the securities amortized cost basis when management does not intend to sell or believes that it is not that they will be required to sell the securities prior to recovery of the securities amortized cost basis. We adopted ASU 2016-13 using the modified retrospective method. Results for reporting periods beginning after January 1, 2020 are presented under ASU 2016-13 while prior period amounts continue to be reported in accordance with previously applicable GAAP. The Company does not own Held to Maturity investment debt securities. The following table illustrates the impact of ASC 326. January 1, 2020 As Reported Pre-ASC 326 Impact of ASC (dollars in thousands) Under ASC 326 Adoption 326 Adoption Assets: Loans Commercial $ 1,545,906 $ 1,545,906 $ — Income producing - commercial real estate 3,702,747 3,702,747 — Owner occupied - commercial real estate 985,409 985,409 — Real estate mortgage - residential 104,221 104,221 — Construction - commercial and residential 1,035,754 1,035,754 — Construction - C&I (owner occupied) 89,490 89,490 — Home equity 80,061 80,061 — Other consumer 2,160 2,160 — Allowance for credit losses on loans $ (84,272) $ (73,658) (10,614) Liabilities: Reserve for Unfunded Commitments $ (4,118) $ — (4,118) Loans Loans held for investment are stated at the amount of unpaid principal reduced by deferred income (net of costs). Interest on loans is recognized using the simple-interest method on the daily balances of the principal amounts outstanding. Loan origination fees, net of direct loan origination costs, and commitment fees are deferred and amortized as an adjustment to yield over the life of the loan, or over the commitment period, as applicable. A modification of a loan constitutes a TDR when a borrower is experiencing financial difficulty and the modification constitutes a concession. The Company offers various types of concessions when modifying a loan. Commercial and industrial loans modified in a TDR often involve temporary interest-only payments, term extensions, and converting revolving credit lines to term loans. Additional collateral, a co-borrower, or a guarantor is often requested. The most common change in terms provided by the Company is an extension of an interest only term. As of March 31, 2020, all performing TDRs were categorized as interest-only modifications. A loan is considered past due when a contractually due payment has not been received by the contractual due date. We place a loan on non-accrual status when there is a clear indication that the borrower’s cash flow may not be sufficient to meet payments as they become due, which is generally when a loan is 90 days past due. When a loan is placed on non-accrual status, all previously accrued and unpaid interest is reversed as a reduction of current period interest income. Interest income is subsequently recognized on a cash basis as long as the remaining book balance of the asset is deemed to be collectible. If collectability is questionable, then cash payments are applied to principal. A loan is placed back on accrual status when both principal and interest are current and it is probable that we will be able to collect all amounts due (both principal and interest) according to the terms of the loan agreement. Allowance for Credit Losses- Loans The allowance for credit losses is an estimate of the expected credit losses in the loans held for investment and available-for-sale debt securities portfolios. ASU 2016-13 replaces the incurred loss impairment model that recognizes losses when it becomes probable that a credit loss will be incurred, with a requirement to recognize lifetime expected credit losses immediately when a financial asset is originated or purchased. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans. Loans, or portions thereof, are charged off against the allowance when they are deemed uncollectible. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged- off. Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, loan concentrations, credit quality, or term as well as for changes in environmental conditions, such as changes in unemployment rates, property values or other relevant factors. The allowance for credit losses is comprised of reserves measured on a collective (pool) basis based on a lifetime loss-rate model when similar risk characteristics exist. Reserves on loans that do not share risk characteristics are evaluated on an individual basis (nonaccrual, TDR). In order to determine the allowance for credit losses, all loans are assigned a credit grade. Nonaccrual loans are specifically reviewed for loss potential and when deemed appropriate are assigned a reserve based on an individual evaluation. For purposes of determining the pool-basis reserve, the remainder of the portfolio, representing all loans not assigned an individual reserve, is segregated by call report codes. Each credit grade within each product type is assigned a historical loss rate. These historical loss rates are then modified to incorporate our reasonable and supportable forecast of future losses at the portfolio segment level, as well as any necessary qualitative adjustments. A similar process is employed to calculate a reserve assigned to off-balance sheet commitments, specifically unfunded loan commitments and letters of credit, and any needed reserve is recorded in reserve for unfunded commitments on the Consolidated Balance Sheets. For periods beyond which we are able to develop reasonable and supportable forecasts, we revert to the historical loss rate on a straight line basis over a twelve month period. See further detail regarding our forecasting methodology in the “Discounted Cash Flow Method” section below. Even though portions of the allowance may be allocated to specific loans, the entire allowance is available for any credit that, in management's judgment, should be charged off. Portfolio segments are used to pool loans with similar risk characteristics and align with our methodology for measuring expected credit losses. A summary of our primary portfolio segments is as follows: Commercial Income producing – commercial real estate Owner occupied – commercial real estate. Real Estate Mortgage – Residential. Construction – commercial and residential Construction – C&I (owner occupied) Home Equity Other Consumer We have several pass credit grades that are assigned to loans based on varying levels of risk, ranging from credits that are secured by cash or marketable securities, to watch credits which have all the characteristics of an acceptable credit risk but warrant more than the normal level of monitoring. Special mention loans are those that are currently protected by the sound worth and paying capacity of the borrower, but that are potentially weak and constitute an additional credit risk. These loans have the potential to deteriorate to a substandard grade due to the existence of financial or administrative deficiencies. Substandard loans have a well-defined weakness or weaknesses that jeopardizes the liquidation of the debt. They are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected. Some substandard loans are inadequately protected by the sound worth and paying capacity of the borrower and of the collateral pledged and may be considered impaired. Substandard loans can be accruing or can be on non-accrual depending on the circumstances of the individual loans. Loans classified as doubtful have all the weaknesses inherent in substandard loans with the added characteristics that the weaknesses make collection in full highly questionable and improbable. The possibility of loss is extremely high. All doubtful loans are on non-accrual. The methodology used in the estimation of the allowance, which is performed at least quarterly, is designed to be dynamic and responsive to changes in portfolio credit quality and forecasted economic conditions. Changes are reflected in the pool-basis allowance and in reserves assigned on an individual basis as the collectability of classified loans is evaluated with new information. As our portfolio has matured, historical loss ratios have been closely monitored. The review of the appropriateness of the allowance is performed by executive management and presented to management committees, Director’s Loan Committee, the Audit Committee, and the Board of Directors. The committees report to the Board as part of the Board's review on a quarterly basis of our consolidated financial statements. When management determines that foreclosure is probable, and for certain collateral-dependent loans where foreclosure is not considered probable, expected credit losses are based on the fair value of the collateral adjusted for selling costs, when appropriate. A loan is considered collateral- dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals and modifications unless either of the following applies: management has a reasonable expectation that a loan will be restructured, or the extension or renewal options are included in the borrower contract. We do not measure an allowance for credit losses on accrued interest receivable balances because these balances are written off in a timely manner as a reduction to interest income when loans are placed on non-accrual status. Allowance for Credit Losses - Available-for-Sale Debt Securities The impairment model for available-for-sale debt securities differs from the CECL approach utilized by HTM debt securities because AFS debt securities are measured at fair value rather than amortized cost. Although ASU No. 2016-13 replaced the legacy other-than-temporary impairment (“OTTI”) model with a credit loss model, it retained the fundamental nature of the legacy OTTI model. One notable change from the legacy OTTI model is when evaluating whether credit loss exists, an entity may no longer consider the length of time fair value has been less than amortized cost. For AFS debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either criterion is met, the security’s amortized cost basis is written down to fair value through income. For AFS debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. Changes in the allowance for credit losses are recorded as a provision for (or reversal of) credit losses. Losses are charged against the allowance when management believes the uncollectibility of an AFS security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Any impairment not recorded through an allowance for credit loss is recognized in other comprehensive income as a noncredit-related impairment. As of March 31, 2020, the Company determined that the unrealized loss positions in AFS securities were not the result of credit losses, and therefore, an allowance for credit losses was not recorded. See Note 3 Investment Securities for more information. We have made a policy election to exclude accrued interest from the amortized cost basis of available-for-sale debt securities and report accrued interest separately in accrued interest and other assets in the consolidated balance sheets. Available-for-sale debt securities are placed on non- accrual status when we no longer expect to receive all contractual amounts due, which is generally at 90 days past due. Accrued interest receivable is reversed against interest income when a security is placed on non-accrual status. Accordingly, we do not recognize an allowance for credit loss against accrued interest receivable. The majority of available for sale debt securities as of March 31, 2020 and December 31, 2019 were issued by US agencies. As such, we do not consider an allowance for credit losses necessary. Discounted Cash Flow Method The Company uses the discounted cash flow (“DCF”) method to estimate expected credit losses for the commercial, income producing – commercial real estate, owner occupied – commercial real estate, real estate mortgage - residential, construction – commercial and residential, construction – C&I (owner occupied), home equity, and other consumer loan pools. For each of these loan segments, the Company generates cash flow projections at the instrument level wherein payment expectations are adjusted for estimated prepayment speed, probability of default, and loss given default. The modeling of expected prepayment speeds, is based on historical internal data. The Company uses regression analysis of historical internal and peer data to determine suitable loss drivers to utilize when modeling lifetime probability of default and loss given default. This analysis also determines how expected probability of default and loss given default will react to forecasted levels of the loss drivers. For all loan pools utilizing the DCF method, management utilizes and forecasts national unemployment as a loss driver. COVID-19 has negatively impacted unemployment projections, which inform our CECL economic forecast and increased our loss reserve as of March 31, 2020. For all DCF models, management has determined that eight quarters represents a reasonable and supportable forecast period and reverts back to a historical loss rate over twelve months on a straight-line basis. Management leverages economic projections from reputable and independent third parties to inform its loss driver forecasts over the forecast period. The combination of adjustments for credit expectations (default and loss) and timing expectations (prepayment, curtailment, and time to recovery) produces an expected cash flow stream at the instrument level. Instrument effective yield is calculated, net of the impacts of prepayment assumptions, and the instrument expected cash flows are then discounted at that effective yield to produce an instrument-level net NPV. An ACL is established for the difference between the instrument’s NPV and amortized cost basis. Collateral Dependent Financial Assets Loans that do not share risk characteristics are evaluated on an individual basis. For collateral dependent financial assets where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the financial asset to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the asset as of the measurement date. When repayment is expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the financial asset exceeds the NPV from the operation of the collateral. When repayment is expected to be from the sale of the collateral, expected credit losses are calculated as the amount by which the amortized costs basis of the financial asset exceeds the fair value of the underlying collateral less estimated cost to sell. The ACL may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the financial asset. The Company’s estimate of the ACL reflects losses expected over the remaining contractual life of the assets. The contractual term does not consider extensions, renewals or modifications unless the Company has identified an expected troubled debt restructuring (“TDR”). A loan that has been modified or renewed is considered a troubled debt restructuring when two conditions are met: 1) the borrower is experiencing financial difficulty and 2) concessions are made for the borrower's benefit that would not otherwise be considered for a borrower or transaction with similar credit risk characteristics. The Company’s ACL reflects all effects of a TDR when an individual asset is specifically identified as a reasonably expected TDR. The Company has determined that a TDR is reasonably expected no later than the point when the lender concludes that modification is the best course of action and it is at least reasonably possible that the troubled borrower will accept some form of concession from the lender to avoid a default. Reasonably expected TDRs and executed non-performing TDRs are evaluated individually to determine the required ACL. Loan Commitments and Allowance for Credit Losses on Off-Balance Sheet Credit Exposures Financial instruments include off-balance sheet credit instruments such as commitments to make loans and commercial letters of credit issued to meet customer financing needs. The Company's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of those instruments. Such financial instruments are recorded when they are funded. The Company records a reserve for unfunded commitments (“RUC”) on off-balance sheet credit exposures through a charge to provision for credit loss expense in the Company’s consolidated statements of operations. The RUC on off-balance sheet credit exposures is estimated by loan segment at each balance sheet date under the current expected credit loss model using the same methodologies as portfolio loans, taking into consideration the likelihood that funding will occur, and is included in Reserve for Unfunded Commitments on the Company’s consolidated balance sheets. These statements should be read in conjunction |
Cash and Due from Banks
Cash and Due from Banks | 3 Months Ended |
Mar. 31, 2020 | |
Cash and Due from Banks | |
Cash and Due from Banks | Note 2. Cash and Due from Banks Regulation D of the Federal Reserve Act requires that banks maintain noninterest reserve balances with the Federal Reserve Bank based principally on the type and amount of their deposits. During 2020, the Bank maintained balances at the Federal Reserve sufficient to meet reserve requirements, as well as significant excess reserves, on which interest is paid. Additionally, the Bank maintains interest bearing balances with the Federal Home Loan Bank of Atlanta and noninterest bearing balances with domestic correspondent banks as compensation for services they provide to the Bank. |
Investment Securities Available
Investment Securities Available-for-Sale | 3 Months Ended |
Mar. 31, 2020 | |
Investment Securities Available-for-Sale | |
Investment Securities Available-for-Sale | Note 3. Investment Securities Available-for-Sale Amortized cost and estimated fair value of securities available-for-sale are summarized as follows: Gross Gross Estimated March 31, 2020 Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value U. S. agency securities $ 146,948 $ 1,527 $ 716 $ 147,759 Residential mortgage backed securities 531,784 16,110 506 547,388 Municipal bonds 72,828 2,760 — 75,588 Corporate bonds 52,087 969 72 52,984 U.S. Treasury 34,986 13 — 34,999 Other equity investments 198 — — 198 $ 838,831 $ 21,379 $ 1,294 $ 858,916 Gross Gross Estimated December 31, 2019 Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value U. S. agency securities $ 180,228 $ 621 $ 1,055 $ 179,794 Residential mortgage backed securities 541,490 4,337 1,975 543,852 Municipal bonds 71,902 2,034 5 73,931 Corporate bonds 10,530 203 — 10,733 U.S. Treasury 34,844 11 — 34,855 Other equity investments 198 — — 198 $ 839,192 $ 7,206 $ 3,035 $ 843,363 In addition, at March 31, 2020 and December 31, 2019 the Company held $40.0 million and $35.2 million, respectively, in equity securities in a combination of Federal Reserve Bank (“FRB”) and Federal Home Loan Bank (“FHLB”) stocks, which are required to be held for regulatory purposes and which are not marketable, and therefore are carried at cost. Accrued interest on available for sale securities totaled $3.4 million and $3.2 million at March 31, 2020 and December 31, 2019, respectively, and was included in other assets in the consolidated balance sheets. Gross unrealized losses and fair value of available-for-sale securities for which an allowance for credit losses has not been recorded, by length of time that individual securities have been in a continuous unrealized loss position are as follows: Less than 12 Months 12 Months or Greater Total Estimated Estimated Estimated March 31, 2020 Number of Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) Securities Value Losses Value Losses Value Losses U. S. agency securities 23 $ 13,835 $ 162 $ 39,486 $ 554 $ 53,321 $ 716 Residential mortgage backed securities 11 18,321 275 7,888 231 26,209 506 Corporate bonds 1 2,955 72 — — 2,955 72 35 $ 35,111 $ 509 $ 47,374 $ 785 $ 82,485 $ 1,294 Less than 12 Months 12 Months or Greater Total Estimated Estimated Estimated December 31, 2019 Number of Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) Securities Value Losses Value Losses Value Losses U. S. agency securities 36 $ 75,159 $ 439 $ 51,481 $ 616 $ 126,640 $ 1,055 Residential mortgage backed securities 111 197,794 1,148 90,742 827 288,536 1,975 Municipal bonds 1 1,994 5 — — 1,994 5 148 $ 274,947 $ 1,592 $ 142,223 $ 1,443 $ 417,170 $ 3,035 The majority of the AFS debt securities in an unrealized loss position as of March 31, 2020, consisted of debt securities issued by U.S. government agencies or U.S. government-sponsored enterprises. These securities carry the explicit and/or implicit guarantee of the U.S. government, are widely recognized as “risk free,” and have a long history of zero credit loss. As of March 31, 2020 total gross unrealized losses were primarily attributable to changes in interest rates, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities. The weighted average duration of debt securities, which comprise 99.9% of total investment securities, is relatively short at 2.6 years. If quoted prices are not available, fair value is measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security's credit rating, prepayment assumptions and other factors such as credit loss assumptions. The Company does not intend to sell the investments and it is more likely than not that the Company will not have to sell the securities before recovery of its amortized cost basis, which may be at maturity. The amortized cost and estimated fair value of investments available-for-sale at March 31, 2020 and December 31, 2019 by contractual maturity are shown in the table below. Expected maturities for residential mortgage backed securities (“MBS”) will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. March 31, 2020 December 31, 2019 Amortized Estimated Amortized Estimated (dollars in thousands) Cost Fair Value Cost Fair Value U. S. agency securities maturing: One year or less $ 61,706 $ 62,055 $ 96,332 $ 96,226 After one year through five years 80,513 81,106 76,121 75,821 Five years through ten years 4,729 4,598 7,775 7,747 Residential mortgage backed securities 531,784 547,388 541,490 543,852 Municipal bonds maturing: One year or less 6,400 6,456 5,897 5,969 After one year through five years 20,844 21,437 21,416 21,953 Five years through ten years 43,584 45,656 42,589 44,015 After ten years 2,000 2,039 2,000 1,994 Corporate bonds maturing: One year or less 10,972 11,054 502 508 After one year through five years 35,891 36,600 8,528 8,725 After ten years 5,224 5,330 1,500 1,500 U.S. treasury 34,986 34,999 34,844 34,855 Other equity investments 198 198 198 198 $ 838,831 $ 858,916 $ 839,192 $ 843,363 For the three months ended March 31, 2020, gross realized gains on sales of investments securities were $822 thousand and there were no gross realized losses on sales of investment securities. For the three months ended March 31, 2019, gross realized gains on sales of investments securities were $912 thousand and there were no gross realized losses on sales of investment securities. Proceeds from sales and calls of investment securities for the three months ended March 31, 2020 were The carrying value of securities pledged as collateral for certain government deposits, securities sold under agreements to repurchase, and certain lines of credit with correspondent banks at March 31, 2020 and December 31, 2019 was $364 million and $378 million, respectively, which is well in excess of required amounts in order to operationally provide significant reserve amounts for new business. As of March 31, 2020 and December 31, 2019, there were no holdings of securities of any one issuer, other than the U.S. Government and U.S. agency securities, which exceeded ten percent of shareholders’ equity. |
Mortgage Banking Derivatives
Mortgage Banking Derivatives | 3 Months Ended |
Mar. 31, 2020 | |
Mortgage Banking Derivatives | |
Mortgage Banking Derivatives | Note 4. Mortgage Banking Derivatives As part of its mortgage banking activities, the Bank enters into interest rate lock commitments, which are commitments to originate loans where the interest rate on the loan is determined prior to funding and the customers have locked into that interest rate. The Bank then locks in the loan and interest rate with an investor and commits to deliver the loan if settlement occurs (“best efforts”) or commits to deliver the locked loan in a binding (“mandatory”) delivery program with an investor. Certain loans under interest rate lock commitments are covered under forward sales contracts of mortgage backed securities. Forward sales contracts of MBS are recorded at fair value with changes in fair value recorded in noninterest income. Interest rate lock commitments and commitments to deliver loans to investors are considered derivatives. The market value of interest rate lock commitments and best efforts contracts are not readily ascertainable with precision because they are not actively traded in stand-alone markets. The Bank determines the fair value of interest rate lock commitments and delivery contracts by measuring the fair value of the underlying asset, which is impacted by current interest rates, taking into consideration the probability that the interest rate lock commitments will close or will be funded. Certain additional risks arise from these forward delivery contracts in that the counterparties to the contracts may not be able to meet the terms of the contracts. The Bank does not expect any counterparty to any MBS to fail to meet its obligation. Additional risks inherent in mandatory delivery programs include the risk that, if the Bank does not close the loans subject to interest rate risk lock commitments, it will still be obligated to deliver MBS to the counterparty under the forward sales agreement. Should this be required, the Bank could incur significant costs in acquiring replacement loans or MBS and such costs could have an adverse effect on mortgage banking operations. The fair value of the mortgage banking derivatives is recorded as a freestanding asset or liability with the change in value being recognized in current earnings during the period of change. At March 31, 2020 the Bank had mortgage banking derivative financial instruments with a notional value of $140.1 million related to its forward contracts as compared to $71.7 million at December 31, 2019. The fair value of these mortgage banking derivative instruments at March 31, 2020 was $331 thousand included in other assets and $1.6 million included in other liabilities as compared to $280 thousand included in other assets and $66 thousand included in other liabilities at December 31, 2019. Included in other noninterest income for the three months ended March 31, 2020 was a net loss of $1.3 million relating to mortgage banking derivative instruments as compared to a net gain of $134 thousand for the three months ended March 31, 2019. The amount included in other noninterest income for the three months ended March 31, 2020 pertaining to its mortgage banking hedging activities was a net realized loss of $1.3 million as compared to a net realized gain of $45 thousand for the three months ended March 31, 2019. |
Loans and Allowance for Credit
Loans and Allowance for Credit Losses | 3 Months Ended |
Mar. 31, 2020 | |
Loans and Allowance for Credit Losses | |
Loans and Allowance for Credit Losses | Note 5. Loans and Allowance for Credit Losses The Bank makes loans to customers primarily in the Washington, D.C. metropolitan area and surrounding communities. A substantial portion of the Bank’s loan portfolio consists of loans to businesses secured by real estate and other business assets. Loans, net of unamortized net deferred fees, at March 31, 2020 and December 31, 2019 are summarized by type as follows: March 31, 2020 December 31, 2019 (dollars in thousands) Amount % Amount % Commercial $ 1,773,478 23 % $ 1,545,906 20 % Income producing - commercial real estate 3,827,024 50 % 3,702,747 50 % Owner occupied - commercial real estate 971,634 12 % 985,409 13 % Real estate mortgage - residential 104,558 1 % 104,221 1 % Construction - commercial and residential 969,166 12 % 1,035,754 14 % Construction - C&I (owner occupied) 114,138 1 % 89,490 1 % Home equity 78,228 1 % 80,061 1 % Other consumer 2,647 — 2,160 — Total loans 7,840,873 100 % 7,545,748 100 % Less: allowance for credit losses (96,336) (73,658) Net loans (1) $ 7,744,537 (1) $ 7,472,090 (1) Excludes accrued interest receivable of $22.6 million and $21.3 million at March 31, 2020 and December 31, 2019, respectively, which is recorded in Other assets. Unamortized net deferred fees amounted to $24.8 million and $25.2 million at March 31, 2020 and December 31, 2019, respectively. As of March 31, 2020 and December 31, 2019, the Bank serviced $101 million and $99 million, respectively, of multifamily FHA loans, SBA loans and other loan participations which are not reflected as loan balances on the Consolidated Balance Sheets. Loan Origination / Risk Management The Company’s goal is to mitigate risks in the event of unforeseen threats to the loan portfolio as a result of economic downturn or other negative influences. Plans for mitigating inherent risks in managing loan assets include: carefully enforcing loan policies and procedures, evaluating each borrower’s business plan during the underwriting process and throughout the loan term, identifying and monitoring primary and alternative sources for loan repayment, and obtaining collateral to mitigate economic loss in the event of liquidation. Specific loan reserves are established based upon credit and/or collateral risks on an individual loan basis. A risk rating system is employed to proactively estimate loss exposure and provide a measuring system for setting general and specific reserve allocations. The composition of the Company’s loan portfolio is heavily weighted toward commercial real estate, both owner occupied and income producing real estate. At March 31, 2020, owner occupied - commercial real estate and construction – Commercial and Industrial (“C&I”) (owner occupied) represent approximately 13% of the loan portfolio . At March 31, 2020, non-owner occupied commercial real estate and real estate construction represented approximately 62% of the loan portfolio. The combined owner occupied and commercial real estate and construction loans represent approximately 75% of the loan portfolio. Real estate also serves as collateral for loans made for other purposes, resulting in 82% of all loans being secured by real estate. These loans are underwritten to mitigate lending risks typical of this type of loan such as declines in real estate values, changes in borrower cash flow and general economic conditions. The Bank typically requires a maximum loan to value of 80% and minimum cash flow debt service coverage of 1.15 to 1.0. Personal guarantees may be required, but may be limited. In making real estate commercial mortgage loans, the Bank generally requires that interest rates adjust not less frequently than five years. The Company is also an active traditional commercial lender providing loans for a variety of purposes, including working capital, equipment and account receivable financing. This loan category represents approximately 23% of the loan portfolio at March 31, 2020 and was generally variable or adjustable rate. Commercial loans meet reasonable underwriting standards, including appropriate collateral and cash flow necessary to support debt service. Personal guarantees are generally required, but may be limited. SBA loans represent approximately 1.2% of the commercial loan category. In originating SBA loans, the Company assumes the risk of non-payment on the unguaranteed portion of the credit as well as potential repairs to the SBA guarantees. The Company generally sells the guaranteed portion of the loan generating noninterest income from the gains on sale, as well as servicing income on the portion participated. SBA loans are subject to the same cash flow analyses as other commercial loans. SBA loans are subject to a maximum loan size established by the SBA as well as internal loan size guidelines. Approximately 1% of the loan portfolio at March 31, 2020 consists of home equity loans and lines of credit and other consumer loans. These credits, while making up a small portion of the loan portfolio, demand the same emphasis on underwriting and credit evaluation as other types of loans advanced by the Bank. Approximately 1% of the loan portfolio consists of residential mortgage loans. The repricing duration of these loans was 17 months. These credits represent first liens on residential property loans originated by the Bank. While the Bank’s general practice is to originate and sell (servicing released) loans made by its Residential Lending department, from time to time certain loan characteristics do not meet the requirements of third party investors and these loans are instead maintained in the Bank’s portfolio until they are resold to another investor at a later date or mature. Loans are secured primarily by duly recorded first deeds of trust or mortgages. In some cases, the Bank may accept a recorded junior trust position. In general, borrowers will have a proven ability to build, lease, manage and/or sell a commercial or residential project and demonstrate satisfactory financial condition. Additionally, an equity contribution toward the project is customarily required. Construction loans require that the financial condition and experience of the general contractor and major subcontractors be satisfactory to the Bank. Guaranteed, fixed price contracts are required whenever appropriate, along with payment and performance bonds or completion bonds for larger scale projects. Loans intended for residential land acquisition, lot development and construction are made on the premise that the land: 1) is or will be developed for building sites for residential structures, and 2) will ultimately be utilized for construction or improvement of residential zoned real properties, including the creation of housing. Residential development and construction loans will finance projects such as single family subdivisions, planned unit developments, townhouses, and condominiums. Residential land acquisition, development and construction loans generally are underwritten with a maximum term of 36 months, including extensions approved at origination. Commercial land acquisition and construction loans are secured by real property where loan funds will be used to acquire land and to construct or improve appropriately zoned real property for the creation of income producing or owner user commercial properties. Borrowers are generally required to put equity into each project at levels determined by the appropriate Loan Committee. Commercial land acquisition and construction loans generally are underwritten with a maximum term of 24 months. Substantially all construction draw requests must be presented in writing on American Institute of Architects documents and certified either by the contractor, the borrower and/or the borrower’s architect. Each draw request shall also include the borrower’s soft cost breakdown certified by the borrower or their Chief Financial Officer. Prior to an advance, the Bank or its contractor inspects the project to determine that the work has been completed, to justify the draw requisition. Commercial permanent loans are generally secured by improved real property which is generating income in the normal course of operation. Debt service coverage, assuming stabilized occupancy, must be satisfactory to support a permanent loan. The debt service coverage ratio is ordinarily at least 1.15 to 1.0. As part of the underwriting process, debt service coverage ratios are stress tested assuming a 200 basis point increase in interest rates from their current levels. Commercial permanent loans generally are underwritten with a term not greater than 10 years or the remaining useful life of the property, whichever is lower. The preferred term is between 5 The Company’s loan portfolio includes acquisition, development and construction (“ADC”) real estate loans including both investment and owner occupied projects. ADC loans amounted to $1.41 billion at March 31, 2020. A portion of the ADC portfolio, both speculative and non-speculative, includes loan funded interest reserves at origination. ADC loans that provide for the use of interest reserves represent approximately 60% of the outstanding ADC loan portfolio at March 31, 2020. The decision to establish a loan-funded interest reserve is made upon origination of the ADC loan and is based upon a number of factors considered during underwriting of the credit including: (1) the feasibility of the project; (2) the experience of the sponsor; (3) the creditworthiness of the borrower and guarantors; (4) the borrower equity contribution; and (5) the level of collateral protection. When appropriate, an interest reserve provides an effective means of addressing the cash flow characteristics of a properly underwritten ADC loan. The Company recognizes that one of the risks inherent in the use of interest reserves is the potential masking of underlying problems with the project and/or the borrower’s ability to repay the loan. In order to mitigate this inherent risk, the Company employs a series of reporting and monitoring mechanisms on all ADC loans, whether or not an interest reserve is provided, including: (1) construction and development timelines which are monitored on an ongoing basis which track the progress of a given project to the timeline projected at origination; (2) a construction loan administration department independent of the lending function; (3) third party independent construction loan inspection reports; (4) monthly interest reserve monitoring reports detailing the balance of the interest reserves approved at origination and the days of interest carry represented by the reserve balances as compared to the then current anticipated time to completion and/or sale of speculative projects; and (5) quarterly commercial real estate construction meetings among senior Company management, which includes monitoring of current and projected real estate market conditions. If a project has not performed as expected, it is not the customary practice of the Company to increase loan funded interest reserves. The following tables detail activity in the allowance for credit losses by portfolio segment for the three months ended March 31, 2020 and 2019. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories. Income Producing - Owner Occupied - Real Estate Construction - Commercial Commercial Mortgage - Commercial and Home Other (dollars in thousands) Commercial Real Estate Real Estate Residential Residential Equity Consumer Total For the Three Months Ended March 31, 2020 Allowance for credit losses: Balance at beginning of period, prior to adoption of ASC 326 $ 18,832 $ 29,265 $ 5,838 $ 1,557 $ 17,485 $ 656 $ 25 $ 73,658 Impact of adopting ASC 326 892 11,230 4,674 (301) (6,143) 245 17 10,614 Loans charged-off — (550) — — (1,768) — — (2,318) Recoveries of loans previously charged-off 69 — — — — — 3 72 Net loans charged-off 69 (550) — — (1,768) — 3 (2,246) Provision for credit losses 7,553 3,606 (645) 113 3,767 (83) (1) 14,310 Ending balance $ 27,346 $ 43,551 $ 9,867 $ 1,369 $ 13,341 $ 818 $ 44 $ 96,336 As of March 31, 2020 Allowance for credit losses: Individually evaluated for impairment $ 7,239 $ 1,903 $ 375 $ 657 $ 1,554 $ 105 $ — $ 11,833 Collectively evaluated for impairment 20,107 41,648 9,492 712 11,787 713 44 84,503 Ending balance $ 27,346 $ 43,551 $ 9,867 $ 1,369 $ 13,341 $ 818 $ 44 $ 96,336 Three Months Ended March 31, 2019 Allowance for credit losses: Balance at beginning of period $ 15,857 $ 28,034 $ 6,242 $ 965 $ 18,175 $ 599 $ 72 $ 69,944 Loans charged-off (4) (3,496) — — — — — (3,500) Recoveries of loans previously charged-off 130 — — 1 — — 8 139 Net loans charged-off 126 (3,496) — 1 — — 8 (3,361) Provision for credit losses 1,212 2,227 (262) (285) 294 6 168 3,360 Ending balance $ 17,195 $ 26,765 $ 5,980 $ 681 $ 18,469 $ 605 $ 248 $ 69,943 As of March 31, 2019 Allowance for credit losses: Individually evaluated for impairment $ 5,892 $ 15 $ 600 $ — $ — $ — $ — $ 6,507 Collectively evaluated for impairment 11,303 26,750 5,380 681 18,469 605 248 63,436 Ending balance $ 17,195 $ 26,765 $ 5,980 $ 681 $ 18,469 $ 605 $ 248 $ 69,943 During the first quarter of 2020, we adopted ASU 2016-13, which replaces the incurred loss methodology for determining our provision for credit losses and allowance for credit losses with an expected loss methodology that is referred to as the CECL model. Upon adoption, the allowance for credit losses was increased by $14.7 million, which included a $4.1 million increase to the allowance for unfunded commitments, with no impact to the consolidated statement of operations. We recorded a $16.4 million provision for credit losses for the first quarter of 2020 utilizing the newly adopted CECL methodology, a significant increase from prior quarters. The increase resulted primarily from the impact of reserve build related to the COVID-19 pandemic and to a lesser extent loan growth, offset by lower charge offs than in the comparable quarters. We recorded $2.2 million in net charge-offs during the first quarter of 2020, compared to $3.4 million during the first quarter of 2019. A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. The following table presents the amortized cost basis of collateral-dependent loans by class of loans as of March 31, 2020: Business/Other (dollars in thousands) Assets Real Estate Commercial $ 15,287 $ 3,518 Income producing - commercial real estate 3,193 18,278 Owner occupied - commercial real estate — 10,645 Real estate mortgage - residential — 8,052 Construction - commercial and residential — 6,875 Construction - C&I (owner occupied) — — Home equity — 541 Other consumer 7 — Total $ 18,487 $ 47,909 Credit Quality Indicators The Company uses several credit quality indicators to manage credit risk in an ongoing manner. The Company’s primary credit quality indicators are to use an internal credit risk rating system that categorizes loans into pass, watch, special mention, or classified categories. Credit risk ratings are applied individually to those classes of loans that have significant or unique credit characteristics that benefit from a case-by-case evaluation. These are typically loans to businesses or individuals in the classes which comprise the commercial portfolio segment. Groups of loans that are underwritten and structured using standardized criteria and characteristics, such as statistical models (e.g., credit scoring or payment performance), are typically risk rated and monitored collectively. These are typically loans to individuals in the classes which comprise the consumer portfolio segment. The following are the definitions of the Company’s credit quality indicators: Pass: Loans in all classes that comprise the commercial and consumer portfolio segments that are not adversely rated, are contractually current as to principal and interest, and are otherwise in compliance with the contractual terms of the loan agreement. Management believes that there is a low likelihood of loss related to those loans that are considered pass. Watch: Loan paying as agreed with generally acceptable asset quality; however the obligor’s performance has not met expectations. Balance sheet and/or income statement has shown deterioration to the point that the obligor could not sustain any further setbacks. Credit is expected to be strengthened through improved obligor performance and/or additional collateral within a reasonable period of time. Special Mention: Loans in the classes that comprise the commercial portfolio segment that have potential weaknesses that deserve management’s close attention. If not addressed, these potential weaknesses may result in deterioration of the repayment prospects for the loan. The special mention credit quality indicator is not used for classes of loans that comprise the consumer portfolio segment. Management believes that there is a moderate likelihood of some loss related to those loans that are considered special mention. Classified: Classified (a) Substandard Classified (b) Doubtful Based on the most recent analysis performed, the risk category of loans by class of loans is as follows: March 31, 2020 (dollars in thousands) 2016 2017 2018 2019 2020 Prior Total Commercial Pass 146,077 339,954 324,160 267,490 113,862 495,376 1,686,919 Watch — 16,892 494 1,010 — 15,828 34,224 Special Mention — 11,108 11,365 — — 1,111 23,584 Substandard 4,871 1,652 2,577 1,131 — 18,520 28,751 Total 150,948 369,606 338,596 269,631 113,862 530,835 1,773,478 Income producing - commercial real estate Pass 417,298 586,243 736,476 897,933 147,214 1,005,065 3,790,229 Watch — 4,641 — 4,334 — 1,365 10,340 Special Mention 800 — — 5,542 — 4,854 11,196 Substandard — 4,984 3,193 — — 7,082 15,259 Total 418,098 595,868 739,669 907,809 147,214 1,018,366 3,827,024 Owner occupied - commercial real estate Pass 112,140 120,780 226,702 92,231 689 369,509 922,051 Watch 2,691 — 2,607 — — 34,500 39,798 Substandard 850 — — — — 8,935 9,785 Total 115,681 120,780 229,309 92,231 689 412,944 971,634 Real estate mortgage - residential Pass 3,436 11,950 24,773 29,207 4,203 22,316 95,885 Watch — — — — — 620 620 Substandard 4,154 2,688 — — — 1,211 8,053 Total 7,590 14,638 24,773 29,207 4,203 24,147 104,558 Construction - commercial and residential Pass 82,642 437,815 292,994 102,645 17,223 28,972 962,291 Substandard 2,303 1,893 — — — 2,679 6,875 Total 84,945 439,708 292,994 102,645 17,223 31,651 969,166 Construction - C&I (owner occupied) Pass 11,742 4,073 39,220 21,460 12,633 11,062 100,190 Watch — 2,129 11,100 — — 719 13,948 Total 11,742 6,202 50,320 21,460 12,633 11,781 114,138 Home Equity Pass 5,598 9,349 8,729 4,935 931 47,201 76,743 Watch — — — — — 944 944 Substandard — — — — — 541 541 Total 5,598 9,349 8,729 4,935 931 48,686 78,228 Other Consumer Pass 200 203 136 109 1,173 810 2,631 Substandard — — — — — 16 16 Total 200 203 136 109 1,173 826 2,647 Total Recorded Investment $ 794,802 $ 1,556,354 $ 1,684,526 $ 1,428,027 $ 297,928 $ 2,079,236 $ 7,840,873 The Company’s credit quality indicators are updated generally on a quarterly basis, but no less frequently than annually. The following table presents by class and by credit quality indicator, the recorded investment in the Company’s loans and leases as of December 31, 2019. Total (dollars in thousands) Pass Watch Special Mention Substandard Doubtful Loans December 31, 2019 Commercial $ 1,470,636 $ 38,522 $ 11,460 $ 25,288 $ — $ 1,545,906 Income producing - commercial real estate 3,667,585 16,069 — 19,093 — 3,702,747 Owner occupied - commercial real estate 925,800 53,146 — 6,463 — 985,409 Real estate mortgage - residential 98,228 628 — 5,365 — 104,221 Construction - commercial and residential 1,113,734 — — 11,510 — 1,125,244 Home equity 78,626 948 — 487 — 80,061 Other consumer 2,160 — — — — 2,160 Total $ 7,356,769 $ 109,313 $ 11,460 $ 68,206 $ — $ 7,545,748 Nonaccrual and Past Due Loans As part of its comprehensive loan review process, the Loan Committee or Credit Review Committee carefully evaluate loans which are past-due 30 days or more. The Committees make a thorough assessment of the conditions and circumstances surrounding each delinquent loan. The Bank’s loan policy requires that loans be placed on nonaccrual if they are ninety days past-due, unless they are well secured and in the process of collection. Additionally, Credit Administration specifically analyzes the status of development and construction projects, sales activities and utilization of interest reserves in order to carefully and prudently assess potential increased levels of risk requiring additional reserves. The following table presents, by class of loan, an aging analysis and the recorded investments in loans past due as of March 31, 2020 and December 31, 2019. Loans Loans Loans Total Recorded 30-59 Days 60-89 Days 90 Days or Total Past Current Investment in (dollars in thousands) Past Due Past Due More Past Due Due Loans Loans Non-Accrual Loans March 31, 2020 Commercial $ 4,596 $ 168 $ — $ 4,764 $ 1,752,396 $ 16,318 $ 1,773,478 Income producing - commercial real estate 3,376 12,086 — 15,462 3,805,665 5,897 3,827,024 Owner occupied - commercial real estate 288 — — 288 961,561 9,785 971,634 Real estate mortgage - residential 5,282 — — 5,282 90,962 8,314 104,558 Construction - commercial and residential 2,062 — — 2,062 960,229 6,875 969,166 Construction - C&I (owner occupied) — — — — 114,138 — 114,138 Home equity 592 — — 592 77,095 541 78,228 Other consumer 8 — — 8 2,632 7 2,647 Total $ 16,204 $ 12,254 $ — $ 28,458 $ 7,764,678 $ 47,737 $ 7,840,873 December 31, 2019 Commercial $ 3,063 $ 781 $ — $ 3,844 $ 1,527,134 $ 14,928 $ 1,545,906 Income producing - commercial real estate — 5,542 — 5,542 3,687,494 9,711 3,702,747 Owner occupied - commercial real estate 13,008 — — 13,008 965,938 6,463 985,409 Real estate mortgage – residential 3,533 — — 5,333 95,057 5,631 104,221 Construction - commercial and residential — — — — 1,113,735 11,509 1,125,244 Home equity 136 192 — 328 79,246 487 80,061 Other consumer — 9 — 9 2,151 — 2,160 Total $ 19,740 $ 6,524 $ — $ 26,264 $ 7,470,755 $ 48,729 $ 7,545,748 The following presents the nonaccrual loans as of March 31, 2020 and December 31, 2019: March 31, 2020 December 31, 2019 Nonaccrual with Nonaccrual with Total Total No Allowance an Allowance Nonaccrual Nonaccrual (dollars in thousands) for Credit Loss for Credit Loss Loans Loans Commercial 9,672 13,093 16,318 14,928 Income producing - commercial real estate 2,704 3,193 5,897 9,711 Owner occupied - commercial real estate 9,008 777 9,785 6,463 Real estate mortgage - residential 5,858 2,717 8,314 5,631 Construction - commercial and residential 3,788 3,087 6,875 11,509 Home equity 53 487 541 487 Other consumer — 7 7 — Total $ 31,083 $ 23,361 $ 47,737 $ 48,729 (1) Excludes troubled debt restructurings (“TDRs”) that were performing under their restructured terms totaling $17.9 million at March 31, 2020 and $16.6.0 million at December 31, 2019. (2) Gross interest income of $717 thousand and $701 thousand would have been recorded for the three months ended March 31, 2020 and 2019, respectively, if nonaccrual loans shown above had been current and in accordance with their original terms, while there was no interest recorded on such loans for the three months ended March 31, 2020 and 2019, respectively. See Note 1 to the Consolidated Financial Statements for a description of the Company’s policy for placing loans on nonaccrual status. Pre Adoption of CECL Loans were considered impaired when, based on current information and events, it was probable the Company would be unable to collect all amounts due in accordance with the original contractual terms of the loan agreement, including scheduled principal and interest payments. If a loan was impaired, a specific valuation allowance was allocated, if necessary, so that the loan was reported at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment was expected solely from the collateral. The Bank’s loan policy requires that loans be placed on nonaccrual if they are ninety days past-due, unless they are well secured and in the process of collection. Impaired loans, or portions thereof, were charged-off when deemed uncollectible. The following table presents, by class of loan, information related to impaired loans for the period December 31, 2019. Unpaid Recorded Recorded Average Recorded Interest Income Contractual Investment Investment Total Investment Recognized Principal With No With Recorded Related Year Year (dollars in thousands) Balance Allowance Allowance Investment Allowance To Date To Date December 31, 2019 Commercial $ 15,814 $ 11,858 $ 3,956 $ 15,814 $ 5,714 $ 15,682 $ 270 Income producing - commercial real estate 14,093 2,713 11,380 14,093 2,145 18,133 382 Owner occupied - commercial real estate 7,349 6,388 961 7,349 415 6,107 197 Real estate mortgage – residential 5,631 3,175 2,456 5,631 650 5,638 — Construction - commercial and residential 11,509 11,101 408 11,509 100 8,211 92 Home equity 487 — 487 487 100 487 — Other consumer — — — — — — — Total $ 54,883 $ 35,235 $ 19,648 $ 54,883 $ 9,124 $ 54,258 $ 941 Modifications A modification of a loan constitutes a TDR when a borrower is experiencing financial difficulty and the modification constitutes a concession. The Company offers various types of concessions when modifying a loan. Commercial and industrial loans modified in a TDR often involve temporary interest-only payments, term extensions, and converting revolving credit lines to term loans. Additional collateral, a co-borrower, or a guarantor is often requested. The most common change in terms provided by the Company is an extension of an interest only term. As of March 31, 2020, all performing TDRs were categorized as interest-only modifications . Loans modified in a TDR for the Company may have the financial effect of increasing the specific allowance associated with the loan. An allowance for impaired consumer and commercial loans that have been modified in a TDR is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the estimated fair value of the collateral, less any selling costs, if the loan is collateral dependent. Management exercises significant judgment in developing these estimates. In response to the COVID-19 pandemic and its economic impact to our customers, we implemented a short-term modification program that complies with the CARES Act and ASC 310-40 to provide temporary payment relief to those borrowers directly impacted by COVID-19 who were not more than 30 days past due as of December 31, 2019. This program allows for a deferral of payments for 90 days, which we may extend for an additional 90 days, for a maximum of 180 days on a cumulative and successive basis. The deferred payments along with interest accrued during the deferral period are due and payable on the maturity date. As of March 31, 2020, we granted temporary modifications on approximately 32 loans representing approximately $45 million in outstanding exposure. Through April 30, 2020, we granted approximately 382 temporary modifications representing approximately $576 million in outstanding exposure. Under the applicable guidance, none of these loans were considered TDRs as of March 31, 2020. The following table presents by class, the recorded investment of loans modified in TDRs held by the Company for the periods ended March 31, 2020 and 2019. For the Three Months Ended March 31, 2020 Income Owner Number Producing - Occupied - Construction - of Commercial Commercial Commercial (dollars in thousands) Contracts Commercial Real Estate Real Estate Real Estate Total Troubled debt restructurings Restructured accruing 11 $ 1,438 $ 15,574 $ 860 $ — $ 17,872 Restructured nonaccruing 2 137 — 2,370 — 2,507 Total 13 $ 1,575 $ 15,574 $ 3,230 $ — $ 20,379 Specific allowance $ — $ 1,007 $ — $ — $ 1,007 Restructured and subsequently defaulted $ — $ — $ — $ — $ — For the Three Months Ended March 31, 2019 Income Owner Number Producing - Occupied - Construction - of Commercial Commercial Commercial (dollars in thousands) Contracts Commercial Real Estate Real Estate Real Estate Total Troubled debt restructurings Restructured accruing 10 $ 3,218 $ 19,622 $ 3,337 $ — $ 26,177 Restructured nonaccruing 3 538 — — — 538 Total 13 $ 3,756 $ 19,622 $ 3,337 $ — $ 26,715 Specific allowance $ 775 $ 3,000 $ — $ — $ 3,775 Restructured and subsequently defaulted $ — $ — $ — $ — $ — The Company had thirteen TDR’s at March 31, 2020 totaling approximately $20.4 million. Eleven of these loans totaling approximately $17.9 million are performing under their modified terms. For the first quarter of 2020 and 2019, there were no performing TDR loans that defaulted on their modified terms. A default is considered to have occurred once the TDR is past due 90 days or more or it has been placed on non-accrual status. Commercial and consumer loans modified in a TDR are closely monitored for delinquency as an early indicator of possible future default. If loans modified in |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases | |
Leases | Note 6. Leases A lease is defined as a contract that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. On January 1, 2019, the Company adopted ASU No. 2016-02 “Leases” (Topic 842) Substantially all of the leases in which the Company is the lessee are comprised of real estate property for branch offices, ATM locations, and corporate office space. Substantially all of our leases are classified as operating leases, and as such, were previously not recognized on the Company’s Consolidated Statements of Condition. With the adoption of Topic 842, operating lease agreements were required to be recognized on the Consolidated Statements of Condition as a right-of-use (“ROU”) asset and a corresponding lease liability. As of March 31, 2020, the Company had $25.7 million of operating lease ROU assets and $28.2 million of operating lease liabilities on the Company’s Consolidated Balance Sheet. As of December 31, 2019, the Company had $27.4 million of operating lease ROU assets and $30.0 million of operating lease liabilities on the Company’s Consolidated Balance Sheet. The Company elects not to recognize ROU assets and lease liabilities arising from short-term leases, leases with initial terms of twelve months or less, or equipment leases (deemed immaterial) on the Consolidated Statements of Condition. Our leases contain terms and conditions of options to extend or terminate the lease which are recognized as part of the ROU assets and lease liabilities when an economic benefit to exercise the option exists and there is a 90% probability that the Company will exercise the option. If these criteria are not met, the options are not included in our ROU assets and lease liabilities. As of March 31, 2020, our leases do not contain material residual value guarantees or impose restrictions or covenants related to dividends or the Company’s ability to incur additional financial obligations. As of March 31, 2020, there were no leases that have been signed but did not yet commence as of the reporting date that create significant rights and obligations for the Company. The following table presents lease costs and other lease information. Three Months Ended (dollars in thousands) March 31, 2020 March 31,2019 Lease Cost Operating Lease Cost (Cost resulting from lease payments) $ 1,998 $ 1,863 Variable Lease Cost (Cost excluded from lease payments) 267 244 Sublease Income (87) (94) Net Lease Cost $ 2,178 $ 2,013 Operating Lease - Operating Cash Flows (Fixed Payments) 2,206 2,024 Right-of-Use Assets - Operating Leases 25,655 28,928 Weighted Average Lease Term - Operating Leases 4.84 yrs 5.50 yrs Weighted Average Discount Rate - Operating Leases 4.00% 4.00% Future minimum payments for operating leases with initial or remaining terms of one year or more as of March 31, 2020 were as follows: (dollars in thousands) Twelve Months Ended: March 31, 2021 $ 8,320 March 31, 2022 7,353 March 31, 2023 4,961 March 31, 2024 4,302 March 31, 2025 3,273 Thereafter 3,174 Total Future Minimum Lease Payments 31,383 Amounts Representing Interest (3,141) Present Value of Net Future Minimum Lease Payments $ 28,242 |
Affordable Housing Projects Tax
Affordable Housing Projects Tax Credit Partnerships | 3 Months Ended |
Mar. 31, 2020 | |
Affordable Housing Projects Tax Credit Partnerships | |
Affordable Housing Projects Tax Credit Partnerships | Note 7 – Affordable Housing Projects Tax Credit Partnerships Included in Other Assets, the Company makes equity investments in various limited partnerships that sponsor affordable housing projects utilizing the Low Income Housing Tax Credit (“LIHTC”) pursuant to Section 42 of the Internal Revenue Code. The purpose of these investments is to achieve a satisfactory return on capital, to facilitate the sale of affordable housing products offerings, and to assist in achieving goals associated with the Community Reinvestment Act. The primary activities of the limited partnerships include the identification, development, and operation of multi-family housing that is leased to qualifying residential tenants. Generally, these types of investments are funded through a combination of debt and equity. The Company is a limited partner in each LIHTC limited partnership. Each limited partnership is managed by an unrelated third party general partner who exercises significant control over the affairs of the limited partnership. The general partner has all the rights, powers and authority granted or permitted to be granted to a general partner of a limited partnership. Duties entrusted to the general partner of each limited partnership include, but are not limited to: investment in operating companies, company expenditures, investment of excess funds, borrowing funds, employment of agents, disposition of fund property, prepayment and refinancing of liabilities, votes and consents, contract authority, disbursement of funds, accounting methods, tax elections, bank accounts, insurance, litigation, cash reserve, and use of working capital reserve funds. Except for limited rights granted to the limited partner(s) relating to the approval of certain transactions, the limited partner(s) may not participate in the operation, management, or control of the limited partnership’s business, transact any business in the limited partnership’s name or have any power to sign documents for or otherwise bind the limited partnership. In addition, the general partner may only be removed by the limited partner(s) in the event the general partner fails to comply with the terms of the agreement or is negligent in performing its duties. The general partner of each limited partnership has both the power to direct the activities which most significantly affect the performance of each partnership and the obligation to absorb losses or the right to receive benefits that could be significant to the entities. Therefore, the Company has determined that it is not the primary beneficiary of any LIHTC partnership. The Company accounts for its affordable housing tax credit investments using the proportional amortization method. The Company’s net affordable housing tax credit investments were $28.9 million and related unfunded commitments were $11.3 million as of March 31, 2020 and are included in Other Assets and Other Liabilities in the Consolidated Statements of Condition. The Company's net affordable housing tax credit investments were $29.7 million and related unfunded commitments were $11.3 million as of December 31, 2019. |
Other Derivatives
Other Derivatives | 3 Months Ended |
Mar. 31, 2020 | |
Other Derivatives | |
Other Derivatives | Note 8. Other Derivatives The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Cash Flow Hedges of Interest Rate Risk The Company uses interest rate swap agreements to assist in its interest rate risk management. The Company’s objective in using interest rate derivatives designated as cash flow hedges is to add stability to interest expense and to better manage its exposure to interest rate movements. To accomplish this objective, the Company utilizes interest rate swaps as part of its interest rate risk management strategy intended to mitigate the potential risk of rising interest rates on the Bank’s cost of funds. The notional amounts of the interest rate swaps designated as cash flow hedges do not represent amounts exchanged by the counterparties, but rather, the notional amount is used to determine, along with other terms of the derivative, the amounts to be exchanged between the counterparties. The interest rate swaps are designated as cash flow hedges and involve the receipt of variable rate amounts from one counterparty in exchange for the Company making fixed payments. The Company’s intent is to hedge its exposure to the variability in potential future interest rate conditions on existing financial instruments. For derivatives designated as cash flow hedges, changes in the fair value of the derivative are initially reported in other comprehensive income (outside of earnings), net of tax, and subsequently reclassified to earnings when the hedged transaction affects earnings. The Company assesses the effectiveness of each hedging relationship by comparing the changes in cash flows of the derivative hedging instrument with the changes in cash flows of the designated hedged transactions. As of March 31, 2020 and December 31, 2019, the Company had one designated cash flow hedge notional interest rate swap transaction outstanding amounting to $100 million associated with the Company’s variable rate deposits. The Company recognized $829 thousand in noninterest income during March 2019 due to the termination of two of its interest rate swap transactions as part of the Company’s asset liability strategy as well as declines in market interest rates. Amounts reported in accumulated other comprehensive income related to designated cash flow hedge derivatives will be reclassified to interest income/expense as interest payments are made/received on the Company’s variable-rate assets/liabilities. During the next twelve months, the Company estimates (based on existing interest rates) that $1.6 million will be reclassified as an increase in interest expense. Non-designated Hedges Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain customers. The Company executes interest rate caps and swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting derivatives that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. As the interest rate derivatives associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings. The Company entered into credit risk participation agreements ("RPAs") with institutional counterparties, under which the Company assumes its pro-rata share of the credit exposure associated with a borrower's performance related to interest rate derivative contracts. The fair value of RPAs is calculated by determining the total expected asset or liability exposure of the derivatives to the borrowers and applying the borrowers' credit spread to that exposure. Total expected exposure incorporates both the current and potential future exposure of the derivatives, derived from using observable inputs, such as yield curves and volatilities. Credit-risk-related Contingent Features The Company has agreements with each of its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, then the Company could also be declared in default on its derivative obligations. The Company is exposed to credit risk in the event of nonperformance by the interest rate derivative counterparty. The Company minimizes this risk by entering into derivative contracts with only large, stable financial institutions, and the Company has not experienced, and does not expect, any losses from counterparty nonperformance on the interest rate derivatives. The Company monitors counterparty risk in accordance with the provisions of ASC Topic 815, "Derivatives and Hedging." The interest rate derivative agreements detail: 1) that collateral be posted when the market value exceeds certain threshold limits associated with the secured party’s exposure; 2) if the Company defaults on any of its indebtedness (including default where repayment of the indebtedness has not been accelerated by the lender), then the Company could also be declared in default on its derivative obligations; 3) if the Company fails to maintain its status as a well-capitalized institution then the counterparty could terminate the derivative positions and the Company would be required to settle its obligations under the agreements. As of March 31, 2020, the aggregate fair value of the derivative contract with credit risk contingent features (i.e., containing collateral posting or termination provisions based on our capital status) that was in a net liability position totaled $4.7 million. The Company has a minimum collateral posting threshold with its derivative counterparty. As of March 31, 2020, the Company was required to post collateral totaling $1.5 million with its derivative counterparty against its obligations under this agreement. If the Company had breached any provisions under the agreement at March 31, 2020, it could have been required to settle its obligations under the agreement at the termination value. The table below identifies the balance sheet category and fair value of the Company’s designated cash flow hedge derivative instruments and non-designated hedges as of March 31, 2020 and December 31, 2019. March 31,2020 December 31,2019 Derivatives designated as hedging instruments Notional Balance Sheet Notional Balance Sheet (dollars in thousands) Amount Fair Value Category Amount Fair Value Category Interest rate product $ 100,000 $ 1,695 Other Liabilities $ 100,000 $ 206 Other Liabilities Derivatives not designated as hedging instruments (dollars in thousands) Interest rate product $ 93,699 $ 2,834 Other Assets $ 56,806 $ 311 Other Assets (dollars in thousands) Interest rate product $ 93,699 $ 3,011 Other Liabilities $ 56,806 $ 319 Other Liabilities Other Contracts 27,268 152 Other Liabilities 27,384 86 Other Liabilities $ 120,967 $ 3,163 $ 84,190 $ 405 Other Liabilities The table below presents the pre-tax net gains (losses) of the Company’s designated cash flow hedges for the three months ended March 31, 2020 and 2019. The Effect of Fair Value and Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income Location of Gain or (Loss) Amount of Gain or (Loss) Amount of Gain or (Loss) Recognized in OCI Recognized from Reclassified from Accumulated OCI on Derivative Accumulated Other into Income Derivatives in Subtopic 815-20 Hedging Three Months Ended March 31, Comprehensive Income into Three Months Ended March 31, Relationships (dollars in thousands) 2020 2019 Income 2020 2019 Derivatives in Cash Flow Hedging Relationships Interest Rate Products $ (1,521) $ (1,034) Interest Expense $ 28 $ 462 Interest Rate Products — — Gain on sale of investment securities — (829) Total $ (1,521) $ (1,034) $ 28 $ (367) The table below presents the effect of the Company’s derivative financial instruments on the Consolidated Statements of Operations for the three months ended March 31, 2020 and 2019. The Effect of Fair Value and Cash Flow Hedge Accounting on the Statements of Operation Location and Amount of Gain or (Loss) Recognize in Income on Fair Value and Cash Flow Hedging Relationships (in 000's) Three Months Ended March 31, 2020 2020 2019 Interest Interest Gain on sale of Expense Expense investment securities Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded $ 28 $ 462 $ — Gain or (loss) on cash flow hedging relationships in Subtopic 815-20 Interest contracts Amount of gain or (loss) reclassified from accumulated other comprehensive income into income $ 28 $ 462 $ — Amount of gain or (loss) reclassified from accumulated other comprehensive income into income as a result that a forecasted transaction is no longer probable of occurring $ — $ — $ (829) Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income - Included Component $ 28 $ 462 $ — Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income - Excluded Component $ — $ — $ — Effect of Derivatives Not Designated as Hedging Instruments on the Statements of Operation Amount of Gain or (Loss) Recognized in Income on Location of Gain or Derivative Derivatives Not Designated as Hedging (Loss) Recognized in Three Months Ended March 31, Instruments under Subtopic 815-20 Income on Derivative 2020 2019 Interest Rate Products Other income / (expense) (168) (13) Other Contracts Other income / (expense) (66) — Total (234) (13) Balance Sheet Offsetting As of March 31, 2020 Net Amounts of Gross Assets Gross Amounts Not Offset in the Gross Amounts presented Balance Sheet Amounts of Offset in in the Cash Recognized the Balance Balance Financial Collateral Net Offsetting of Derivative Assets (dollars in thousands) Assets Sheet Sheet Instruments Posted Amount $ 3,165 $ — $ 3,165 $ — $ — $ 3,165 Net Amounts of Gross Liabilities Gross Amounts Not Offset in the Gross Amounts presented Balance Sheet Amounts of Offset in in the Cash Recognized the Balance Balance Financial Collateral Net Offsetting of Derivative Liabilities (dollars in thousands) Liabilities Sheet Sheet Instruments Posted Amount Derivatives $ 6,459 $ — $ 6,459 $ — $ 3,230 $ 3,229 As of December 31, 2019 Net Amounts of Gross Assets Gross Amounts Not Offset in the Gross Amounts presented Balance Sheet Amounts of Offset in in the Cash Recognized the Balance Balance Financial Collateral Net Offsetting of Derivative Assets (dollars in thousands) Assets Sheet Sheet Instruments Posted Amount Derivatives $ 311 $ — $ 311 $ — $ — $ 311 Net Amounts of Gross Liabilities Gross Amounts Not Offset in the Gross Amounts presented Balance Sheet Amounts of Offset in in the Cash Recognized the Balance Balance Financial Collateral Net Offsetting of Derivative Liabilities (dollars in thousands) Liabilities Sheet Sheet Instruments Posted Amount Derivatives $ 611 $ — $ 611 $ — $ 500 $ 111 |
Other Real Estate Owned
Other Real Estate Owned | 3 Months Ended |
Mar. 31, 2020 | |
Other Real Estate Owned | |
Other Real Estate Owned | Note 9. Other Real Estate Owned The activity within Other Real Estate Owned (“OREO”) for the three months ended March 31, 2020 and 2019 is presented in the table below. There were no residential real estate loans in the process of foreclosure as of March 31, 2020. For the three months ended March 31, 2020 and 2019, there were no sales of OREO property. Three Months Ended March 31, (dollars in thousands) 2020 2019 Beginning Balance $ 1,487 $ 1,394 Real estate acquired from borrowers 6,750 — Properties sold — — Ending Balance $ 8,237 $ 1,394 |
Long-Term Borrowings
Long-Term Borrowings | 3 Months Ended |
Mar. 31, 2020 | |
Long-term Debt, Unclassified [Abstract] | |
Long-Term Borrowings | Note 10. Long-Term Borrowings The following table presents information related to the Company’s long-term borrowings as of March 31, 2020 and December 31, 2019. (dollars in thousands) March 31, 2020 December 31, 2019 Subordinated Notes, 5.75% $ 70,000 $ 70,000 Subordinated Notes, 5.0% 150,000 150,000 FHLB Advance, 1.81% 50,000 — Less: unamortized debt issuance costs (2,216) (2,313) Long-term borrowings $ 267,784 $ 217,687 On August 5, 2014, the Company completed the sale of $70.0 million of its 5.75% subordinated notes, due September 1, 2024 (the “2024 Notes”). The 2024 Notes were offered to the public at par and qualify as Tier 2 capital for regulatory purposes to the fullest extent permitted under the Basel III Rule capital requirements. The net proceeds were approximately $68.8 million, which includes $1.2 million in deferred financing costs which are being amortized over the life of the 2024 Notes. On July 26, 2016, the Company completed the sale of $150.0 million of its 5.00% Fixed-to-Floating Rate Subordinated Notes, due August 1, 2026 (the “2026 Notes”). The 2026 Notes were offered to the public at par and qualify as Tier 2 capital for regulatory purposes to the fullest extent permitted under the Basel III Rule capital requirements. The net proceeds were approximately $147.35 million, which includes $2.6 million in deferred financing costs which are being amortized over the life of the 2026 Notes. On February 26th, 2020, the Bank advanced $50 million dollars under its borrowing arrangement with the Federal Home Loan Bank of Atlanta at a fixed rate of 1.81% with a maturity date of February 26, 2030 as part of the overall asset liability strategy and to support loan growth. |
Net Income per Common Share
Net Income per Common Share | 3 Months Ended |
Mar. 31, 2020 | |
Net Income per Common Share | |
Net Income per Common Share | Note 11. Net Income per Common Share The calculation of net income per common share for the three months ended March 31, 2020 and 2019 was as follows: Three Months Ended March 31, (dollars and shares in thousands, except per share data) 2020 2019 Basic: Net income $ 23,123 $ 33,749 Average common shares outstanding 32,850 34,481 Basic net income per common share $ 0.70 $ 0.98 Diluted: Net income $ 23,123 $ 33,749 Average common shares outstanding 32,850 34,481 Adjustment for common share equivalents 25 55 Average common shares outstanding-diluted 32,875 34,536 Diluted net income per common share $ 0.70 $ 0.98 Anti-dilutive shares 26 3 |
Other Comprehensive Income
Other Comprehensive Income | 3 Months Ended |
Mar. 31, 2020 | |
Other Comprehensive Income. | |
Other Comprehensive Income | Note 12. Other Comprehensive Income The following table presents the components of other comprehensive income (loss) for the three months ended March 31, 2020 and 2019. (dollars in thousands) Before Tax Tax Effect Net of Tax Three Months Ended March 31, 2020 Net unrealized gain on securities available-for-sale $ 16,736 $ (4,632) $ 12,104 Less: Reclassification adjustment for net gains included in net income (822) (218) (604) Total unrealized gain 15,914 (4,850) 11,500 Net unrealized loss on derivatives (1,989) 664 (1,325) Less: Reclassification adjustment for gain included in net income (94) (25) (69) Total unrealized loss (2,083) 639 (1,394) Other Comprehensive Income $ 13,831 $ (4,211) $ 10,106 Three Months Ended March 31, 2019 Net unrealized loss on securities available-for-sale $ 7,322 $ 1,882 $ 5,440 Less: Reclassification adjustment for net gains included in net income (83) (22) (61) Total unrealized loss 7,239 1,860 5,379 Net unrealized loss on derivatives (1,545) (391) (1,154) Less: Reclassification adjustment for gain included in net income (1,275) (333) (942) Total unrealized loss (2,820) (724) (2,096) Other Comprehensive Income $ 4,419 $ 1,136 $ 3,283 The following table presents the changes in each component of accumulated other comprehensive income (loss), net of tax, for the three months ended March 31, 2020 and 2019. Securities Accumulated Other Available Comprehensive Income (dollars in thousands) For Sale Derivatives (Loss) Three Months Ended March 31, 2020 Balance at Beginning of Period $ 3,109 $ (150) $ 2,959 Other comprehensive income (loss) before reclassifications 12,104 (1,325) 10,779 Amounts reclassified from accumulated other comprehensive income (loss) (604) (69) (673) Net other comprehensive income (loss) during period 11,500 (1,394) 10,106 Balance at End of Period $ 14,609 $ (1,544) $ 13,065 Three Months Ended March 31, 2019 Balance at Beginning of Period $ (7,044) $ 2,769 $ (4,275) Other comprehensive income (loss) before reclassifications 5,440 (1,154) 4,286 Amounts reclassified from accumulated other comprehensive income (loss) (61) (942) (1,003) Net other comprehensive income (loss) during period 5,379 (2,096) 3,283 Balance at End of Period $ (1,665) $ 673 $ (992) The following table presents the amounts reclassified out of each component of accumulated other comprehensive income (loss) for the three months ended March 31, 2020 and 2019. Amount Reclassified from Accumulated Other Affected Line Item in Details about Accumulated Other Comprehensive (Loss) Income the Statement Where Comprehensive Income Components Three Months Ended March 31, Net Income is Presented (dollars in thousands) 2020 2019 Realized gain on sale of investment securities $ 822 $ 83 Gain on sale of investment securities Realized gain on swap termination — 829 Gain on sale of investment securities Interest income (expense) derivative deposits 94 446 Interest expense on deposits Income tax (expense) benefit (243) (355) Income Tax Expense Total Reclassifications for the Period $ 673 $ 1,003 Net Income |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Measurements | |
Fair Value Measurements | Note 13. Fair Value Measurements The fair value of an asset or liability is the price that would be received to sell that asset or paid to transfer that liability in an orderly transaction occurring in the principal market (or most advantageous market in the absence of a principal market) for such asset or liability. In estimating fair value, the Company utilizes valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. Such valuation techniques are consistently applied. Inputs to valuation techniques include the assumptions that market participants would use in pricing an asset or liability. ASC Topic 820, “Fair Value Measurements and Disclosures,” Level 1 Quoted prices in active exchange markets for identical assets or liabilities; also includes certain U.S. Treasury and other U.S. Government and agency securities actively traded in over-the-counter markets. Level 2 Observable inputs other than Level 1 including quoted prices for similar assets or liabilities, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data; also includes derivative contracts whose value is determined using a pricing model with observable market inputs or can be derived principally from or corroborated by observable market data. This category generally includes certain U.S. Government and agency securities, corporate debt securities, derivative instruments, and residential mortgage loans held for sale. Level 3 Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation; also includes observable inputs for single dealer nonbinding quotes not corroborated by observable market data. This category generally includes certain private equity investments, retained interests from securitizations, and certain collateralized debt obligations. Assets and Liabilities Recorded at Fair Value on a Recurring Basis The table below presents the recorded amount of assets and liabilities measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019. Significant Significant Other Other Observable Unobservable Quoted Prices Inputs Inputs Total (dollars in thousands) (Level 1) (Level 2) (Level 3) (Fair Value) March 31, 2020 Assets: Investment securities available-for-sale: U. S. agency securities $ — $ 147,759 $ — $ 147,759 Residential mortgage backed securities — 547,388 — 547,388 Municipal bonds — 75,588 — 75,588 Corporate bonds — — 52,984 52,984 U.S. Treasury — 34,999 — 34,999 Other equity investments — — 198 198 Loans held for sale — 60,036 — 60,036 Interest Rate Caps — 317 — 317 Mortgage banking derivatives — — 331 331 Total assets measured at fair value on a recurring basis as of March 31, 2020 $ — $ 866,087 $ 53,513 $ 919,600 Liabilities: Interest rate swap derivatives $ — $ 1,695 $ — $ 1,695 Derivative liability — 152 — 152 Interest Rate Caps — 2,975 — 2,975 Mortgage banking derivatives — — 1,602 1,602 Total liabilities measured at fair value on a recurring basis as of March 31, 2020 $ — $ 4,822 $ 1,602 $ 6,424 December 31, 2019 Assets: Investment securities available-for-sale: U. S. agency securities $ — $ 179,794 $ — $ 179,794 Residential mortgage backed securities — 543,852 — 543,852 Municipal bonds — 73,931 — 73,931 Corporate bonds — — 10,733 10,733 U.S. Treasury — 34,855 — 34,855 Other equity investments — — 198 198 Loans held for sale — 56,707 — 56,707 Interest Rate Caps — 317 — 317 Mortgage banking derivatives — — 280 280 Total assets measured at fair value on a recurring basis as of December 31, 2019 $ — $ 889,456 $ 11,211 $ 900,667 Liabilities: Interest rate swap derivatives $ — $ 203 $ — $ 203 Derivative liability — 86 — 86 Interest Rate Caps — 312 — 312 Mortgage banking derivatives — — 66 66 Total liabilities measured at fair value on a recurring basis as of December 31, 2019 $ — $ 601 $ 66 $ 667 Investment Securities Available-for-Sale: Loans held for sale The following table summarizes the difference between the aggregate fair value and the aggregate unpaid principal balance for loans held for sale measured at fair value as of March 31, 2020 and December 31, 2019. March 31, 2020 Aggregate Unpaid Principal (dollars in thousands) Fair Value Balance Difference Residential mortgage loans held for sale $ 60,036 $ 58,970 $ 1,066 FHA mortgage loans held for sale $ — $ — $ — December 31, 2019 Aggregate Unpaid Principal (dollars in thousands) Fair Value Balance Difference Residential mortgage loans held for sale $ 52,927 $ 52,054 $ 873 FHA mortgage loans held for sale $ 3,780 $ 3,780 $ — No residential mortgage loans held for sale were 90 or more days past due or on nonaccrual status as of March 31, 2020 or December 31, 2019. Interest rate swap derivatives: Credit Risk Participation Agreements Interest Rate Caps: Mortgage banking derivatives: The following is a reconciliation of activity for assets and liabilities measured at fair value based on Significant Other Unobservable Inputs (Level 3): Investment Mortgage Banking (dollars in thousands) Securities Derivatives Total Assets: Beginning balance at January 1, 2020 $ 10,931 $ 280 $ 11,211 Realized (loss) gain included in earnings — 51 51 Unrealized gain included in other comprehensive income 694 — 694 Purchases of available-for-sale securities 41,557 — 41,557 Principal redemption — — — Ending balance at March 31, 2020 $ 53,182 $ 331 $ 53,513 Liabilities: Beginning balance at January 1, 2020 $ — $ 66 $ 66 Realized loss included in earnings — 1,536 1,536 Principal redemption — — — Ending balance at March 31, 2020 $ — $ 1,602 $ 1,602 Investment Mortgage Banking (dollars in thousands) Securities Derivatives Total Assets: Beginning balance at January 1, 2019 $ 9,794 $ 229 $ 10,023 Realized (loss) gain included in earnings (20) 51 31 Unrealized gain included in other comprehensive income 131 — 131 Purchases of available-for-sale securities 4,030 — 4,030 Principal redemption (3,004) — (3,004) Ending balance at December 31, 2019 $ 10,931 $ 280 $ 11,211 Liabilities: Beginning balance at January 1, 2019 $ — $ 269 $ 269 Realized gain included in earnings — (203) (203) Principal redemption — — — Ending balance at December 31, 2019 $ — $ 66 $ 66 The other equity securities classified as Level 3 consist of equity investments in the form of common stock of two local banking companies which are not publicly traded, and for which the carrying amount approximates fair value. Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis The Company measures certain assets at fair value on a nonrecurring basis and the following is a general description of the methods used to value such assets. At March 31, 2020, substantially all of the Company’s individually evaluated loans were evaluated based upon the fair value of the collateral. In accordance with ASC Topic 820, individually evaluated loans where an allowance is established based on the fair value of collateral require classification in the fair value hierarchy. When the fair value of the collateral is based on an observable market price or a current appraised value, the Company records the loan as nonrecurring Level 2. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company records the loan as nonrecurring Level 3. Pre Adoption of CECL “Receivables.” Other real estate owned Significant Significant Other Other Observable Unobservable Quoted Prices Inputs Inputs Total (dollars in thousands) (Level 1) (Level 2) (Level 3) (Fair Value) March 31, 2020 Commercial $ — $ — $ 17,756 $ 17,756 Income producing - commercial real estate — — 21,471 21,471 Owner occupied - commercial real estate — — 10,645 10,645 Real estate mortgage - residential — — 8,314 8,314 Construction - commercial and residential — — 6,875 6,875 Home equity — — 541 541 Other consumer — — 7 7 Other real estate owned — — 8,237 8,237 Total assets measured at fair value on a nonrecurring basis as of March 31, 2020 $ — $ — $ 73,846 $ 73,846 Significant Significant Other Other Observable Unobservable Quoted Prices Inputs Inputs Total (dollars in thousands) (Level 1) (Level 2) (Level 3) (Fair Value) December 31, 2019 Impaired loans: Commercial $ — $ — $ 10,100 $ 10,100 Income producing - commercial real estate — — 11,948 11,948 Owner occupied - commercial real estate — — 6,934 6,934 Real estate mortgage - residential — — 4,981 4,981 Construction - commercial and residential — — 11,409 11,409 Home equity — — 387 387 Other real estate owned — — 1,487 1,487 Total assets measured at fair value on a nonrecurring basis as of December 31, 2019 $ — $ — $ 47,246 $ 47,246 Fair Value of Financial Instruments The Company discloses fair value information about financial instruments for which it is practicable to estimate the value, whether or not such financial instruments are recognized on the balance sheet. Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation, and is best evidenced by quoted market price, if one exists. Quoted market prices, if available, are shown as estimates of fair value. Because no quoted market prices exist for a portion of the Company’s financial instruments, the fair value of such instruments has been derived based on management’s assumptions with respect to future economic conditions, the amount and timing of future cash flows and estimated discount rates. Different assumptions could significantly affect these estimates. Accordingly, the net realizable value could be materially different from the estimates presented below. In addition, the estimates are only indicative of individual financial instrument values and should not be considered an indication of the fair value of the Company taken as a whole. The estimated fair value of the Company’s financial instruments at March 31, 2020 and December 31, 2019 are as follows: Fair Value Measurements Significant Other Significant Quoted Observable Unobservable Carrying Prices Inputs Inputs (dollars in thousands) Value Fair Value (Level 1) (Level 2) (Level 3) March 31, 2020 Assets Cash and due from banks $ 7,177 $ 7,177 $ — $ 7,177 $ — Federal funds sold 28,277 28,277 — 28,277 — Interest bearing deposits with other banks 904,160 904,160 — 904,160 — Investment securities 858,916 858,916 — 805,734 53,182 Federal Reserve and Federal Home Loan Bank stock 39,988 39,988 — 39,988 — Loans held for sale 60,036 60,036 — 60,036 — Loans 7,744,537 7,956,500 — — 7,956,500 Bank owned life insurance 76,139 76,139 — 76,139 — Annuity investment 14,675 14,675 — 14,675 — Interest Rate Caps 331 331 — 331 — Liabilities Noninterest bearing deposits 1,994,209 1,994,209 — 1,994,209 — Interest bearing deposits 4,882,092 4,882,092 — 4,882,092 — Certificates of deposit 1,265,267 1,282,095 — 1,282,095 — Customer repurchase agreements 31,377 31,377 — 31,377 — Borrowings 567,784 548,154 — 548,154 — Interest rate swap derivatives 1,695 1,695 1,695 — Derivative liability 152 152 — 152 — Interest Rate Caps 2,975 2,975 — 2,975 — Mortgage banking derivatives 1,602 1,602 — — 1,602 December 31, 2019 Assets Cash and due from banks $ 7,539 $ 7,539 $ — $ 7,539 $ — Federal funds sold 38,987 38,987 — 38,987 — Interest bearing deposits with other banks 195,447 195,447 — 195,447 — Investment securities 843,363 843,363 — 832,432 10,931 Federal Reserve and Federal Home Loan Bank stock 35,194 35,194 — 35,194 — Loans held for sale 56,707 56,707 — 56,707 — Loans 7,472,090 7,550,249 — — 7,550,249 Bank owned life insurance 75,724 75,724 — 75,724 — Annuity investment 14,697 14,697 — 14,697 — Interest Rate Caps 280 280 — 280 — Liabilities Noninterest bearing deposits 2,064,367 2,064,367 — 2,064,367 — Interest bearing deposits 3,876,985 3,876,985 — 3,876,985 — Certificates of deposit 1,283,039 1,291,688 — 1,291,688 — Customer repurchase agreements 30,980 30,980 — 30,980 — Borrowings 467,687 328,330 — 328,330 — Interest rate swap derivatives 203 203 203 — Derivative liability 86 86 — 86 — Interest Rate Caps 312 312 — 312 — Mortgage banking derivatives 66 66 — — 66 |
Supplemental Executive Retireme
Supplemental Executive Retirement Plan | 3 Months Ended |
Mar. 31, 2020 | |
Supplemental Executive Retirement Plan | |
Supplemental Executive Retirement Plan | Note 14. Supplemental Executive Retirement Plan The Bank has entered into Supplemental Executive Retirement and Death Benefit Agreements (the “SERP Agreements”) with certain of the Bank’s executive officers, which upon the executive’s retirement, will provide for a stated monthly payment for such executive’s lifetime subject to certain death benefits described below. The retirement benefit is computed as a percentage of each executive’s projected average base salary over the five years preceding retirement, assuming retirement at age 67. The SERP Agreements provide that (a) the benefits vest ratably over six years of service to the Bank, with the executive receiving credit for years of service prior to entering into the SERP Agreement, (b) death, disability and change-in-control shall result in immediate vesting, and (c) the monthly amount will be reduced if retirement occurs earlier than age 67 for any reason other than death, disability or change-in-control. The SERP Agreements further provide for a death benefit in the event the retired executive dies prior to receiving 180 monthly installments, paid either in a lump sum payment or continued monthly installment payments, such that the executive’s beneficiary has received payment(s) sufficient to equate to a cumulative 180 monthly installments. The SERP Agreements are unfunded arrangements maintained primarily to provide supplemental retirement benefits and comply with Section 409A of the Internal Revenue Code. The Bank financed the retirement benefits by purchasing fixed annuity contracts with four insurance carriers in 2013 totaling $11.4 million and two insurance carriers in 2019 totaling $2.6 million. These annuity contracts have been designed to provide a future source of funds for the lifetime retirement benefits of the SERP Agreements. The primary impetus for utilizing fixed annuities is a substantial savings in compensation expenses for the Bank as opposed to a traditional SERP Agreement. For the three months ended March 31, 2020, the annuity contracts accrued $40 thousand of income which was included in other noninterest income on the Consolidated Statement of Operations. For the three months ended March 31, 2019, the annuity contracts accrued $32 thousand of income which was included in other noninterest income on the Consolidated Statement of Operations. The cash surrender value of the annuity contracts was $14.7 million at March 31, 2020 and December 31, 2019, respectively, and is included in other assets on the Consolidated Balance Sheets. For the three months ended March 31, 2020, the Company recorded benefit expense accruals of $108 thousand for this post retirement benefit. For the three months ended March 31, 2019, the Company recorded benefit expense accruals of $101 thousand for this post retirement benefit. Upon death of a named executive, the annuity contract related to such executive terminates. The Bank has purchased additional bank owned life insurance contracts, which would effectively finance payments (up to a 15 year certain amount) to the executives’ named beneficiaries. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The Consolidated Financial Statements include the accounts of Eagle Bancorp, Inc. and its subsidiaries (the “Company”). Active subsidiaries include: EagleBank (the “Bank”), Eagle Insurance Services, LLC, Bethesda Leasing, LLC, and Landroval Municipal Finance, Inc., with all significant intercompany transactions eliminated. The Consolidated Financial Statements of the Company included herein are unaudited. The Consolidated Financial Statements reflect all adjustments, consisting of normal recurring accruals that in the opinion of management, are necessary to present fairly the results for the periods presented. The amounts as of and for the year ended December 31, 2019 were derived from audited Consolidated Financial Statements. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. In addition to the “Critical Accounting Policies” impacted by the new Current Expected Credit Loss (“CECL”) standard described below, the Company applies the accounting policies contained in Note 1 to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The Company believes that the disclosures are adequate to make the information presented not misleading. Certain reclassifications have been made to amounts previously reported to conform to the current period presentation. |
Nature of Operations | Nature of Operations The Company, through the Bank, conducts a full service community banking business, primarily in Northern Virginia, Suburban Maryland, and Washington, D.C. The primary financial services offered by the Bank include real estate, commercial and consumer lending, as well as traditional deposit and repurchase agreement products. The Bank is also active in the origination and sale of residential mortgage loans, the origination of small business loans, and the origination, securitization and sale of multifamily Federal Housing Administration (“FHA”) loans. The guaranteed portion of small business loans, guaranteed by the Small Business Administration (“SBA”), is typically sold to third party investors in a transaction apart from the loan’s origination. The Bank offers its products and services through twenty banking offices, five lending centers and various electronic capabilities, including remote deposit services and digital banking services. Eagle Insurance Services, LLC, a subsidiary of the Bank, offers access to insurance products and services through a referral program with a third party insurance broker. Landroval Municipal Finance, Inc., a subsidiary of the Bank, focuses on lending to municipalities by buying debt on the public market as well as direct purchase issuance. Bethesda Leasing, a subsidiary of the Bank, holds title to repossessed real estate. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. The allowance for credit losses, the fair value of financial instruments and the status of contingencies are particularly susceptible to significant change. |
Risks and Uncertainties | Risks and Uncertainties The outbreak of COVID-19 has adversely impacted a broad range of industries in which the Company’s customers operate and could impair their ability to fulfill their financial obligations to the Company. The World Health Organization has declared COVID-19 to be a global pandemic indicating that almost all public commerce and related business activities must be, to varying degrees, curtailed with the goal of decreasing the rate of new infections. The spread of the outbreak has caused significant disruptions in the U.S. economy and has disrupted banking and other financial activity in the areas in which the Company operates. While there has been no material impact to the Company’s employees to date, COVID-19 could also potentially create widespread business continuity issues for the Company. Congress, the President, and the Federal Reserve have taken several actions designed to cushion the economic fallout. Most notably, the Coronavirus Aid, Relief and Economic Security (“CARES”) Act was signed into law at the end of March 2020 as a $2 trillion legislative package. The goal of the CARES Act is to prevent a severe economic downturn through various measures, including direct financial aid to American families and economic stimulus to significantly impacted industry sectors. The package also includes extensive emergency funding for hospitals and providers. In addition to the general impact of COVID-19, certain provisions of the CARES Act as well as other recent legislative and regulatory relief efforts are expected to have a material impact on the Company’s operations. The Company’s business is dependent upon the willingness and ability of its employees and customers to conduct banking and other financial transactions. If the global response to contain COVID-19 escalates further or is unsuccessful, the Company could experience a material adverse effect on its business, financial condition, results of operations and cash flows. While it is not possible to know the full universe or extent that the impact of COVID-19, and resulting measures to curtail its spread, will have on the Company’s operations, the Company is disclosing potentially material items of which it is aware. Financial position and results of operations The Company’s fee income could be reduced due to COVID-19. In keeping with guidance from regulators, the Company is actively working with COVID-19 affected customers to waive fees from a variety of sources, such as, but not limited to, insufficient funds and overdraft fees, ATM fees, account maintenance fees, etc. These reductions in fees are thought, at this time, to be temporary in conjunction with the length of the expected COVID-19 related economic crisis. At this time, the Company is unable to project the materiality of such an impact, but recognize the breadth of the economic impact is likely to impact its fee income in future periods. The Company’s interest income could be reduced due to COVID-19. In keeping with guidance from regulators, the Company is actively working with COVID-19 affected borrowers to defer their payments, interest, and fees. While interest and fees will still accrue to income, through normal GAAP accounting, should eventual credit losses on these deferred payments emerge, interest income and fees accrued would need to be reversed. In such a scenario, interest income in future periods could be negatively impacted. At this time the Company is unable to project the materiality of such an impact, but recognizes the breadth of the economic impact may affect its borrowers’ ability to repay in future periods. Capital and liquidity While the Company believes that it has sufficient capital to withstand an extended economic recession brought about by COVID-19, its reported and regulatory capital ratios could be adversely impacted by further credit losses. The Company maintains access to multiple sources of liquidity. Wholesale funding markets have remained open to us, but rates for short term funding have recently been volatile. If funding costs are elevated for an extended period of time, it could have an adverse effect on the Company’s net interest margin. If an extended recession caused large numbers of the Company’s customers to withdraw their funds, the Company might become more reliant on volatile or more expensive sources of funding. Asset valuation Currently, the Company does not expect COVID-19 to affect its ability to account timely for the assets on its balance sheet; however, this could change in future periods. While certain valuation assumptions and judgments will change to account for pandemic-related circumstances such as widening credit spreads, the Company does not anticipate significant changes in methodology used to determine the fair value of assets measured in accordance with GAAP. COVID-19 could cause a further and sustained decline in the Company’s stock price or the occurrence of what management would deem to be a triggering event that could, under certain circumstances, cause us to perform a goodwill impairment test and result in an impairment charge being recorded for that period. In the event that the Company concludes that all or a portion of its goodwill is impaired, a non-cash charge for the amount of such impairment would be recorded to earnings. Such a charge would have no impact on tangible capital or regulatory capital. Business Continuity Plan The Company has implemented a remote working strategy for many of its employees. The Company does not anticipate incurring additional material cost related to its continued deployment of the remote working strategy. No material operational or internal control challenges or risks have been identified to date. The Company does not anticipate significant challenges to its ability to maintain its systems and controls in light of the measures the Company has taken to prevent the spread of COVID-19. The Company does not currently face any material resource constraint through the implementation of its business continuity plans. Lending operations and accommodations to borrowers In response to the COVID-19 pandemic, we have also implemented a short-term loan modification program to provide temporary payment relief to certain borrowers who meet the program's qualifications. Modifications under this program have predominately been for a period of 90 days. The deferred payments along with interest accrued during the deferral period are due and payable on the maturity date of the existing loan. As of March 31, 2020, we granted temporary modifications on approximately 32 loans representing approximately $45 million in outstanding exposure. Through April 30, 2020, we granted approximately 382 temporary modifications representing approximately $576 million in outstanding exposure. None With the passage of the Paycheck Protection Program (“PPP”), administered by the Small Business Administration (“SBA”), the Company is actively participating in assisting its customers with applications for resources through the program. PPP loans have a two-year term and earn interest at 1%. The Company believes that the majority of these loans will ultimately be forgiven by the SBA in accordance with the terms of the program. As of April 30, 2020, principal outstanding on PPP loans totaled $444.8 million across 1,090 borrowers. As of April 30, 2020 the Company had approved 1,233 applications totaling $449.7 million in PPP loans. The Company understands that loans funded through the PPP program are fully guaranteed by the U.S. government. Should those circumstances change, the Company could be required to establish additional allowance for credit loss through additional credit loss expense charged to earnings. Credit The Company is working with customers directly affected by COVID-19. The Company is prepared to offer short-term assistance in accordance with regulatory guidelines. As a result of the current economic environment caused by the COVID-19 virus, the Company is engaging in more frequent communication with borrowers to better understand their situation and the challenges faced, allowing it to respond proactively as needs and issues arise. Should economic conditions worsen, the Company could experience further increases in its required allowance for credit losses (“ACL”) and record additional provision for credit losses. It is possible that the Company’s asset quality measures could worsen at future measurement periods if the effects of COVID-19 are prolonged. |
Allowance for Credit Losses | Allowance for Credit Losses On January 1, 2020, we adopted ASU 2016-13 “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which replaces the incurred loss methodology for determining our provision for credit losses and ACL with an expected loss methodology that is referred to as the Current Expected Credit Loss model. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loans receivable and held-to-maturity (“HTM”) debt securities. It also applies to off-balance sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments in leases recognized by a lessor in accordance with ASU 2016-02 "Leases (Topic 842)" ("ASU 2016-02"). In addition, ASU 2016-13 made changes to the accounting for available-for-sale (“AFS”) debt securities. One such change is to require credit-related impairments to be recognized as an allowance for credit losses rather than as a write-down of the securities amortized cost basis when management does not intend to sell or believes that it is not that they will be required to sell the securities prior to recovery of the securities amortized cost basis. We adopted ASU 2016-13 using the modified retrospective method. Results for reporting periods beginning after January 1, 2020 are presented under ASU 2016-13 while prior period amounts continue to be reported in accordance with previously applicable GAAP. The Company does not own Held to Maturity investment debt securities. The following table illustrates the impact of ASC 326. January 1, 2020 As Reported Pre-ASC 326 Impact of ASC (dollars in thousands) Under ASC 326 Adoption 326 Adoption Assets: Loans Commercial $ 1,545,906 $ 1,545,906 $ — Income producing - commercial real estate 3,702,747 3,702,747 — Owner occupied - commercial real estate 985,409 985,409 — Real estate mortgage - residential 104,221 104,221 — Construction - commercial and residential 1,035,754 1,035,754 — Construction - C&I (owner occupied) 89,490 89,490 — Home equity 80,061 80,061 — Other consumer 2,160 2,160 — Allowance for credit losses on loans $ (84,272) $ (73,658) (10,614) Liabilities: Reserve for Unfunded Commitments $ (4,118) $ — (4,118) |
Loans | Loans Loans held for investment are stated at the amount of unpaid principal reduced by deferred income (net of costs). Interest on loans is recognized using the simple-interest method on the daily balances of the principal amounts outstanding. Loan origination fees, net of direct loan origination costs, and commitment fees are deferred and amortized as an adjustment to yield over the life of the loan, or over the commitment period, as applicable. A modification of a loan constitutes a TDR when a borrower is experiencing financial difficulty and the modification constitutes a concession. The Company offers various types of concessions when modifying a loan. Commercial and industrial loans modified in a TDR often involve temporary interest-only payments, term extensions, and converting revolving credit lines to term loans. Additional collateral, a co-borrower, or a guarantor is often requested. The most common change in terms provided by the Company is an extension of an interest only term. As of March 31, 2020, all performing TDRs were categorized as interest-only modifications. A loan is considered past due when a contractually due payment has not been received by the contractual due date. We place a loan on non-accrual status when there is a clear indication that the borrower’s cash flow may not be sufficient to meet payments as they become due, which is generally when a loan is 90 days past due. When a loan is placed on non-accrual status, all previously accrued and unpaid interest is reversed as a reduction of current period interest income. Interest income is subsequently recognized on a cash basis as long as the remaining book balance of the asset is deemed to be collectible. If collectability is questionable, then cash payments are applied to principal. A loan is placed back on accrual status when both principal and interest are current and it is probable that we will be able to collect all amounts due (both principal and interest) according to the terms of the loan agreement. |
Allowance for Credit Losses- Loans | Allowance for Credit Losses- Loans The allowance for credit losses is an estimate of the expected credit losses in the loans held for investment and available-for-sale debt securities portfolios. ASU 2016-13 replaces the incurred loss impairment model that recognizes losses when it becomes probable that a credit loss will be incurred, with a requirement to recognize lifetime expected credit losses immediately when a financial asset is originated or purchased. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans. Loans, or portions thereof, are charged off against the allowance when they are deemed uncollectible. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged- off. Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, loan concentrations, credit quality, or term as well as for changes in environmental conditions, such as changes in unemployment rates, property values or other relevant factors. The allowance for credit losses is comprised of reserves measured on a collective (pool) basis based on a lifetime loss-rate model when similar risk characteristics exist. Reserves on loans that do not share risk characteristics are evaluated on an individual basis (nonaccrual, TDR). In order to determine the allowance for credit losses, all loans are assigned a credit grade. Nonaccrual loans are specifically reviewed for loss potential and when deemed appropriate are assigned a reserve based on an individual evaluation. For purposes of determining the pool-basis reserve, the remainder of the portfolio, representing all loans not assigned an individual reserve, is segregated by call report codes. Each credit grade within each product type is assigned a historical loss rate. These historical loss rates are then modified to incorporate our reasonable and supportable forecast of future losses at the portfolio segment level, as well as any necessary qualitative adjustments. A similar process is employed to calculate a reserve assigned to off-balance sheet commitments, specifically unfunded loan commitments and letters of credit, and any needed reserve is recorded in reserve for unfunded commitments on the Consolidated Balance Sheets. For periods beyond which we are able to develop reasonable and supportable forecasts, we revert to the historical loss rate on a straight line basis over a twelve month period. See further detail regarding our forecasting methodology in the “Discounted Cash Flow Method” section below. Even though portions of the allowance may be allocated to specific loans, the entire allowance is available for any credit that, in management's judgment, should be charged off. Portfolio segments are used to pool loans with similar risk characteristics and align with our methodology for measuring expected credit losses. A summary of our primary portfolio segments is as follows: Commercial Income producing – commercial real estate Owner occupied – commercial real estate. Real Estate Mortgage – Residential. Construction – commercial and residential Construction – C&I (owner occupied) Home Equity Other Consumer We have several pass credit grades that are assigned to loans based on varying levels of risk, ranging from credits that are secured by cash or marketable securities, to watch credits which have all the characteristics of an acceptable credit risk but warrant more than the normal level of monitoring. Special mention loans are those that are currently protected by the sound worth and paying capacity of the borrower, but that are potentially weak and constitute an additional credit risk. These loans have the potential to deteriorate to a substandard grade due to the existence of financial or administrative deficiencies. Substandard loans have a well-defined weakness or weaknesses that jeopardizes the liquidation of the debt. They are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected. Some substandard loans are inadequately protected by the sound worth and paying capacity of the borrower and of the collateral pledged and may be considered impaired. Substandard loans can be accruing or can be on non-accrual depending on the circumstances of the individual loans. Loans classified as doubtful have all the weaknesses inherent in substandard loans with the added characteristics that the weaknesses make collection in full highly questionable and improbable. The possibility of loss is extremely high. All doubtful loans are on non-accrual. The methodology used in the estimation of the allowance, which is performed at least quarterly, is designed to be dynamic and responsive to changes in portfolio credit quality and forecasted economic conditions. Changes are reflected in the pool-basis allowance and in reserves assigned on an individual basis as the collectability of classified loans is evaluated with new information. As our portfolio has matured, historical loss ratios have been closely monitored. The review of the appropriateness of the allowance is performed by executive management and presented to management committees, Director’s Loan Committee, the Audit Committee, and the Board of Directors. The committees report to the Board as part of the Board's review on a quarterly basis of our consolidated financial statements. When management determines that foreclosure is probable, and for certain collateral-dependent loans where foreclosure is not considered probable, expected credit losses are based on the fair value of the collateral adjusted for selling costs, when appropriate. A loan is considered collateral- dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals and modifications unless either of the following applies: management has a reasonable expectation that a loan will be restructured, or the extension or renewal options are included in the borrower contract. We do not measure an allowance for credit losses on accrued interest receivable balances because these balances are written off in a timely manner as a reduction to interest income when loans are placed on non-accrual status. |
Allowance for Credit Losses - Available-for-Sale Debt Securities | Allowance for Credit Losses - Available-for-Sale Debt Securities The impairment model for available-for-sale debt securities differs from the CECL approach utilized by HTM debt securities because AFS debt securities are measured at fair value rather than amortized cost. Although ASU No. 2016-13 replaced the legacy other-than-temporary impairment (“OTTI”) model with a credit loss model, it retained the fundamental nature of the legacy OTTI model. One notable change from the legacy OTTI model is when evaluating whether credit loss exists, an entity may no longer consider the length of time fair value has been less than amortized cost. For AFS debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either criterion is met, the security’s amortized cost basis is written down to fair value through income. For AFS debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. Changes in the allowance for credit losses are recorded as a provision for (or reversal of) credit losses. Losses are charged against the allowance when management believes the uncollectibility of an AFS security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Any impairment not recorded through an allowance for credit loss is recognized in other comprehensive income as a noncredit-related impairment. As of March 31, 2020, the Company determined that the unrealized loss positions in AFS securities were not the result of credit losses, and therefore, an allowance for credit losses was not recorded. See Note 3 Investment Securities for more information. We have made a policy election to exclude accrued interest from the amortized cost basis of available-for-sale debt securities and report accrued interest separately in accrued interest and other assets in the consolidated balance sheets. Available-for-sale debt securities are placed on non- accrual status when we no longer expect to receive all contractual amounts due, which is generally at 90 days past due. Accrued interest receivable is reversed against interest income when a security is placed on non-accrual status. Accordingly, we do not recognize an allowance for credit loss against accrued interest receivable. The majority of available for sale debt securities as of March 31, 2020 and December 31, 2019 were issued by US agencies. As such, we do not consider an allowance for credit losses necessary. |
Discounted Cash Flow Method | Discounted Cash Flow Method The Company uses the discounted cash flow (“DCF”) method to estimate expected credit losses for the commercial, income producing – commercial real estate, owner occupied – commercial real estate, real estate mortgage - residential, construction – commercial and residential, construction – C&I (owner occupied), home equity, and other consumer loan pools. For each of these loan segments, the Company generates cash flow projections at the instrument level wherein payment expectations are adjusted for estimated prepayment speed, probability of default, and loss given default. The modeling of expected prepayment speeds, is based on historical internal data. The Company uses regression analysis of historical internal and peer data to determine suitable loss drivers to utilize when modeling lifetime probability of default and loss given default. This analysis also determines how expected probability of default and loss given default will react to forecasted levels of the loss drivers. For all loan pools utilizing the DCF method, management utilizes and forecasts national unemployment as a loss driver. COVID-19 has negatively impacted unemployment projections, which inform our CECL economic forecast and increased our loss reserve as of March 31, 2020. For all DCF models, management has determined that eight quarters represents a reasonable and supportable forecast period and reverts back to a historical loss rate over twelve months on a straight-line basis. Management leverages economic projections from reputable and independent third parties to inform its loss driver forecasts over the forecast period. The combination of adjustments for credit expectations (default and loss) and timing expectations (prepayment, curtailment, and time to recovery) produces an expected cash flow stream at the instrument level. Instrument effective yield is calculated, net of the impacts of prepayment assumptions, and the instrument expected cash flows are then discounted at that effective yield to produce an instrument-level net NPV. An ACL is established for the difference between the instrument’s NPV and amortized cost basis. |
Collateral Dependent Financial Assets | Collateral Dependent Financial Assets Loans that do not share risk characteristics are evaluated on an individual basis. For collateral dependent financial assets where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the financial asset to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the asset as of the measurement date. When repayment is expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the financial asset exceeds the NPV from the operation of the collateral. When repayment is expected to be from the sale of the collateral, expected credit losses are calculated as the amount by which the amortized costs basis of the financial asset exceeds the fair value of the underlying collateral less estimated cost to sell. The ACL may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the financial asset. The Company’s estimate of the ACL reflects losses expected over the remaining contractual life of the assets. The contractual term does not consider extensions, renewals or modifications unless the Company has identified an expected troubled debt restructuring (“TDR”). A loan that has been modified or renewed is considered a troubled debt restructuring when two conditions are met: 1) the borrower is experiencing financial difficulty and 2) concessions are made for the borrower's benefit that would not otherwise be considered for a borrower or transaction with similar credit risk characteristics. The Company’s ACL reflects all effects of a TDR when an individual asset is specifically identified as a reasonably expected TDR. The Company has determined that a TDR is reasonably expected no later than the point when the lender concludes that modification is the best course of action and it is at least reasonably possible that the troubled borrower will accept some form of concession from the lender to avoid a default. Reasonably expected TDRs and executed non-performing TDRs are evaluated individually to determine the required ACL. |
Loan Commitments and Allowance for Credit Losses on Off-Balance Sheet Credit Exposures | Loan Commitments and Allowance for Credit Losses on Off-Balance Sheet Credit Exposures Financial instruments include off-balance sheet credit instruments such as commitments to make loans and commercial letters of credit issued to meet customer financing needs. The Company's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of those instruments. Such financial instruments are recorded when they are funded. The Company records a reserve for unfunded commitments (“RUC”) on off-balance sheet credit exposures through a charge to provision for credit loss expense in the Company’s consolidated statements of operations. The RUC on off-balance sheet credit exposures is estimated by loan segment at each balance sheet date under the current expected credit loss model using the same methodologies as portfolio loans, taking into consideration the likelihood that funding will occur, and is included in Reserve for Unfunded Commitments on the Company’s consolidated balance sheets. These statements should be read in conjunction with the audited Consolidated Financial Statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. |
Other New Authoritative Accounting Guidance | Other New Authoritative Accounting Guidance Accounting Standards Adopted in 2020 In March 2020, various regulatory agencies, including the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation, (“the Agencies”) issued an interagency statement on loan modifications and reporting for financial institutions working with customers affected by COVID-19. The interagency statement was effective immediately and impacted accounting for loan modifications. Under Accounting Standards Codification 310-40, “Receivables – Troubled Debt Restructurings by Creditors,” (“ASC 310-40”), a restructuring of debt constitutes a troubled debt restructuring if the creditor, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. The Agencies confirmed with the staff of the Financial Accounting Standards Board (“FASB”) that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief, are not to be considered TDRs. This includes short-term (e.g., six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. Borrowers considered current are those that are less than 30 days past due on their contractual payments at the time a modification program is implemented. This interagency guidance is expected to have a material impact on the Company’s financial statements; however, this impact cannot be quantified at this time. See Note 5 to the Consolidated Financial Statements for further detail. ASU 2016-13, “Measurement of Credit Losses on Financial Instruments (Topic 326).” ASU 2020-02 "Financial Instruments - Credit Losses (Topic 326) and Leases (Topic 842)" ("ASU 2020-02") incorporates SEC SAB 119 (updated from SAB 102) into the Accounting Standards Codification (the "Codification") by aligning SEC recommended policies and procedures with ASC 326. ASU 2020-02 was effective on January 1, 2020 and has no significant impact on our documentation requirements. ASU 2020-03 "Codification Improvements to Financial Instruments" ("ASU 2020-03") revised a wide variety of topics in the Codification with the intent to make the Codification easier to understand and apply by eliminating inconsistencies and providing clarifications. ASU 2020-03 was effective immediately upon its release in March 2020 and did not have a material impact on our consolidated financial statements. Accounting Standards Pending Adoption ASU 2019-12 "Income Taxes (Topic 740)" ("ASU 2019-12") simplifies the accounting for income taxes by removing certain exceptions and improves the consistent application of GAAP by clarifying and amending other existing guidance. ASU 2019-012 will be effective for us on January 1, 2021 and is not expected to have any material impact on our consolidated financial statements. ASU 2020-04, "Reference Rate Reform (Topic 848)" ("ASU 2020-04") provides optional expedients and exceptions for applying GAAP to loan and lease agreements, derivative contracts, and other transactions affected by the anticipated transition away from LIBOR toward new interest rate benchmarks. For transactions that are modified because of reference rate reform and that meet certain scope guidance (i) modifications of loan agreements should be accounted for by prospectively adjusting the effective interest rate and the modification will be considered "minor" so that any existing unamortized origination fees/costs would carry forward and continue to be amortized and (ii) modifications of lease agreements should be accounted for as a continuation of the existing agreement with no reassessments of the lease classification and the discount rate or remeasurements of lease payments that otherwise would be required for modifications not accounted for as separate contracts. ASU 2020-04 also provides numerous optional expedients for derivative accounting. ASU 2020-04 is effective March 12, 2020 through December 31, 2022. An entity may elect to apply ASU 2020-04 for contract modifications as of January 1, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. Once elected for a Topic or an Industry Subtopic within the Codification, the amendments in this ASU must be applied prospectively for all eligible contract modifications for that Topic or Industry Subtopic. We anticipate this ASU will simplify any modifications we execute between the selected start date (yet to be determined) and December 31, 2022 that are directly related to LIBOR transition by allowing prospective recognition of the continuation of the contract, rather than extinguishment of the old contract resulting in writing off unamortized fees/costs. We are evaluating the impacts of this ASU and have not yet determined whether LIBOR transition and this ASU will have material effects on our business operations and consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
ASU 2016-13 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Schedule of the impact of ASC 326 | January 1, 2020 As Reported Pre-ASC 326 Impact of ASC (dollars in thousands) Under ASC 326 Adoption 326 Adoption Assets: Loans Commercial $ 1,545,906 $ 1,545,906 $ — Income producing - commercial real estate 3,702,747 3,702,747 — Owner occupied - commercial real estate 985,409 985,409 — Real estate mortgage - residential 104,221 104,221 — Construction - commercial and residential 1,035,754 1,035,754 — Construction - C&I (owner occupied) 89,490 89,490 — Home equity 80,061 80,061 — Other consumer 2,160 2,160 — Allowance for credit losses on loans $ (84,272) $ (73,658) (10,614) Liabilities: Reserve for Unfunded Commitments $ (4,118) $ — (4,118) |
Investment Securities Availab_2
Investment Securities Available-for-Sale (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Investment Securities Available-for-Sale | |
Schedule of amortized cost and estimated fair value of securities available-for-sale | Amortized cost and estimated fair value of securities available-for-sale are summarized as follows: Gross Gross Estimated March 31, 2020 Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value U. S. agency securities $ 146,948 $ 1,527 $ 716 $ 147,759 Residential mortgage backed securities 531,784 16,110 506 547,388 Municipal bonds 72,828 2,760 — 75,588 Corporate bonds 52,087 969 72 52,984 U.S. Treasury 34,986 13 — 34,999 Other equity investments 198 — — 198 $ 838,831 $ 21,379 $ 1,294 $ 858,916 Gross Gross Estimated December 31, 2019 Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value U. S. agency securities $ 180,228 $ 621 $ 1,055 $ 179,794 Residential mortgage backed securities 541,490 4,337 1,975 543,852 Municipal bonds 71,902 2,034 5 73,931 Corporate bonds 10,530 203 — 10,733 U.S. Treasury 34,844 11 — 34,855 Other equity investments 198 — — 198 $ 839,192 $ 7,206 $ 3,035 $ 843,363 |
Schedule of gross unrealized losses and fair value by length of time that the individual available-for-sale securities have been in a continuous unrealized loss | Gross unrealized losses and fair value of available-for-sale securities for which an allowance for credit losses has not been recorded, by length of time that individual securities have been in a continuous unrealized loss position are as follows: Less than 12 Months 12 Months or Greater Total Estimated Estimated Estimated March 31, 2020 Number of Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) Securities Value Losses Value Losses Value Losses U. S. agency securities 23 $ 13,835 $ 162 $ 39,486 $ 554 $ 53,321 $ 716 Residential mortgage backed securities 11 18,321 275 7,888 231 26,209 506 Corporate bonds 1 2,955 72 — — 2,955 72 35 $ 35,111 $ 509 $ 47,374 $ 785 $ 82,485 $ 1,294 Less than 12 Months 12 Months or Greater Total Estimated Estimated Estimated December 31, 2019 Number of Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) Securities Value Losses Value Losses Value Losses U. S. agency securities 36 $ 75,159 $ 439 $ 51,481 $ 616 $ 126,640 $ 1,055 Residential mortgage backed securities 111 197,794 1,148 90,742 827 288,536 1,975 Municipal bonds 1 1,994 5 — — 1,994 5 148 $ 274,947 $ 1,592 $ 142,223 $ 1,443 $ 417,170 $ 3,035 |
Schedule of amortized cost and estimated fair value of investments available-for-sale by contractual maturity | March 31, 2020 December 31, 2019 Amortized Estimated Amortized Estimated (dollars in thousands) Cost Fair Value Cost Fair Value U. S. agency securities maturing: One year or less $ 61,706 $ 62,055 $ 96,332 $ 96,226 After one year through five years 80,513 81,106 76,121 75,821 Five years through ten years 4,729 4,598 7,775 7,747 Residential mortgage backed securities 531,784 547,388 541,490 543,852 Municipal bonds maturing: One year or less 6,400 6,456 5,897 5,969 After one year through five years 20,844 21,437 21,416 21,953 Five years through ten years 43,584 45,656 42,589 44,015 After ten years 2,000 2,039 2,000 1,994 Corporate bonds maturing: One year or less 10,972 11,054 502 508 After one year through five years 35,891 36,600 8,528 8,725 After ten years 5,224 5,330 1,500 1,500 U.S. treasury 34,986 34,999 34,844 34,855 Other equity investments 198 198 198 198 $ 838,831 $ 858,916 $ 839,192 $ 843,363 |
Loans and Allowance for Credi_2
Loans and Allowance for Credit Losses (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Loans and Allowance for Credit Losses | |
Schedule of loans, net of unamortized net deferred fees | Loans, net of unamortized net deferred fees, at March 31, 2020 and December 31, 2019 are summarized by type as follows: March 31, 2020 December 31, 2019 (dollars in thousands) Amount % Amount % Commercial $ 1,773,478 23 % $ 1,545,906 20 % Income producing - commercial real estate 3,827,024 50 % 3,702,747 50 % Owner occupied - commercial real estate 971,634 12 % 985,409 13 % Real estate mortgage - residential 104,558 1 % 104,221 1 % Construction - commercial and residential 969,166 12 % 1,035,754 14 % Construction - C&I (owner occupied) 114,138 1 % 89,490 1 % Home equity 78,228 1 % 80,061 1 % Other consumer 2,647 — 2,160 — Total loans 7,840,873 100 % 7,545,748 100 % Less: allowance for credit losses (96,336) (73,658) Net loans (1) $ 7,744,537 (1) $ 7,472,090 (1) Excludes accrued interest receivable of $22.6 million and $21.3 million at March 31, 2020 and December 31, 2019, respectively, which is recorded in Other assets. |
Schedule of detail activity in the allowance for credit losses by portfolio segment | The following tables detail activity in the allowance for credit losses by portfolio segment for the three months ended March 31, 2020 and 2019. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories. Income Producing - Owner Occupied - Real Estate Construction - Commercial Commercial Mortgage - Commercial and Home Other (dollars in thousands) Commercial Real Estate Real Estate Residential Residential Equity Consumer Total For the Three Months Ended March 31, 2020 Allowance for credit losses: Balance at beginning of period, prior to adoption of ASC 326 $ 18,832 $ 29,265 $ 5,838 $ 1,557 $ 17,485 $ 656 $ 25 $ 73,658 Impact of adopting ASC 326 892 11,230 4,674 (301) (6,143) 245 17 10,614 Loans charged-off — (550) — — (1,768) — — (2,318) Recoveries of loans previously charged-off 69 — — — — — 3 72 Net loans charged-off 69 (550) — — (1,768) — 3 (2,246) Provision for credit losses 7,553 3,606 (645) 113 3,767 (83) (1) 14,310 Ending balance $ 27,346 $ 43,551 $ 9,867 $ 1,369 $ 13,341 $ 818 $ 44 $ 96,336 As of March 31, 2020 Allowance for credit losses: Individually evaluated for impairment $ 7,239 $ 1,903 $ 375 $ 657 $ 1,554 $ 105 $ — $ 11,833 Collectively evaluated for impairment 20,107 41,648 9,492 712 11,787 713 44 84,503 Ending balance $ 27,346 $ 43,551 $ 9,867 $ 1,369 $ 13,341 $ 818 $ 44 $ 96,336 Three Months Ended March 31, 2019 Allowance for credit losses: Balance at beginning of period $ 15,857 $ 28,034 $ 6,242 $ 965 $ 18,175 $ 599 $ 72 $ 69,944 Loans charged-off (4) (3,496) — — — — — (3,500) Recoveries of loans previously charged-off 130 — — 1 — — 8 139 Net loans charged-off 126 (3,496) — 1 — — 8 (3,361) Provision for credit losses 1,212 2,227 (262) (285) 294 6 168 3,360 Ending balance $ 17,195 $ 26,765 $ 5,980 $ 681 $ 18,469 $ 605 $ 248 $ 69,943 As of March 31, 2019 Allowance for credit losses: Individually evaluated for impairment $ 5,892 $ 15 $ 600 $ — $ — $ — $ — $ 6,507 Collectively evaluated for impairment 11,303 26,750 5,380 681 18,469 605 248 63,436 Ending balance $ 17,195 $ 26,765 $ 5,980 $ 681 $ 18,469 $ 605 $ 248 $ 69,943 |
Schedule of amortized cost basis of collateral-dependent loans by class of loans | The following table presents the amortized cost basis of collateral-dependent loans by class of loans as of March 31, 2020: Business/Other (dollars in thousands) Assets Real Estate Commercial $ 15,287 $ 3,518 Income producing - commercial real estate 3,193 18,278 Owner occupied - commercial real estate — 10,645 Real estate mortgage - residential — 8,052 Construction - commercial and residential — 6,875 Construction - C&I (owner occupied) — — Home equity — 541 Other consumer 7 — Total $ 18,487 $ 47,909 |
Schedule of the risk category of loans by class of loans | March 31, 2020 (dollars in thousands) 2016 2017 2018 2019 2020 Prior Total Commercial Pass 146,077 339,954 324,160 267,490 113,862 495,376 1,686,919 Watch — 16,892 494 1,010 — 15,828 34,224 Special Mention — 11,108 11,365 — — 1,111 23,584 Substandard 4,871 1,652 2,577 1,131 — 18,520 28,751 Total 150,948 369,606 338,596 269,631 113,862 530,835 1,773,478 Income producing - commercial real estate Pass 417,298 586,243 736,476 897,933 147,214 1,005,065 3,790,229 Watch — 4,641 — 4,334 — 1,365 10,340 Special Mention 800 — — 5,542 — 4,854 11,196 Substandard — 4,984 3,193 — — 7,082 15,259 Total 418,098 595,868 739,669 907,809 147,214 1,018,366 3,827,024 Owner occupied - commercial real estate Pass 112,140 120,780 226,702 92,231 689 369,509 922,051 Watch 2,691 — 2,607 — — 34,500 39,798 Substandard 850 — — — — 8,935 9,785 Total 115,681 120,780 229,309 92,231 689 412,944 971,634 Real estate mortgage - residential Pass 3,436 11,950 24,773 29,207 4,203 22,316 95,885 Watch — — — — — 620 620 Substandard 4,154 2,688 — — — 1,211 8,053 Total 7,590 14,638 24,773 29,207 4,203 24,147 104,558 Construction - commercial and residential Pass 82,642 437,815 292,994 102,645 17,223 28,972 962,291 Substandard 2,303 1,893 — — — 2,679 6,875 Total 84,945 439,708 292,994 102,645 17,223 31,651 969,166 Construction - C&I (owner occupied) Pass 11,742 4,073 39,220 21,460 12,633 11,062 100,190 Watch — 2,129 11,100 — — 719 13,948 Total 11,742 6,202 50,320 21,460 12,633 11,781 114,138 Home Equity Pass 5,598 9,349 8,729 4,935 931 47,201 76,743 Watch — — — — — 944 944 Substandard — — — — — 541 541 Total 5,598 9,349 8,729 4,935 931 48,686 78,228 Other Consumer Pass 200 203 136 109 1,173 810 2,631 Substandard — — — — — 16 16 Total 200 203 136 109 1,173 826 2,647 Total Recorded Investment $ 794,802 $ 1,556,354 $ 1,684,526 $ 1,428,027 $ 297,928 $ 2,079,236 $ 7,840,873 |
Schedule of loans by class and credit quality indicators | Total (dollars in thousands) Pass Watch Special Mention Substandard Doubtful Loans December 31, 2019 Commercial $ 1,470,636 $ 38,522 $ 11,460 $ 25,288 $ — $ 1,545,906 Income producing - commercial real estate 3,667,585 16,069 — 19,093 — 3,702,747 Owner occupied - commercial real estate 925,800 53,146 — 6,463 — 985,409 Real estate mortgage - residential 98,228 628 — 5,365 — 104,221 Construction - commercial and residential 1,113,734 — — 11,510 — 1,125,244 Home equity 78,626 948 — 487 — 80,061 Other consumer 2,160 — — — — 2,160 Total $ 7,356,769 $ 109,313 $ 11,460 $ 68,206 $ — $ 7,545,748 |
Schedule by class of loan, an aging analysis and the recorded investments in loans past due | The following table presents, by class of loan, an aging analysis and the recorded investments in loans past due as of March 31, 2020 and December 31, 2019. Loans Loans Loans Total Recorded 30-59 Days 60-89 Days 90 Days or Total Past Current Investment in (dollars in thousands) Past Due Past Due More Past Due Due Loans Loans Non-Accrual Loans March 31, 2020 Commercial $ 4,596 $ 168 $ — $ 4,764 $ 1,752,396 $ 16,318 $ 1,773,478 Income producing - commercial real estate 3,376 12,086 — 15,462 3,805,665 5,897 3,827,024 Owner occupied - commercial real estate 288 — — 288 961,561 9,785 971,634 Real estate mortgage - residential 5,282 — — 5,282 90,962 8,314 104,558 Construction - commercial and residential 2,062 — — 2,062 960,229 6,875 969,166 Construction - C&I (owner occupied) — — — — 114,138 — 114,138 Home equity 592 — — 592 77,095 541 78,228 Other consumer 8 — — 8 2,632 7 2,647 Total $ 16,204 $ 12,254 $ — $ 28,458 $ 7,764,678 $ 47,737 $ 7,840,873 December 31, 2019 Commercial $ 3,063 $ 781 $ — $ 3,844 $ 1,527,134 $ 14,928 $ 1,545,906 Income producing - commercial real estate — 5,542 — 5,542 3,687,494 9,711 3,702,747 Owner occupied - commercial real estate 13,008 — — 13,008 965,938 6,463 985,409 Real estate mortgage – residential 3,533 — — 5,333 95,057 5,631 104,221 Construction - commercial and residential — — — — 1,113,735 11,509 1,125,244 Home equity 136 192 — 328 79,246 487 80,061 Other consumer — 9 — 9 2,151 — 2,160 Total $ 19,740 $ 6,524 $ — $ 26,264 $ 7,470,755 $ 48,729 $ 7,545,748 |
Schedule of information related to nonaccrual loans by class | The following presents the nonaccrual loans as of March 31, 2020 and December 31, 2019: March 31, 2020 December 31, 2019 Nonaccrual with Nonaccrual with Total Total No Allowance an Allowance Nonaccrual Nonaccrual (dollars in thousands) for Credit Loss for Credit Loss Loans Loans Commercial 9,672 13,093 16,318 14,928 Income producing - commercial real estate 2,704 3,193 5,897 9,711 Owner occupied - commercial real estate 9,008 777 9,785 6,463 Real estate mortgage - residential 5,858 2,717 8,314 5,631 Construction - commercial and residential 3,788 3,087 6,875 11,509 Home equity 53 487 541 487 Other consumer — 7 7 — Total $ 31,083 $ 23,361 $ 47,737 $ 48,729 (1) Excludes troubled debt restructurings (“TDRs”) that were performing under their restructured terms totaling $17.9 million at March 31, 2020 and $16.6.0 million at December 31, 2019. (2) Gross interest income of $717 thousand and $701 thousand would have been recorded for the three months ended March 31, 2020 and 2019, respectively, if nonaccrual loans shown above had been current and in accordance with their original terms, while there was no interest recorded on such loans for the three months ended March 31, 2020 and 2019, respectively. See Note 1 to the Consolidated Financial Statements for a description of the Company’s policy for placing loans on nonaccrual status. |
Schedule of impaired loans, by class of loan | The following table presents, by class of loan, information related to impaired loans for the period December 31, 2019. Unpaid Recorded Recorded Average Recorded Interest Income Contractual Investment Investment Total Investment Recognized Principal With No With Recorded Related Year Year (dollars in thousands) Balance Allowance Allowance Investment Allowance To Date To Date December 31, 2019 Commercial $ 15,814 $ 11,858 $ 3,956 $ 15,814 $ 5,714 $ 15,682 $ 270 Income producing - commercial real estate 14,093 2,713 11,380 14,093 2,145 18,133 382 Owner occupied - commercial real estate 7,349 6,388 961 7,349 415 6,107 197 Real estate mortgage – residential 5,631 3,175 2,456 5,631 650 5,638 — Construction - commercial and residential 11,509 11,101 408 11,509 100 8,211 92 Home equity 487 — 487 487 100 487 — Other consumer — — — — — — — Total $ 54,883 $ 35,235 $ 19,648 $ 54,883 $ 9,124 $ 54,258 $ 941 |
Schedule of loans modified in troubled debt restructurings | The following table presents by class, the recorded investment of loans modified in TDRs held by the Company for the periods ended March 31, 2020 and 2019. For the Three Months Ended March 31, 2020 Income Owner Number Producing - Occupied - Construction - of Commercial Commercial Commercial (dollars in thousands) Contracts Commercial Real Estate Real Estate Real Estate Total Troubled debt restructurings Restructured accruing 11 $ 1,438 $ 15,574 $ 860 $ — $ 17,872 Restructured nonaccruing 2 137 — 2,370 — 2,507 Total 13 $ 1,575 $ 15,574 $ 3,230 $ — $ 20,379 Specific allowance $ — $ 1,007 $ — $ — $ 1,007 Restructured and subsequently defaulted $ — $ — $ — $ — $ — For the Three Months Ended March 31, 2019 Income Owner Number Producing - Occupied - Construction - of Commercial Commercial Commercial (dollars in thousands) Contracts Commercial Real Estate Real Estate Real Estate Total Troubled debt restructurings Restructured accruing 10 $ 3,218 $ 19,622 $ 3,337 $ — $ 26,177 Restructured nonaccruing 3 538 — — — 538 Total 13 $ 3,756 $ 19,622 $ 3,337 $ — $ 26,715 Specific allowance $ 775 $ 3,000 $ — $ — $ 3,775 Restructured and subsequently defaulted $ — $ — $ — $ — $ — |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases | |
Schedule of lease costs and other lease information | The following table presents lease costs and other lease information. Three Months Ended (dollars in thousands) March 31, 2020 March 31,2019 Lease Cost Operating Lease Cost (Cost resulting from lease payments) $ 1,998 $ 1,863 Variable Lease Cost (Cost excluded from lease payments) 267 244 Sublease Income (87) (94) Net Lease Cost $ 2,178 $ 2,013 Operating Lease - Operating Cash Flows (Fixed Payments) 2,206 2,024 Right-of-Use Assets - Operating Leases 25,655 28,928 Weighted Average Lease Term - Operating Leases 4.84 yrs 5.50 yrs Weighted Average Discount Rate - Operating Leases 4.00% 4.00% |
Schedule of future minimum payments for operating leases | Future minimum payments for operating leases with initial or remaining terms of one year or more as of March 31, 2020 were as follows: (dollars in thousands) Twelve Months Ended: March 31, 2021 $ 8,320 March 31, 2022 7,353 March 31, 2023 4,961 March 31, 2024 4,302 March 31, 2025 3,273 Thereafter 3,174 Total Future Minimum Lease Payments 31,383 Amounts Representing Interest (3,141) Present Value of Net Future Minimum Lease Payments $ 28,242 |
Other Derivatives (Tables)
Other Derivatives (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Other Derivatives | |
Schedule of balance sheet category and fair values of the derivative instruments | The table below identifies the balance sheet category and fair value of the Company’s designated cash flow hedge derivative instruments and non-designated hedges as of March 31, 2020 and December 31, 2019. March 31,2020 December 31,2019 Derivatives designated as hedging instruments Notional Balance Sheet Notional Balance Sheet (dollars in thousands) Amount Fair Value Category Amount Fair Value Category Interest rate product $ 100,000 $ 1,695 Other Liabilities $ 100,000 $ 206 Other Liabilities Derivatives not designated as hedging instruments (dollars in thousands) Interest rate product $ 93,699 $ 2,834 Other Assets $ 56,806 $ 311 Other Assets (dollars in thousands) Interest rate product $ 93,699 $ 3,011 Other Liabilities $ 56,806 $ 319 Other Liabilities Other Contracts 27,268 152 Other Liabilities 27,384 86 Other Liabilities $ 120,967 $ 3,163 $ 84,190 $ 405 Other Liabilities |
Schedule of pretax net gains (losses) of designated cash flow hedges | The table below presents the pre-tax net gains (losses) of the Company’s designated cash flow hedges for the three months ended March 31, 2020 and 2019. The Effect of Fair Value and Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income Location of Gain or (Loss) Amount of Gain or (Loss) Amount of Gain or (Loss) Recognized in OCI Recognized from Reclassified from Accumulated OCI on Derivative Accumulated Other into Income Derivatives in Subtopic 815-20 Hedging Three Months Ended March 31, Comprehensive Income into Three Months Ended March 31, Relationships (dollars in thousands) 2020 2019 Income 2020 2019 Derivatives in Cash Flow Hedging Relationships Interest Rate Products $ (1,521) $ (1,034) Interest Expense $ 28 $ 462 Interest Rate Products — — Gain on sale of investment securities — (829) Total $ (1,521) $ (1,034) $ 28 $ (367) |
Schedule of the effect of derivative financial instruments on the Consolidated Statements of Operations | The table below presents the effect of the Company’s derivative financial instruments on the Consolidated Statements of Operations for the three months ended March 31, 2020 and 2019. The Effect of Fair Value and Cash Flow Hedge Accounting on the Statements of Operation Location and Amount of Gain or (Loss) Recognize in Income on Fair Value and Cash Flow Hedging Relationships (in 000's) Three Months Ended March 31, 2020 2020 2019 Interest Interest Gain on sale of Expense Expense investment securities Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded $ 28 $ 462 $ — Gain or (loss) on cash flow hedging relationships in Subtopic 815-20 Interest contracts Amount of gain or (loss) reclassified from accumulated other comprehensive income into income $ 28 $ 462 $ — Amount of gain or (loss) reclassified from accumulated other comprehensive income into income as a result that a forecasted transaction is no longer probable of occurring $ — $ — $ (829) Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income - Included Component $ 28 $ 462 $ — Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income - Excluded Component $ — $ — $ — Effect of Derivatives Not Designated as Hedging Instruments on the Statements of Operation Amount of Gain or (Loss) Recognized in Income on Location of Gain or Derivative Derivatives Not Designated as Hedging (Loss) Recognized in Three Months Ended March 31, Instruments under Subtopic 815-20 Income on Derivative 2020 2019 Interest Rate Products Other income / (expense) (168) (13) Other Contracts Other income / (expense) (66) — Total (234) (13) |
Schedule of the effects of offsetting, and a net presentation of cash flow hedge derivatives | As of March 31, 2020 Net Amounts of Gross Assets Gross Amounts Not Offset in the Gross Amounts presented Balance Sheet Amounts of Offset in in the Cash Recognized the Balance Balance Financial Collateral Net Offsetting of Derivative Assets (dollars in thousands) Assets Sheet Sheet Instruments Posted Amount $ 3,165 $ — $ 3,165 $ — $ — $ 3,165 Net Amounts of Gross Liabilities Gross Amounts Not Offset in the Gross Amounts presented Balance Sheet Amounts of Offset in in the Cash Recognized the Balance Balance Financial Collateral Net Offsetting of Derivative Liabilities (dollars in thousands) Liabilities Sheet Sheet Instruments Posted Amount Derivatives $ 6,459 $ — $ 6,459 $ — $ 3,230 $ 3,229 As of December 31, 2019 Net Amounts of Gross Assets Gross Amounts Not Offset in the Gross Amounts presented Balance Sheet Amounts of Offset in in the Cash Recognized the Balance Balance Financial Collateral Net Offsetting of Derivative Assets (dollars in thousands) Assets Sheet Sheet Instruments Posted Amount Derivatives $ 311 $ — $ 311 $ — $ — $ 311 Net Amounts of Gross Liabilities Gross Amounts Not Offset in the Gross Amounts presented Balance Sheet Amounts of Offset in in the Cash Recognized the Balance Balance Financial Collateral Net Offsetting of Derivative Liabilities (dollars in thousands) Liabilities Sheet Sheet Instruments Posted Amount Derivatives $ 611 $ — $ 611 $ — $ 500 $ 111 |
Other Real Estate Owned (Tables
Other Real Estate Owned (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Other Real Estate Owned | |
Schedule of activity of other real estate owned | Three Months Ended March 31, (dollars in thousands) 2020 2019 Beginning Balance $ 1,487 $ 1,394 Real estate acquired from borrowers 6,750 — Properties sold — — Ending Balance $ 8,237 $ 1,394 |
Long-Term Borrowings (Tables)
Long-Term Borrowings (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
. Long-Term Borrowings | |
Schedule of long-term borrowings | (dollars in thousands) March 31, 2020 December 31, 2019 Subordinated Notes, 5.75% $ 70,000 $ 70,000 Subordinated Notes, 5.0% 150,000 150,000 FHLB Advance, 1.81% 50,000 — Less: unamortized debt issuance costs (2,216) (2,313) Long-term borrowings $ 267,784 $ 217,687 |
Net Income per Common Share (Ta
Net Income per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Net Income per Common Share | |
Schedule of calculation of net income per common share | The calculation of net income per common share for the three months ended March 31, 2020 and 2019 was as follows: Three Months Ended March 31, (dollars and shares in thousands, except per share data) 2020 2019 Basic: Net income $ 23,123 $ 33,749 Average common shares outstanding 32,850 34,481 Basic net income per common share $ 0.70 $ 0.98 Diluted: Net income $ 23,123 $ 33,749 Average common shares outstanding 32,850 34,481 Adjustment for common share equivalents 25 55 Average common shares outstanding-diluted 32,875 34,536 Diluted net income per common share $ 0.70 $ 0.98 Anti-dilutive shares 26 3 |
Other Comprehensive Income (Tab
Other Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Other Comprehensive Income | |
Schedule of components of other comprehensive income (loss) | The following table presents the components of other comprehensive income (loss) for the three months ended March 31, 2020 and 2019. (dollars in thousands) Before Tax Tax Effect Net of Tax Three Months Ended March 31, 2020 Net unrealized gain on securities available-for-sale $ 16,736 $ (4,632) $ 12,104 Less: Reclassification adjustment for net gains included in net income (822) (218) (604) Total unrealized gain 15,914 (4,850) 11,500 Net unrealized loss on derivatives (1,989) 664 (1,325) Less: Reclassification adjustment for gain included in net income (94) (25) (69) Total unrealized loss (2,083) 639 (1,394) Other Comprehensive Income $ 13,831 $ (4,211) $ 10,106 Three Months Ended March 31, 2019 Net unrealized loss on securities available-for-sale $ 7,322 $ 1,882 $ 5,440 Less: Reclassification adjustment for net gains included in net income (83) (22) (61) Total unrealized loss 7,239 1,860 5,379 Net unrealized loss on derivatives (1,545) (391) (1,154) Less: Reclassification adjustment for gain included in net income (1,275) (333) (942) Total unrealized loss (2,820) (724) (2,096) Other Comprehensive Income $ 4,419 $ 1,136 $ 3,283 |
Schedule of changes in each component of accumulated other comprehensive income (loss), net of tax | Securities Accumulated Other Available Comprehensive Income (dollars in thousands) For Sale Derivatives (Loss) Three Months Ended March 31, 2020 Balance at Beginning of Period $ 3,109 $ (150) $ 2,959 Other comprehensive income (loss) before reclassifications 12,104 (1,325) 10,779 Amounts reclassified from accumulated other comprehensive income (loss) (604) (69) (673) Net other comprehensive income (loss) during period 11,500 (1,394) 10,106 Balance at End of Period $ 14,609 $ (1,544) $ 13,065 Three Months Ended March 31, 2019 Balance at Beginning of Period $ (7,044) $ 2,769 $ (4,275) Other comprehensive income (loss) before reclassifications 5,440 (1,154) 4,286 Amounts reclassified from accumulated other comprehensive income (loss) (61) (942) (1,003) Net other comprehensive income (loss) during period 5,379 (2,096) 3,283 Balance at End of Period $ (1,665) $ 673 $ (992) |
Schedule of amounts reclassified out of accumulated other comprehensive (loss) income | The following table presents the amounts reclassified out of each component of accumulated other comprehensive income (loss) for the three months ended March 31, 2020 and 2019. Amount Reclassified from Accumulated Other Affected Line Item in Details about Accumulated Other Comprehensive (Loss) Income the Statement Where Comprehensive Income Components Three Months Ended March 31, Net Income is Presented (dollars in thousands) 2020 2019 Realized gain on sale of investment securities $ 822 $ 83 Gain on sale of investment securities Realized gain on swap termination — 829 Gain on sale of investment securities Interest income (expense) derivative deposits 94 446 Interest expense on deposits Income tax (expense) benefit (243) (355) Income Tax Expense Total Reclassifications for the Period $ 673 $ 1,003 Net Income |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Measurements | |
Schedule of recorded amount of assets and liabilities measured at fair value on a recurring basis | The table below presents the recorded amount of assets and liabilities measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019. Significant Significant Other Other Observable Unobservable Quoted Prices Inputs Inputs Total (dollars in thousands) (Level 1) (Level 2) (Level 3) (Fair Value) March 31, 2020 Assets: Investment securities available-for-sale: U. S. agency securities $ — $ 147,759 $ — $ 147,759 Residential mortgage backed securities — 547,388 — 547,388 Municipal bonds — 75,588 — 75,588 Corporate bonds — — 52,984 52,984 U.S. Treasury — 34,999 — 34,999 Other equity investments — — 198 198 Loans held for sale — 60,036 — 60,036 Interest Rate Caps — 317 — 317 Mortgage banking derivatives — — 331 331 Total assets measured at fair value on a recurring basis as of March 31, 2020 $ — $ 866,087 $ 53,513 $ 919,600 Liabilities: Interest rate swap derivatives $ — $ 1,695 $ — $ 1,695 Derivative liability — 152 — 152 Interest Rate Caps — 2,975 — 2,975 Mortgage banking derivatives — — 1,602 1,602 Total liabilities measured at fair value on a recurring basis as of March 31, 2020 $ — $ 4,822 $ 1,602 $ 6,424 December 31, 2019 Assets: Investment securities available-for-sale: U. S. agency securities $ — $ 179,794 $ — $ 179,794 Residential mortgage backed securities — 543,852 — 543,852 Municipal bonds — 73,931 — 73,931 Corporate bonds — — 10,733 10,733 U.S. Treasury — 34,855 — 34,855 Other equity investments — — 198 198 Loans held for sale — 56,707 — 56,707 Interest Rate Caps — 317 — 317 Mortgage banking derivatives — — 280 280 Total assets measured at fair value on a recurring basis as of December 31, 2019 $ — $ 889,456 $ 11,211 $ 900,667 Liabilities: Interest rate swap derivatives $ — $ 203 $ — $ 203 Derivative liability — 86 — 86 Interest Rate Caps — 312 — 312 Mortgage banking derivatives — — 66 66 Total liabilities measured at fair value on a recurring basis as of December 31, 2019 $ — $ 601 $ 66 $ 667 |
Schedule of aggregate fair value and the aggregate unpaid principal balance for loans held for sale measured at fair value | The following table summarizes the difference between the aggregate fair value and the aggregate unpaid principal balance for loans held for sale measured at fair value as of March 31, 2020 and December 31, 2019. March 31, 2020 Aggregate Unpaid Principal (dollars in thousands) Fair Value Balance Difference Residential mortgage loans held for sale $ 60,036 $ 58,970 $ 1,066 FHA mortgage loans held for sale $ — $ — $ — December 31, 2019 Aggregate Unpaid Principal (dollars in thousands) Fair Value Balance Difference Residential mortgage loans held for sale $ 52,927 $ 52,054 $ 873 FHA mortgage loans held for sale $ 3,780 $ 3,780 $ — |
Schedule of the reconciliation of activity for assets and liabilities measured at fair value based on Significant Other Unobservable Inputs (Level 3) | The following is a reconciliation of activity for assets and liabilities measured at fair value based on Significant Other Unobservable Inputs (Level 3): Investment Mortgage Banking (dollars in thousands) Securities Derivatives Total Assets: Beginning balance at January 1, 2020 $ 10,931 $ 280 $ 11,211 Realized (loss) gain included in earnings — 51 51 Unrealized gain included in other comprehensive income 694 — 694 Purchases of available-for-sale securities 41,557 — 41,557 Principal redemption — — — Ending balance at March 31, 2020 $ 53,182 $ 331 $ 53,513 Liabilities: Beginning balance at January 1, 2020 $ — $ 66 $ 66 Realized loss included in earnings — 1,536 1,536 Principal redemption — — — Ending balance at March 31, 2020 $ — $ 1,602 $ 1,602 Investment Mortgage Banking (dollars in thousands) Securities Derivatives Total Assets: Beginning balance at January 1, 2019 $ 9,794 $ 229 $ 10,023 Realized (loss) gain included in earnings (20) 51 31 Unrealized gain included in other comprehensive income 131 — 131 Purchases of available-for-sale securities 4,030 — 4,030 Principal redemption (3,004) — (3,004) Ending balance at December 31, 2019 $ 10,931 $ 280 $ 11,211 Liabilities: Beginning balance at January 1, 2019 $ — $ 269 $ 269 Realized gain included in earnings — (203) (203) Principal redemption — — — Ending balance at December 31, 2019 $ — $ 66 $ 66 |
Schedule of assets measured at fair value on nonrecurring basis | Significant Significant Other Other Observable Unobservable Quoted Prices Inputs Inputs Total (dollars in thousands) (Level 1) (Level 2) (Level 3) (Fair Value) March 31, 2020 Commercial $ — $ — $ 17,756 $ 17,756 Income producing - commercial real estate — — 21,471 21,471 Owner occupied - commercial real estate — — 10,645 10,645 Real estate mortgage - residential — — 8,314 8,314 Construction - commercial and residential — — 6,875 6,875 Home equity — — 541 541 Other consumer — — 7 7 Other real estate owned — — 8,237 8,237 Total assets measured at fair value on a nonrecurring basis as of March 31, 2020 $ — $ — $ 73,846 $ 73,846 Significant Significant Other Other Observable Unobservable Quoted Prices Inputs Inputs Total (dollars in thousands) (Level 1) (Level 2) (Level 3) (Fair Value) December 31, 2019 Impaired loans: Commercial $ — $ — $ 10,100 $ 10,100 Income producing - commercial real estate — — 11,948 11,948 Owner occupied - commercial real estate — — 6,934 6,934 Real estate mortgage - residential — — 4,981 4,981 Construction - commercial and residential — — 11,409 11,409 Home equity — — 387 387 Other real estate owned — — 1,487 1,487 Total assets measured at fair value on a nonrecurring basis as of December 31, 2019 $ — $ — $ 47,246 $ 47,246 |
Schedule of estimated fair values of financial instruments | The estimated fair value of the Company’s financial instruments at March 31, 2020 and December 31, 2019 are as follows: Fair Value Measurements Significant Other Significant Quoted Observable Unobservable Carrying Prices Inputs Inputs (dollars in thousands) Value Fair Value (Level 1) (Level 2) (Level 3) March 31, 2020 Assets Cash and due from banks $ 7,177 $ 7,177 $ — $ 7,177 $ — Federal funds sold 28,277 28,277 — 28,277 — Interest bearing deposits with other banks 904,160 904,160 — 904,160 — Investment securities 858,916 858,916 — 805,734 53,182 Federal Reserve and Federal Home Loan Bank stock 39,988 39,988 — 39,988 — Loans held for sale 60,036 60,036 — 60,036 — Loans 7,744,537 7,956,500 — — 7,956,500 Bank owned life insurance 76,139 76,139 — 76,139 — Annuity investment 14,675 14,675 — 14,675 — Interest Rate Caps 331 331 — 331 — Liabilities Noninterest bearing deposits 1,994,209 1,994,209 — 1,994,209 — Interest bearing deposits 4,882,092 4,882,092 — 4,882,092 — Certificates of deposit 1,265,267 1,282,095 — 1,282,095 — Customer repurchase agreements 31,377 31,377 — 31,377 — Borrowings 567,784 548,154 — 548,154 — Interest rate swap derivatives 1,695 1,695 1,695 — Derivative liability 152 152 — 152 — Interest Rate Caps 2,975 2,975 — 2,975 — Mortgage banking derivatives 1,602 1,602 — — 1,602 December 31, 2019 Assets Cash and due from banks $ 7,539 $ 7,539 $ — $ 7,539 $ — Federal funds sold 38,987 38,987 — 38,987 — Interest bearing deposits with other banks 195,447 195,447 — 195,447 — Investment securities 843,363 843,363 — 832,432 10,931 Federal Reserve and Federal Home Loan Bank stock 35,194 35,194 — 35,194 — Loans held for sale 56,707 56,707 — 56,707 — Loans 7,472,090 7,550,249 — — 7,550,249 Bank owned life insurance 75,724 75,724 — 75,724 — Annuity investment 14,697 14,697 — 14,697 — Interest Rate Caps 280 280 — 280 — Liabilities Noninterest bearing deposits 2,064,367 2,064,367 — 2,064,367 — Interest bearing deposits 3,876,985 3,876,985 — 3,876,985 — Certificates of deposit 1,283,039 1,291,688 — 1,291,688 — Customer repurchase agreements 30,980 30,980 — 30,980 — Borrowings 467,687 328,330 — 328,330 — Interest rate swap derivatives 203 203 203 — Derivative liability 86 86 — 86 — Interest Rate Caps 312 312 — 312 — Mortgage banking derivatives 66 66 — — 66 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) $ in Thousands | Apr. 30, 2020USD ($)borrower | Mar. 31, 2020USD ($)loanstore | Jan. 01, 2020USD ($) |
Short-term loan modification program, period | 90 days | ||
Number of temporary loan modifications | loan | 32 | ||
Outstanding exposure | $ 576,000 | ||
Number of temporary loan modifications | 382 | ||
Number of loans considered as restructured | 0 | ||
Historical rate application, period | 12 months | ||
Number of quarters representing reasonable and supportable forecast period | 8 | ||
Reserve for unfunded commitments | $ 6,230 | $ 4,118 | |
Outstanding exposure | $ 45,000 | ||
PPP loans | |||
Term of the loans granted | 2 years | ||
Interest rate (as a percent) | 1.00% | ||
PPP loans | Subsequent events | |||
Principal outstanding amount | $ 444,800 | ||
Number of borrowers | borrower | 1,090 | ||
Number of loan applications approved | 1,233 | ||
Value of loan applications approved | $ 449,700 | ||
Impact of ASC 326 Adoption | |||
Reserve for unfunded commitments | 4,118 | ||
Banking Services | |||
Number of locations | store | 20 | ||
Lending Services | |||
Number of locations | store | 5 | ||
ASU 2016-13 | |||
Reserve for unfunded commitments | $ 4,100 | ||
ASU 2016-13 | Impact of ASC 326 Adoption | |||
Allowance for credit losses | 10,600 | ||
Reserve for unfunded commitments | $ 4,100 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Impact of ASC 326 (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Loans | $ 7,840,873 | $ 7,545,748 | |||
Allowance for credit losses on loans | (96,336) | $ (84,272) | (73,658) | $ (69,943) | $ (69,944) |
Liabilities: Reserve for Unfunded Commitments | (6,230) | (4,118) | |||
C & I Owner Occupied | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Loans | 114,138 | 89,490 | |||
Commercial | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Loans | 1,773,478 | 1,545,906 | 1,545,906 | ||
Allowance for credit losses on loans | (27,346) | (18,832) | (17,195) | (15,857) | |
Income Producing - Commercial Real Estate | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Loans | 3,827,024 | 3,702,747 | 3,702,747 | ||
Allowance for credit losses on loans | (43,551) | (29,265) | (26,765) | (28,034) | |
Owner Occupied - Commercial Real Estate | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Loans | 971,634 | 985,409 | 985,409 | ||
Allowance for credit losses on loans | (9,867) | (5,838) | (5,980) | (6,242) | |
Real Estate Mortgage Residential | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Loans | 104,558 | 104,221 | 104,221 | ||
Allowance for credit losses on loans | (1,369) | (1,557) | (681) | (965) | |
Construction - Commercial and Residential | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Loans | 969,166 | 1,035,754 | 1,125,244 | ||
Allowance for credit losses on loans | (13,341) | (17,485) | (18,469) | (18,175) | |
Construction - Commercial and Residential | C & I Owner Occupied | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Loans | 114,138 | 89,490 | |||
Home Equity | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Loans | 78,228 | 80,061 | 80,061 | ||
Allowance for credit losses on loans | (818) | (656) | (605) | (599) | |
Other Consumer | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Loans | 2,647 | 2,160 | 2,160 | ||
Allowance for credit losses on loans | (44) | $ (25) | $ (248) | $ (72) | |
Pre-ASC 326 Adoption | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Allowance for credit losses on loans | (73,658) | ||||
Pre-ASC 326 Adoption | C & I Owner Occupied | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Loans | 89,490 | ||||
Pre-ASC 326 Adoption | Commercial | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Loans | 1,545,906 | ||||
Pre-ASC 326 Adoption | Income Producing - Commercial Real Estate | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Loans | 3,702,747 | ||||
Pre-ASC 326 Adoption | Owner Occupied - Commercial Real Estate | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Loans | 985,409 | ||||
Pre-ASC 326 Adoption | Real Estate Mortgage Residential | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Loans | 104,221 | ||||
Pre-ASC 326 Adoption | Construction - Commercial and Residential | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Loans | 1,035,754 | ||||
Pre-ASC 326 Adoption | Home Equity | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Loans | 80,061 | ||||
Pre-ASC 326 Adoption | Other Consumer | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Loans | 2,160 | ||||
Impact of ASC 326 Adoption | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Allowance for credit losses on loans | (10,614) | ||||
Liabilities: Reserve for Unfunded Commitments | (4,118) | ||||
ASU 2016-13 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Liabilities: Reserve for Unfunded Commitments | $ (4,100) | ||||
ASU 2016-13 | Impact of ASC 326 Adoption | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Liabilities: Reserve for Unfunded Commitments | $ (4,100) |
Investment Securities Availab_3
Investment Securities Available-for-Sale - Amortized cost and estimated fair value of securities available-for-sale (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Amortized Cost | $ 838,831 | $ 839,192 |
Gross Unrealized Gains | 21,379 | 7,206 |
Gross Unrealized Losses | 1,294 | 3,035 |
Investment securities | 858,916 | 843,363 |
U. S. agency securities | ||
Amortized Cost | 146,948 | 180,228 |
Gross Unrealized Gains | 1,527 | 621 |
Gross Unrealized Losses | 716 | 1,055 |
Investment securities | 147,759 | 179,794 |
Residential mortgage backed securities | ||
Amortized Cost | 531,784 | 541,490 |
Gross Unrealized Gains | 16,110 | 4,337 |
Gross Unrealized Losses | 506 | 1,975 |
Investment securities | 547,388 | 543,852 |
Municipal bonds | ||
Amortized Cost | 72,828 | 71,902 |
Gross Unrealized Gains | 2,760 | 2,034 |
Gross Unrealized Losses | 5 | |
Investment securities | 75,588 | 73,931 |
Corporate bonds | ||
Amortized Cost | 52,087 | 10,530 |
Gross Unrealized Gains | 969 | 203 |
Gross Unrealized Losses | 72 | |
Investment securities | 52,984 | 10,733 |
U.S. Treasury | ||
Amortized Cost | 34,986 | 34,844 |
Gross Unrealized Gains | 13 | 11 |
Investment securities | 34,999 | 34,855 |
Other equity investments | ||
Amortized Cost | 198 | 198 |
Investment securities | $ 198 | $ 198 |
Investment Securities Availab_4
Investment Securities Available-for-Sale - Gross unrealized losses and fair value (Details) $ in Thousands | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($)security |
Number of securities | 35 | 148 |
Less than 12 months, estimated fair value | $ 35,111 | $ 274,947 |
Less than 12 months, unrealized losses | 509 | 1,592 |
12 months or greater, estimated fair value | 47,374 | 142,223 |
12 months or greater, unrealized losses | 785 | 1,443 |
Estimated fair value | 82,485 | 417,170 |
Unrealized losses | $ 1,294 | $ 3,035 |
U. S. agency securities | ||
Number of securities | 23 | 36 |
Less than 12 months, estimated fair value | $ 13,835 | $ 75,159 |
Less than 12 months, unrealized losses | 162 | 439 |
12 months or greater, estimated fair value | 39,486 | 51,481 |
12 months or greater, unrealized losses | 554 | 616 |
Estimated fair value | 53,321 | 126,640 |
Unrealized losses | $ 716 | $ 1,055 |
Residential mortgage backed securities | ||
Number of securities | 11 | 111 |
Less than 12 months, estimated fair value | $ 18,321 | $ 197,794 |
Less than 12 months, unrealized losses | 275 | 1,148 |
12 months or greater, estimated fair value | 7,888 | 90,742 |
12 months or greater, unrealized losses | 231 | 827 |
Estimated fair value | 26,209 | 288,536 |
Unrealized losses | $ 506 | $ 1,975 |
Municipal bonds | ||
Number of securities | security | 1 | |
Less than 12 months, estimated fair value | $ 1,994 | |
Less than 12 months, unrealized losses | 5 | |
Estimated fair value | 1,994 | |
Unrealized losses | $ 5 | |
Corporate bonds | ||
Number of securities | 1 | |
Less than 12 months, estimated fair value | $ 2,955 | |
Less than 12 months, unrealized losses | 72 | |
Estimated fair value | 2,955 | |
Unrealized losses | $ 72 |
Investment Securities Availab_5
Investment Securities Available-for-Sale - Expected maturities for residential mortgage backed securities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Amortized cost | $ 838,831 | $ 839,192 |
Investment securities | 858,916 | 843,363 |
U. S. agency securities | ||
One year or less, amortized cost | 61,706 | 96,332 |
After one year through five years, amortized cost | 80,513 | 76,121 |
Five years through ten years, amortized cost | 4,729 | 7,775 |
Amortized cost | 146,948 | 180,228 |
One year or less, estimated fair value | 62,055 | 96,226 |
After one year through five years, estimated fair value | 81,106 | 75,821 |
Five years through ten years, estimated fair value | 4,598 | 7,747 |
Investment securities | 147,759 | 179,794 |
Residential mortgage backed securities | ||
Amortized cost, without maturity date | 531,784 | 541,490 |
Amortized cost | 531,784 | 541,490 |
Estimated fair value, without maturity date | 547,388 | 543,852 |
Investment securities | 547,388 | 543,852 |
Municipal bonds | ||
One year or less, amortized cost | 6,400 | 5,897 |
After one year through five years, amortized cost | 20,844 | 21,416 |
Five years through ten years, amortized cost | 43,584 | 42,589 |
After ten years, amortized cost | 2,000 | 2,000 |
Amortized cost | 72,828 | 71,902 |
One year or less, estimated fair value | 6,456 | 5,969 |
After one year through five years, estimated fair value | 21,437 | 21,953 |
Five years through ten years, estimated fair value | 45,656 | 44,015 |
After ten years, estimated fair value | 2,039 | 1,994 |
Investment securities | 75,588 | 73,931 |
Corporate bonds | ||
One year or less, amortized cost | 10,972 | 502 |
After one year through five years, amortized cost | 35,891 | 8,528 |
After ten years, amortized cost | 5,224 | 1,500 |
Amortized cost | 52,087 | 10,530 |
One year or less, estimated fair value | 11,054 | 508 |
After one year through five years, estimated fair value | 36,600 | 8,725 |
After ten years, estimated fair value | 5,330 | 1,500 |
Investment securities | 52,984 | 10,733 |
U.S. Treasury | ||
Amortized cost, without maturity date | 34,986 | 34,844 |
Amortized cost | 34,986 | 34,844 |
Estimated fair value, without maturity date | 34,999 | 34,855 |
Investment securities | 34,999 | 34,855 |
Other equity investments | ||
Amortized cost, without maturity date | 198 | 198 |
Amortized cost | 198 | 198 |
Estimated fair value, without maturity date | 198 | 198 |
Investment securities | $ 198 | $ 198 |
Investment Securities Availab_6
Investment Securities Available-for-Sale - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Jan. 31, 2020 | Dec. 31, 2019 | |
Federal Reserve and Federal Home Loan Bank stock | $ 39,988 | $ 35,194 | ||
Debt securities as percentage of total investment securities | 99.90% | |||
Debt securities weighted average duration | 2 years 7 months 6 days | |||
Proceeds from sale/call of available-for-sale securities | $ 78,030 | $ 22,808 | ||
Holdings of securities of any one issuer | 10.00% | |||
Gross realized gains on sales of investment securities | $ 822 | 912 | ||
Gross realized losses on sales of investment | 0 | $ 0 | ||
Other Assets | ||||
Accrued interest on available for sale securities | $ 3,400 | 3,200 | ||
Collateral Pledged | ||||
Available-for-sale securities pledged as collateral | $ 364,000 | $ 378,000 |
Mortgage Banking Derivatives (D
Mortgage Banking Derivatives (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Derivative asset | $ 3,165 | $ 311 | |
Derivative liability | 6,459 | 611 | |
Designated Cash Flow Hedge | |||
Noninterest income (loss), other | 1,300 | $ 45 | |
Mortgage Banking Derivative | |||
Derivative, notional amount | 140,100 | 71,700 | |
Noninterest income (loss), other | 1,300 | $ 134 | |
Mortgage Banking Derivative | Other Assets | |||
Derivative asset | 331 | 280 | |
Mortgage Banking Derivative | Other Liabilities | |||
Derivative liability | $ 1,600 | $ 66 |
Loans and Allowance for Credi_3
Loans and Allowance for Credit Losses (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Loans and leases receivable, net of deferred income | $ 7,840,873 | $ 7,545,748 | |||
Loans, percent | 100.00% | 100.00% | |||
Less allowance for credit losses | $ (96,336) | $ (84,272) | $ (73,658) | $ (69,943) | $ (69,944) |
Loans, net | 7,744,537 | 7,472,090 | |||
Accrued interest receivable and other assets | |||||
Accrued interest on available for sale securities | 22,600 | 21,300 | |||
C & I Owner Occupied | |||||
Loans and leases receivable, net of deferred income | 114,138 | 89,490 | |||
Commercial | |||||
Loans and leases receivable, net of deferred income | $ 1,773,478 | 1,545,906 | $ 1,545,906 | ||
Loans, percent | 23.00% | 20.00% | |||
Less allowance for credit losses | $ (27,346) | $ (18,832) | (17,195) | (15,857) | |
Income Producing - Commercial Real Estate | |||||
Loans and leases receivable, net of deferred income | $ 3,827,024 | 3,702,747 | $ 3,702,747 | ||
Loans, percent | 50.00% | 50.00% | |||
Less allowance for credit losses | $ (43,551) | $ (29,265) | (26,765) | (28,034) | |
Owner Occupied - Commercial Real Estate | |||||
Loans and leases receivable, net of deferred income | $ 971,634 | 985,409 | $ 985,409 | ||
Loans, percent | 12.00% | 13.00% | |||
Less allowance for credit losses | $ (9,867) | $ (5,838) | (5,980) | (6,242) | |
Real Estate Mortgage Residential | |||||
Loans and leases receivable, net of deferred income | $ 104,558 | 104,221 | $ 104,221 | ||
Loans, percent | 1.00% | 1.00% | |||
Less allowance for credit losses | $ (1,369) | $ (1,557) | (681) | (965) | |
Construction - Commercial and Residential | |||||
Loans and leases receivable, net of deferred income | 969,166 | 1,035,754 | 1,125,244 | ||
Less allowance for credit losses | (13,341) | (17,485) | (18,469) | (18,175) | |
Construction - Commercial and Residential | Commercial And Residential | |||||
Loans and leases receivable, net of deferred income | $ 969,166 | $ 1,035,754 | |||
Loans, percent | 12.00% | 14.00% | |||
Construction - Commercial and Residential | C & I Owner Occupied | |||||
Loans and leases receivable, net of deferred income | $ 114,138 | $ 89,490 | |||
Loans, percent | 1.00% | 1.00% | |||
Home Equity | |||||
Loans and leases receivable, net of deferred income | $ 78,228 | 80,061 | $ 80,061 | ||
Loans, percent | 1.00% | 1.00% | |||
Less allowance for credit losses | $ (818) | $ (656) | (605) | (599) | |
Other Consumer | |||||
Loans and leases receivable, net of deferred income | 2,647 | $ 2,160 | 2,160 | ||
Less allowance for credit losses | $ (44) | $ (25) | $ (248) | $ (72) |
Loans and Allowance for Credi_4
Loans and Allowance for Credit Losses - Detail activity in the allowance for credit losses by portfolio segment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Allowance for Credit Losses, beginning balance | $ 73,658 | $ 69,944 | |
Impact of adopting ASC 326 | (10,931) | $ 10,614 | |
Loans charged-off | (2,318) | (3,500) | |
Recoveries of loans previously charged-off | 72 | 139 | |
Net loans charged-off | (2,246) | (3,361) | |
Provision for credit losses | 14,310 | 3,360 | |
Individually evaluated for impairment | 11,833 | 6,507 | |
Collectively evaluated for impairment | 84,503 | 63,436 | |
Allowance for Credit Losses, ending balance | 96,336 | 69,943 | |
Commercial | |||
Allowance for Credit Losses, beginning balance | 18,832 | 15,857 | |
Impact of adopting ASC 326 | 892 | ||
Loans charged-off | (4) | ||
Recoveries of loans previously charged-off | 69 | 130 | |
Net loans charged-off | 69 | 126 | |
Provision for credit losses | 7,553 | 1,212 | |
Individually evaluated for impairment | 7,239 | 5,892 | |
Collectively evaluated for impairment | 20,107 | 11,303 | |
Allowance for Credit Losses, ending balance | 27,346 | 17,195 | |
Income Producing - Commercial Real Estate | |||
Allowance for Credit Losses, beginning balance | 29,265 | 28,034 | |
Impact of adopting ASC 326 | 11,230 | ||
Loans charged-off | (550) | (3,496) | |
Net loans charged-off | (550) | (3,496) | |
Provision for credit losses | 3,606 | 2,227 | |
Individually evaluated for impairment | 1,903 | 15 | |
Collectively evaluated for impairment | 41,648 | 26,750 | |
Allowance for Credit Losses, ending balance | 43,551 | 26,765 | |
Owner Occupied - Commercial Real Estate | |||
Allowance for Credit Losses, beginning balance | 5,838 | 6,242 | |
Impact of adopting ASC 326 | 4,674 | ||
Provision for credit losses | (645) | (262) | |
Individually evaluated for impairment | 375 | 600 | |
Collectively evaluated for impairment | 9,492 | 5,380 | |
Allowance for Credit Losses, ending balance | 9,867 | 5,980 | |
Real Estate Mortgage Residential | |||
Allowance for Credit Losses, beginning balance | 1,557 | 965 | |
Impact of adopting ASC 326 | (301) | ||
Recoveries of loans previously charged-off | 1 | ||
Net loans charged-off | 1 | ||
Provision for credit losses | 113 | (285) | |
Individually evaluated for impairment | 657 | ||
Collectively evaluated for impairment | 712 | 681 | |
Allowance for Credit Losses, ending balance | 1,369 | 681 | |
Construction - Commercial and Residential | |||
Allowance for Credit Losses, beginning balance | 17,485 | 18,175 | |
Impact of adopting ASC 326 | (6,143) | ||
Loans charged-off | (1,768) | ||
Net loans charged-off | (1,768) | ||
Provision for credit losses | 3,767 | 294 | |
Individually evaluated for impairment | 1,554 | ||
Collectively evaluated for impairment | 11,787 | 18,469 | |
Allowance for Credit Losses, ending balance | 13,341 | 18,469 | |
Home Equity | |||
Allowance for Credit Losses, beginning balance | 656 | 599 | |
Impact of adopting ASC 326 | 245 | ||
Provision for credit losses | (83) | 6 | |
Individually evaluated for impairment | 105 | ||
Collectively evaluated for impairment | 713 | 605 | |
Allowance for Credit Losses, ending balance | 818 | 605 | |
Other Consumer | |||
Allowance for Credit Losses, beginning balance | 25 | 72 | |
Impact of adopting ASC 326 | $ 17 | ||
Recoveries of loans previously charged-off | 3 | 8 | |
Net loans charged-off | 3 | 8 | |
Provision for credit losses | (1) | 168 | |
Collectively evaluated for impairment | 44 | 248 | |
Allowance for Credit Losses, ending balance | $ 44 | $ 248 |
Loans and Allowance for Credi_5
Loans and Allowance for Credit Losses - Amortized cost basis of collateral-dependent loans (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 |
Loans And Leases Receivable Net Of Deferred Income | $ 7,840,873 | $ 7,545,748 | |
C & I Owner Occupied | |||
Loans And Leases Receivable Net Of Deferred Income | 114,138 | $ 89,490 | |
Commercial | |||
Loans And Leases Receivable Net Of Deferred Income | 1,773,478 | 1,545,906 | 1,545,906 |
Income Producing - Commercial Real Estate | |||
Loans And Leases Receivable Net Of Deferred Income | 3,827,024 | 3,702,747 | 3,702,747 |
Owner Occupied - Commercial Real Estate | |||
Loans And Leases Receivable Net Of Deferred Income | 971,634 | 985,409 | 985,409 |
Real Estate Mortgage Residential | |||
Loans And Leases Receivable Net Of Deferred Income | 104,558 | 104,221 | 104,221 |
Construction - Commercial and Residential | |||
Loans And Leases Receivable Net Of Deferred Income | 969,166 | 1,035,754 | 1,125,244 |
Construction - Commercial and Residential | C & I Owner Occupied | |||
Loans And Leases Receivable Net Of Deferred Income | 114,138 | 89,490 | |
Home Equity | |||
Loans And Leases Receivable Net Of Deferred Income | 78,228 | 80,061 | 80,061 |
Other Consumer | |||
Loans And Leases Receivable Net Of Deferred Income | 2,647 | $ 2,160 | $ 2,160 |
Business or Other Assets | |||
Loans And Leases Receivable Net Of Deferred Income | 18,487 | ||
Business or Other Assets | Commercial | |||
Loans And Leases Receivable Net Of Deferred Income | 15,287 | ||
Business or Other Assets | Income Producing - Commercial Real Estate | |||
Loans And Leases Receivable Net Of Deferred Income | 3,193 | ||
Business or Other Assets | Other Consumer | |||
Loans And Leases Receivable Net Of Deferred Income | 7 | ||
Real Estate | |||
Loans And Leases Receivable Net Of Deferred Income | 47,909 | ||
Real Estate | Commercial | |||
Loans And Leases Receivable Net Of Deferred Income | 3,518 | ||
Real Estate | Income Producing - Commercial Real Estate | |||
Loans And Leases Receivable Net Of Deferred Income | 18,278 | ||
Real Estate | Owner Occupied - Commercial Real Estate | |||
Loans And Leases Receivable Net Of Deferred Income | 10,645 | ||
Real Estate | Real Estate Mortgage Residential | |||
Loans And Leases Receivable Net Of Deferred Income | 8,052 | ||
Real Estate | Construction - Commercial and Residential | |||
Loans And Leases Receivable Net Of Deferred Income | 6,875 | ||
Real Estate | Home Equity | |||
Loans And Leases Receivable Net Of Deferred Income | $ 541 |
Loans and Allowance for Credi_6
Loans and Allowance for Credit Losses - Risk category of loans by class of loans (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 |
2016 | $ 794,802 | ||
2017 | 1,556,354 | ||
2018 | 1,684,526 | ||
2019 | 1,428,027 | ||
2020 | 297,928 | ||
Prior | 2,079,236 | ||
Loans | 7,840,873 | $ 7,545,748 | |
Pass | |||
Loans | 7,356,769 | ||
Special Mention | |||
Loans | 11,460 | ||
Substandard | |||
Loans | 68,206 | ||
Watch | |||
Loans | 109,313 | ||
Commercial | |||
2016 | 150,948 | ||
2017 | 369,606 | ||
2018 | 338,596 | ||
2019 | 269,631 | ||
2020 | 113,862 | ||
Prior | 530,835 | ||
Loans | 1,773,478 | $ 1,545,906 | 1,545,906 |
Commercial | Pass | |||
2016 | 146,077 | ||
2017 | 339,954 | ||
2018 | 324,160 | ||
2019 | 267,490 | ||
2020 | 113,862 | ||
Prior | 495,376 | ||
Loans | 1,686,919 | 1,470,636 | |
Commercial | Special Mention | |||
2017 | 11,108 | ||
2018 | 11,365 | ||
Prior | 1,111 | ||
Loans | 23,584 | 11,460 | |
Commercial | Substandard | |||
2016 | 4,871 | ||
2017 | 1,652 | ||
2018 | 2,577 | ||
2019 | 1,131 | ||
Prior | 18,520 | ||
Loans | 28,751 | 25,288 | |
Commercial | Watch | |||
2017 | 16,892 | ||
2018 | 494 | ||
2019 | 1,010 | ||
Prior | 15,828 | ||
Loans | 34,224 | 38,522 | |
Income Producing - Commercial Real Estate | |||
2016 | 418,098 | ||
2017 | 595,868 | ||
2018 | 739,669 | ||
2019 | 907,809 | ||
2020 | 147,214 | ||
Prior | 1,018,366 | ||
Loans | 3,827,024 | 3,702,747 | 3,702,747 |
Income Producing - Commercial Real Estate | Pass | |||
2016 | 417,298 | ||
2017 | 586,243 | ||
2018 | 736,476 | ||
2019 | 897,933 | ||
2020 | 147,214 | ||
Prior | 1,005,065 | ||
Loans | 3,790,229 | 3,667,585 | |
Income Producing - Commercial Real Estate | Special Mention | |||
2016 | 800 | ||
2019 | 5,542 | ||
Prior | 4,854 | ||
Loans | 11,196 | ||
Income Producing - Commercial Real Estate | Substandard | |||
2017 | 4,984 | ||
2018 | 3,193 | ||
Prior | 7,082 | ||
Loans | 15,259 | 19,093 | |
Income Producing - Commercial Real Estate | Watch | |||
2017 | 4,641 | ||
2019 | 4,334 | ||
Prior | 1,365 | ||
Loans | 10,340 | 16,069 | |
Owner Occupied - Commercial Real Estate | |||
2016 | 115,681 | ||
2017 | 120,780 | ||
2018 | 229,309 | ||
2019 | 92,231 | ||
2020 | 689 | ||
Prior | 412,944 | ||
Loans | 971,634 | 985,409 | 985,409 |
Owner Occupied - Commercial Real Estate | Pass | |||
2016 | 112,140 | ||
2017 | 120,780 | ||
2018 | 226,702 | ||
2019 | 92,231 | ||
2020 | 689 | ||
Prior | 369,509 | ||
Loans | 922,051 | 925,800 | |
Owner Occupied - Commercial Real Estate | Substandard | |||
2016 | 850 | ||
Prior | 8,935 | ||
Loans | 9,785 | 6,463 | |
Owner Occupied - Commercial Real Estate | Watch | |||
2016 | 2,691 | ||
2018 | 2,607 | ||
Prior | 34,500 | ||
Loans | 39,798 | 53,146 | |
Real Estate Mortgage Residential | |||
2016 | 7,590 | ||
2017 | 14,638 | ||
2018 | 24,773 | ||
2019 | 29,207 | ||
2020 | 4,203 | ||
Prior | 24,147 | ||
Loans | 104,558 | 104,221 | 104,221 |
Real Estate Mortgage Residential | Pass | |||
2016 | 3,436 | ||
2017 | 11,950 | ||
2018 | 24,773 | ||
2019 | 29,207 | ||
2020 | 4,203 | ||
Prior | 22,316 | ||
Loans | 95,885 | 98,228 | |
Real Estate Mortgage Residential | Substandard | |||
2016 | 4,154 | ||
2017 | 2,688 | ||
Prior | 1,211 | ||
Loans | 8,053 | 5,365 | |
Real Estate Mortgage Residential | Watch | |||
Prior | 620 | ||
Loans | 620 | 628 | |
Construction - Commercial and Residential | |||
2016 | 84,945 | ||
2017 | 439,708 | ||
2018 | 292,994 | ||
2019 | 102,645 | ||
2020 | 17,223 | ||
Prior | 31,651 | ||
Loans | 969,166 | 1,035,754 | 1,125,244 |
Construction - Commercial and Residential | Pass | |||
2016 | 82,642 | ||
2017 | 437,815 | ||
2018 | 292,994 | ||
2019 | 102,645 | ||
2020 | 17,223 | ||
Prior | 28,972 | ||
Loans | 962,291 | 1,113,734 | |
Construction - Commercial and Residential | Substandard | |||
2016 | 2,303 | ||
2017 | 1,893 | ||
Prior | 2,679 | ||
Loans | 6,875 | 11,510 | |
Home Equity | |||
2016 | 5,598 | ||
2017 | 9,349 | ||
2018 | 8,729 | ||
2019 | 4,935 | ||
2020 | 931 | ||
Prior | 48,686 | ||
Loans | 78,228 | 80,061 | 80,061 |
Home Equity | Pass | |||
2016 | 5,598 | ||
2017 | 9,349 | ||
2018 | 8,729 | ||
2019 | 4,935 | ||
2020 | 931 | ||
Prior | 47,201 | ||
Loans | 76,743 | 78,626 | |
Home Equity | Substandard | |||
Prior | 541 | ||
Loans | 541 | 487 | |
Home Equity | Watch | |||
Prior | 944 | ||
Loans | 944 | 948 | |
Other Consumer | |||
2016 | 200 | ||
2017 | 203 | ||
2018 | 136 | ||
2019 | 109 | ||
2020 | 1,173 | ||
Prior | 826 | ||
Loans | 2,647 | 2,160 | 2,160 |
Other Consumer | Pass | |||
2016 | 200 | ||
2017 | 203 | ||
2018 | 136 | ||
2019 | 109 | ||
2020 | 1,173 | ||
Prior | 810 | ||
Loans | 2,631 | 2,160 | |
Other Consumer | Substandard | |||
Prior | 16 | ||
Loans | 16 | ||
C & I Owner Occupied | |||
2016 | 11,742 | ||
2017 | 6,202 | ||
2018 | 50,320 | ||
2019 | 21,460 | ||
2020 | 12,633 | ||
Prior | 11,781 | ||
Loans | 114,138 | $ 89,490 | |
C & I Owner Occupied | Pass | |||
2016 | 11,742 | ||
2017 | 4,073 | ||
2018 | 39,220 | ||
2019 | 21,460 | ||
2020 | 12,633 | ||
Prior | 11,062 | ||
Loans | 100,190 | ||
C & I Owner Occupied | Watch | |||
2017 | 2,129 | ||
2018 | 11,100 | ||
Prior | 719 | ||
Loans | 13,948 | ||
C & I Owner Occupied | Construction - Commercial and Residential | |||
Loans | $ 114,138 | $ 89,490 |
Loans and Allowance for Credi_7
Loans and Allowance for Credit Losses - Loans by class and credit quality indicators (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 |
Loans | $ 7,840,873 | $ 7,545,748 | |
C & I Owner Occupied | |||
Loans | 114,138 | $ 89,490 | |
Pass | |||
Loans | 7,356,769 | ||
Pass | C & I Owner Occupied | |||
Loans | 100,190 | ||
Watch | |||
Loans | 109,313 | ||
Watch | C & I Owner Occupied | |||
Loans | 13,948 | ||
Special Mention | |||
Loans | 11,460 | ||
Substandard | |||
Loans | 68,206 | ||
Commercial | |||
Loans | 1,773,478 | 1,545,906 | 1,545,906 |
Commercial | Pass | |||
Loans | 1,686,919 | 1,470,636 | |
Commercial | Watch | |||
Loans | 34,224 | 38,522 | |
Commercial | Special Mention | |||
Loans | 23,584 | 11,460 | |
Commercial | Substandard | |||
Loans | 28,751 | 25,288 | |
Income Producing - Commercial Real Estate | |||
Loans | 3,827,024 | 3,702,747 | 3,702,747 |
Income Producing - Commercial Real Estate | Pass | |||
Loans | 3,790,229 | 3,667,585 | |
Income Producing - Commercial Real Estate | Watch | |||
Loans | 10,340 | 16,069 | |
Income Producing - Commercial Real Estate | Special Mention | |||
Loans | 11,196 | ||
Income Producing - Commercial Real Estate | Substandard | |||
Loans | 15,259 | 19,093 | |
Owner Occupied - Commercial Real Estate | |||
Loans | 971,634 | 985,409 | 985,409 |
Owner Occupied - Commercial Real Estate | Pass | |||
Loans | 922,051 | 925,800 | |
Owner Occupied - Commercial Real Estate | Watch | |||
Loans | 39,798 | 53,146 | |
Owner Occupied - Commercial Real Estate | Substandard | |||
Loans | 9,785 | 6,463 | |
Real Estate Mortgage Residential | |||
Loans | 104,558 | 104,221 | 104,221 |
Real Estate Mortgage Residential | Pass | |||
Loans | 95,885 | 98,228 | |
Real Estate Mortgage Residential | Watch | |||
Loans | 620 | 628 | |
Real Estate Mortgage Residential | Substandard | |||
Loans | 8,053 | 5,365 | |
Construction - Commercial and Residential | |||
Loans | 969,166 | 1,035,754 | 1,125,244 |
Construction - Commercial and Residential | C & I Owner Occupied | |||
Loans | 114,138 | 89,490 | |
Construction - Commercial and Residential | Pass | |||
Loans | 962,291 | 1,113,734 | |
Construction - Commercial and Residential | Substandard | |||
Loans | 6,875 | 11,510 | |
Home Equity | |||
Loans | 78,228 | 80,061 | 80,061 |
Home Equity | Pass | |||
Loans | 76,743 | 78,626 | |
Home Equity | Watch | |||
Loans | 944 | 948 | |
Home Equity | Substandard | |||
Loans | 541 | 487 | |
Other Consumer | |||
Loans | 2,647 | $ 2,160 | 2,160 |
Other Consumer | Pass | |||
Loans | 2,631 | $ 2,160 | |
Other Consumer | Substandard | |||
Loans | $ 16 |
Loans and Allowance for Credi_8
Loans and Allowance for Credit Losses - Class of loan, an aging analysis and the recorded investments in loans past due (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Loans past due | $ 28,458 | $ 26,264 |
Current loans | 7,764,678 | 7,470,755 |
Non-Accrual | 47,737 | 48,729 |
Total recorded investment in loans | 7,840,873 | 7,545,748 |
C & I Owner Occupied | ||
Current loans | 114,138 | |
Total recorded investment in loans | 114,138 | |
Commercial | ||
Loans past due | 4,764 | 3,844 |
Current loans | 1,752,396 | 1,527,134 |
Non-Accrual | 16,318 | 14,928 |
Total recorded investment in loans | 1,773,478 | 1,545,906 |
Income Producing - Commercial Real Estate | ||
Loans past due | 15,462 | 5,542 |
Current loans | 3,805,665 | 3,687,494 |
Non-Accrual | 5,897 | 9,711 |
Total recorded investment in loans | 3,827,024 | 3,702,747 |
Owner Occupied - Commercial Real Estate | ||
Loans past due | 288 | 13,008 |
Current loans | 961,561 | 965,938 |
Non-Accrual | 9,785 | 6,463 |
Total recorded investment in loans | 971,634 | 985,409 |
Real Estate Mortgage Residential | ||
Loans past due | 5,282 | 5,333 |
Current loans | 90,962 | 95,057 |
Non-Accrual | 8,314 | 5,631 |
Total recorded investment in loans | 104,558 | 104,221 |
Construction - Commercial and Residential | ||
Loans past due | 2,062 | |
Current loans | 960,229 | 1,113,735 |
Non-Accrual | 6,875 | 11,509 |
Total recorded investment in loans | 969,166 | 1,125,244 |
Home Equity | ||
Loans past due | 592 | 328 |
Current loans | 77,095 | 79,246 |
Non-Accrual | 541 | 487 |
Total recorded investment in loans | 78,228 | 80,061 |
Other Consumer | ||
Loans past due | 8 | 9 |
Current loans | 2,632 | 2,151 |
Non-Accrual | 7 | |
Total recorded investment in loans | 2,647 | 2,160 |
30 to 59 days past due | ||
Loans past due | 16,204 | 19,740 |
30 to 59 days past due | Commercial | ||
Loans past due | 4,596 | 3,063 |
30 to 59 days past due | Income Producing - Commercial Real Estate | ||
Loans past due | 3,376 | |
30 to 59 days past due | Owner Occupied - Commercial Real Estate | ||
Loans past due | 288 | 13,008 |
30 to 59 days past due | Real Estate Mortgage Residential | ||
Loans past due | 5,282 | 3,533 |
30 to 59 days past due | Construction - Commercial and Residential | ||
Loans past due | 2,062 | |
30 to 59 days past due | Home Equity | ||
Loans past due | 592 | 136 |
30 to 59 days past due | Other Consumer | ||
Loans past due | 8 | |
60-89 days past due | ||
Loans past due | 12,254 | 6,524 |
60-89 days past due | Commercial | ||
Loans past due | 168 | 781 |
60-89 days past due | Income Producing - Commercial Real Estate | ||
Loans past due | $ 12,086 | 5,542 |
60-89 days past due | Home Equity | ||
Loans past due | 192 | |
60-89 days past due | Other Consumer | ||
Loans past due | $ 9 |
Loans and Allowance for Credi_9
Loans and Allowance for Credit Losses - Information related to nonaccrual loans by class (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Non accrual with No allowance for credit Loss | $ 31,083 | |
Nonaccrual with an Allowance for Credit Loss | 23,361 | |
Nonaccrual loan, recorded investment | 47,737 | $ 48,729 |
Commercial | ||
Non accrual with No allowance for credit Loss | 9,672 | |
Nonaccrual with an Allowance for Credit Loss | 13,093 | |
Nonaccrual loan, recorded investment | 16,318 | 14,928 |
Income Producing - Commercial Real Estate | ||
Non accrual with No allowance for credit Loss | 2,704 | |
Nonaccrual with an Allowance for Credit Loss | 3,193 | |
Nonaccrual loan, recorded investment | 5,897 | 9,711 |
Owner Occupied - Commercial Real Estate | ||
Non accrual with No allowance for credit Loss | 9,008 | |
Nonaccrual with an Allowance for Credit Loss | 777 | |
Nonaccrual loan, recorded investment | 9,785 | 6,463 |
Real Estate Mortgage Residential | ||
Non accrual with No allowance for credit Loss | 5,858 | |
Nonaccrual with an Allowance for Credit Loss | 2,717 | |
Nonaccrual loan, recorded investment | 8,314 | 5,631 |
Construction - Commercial and Residential | ||
Non accrual with No allowance for credit Loss | 3,788 | |
Nonaccrual with an Allowance for Credit Loss | 3,087 | |
Nonaccrual loan, recorded investment | 6,875 | 11,509 |
Home Equity | ||
Non accrual with No allowance for credit Loss | 53 | |
Nonaccrual with an Allowance for Credit Loss | 487 | |
Nonaccrual loan, recorded investment | 541 | $ 487 |
Other Consumer | ||
Nonaccrual with an Allowance for Credit Loss | 7 | |
Nonaccrual loan, recorded investment | $ 7 |
Loans and Allowance for Cred_10
Loans and Allowance for Credit Losses - Impaired loans, by class of loan (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2019 | |
Unpaid Contractual Principal Balance | $ 54,883 | $ 54,883 | ||
Recorded Investment With No Allowance | 35,235 | 35,235 | ||
Recorded Investment With Allowance | 19,648 | 19,648 | ||
Total Recorded Investment | 54,883 | 54,883 | ||
Related Allowance | 9,124 | 9,124 | ||
Average Recorded Investment | 54,258 | |||
Interest Income Recognized | $ 717 | $ 701 | 941 | |
Commercial | ||||
Unpaid Contractual Principal Balance | 15,814 | 15,814 | ||
Recorded Investment With No Allowance | 11,858 | 11,858 | ||
Recorded Investment With Allowance | 3,956 | 3,956 | ||
Total Recorded Investment | 15,814 | 15,814 | ||
Related Allowance | 5,714 | 5,714 | ||
Average Recorded Investment | 15,682 | |||
Interest Income Recognized | 270 | |||
Income Producing - Commercial Real Estate | ||||
Unpaid Contractual Principal Balance | 14,093 | 14,093 | ||
Recorded Investment With No Allowance | 2,713 | 2,713 | ||
Recorded Investment With Allowance | 11,380 | 11,380 | ||
Total Recorded Investment | 14,093 | 14,093 | ||
Related Allowance | 2,145 | 2,145 | ||
Average Recorded Investment | 18,133 | |||
Interest Income Recognized | 382 | |||
Owner Occupied - Commercial Real Estate | ||||
Unpaid Contractual Principal Balance | 7,349 | 7,349 | ||
Recorded Investment With No Allowance | 6,388 | 6,388 | ||
Recorded Investment With Allowance | 961 | 961 | ||
Total Recorded Investment | 7,349 | 7,349 | ||
Related Allowance | 415 | 415 | ||
Average Recorded Investment | 6,107 | |||
Interest Income Recognized | 197 | |||
Real Estate Mortgage Residential | ||||
Unpaid Contractual Principal Balance | 5,631 | 5,631 | ||
Recorded Investment With No Allowance | 3,175 | 3,175 | ||
Recorded Investment With Allowance | 2,456 | 2,456 | ||
Total Recorded Investment | 5,631 | 5,631 | ||
Related Allowance | 650 | 650 | ||
Average Recorded Investment | 5,638 | |||
Construction - Commercial and Residential | ||||
Unpaid Contractual Principal Balance | 11,509 | 11,509 | ||
Recorded Investment With No Allowance | 11,101 | 11,101 | ||
Recorded Investment With Allowance | 408 | 408 | ||
Total Recorded Investment | 11,509 | 11,509 | ||
Related Allowance | 100 | 100 | ||
Average Recorded Investment | 8,211 | |||
Interest Income Recognized | 92 | |||
Home Equity | ||||
Unpaid Contractual Principal Balance | 487 | 487 | ||
Recorded Investment With Allowance | 487 | 487 | ||
Total Recorded Investment | 487 | 487 | ||
Related Allowance | 100 | $ 100 | ||
Average Recorded Investment | $ 487 |
Loans and Allowance for Cred_11
Loans and Allowance for Credit Losses - Loans modified in troubled debt restructurings (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020USD ($)contract | Mar. 31, 2019USD ($)contract | |
Number of loans - restructured accruing | contract | 11 | 10 |
Number of loans - restructured nonaccruing | contract | 2 | 3 |
Number of loans | contract | 13 | 13 |
Restructured accruing | $ 17,872 | $ 26,177 |
Restructured nonaccruing | 2,507 | 538 |
Troubled Debt Restructured | 20,379 | 26,715 |
Specific allowance | 1,007 | 3,775 |
Commercial | ||
Restructured accruing | 1,438 | 3,218 |
Restructured nonaccruing | 137 | 538 |
Troubled Debt Restructured | 1,575 | 3,756 |
Specific allowance | 775 | |
Income Producing - Commercial Real Estate | ||
Restructured accruing | 15,574 | 19,622 |
Troubled Debt Restructured | 15,574 | 19,622 |
Specific allowance | 1,007 | 3,000 |
Owner Occupied - Commercial Real Estate | ||
Restructured accruing | 860 | 3,337 |
Restructured nonaccruing | 2,370 | |
Troubled Debt Restructured | $ 3,230 | $ 3,337 |
Loans and Allowance for Cred_12
Loans and Allowance for Credit Losses - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |||
Apr. 30, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Jan. 01, 2020 | Dec. 31, 2019 | |
Unamortized net deferred fees | $ 24,800 | $ 25,200 | |||
Serving assets not reflected as loan balances | 101,000 | 99,000 | |||
Credit modification exposure | $ 576,000 | 45,000 | |||
Financing receivable, net | $ 7,840,873 | 7,545,748 | |||
Loans secured by real estate (percent) | 82.00% | ||||
Increase in allowance for credit losses | $ 14,310 | $ 3,360 | |||
Reserve for unfunded commitments | 6,230 | $ 4,118 | |||
Provision for credit losses utilizing the newly adopted methodology | 1,007 | 3,775 | |||
Net charge-offs | 2,246 | 3,361 | |||
Loans and leases receivable, net of deferred income | 7,840,873 | 7,545,748 | |||
ASU 2016-13 | |||||
Increase in allowance for credit losses | 14,700 | ||||
Reserve for unfunded commitments | 4,100 | ||||
Criticized | ASU 2016-13 | |||||
Provision for credit losses utilizing the newly adopted methodology | $ 16,400 | ||||
ADC Loans | |||||
Percent of ADC loan portfolio using interest reserves | 60.00% | ||||
Financing receivable, net | $ 1,410,000 | ||||
Home Equity | |||||
Financing receivable, net | 78,228 | 80,061 | |||
Increase in allowance for credit losses | (83) | 6 | |||
Loans and leases receivable, net of deferred income | $ 78,228 | 80,061 | 80,061 | ||
Owner Occupied Commercial Real Estate and Construction | |||||
Percent of loan portfolio | 13.00% | ||||
Income Producing Commercial Real Estate and Real Estate Construction | |||||
Percent of loan portfolio | 62.00% | ||||
Maximum loan to value (percent) | 80.00% | ||||
Income Producing Commercial Real Estate and Real Estate Construction | Minimum | |||||
Minimum cash flow debt service coverage ratio | 1.15 | ||||
Income Producing Commercial Real Estate and Real Estate Construction | Maximum | |||||
Minimum cash flow debt service coverage ratio | 1 | ||||
Commercial Real Estate and Real Estate Construction Loans [Member] | |||||
Percent of loan portfolio | 75.00% | ||||
Commercial | |||||
Percent of loan portfolio | 23.00% | ||||
Financing receivable, net | $ 1,773,478 | 1,545,906 | |||
Increase in allowance for credit losses | 7,553 | 1,212 | |||
Provision for credit losses utilizing the newly adopted methodology | 775 | ||||
Net charge-offs | (69) | (126) | |||
Loans and leases receivable, net of deferred income | $ 1,773,478 | 1,545,906 | 1,545,906 | ||
Commercial | Minimum | Preferred Term | |||||
Loan period | 5 years | ||||
Commercial | Maximum | |||||
Loan period | 10 years | ||||
Amortization term | 25 years | ||||
Commercial | Maximum | Preferred Term | |||||
Loan period | 7 years | ||||
Commercial | SBA Loans | |||||
Percent of loan portfolio | 1.20% | ||||
Consumer Portfolio Segment | |||||
Percent of loan portfolio | 1.00% | ||||
Consumer Portfolio Segment | Land Acquisition Development and Construction Loans | Maximum | |||||
Loan period | 24 months | ||||
Real Estate Mortgage Residential | |||||
Financing receivable, net | $ 104,558 | 104,221 | |||
Increase in allowance for credit losses | 113 | (285) | |||
Net charge-offs | $ (1) | ||||
Loans and leases receivable, net of deferred income | $ 104,558 | $ 104,221 | $ 104,221 | ||
Real Estate Mortgage Residential | Real Estate Loan | |||||
Percent of loan portfolio | 1.00% | ||||
Repricing duration | 17 months | ||||
Real Estate Mortgage Residential | Land Acquisition Development and Construction Loans | Maximum | |||||
Loan period | 36 months |
Loans and Allowance for Cred_13
Loans and Allowance for Credit Losses - Additional Information II (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020USD ($)contract | Mar. 31, 2019USD ($)contract | |
Loans and Allowance for Credit Losses | ||
Number of TDR loans | 13 | 13 |
Troubled Debt Restructurings | $ | $ 20,379 | $ 26,715 |
Number of loans - restructured accruing | 11 | 10 |
Restructured accruing | $ | $ 17,872 | $ 26,177 |
Number of defaulted loans charged-off | 0 | |
Number of loans modified in TDR | 4 | 1 |
Recorded investment - loans modified in TDR | $ | $ 1,300 | $ 2,300 |
Leases - Additional Information
Leases - Additional Information (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020USD ($)lease | Dec. 31, 2019USD ($) | Mar. 31, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | |||
Operating lease right-of-use assets | $ 25,655 | $ 27,372 | $ 28,928 |
Operating lease liabilities | $ 28,242 | 29,959 | |
Existence of option to extend leases | true | ||
Existence of option to terminate leases | true | ||
Probability that lease options will be exercised | 90.00% | ||
Number of operating leases signed but not yet commenced | lease | 0 | ||
Impact of ASC 326 Adoption | ASU 2016-02 Leases (Topic 842) | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease right-of-use assets | $ 25,700 | 27,400 | |
Operating lease liabilities | $ 28,200 | $ 30,000 |
Leases - Lease Costs (Details)
Leases - Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Leases | |||
Operating Lease Cost (Cost resulting from lease payments) | $ 1,998 | $ 1,863 | |
Variable Lease Cost (Cost excluded from lease payments) | 267 | 244 | |
Sublease Income | (87) | (94) | |
Net Lease Cost | 2,178 | 2,013 | |
Operating Lease - Operating Cash Flows (Fixed Payments) | 2,206 | 2,024 | |
Operating lease right-of-use assets | $ 25,655 | $ 28,928 | $ 27,372 |
Weighted Average Lease Term - Operating Leases | 4 years 10 months 2 days | 5 years 6 months | |
Weighted Average Discount Rate - Operating Leases | 4.00% | 4.00% |
Leases - Future minimum payment
Leases - Future minimum payments for operating leases (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Future minimum lease payments | ||
March 31, 2021 | $ 8,320 | |
March 31, 2022 | 7,353 | |
March 31, 2023 | 4,961 | |
March 31, 2024 | 4,302 | |
March 31, 2025 | 3,273 | |
Thereafter | 3,174 | |
Total Future Minimum Lease Payments | 31,383 | |
Amounts Representing Interest | (3,141) | |
Present Value of Net Future Minimum Lease Payments | $ 28,242 | $ 29,959 |
Affordable Housing Projects T_2
Affordable Housing Projects Tax Credit Partnerships - Additional Information (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Other Liabilities | ||
Affordable Housing Projects Tax Credit - Unfunded Commitments | $ 11.3 | $ 11.3 |
Affordable Housing Projects Tax Credit Partnership | Other Assets | ||
Investments | $ 28.9 | $ 29.7 |
Other Derivatives (Details)
Other Derivatives (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Fair value | $ 3,165 | $ 311 |
Other Liabilities | ||
Notional Amount | 120,967 | 84,190 |
Fair value | 3,163 | 405 |
Other Liabilities | Interest Rate Product | ||
Notional Amount | 93,699 | 56,806 |
Fair value | 3,011 | 319 |
Other Liabilities | Other Contracts | ||
Notional Amount | 27,268 | 27,384 |
Fair value | 152 | 86 |
Designated Cash Flow Hedge | Other Liabilities | Interest Rate Product | ||
Notional Amount | 100,000 | 100,000 |
Fair value | 1,695 | 206 |
Not Designated as Hedging Instrument | Other Assets | Interest Rate Product | ||
Notional Amount | 93,699 | 56,806 |
Fair value | $ 2,834 | $ 311 |
Other Derivatives - Cash flow h
Other Derivatives - Cash flow hedges (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Gross Amount of Recognized Liabilities | $ 6,459 | $ 611 | |
Amount of Gain or (Loss) recognized in OCI | (1,989) | $ (1,545) | |
Designated Cash Flow Hedge | Interest Rate Product | |||
Amount of Gain or (Loss) recognized in OCI | (1,521) | (1,034) | |
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income | 28 | (367) | |
Designated Cash Flow Hedge | Interest Rate Product | Interest Expense | |||
Amount of Gain or (Loss) recognized in OCI | (1,521) | (1,034) | |
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income | 28 | 462 | |
Designated Cash Flow Hedge | Interest Rate Product | Gain on sale of investment securities | |||
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income | (829) | ||
Designated Cash Flow Hedge | Interest Rate Swap | |||
Notional Amount | $ 100,000 | 100,000 | |
Designated Cash Flow Hedge | Interest Rate Swap | Non-interest income | |||
Gross Amount of Recognized Liabilities | $ 829 |
Other Derivatives - Designated
Other Derivatives - Designated cash flow hedges (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Designated Cash Flow Hedge | ||
Gain or (loss) on cash flow hedging relationships in Subtopic 815-20 | ||
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income as a result that a forecasted transaction is no longer probable of occurring | $ (829) | |
Interest Expenses | ||
Gain or (loss) on cash flow hedging relationships in Subtopic 815-20 | ||
Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded | $ 28 | 462 |
Interest Expenses | Designated Cash Flow Hedge | ||
Gain or (loss) on cash flow hedging relationships in Subtopic 815-20 | ||
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income | 28 | 462 |
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income - Included Component | $ 28 | $ 462 |
Other Derivatives - Hedging ins
Other Derivatives - Hedging instruments on statements of operations (Details) - Nonoperating Income (Expense) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Interest Rate Products | ||
Derivatives not designated as cash flow hedging instruments under Subtopic 815-20 | ||
Derivative, Gain (Loss) on Derivative, Net | $ (168) | $ (13) |
Other Contracts | ||
Derivatives not designated as cash flow hedging instruments under Subtopic 815-20 | ||
Derivative, Gain (Loss) on Derivative, Net | (66) | |
Not Designated as Hedging Instrument | ||
Derivatives not designated as cash flow hedging instruments under Subtopic 815-20 | ||
Derivative, Gain (Loss) on Derivative, Net | $ (234) | $ (13) |
Other Derivatives - Liabilities
Other Derivatives - Liabilities subject to master netting arrangement (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Gross Amount of Recognized Assets | $ 3,165 | $ 311 |
Gross Amount of Recognized Liabilities | 6,459 | 611 |
Net amounts of assets presented in the balance sheet | 3,165 | 311 |
Net amounts of liabilities presented in the balance sheet | 6,459 | 611 |
Gross amounts not offset in the balance sheet cash collateral | 3,230 | 500 |
Gross amounts not offset in the balance sheet net amount | 3,165 | 311 |
Gross amounts not offset in the balance sheet net amount | $ 3,229 | $ 111 |
Other Derivatives - Additional
Other Derivatives - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Net liability position | $ 4,700 | |
Collateral against Obligation | 1,500 | |
Designated Cash Flow Hedge | ||
Estimated amount to be reclassified to interest expense (based on existing interest rates) for cash flow hedges | $ (829) | |
Designated Cash Flow Hedge | Interest Rate Swap | ||
Notional amount | 100,000 | $ 100,000 |
Designated Cash Flow Hedge | Interest Rate Swap | During the next twelve months | ||
Estimated amount to be reclassified to interest expense (based on existing interest rates) for cash flow hedges | $ 1,600 |
Other Real Estate Owned (Detail
Other Real Estate Owned (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Other Real Estate [Roll Forward] | ||
Balance at January 1 | $ 1,487 | $ 1,394 |
Real estate acquired from borrowers | 6,750 | |
Properties sold | 0 | 0 |
Ending balance | $ 8,237 | $ 1,394 |
Long-Term Borrowings - Schedule
Long-Term Borrowings - Schedules of long-term Borrowings (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Feb. 26, 2020 | Dec. 31, 2019 |
Long-Term Borrowings | |||
Less: unamortized debt issuance costs | $ (2,216) | $ (2,313) | |
Long-term borrowings | 267,784 | 217,687 | |
Subordinated Notes, 5.75% | |||
Long-Term Borrowings | |||
Long-term borrowings, gross | $ 70,000 | 70,000 | |
Interest rate (as a percent) | 5.75% | ||
Subordinated Notes, 5.0% | |||
Long-Term Borrowings | |||
Long-term borrowings, gross | $ 150,000 | $ 150,000 | |
Interest rate (as a percent) | 5.00% | ||
FHLB Advance, 1.81% | |||
Long-Term Borrowings | |||
Long-term borrowings, gross | $ 50,000 | $ 50,000 | |
Interest rate (as a percent) | 1.81% | 1.81% |
Long Term Borrowings - Addition
Long Term Borrowings - Additional Information (Details) - USD ($) $ in Thousands | Jul. 26, 2016 | Aug. 05, 2014 | Mar. 31, 2020 | Feb. 26, 2020 |
Net proceeds from issuance of subordinated long-term debt | $ 147,350 | $ 68,800 | ||
Subordinated Debt | ||||
Debt instrument, interest rate, stated percentage | 5.00% | 5.75% | ||
Debt instrument, face amount | $ 150,000 | $ 70,000 | ||
Payments of debt issuance costs | $ 2,600 | $ 1,200 | ||
FHLB Advance, 1.81% | ||||
Long-term borrowings | $ 50,000 | $ 50,000 | ||
Debt instrument, interest rate, stated percentage | 1.81% | 1.81% |
Net Income per Common Share (De
Net Income per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Basic: | ||
Net income | $ 23,123 | $ 33,749 |
Average common shares outstanding (in shares) | 32,850 | 34,481 |
Basic net income per common share (in dollars per share) | $ 0.70 | $ 0.98 |
Diluted: | ||
Net income | $ 23,123 | $ 33,749 |
Average common shares outstanding (in shares) | 32,850 | 34,481 |
Adjustment for common share equivalents (in shares) | 25 | 55 |
Average common shares outstanding-diluted (in shares) | 32,875 | 34,536 |
Diluted net income per common share (in dollars per share) | $ 0.70 | $ 0.98 |
Anti-dilutive shares | 26 | 3 |
Other Comprehensive Income (Det
Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Other Comprehensive Income. | ||
Net unrealized gain (loss) on securities available-for-sale, before tax | $ 16,736 | $ 7,322 |
Less: Reclassification adjustment for net gains/loss included in net income, before tax | (822) | (83) |
Total unrealized gain (loss), before tax | 15,914 | 7,239 |
Net unrealized gain (loss) on derivatives, before tax | (1,989) | (1,545) |
Less: Reclassification adjustment for gains/losses included in net income, before tax | (94) | (1,275) |
Total unrealized gain (loss) on derivatives, before tax | (2,083) | (2,820) |
Other Comprehensive Income (Loss), before tax | 13,831 | 4,419 |
Net unrealized gain (loss) on securities available-for-sale, tax effect | (4,632) | 1,882 |
Less: Reclassification adjustment for net gains/loss included in net income, tax | (218) | (22) |
Total unrealized gain (loss), tax effect | (4,850) | 1,860 |
Net unrealized gain (loss) on derivatives, tax effect | 664 | (391) |
Less: Reclassification adjustment for gains/losses included in net income, tax effect | (25) | (333) |
Total unrealized gain (loss) on derivatives, tax effect | 639 | (724) |
Other Comprehensive Income (Loss), tax effect | (4,211) | 1,136 |
Net unrealized gain (loss) on securities available-for-sale, net of tax | 12,104 | 5,440 |
Less: Reclassification adjustment for net gains/loss included in net income, net of tax | (604) | (61) |
Total unrealized gain (loss) on investment securities | 11,500 | 5,379 |
Net unrealized gain (loss) on derivatives, net of tax | (1,325) | (1,154) |
Less: Reclassification adjustment for gains/losses included in net income, net of tax | (69) | (942) |
Total unrealized (loss) gain on derivatives | (1,394) | (2,096) |
Other comprehensive income, net of tax | $ 10,106 | $ 3,283 |
Other Comprehensive Income - Ch
Other Comprehensive Income - Changes in accumulated other comprehensive income (loss), net of tax (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Securities Available for Sale | ||
Beginning balance | $ 3,109 | $ (7,044) |
Other comprehensive income (loss) before reclassifications | 12,104 | 5,440 |
Amounts reclassified from accumulated other comprehensive income | (604) | (61) |
Net other comprehensive income (loss) during the period | 11,500 | 5,379 |
Ending balance | 14,609 | (1,665) |
Derivatives | ||
Beginning balance | (150) | 2,769 |
Other comprehensive income (loss) before reclassifications | (1,325) | (1,154) |
Amounts reclassified from accumulated other comprehensive income | (69) | (942) |
Net other comprehensive (loss) income during the period | (1,394) | (2,096) |
Ending balance | (1,544) | 673 |
Accumulated Other Comprehensive Income (Loss) | ||
Beginning balance | 2,959 | (4,275) |
Other comprehensive income (loss) before reclassifications | 10,779 | 4,286 |
Amounts reclassified from accumulated other comprehensive income | (673) | (1,003) |
Net other comprehensive income (loss) during period | 10,106 | 3,283 |
Ending balance | $ 13,065 | $ (992) |
Other Comprehensive Income - Am
Other Comprehensive Income - Amounts reclassified from accumulated other comprehensive income (loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Realized gain on sale of investment securities | $ 822 | $ 912 |
Interest income (expense) derivative deposits | (20,546) | (20,900) |
Income tax (expense) benefit | (8,322) | (11,895) |
Amounts reclassified from accumulated other comprehensive income (loss) | (673) | (1,003) |
Reclassification out of Accumulated Other Comprehensive Income (Loss) | ||
Realized gain on sale of investment securities | 822 | 83 |
Realized gain on swap termination | 829 | |
Interest income (expense) derivative deposits | 94 | 446 |
Income tax (expense) benefit | (243) | (355) |
Amounts reclassified from accumulated other comprehensive income (loss) | $ 673 | $ 1,003 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and liabilities recorded at fair value on recurring basis (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
Investment securities available-for-sale, at fair value | $ 858,916 | $ 843,363 | |
Derivative asset | 3,165 | 311 | |
Derivative liability | 6,459 | 611 | |
U. S. agency securities | |||
Investment securities available-for-sale, at fair value | 147,759 | 179,794 | |
Residential mortgage backed securities | |||
Investment securities available-for-sale, at fair value | 547,388 | 543,852 | |
Loans held for sale | 60,036 | 52,927 | |
Municipal bonds | |||
Investment securities available-for-sale, at fair value | 75,588 | 73,931 | |
Corporate bonds | |||
Investment securities available-for-sale, at fair value | 52,984 | 10,733 | |
U.S. Treasury | |||
Investment securities available-for-sale, at fair value | 34,999 | 34,855 | |
Recurring | |||
Loans held for sale | 60,036 | 56,707 | |
Other equity investments | 198 | 198 | |
Assets measured at a fair value | 919,600 | 900,667 | |
Derivative liability | 152 | $ 86 | |
Liabilities measured at a fair value | 6,424 | 667 | |
Recurring | Interest Rate Swap | |||
Derivative liability | 1,695 | 203 | |
Recurring | Interest Rate Caps | |||
Derivative asset | 317 | 317 | |
Derivative liability | 2,975 | 312 | |
Recurring | U. S. agency securities | |||
Investment securities available-for-sale, at fair value | 147,759 | 179,794 | |
Recurring | Residential mortgage backed securities | |||
Investment securities available-for-sale, at fair value | 547,388 | 543,852 | |
Recurring | Municipal bonds | |||
Investment securities available-for-sale, at fair value | 75,588 | 73,931 | |
Recurring | Corporate bonds | |||
Investment securities available-for-sale, at fair value | 52,984 | 10,733 | |
Recurring | U.S. Treasury | |||
Investment securities available-for-sale, at fair value | 34,999 | 34,855 | |
Recurring | Mortgage Banking Derivative | Derivative Financial Instruments, Liability | |||
Derivative liability | 1,602 | 66 | |
Recurring | Mortgage Banking Derivative | Derivative Financial Instruments, Assets | |||
Derivative asset | 331 | 280 | |
Recurring | Fair Value, Inputs, Level 2 | |||
Loans held for sale | 60,036 | 56,707 | |
Assets measured at a fair value | 866,087 | 889,456 | |
Derivative liability | 152 | 86 | |
Liabilities measured at a fair value | 4,822 | 601 | |
Recurring | Fair Value, Inputs, Level 2 | Interest Rate Swap | |||
Derivative liability | 1,695 | 203 | |
Recurring | Fair Value, Inputs, Level 2 | Interest Rate Caps | |||
Derivative asset | 317 | 317 | |
Derivative liability | 2,975 | $ 312 | |
Recurring | Fair Value, Inputs, Level 2 | U. S. agency securities | |||
Investment securities available-for-sale, at fair value | 147,759 | 179,794 | |
Recurring | Fair Value, Inputs, Level 2 | Residential mortgage backed securities | |||
Investment securities available-for-sale, at fair value | 547,388 | 543,852 | |
Recurring | Fair Value, Inputs, Level 2 | Municipal bonds | |||
Investment securities available-for-sale, at fair value | 75,588 | 73,931 | |
Recurring | Fair Value, Inputs, Level 2 | U.S. Treasury | |||
Investment securities available-for-sale, at fair value | 34,999 | 34,855 | |
Recurring | Fair Value, Inputs, Level 3 | |||
Other equity investments | 198 | 198 | |
Assets measured at a fair value | 53,513 | 11,211 | |
Liabilities measured at a fair value | 1,602 | 66 | |
Recurring | Fair Value, Inputs, Level 3 | Corporate bonds | |||
Investment securities available-for-sale, at fair value | 52,984 | 10,733 | |
Recurring | Fair Value, Inputs, Level 3 | Mortgage Banking Derivative | Derivative Financial Instruments, Liability | |||
Derivative liability | 1,602 | 66 | |
Recurring | Fair Value, Inputs, Level 3 | Mortgage Banking Derivative | Derivative Financial Instruments, Assets | |||
Derivative asset | $ 331 | $ 280 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of difference between aggregate fair value and aggregate unpaid principal balance (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Residential mortgage backed securities | ||
Fair Value | $ 60,036 | $ 52,927 |
Aggregate Unpaid Principal Balance | 58,970 | 52,054 |
Difference | 1,066 | 873 |
Loans 90 or more days past due | 0 | 0 |
Loans in nonaccrual status | $ 0 | 0 |
FHA Mortgage Backed Securities | ||
Fair Value | 3,780 | |
Aggregate Unpaid Principal Balance | $ 3,780 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of activity for assets and liabilities measured at fair value (Details) - Fair Value, Inputs, Level 3 - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Assets - Beginning balance | $ 11,211 | $ 10,023 |
Realized (loss) gain included in earnings | 51 | 31 |
Unrealized gain included in other comprehensive income | 694 | 131 |
Purchases of available -for-sale securities | 41,557 | 4,030 |
Principal redemption | (3,004) | |
Assets - Ending balance | 53,513 | 11,211 |
Liabilities - Beginning balance | 66 | 269 |
Realized loss (gain) included in earnings | 1,536 | (203) |
Liabilities - Ending balance | 1,602 | 66 |
Other equity investments | ||
Assets - Beginning balance | 10,931 | 9,794 |
Realized (loss) gain included in earnings | (20) | |
Unrealized gain included in other comprehensive income | 694 | 131 |
Purchases of available -for-sale securities | 41,557 | 4,030 |
Principal redemption | (3,004) | |
Assets - Ending balance | 53,182 | 10,931 |
Mortgage Banking Derivatives | ||
Assets - Beginning balance | 280 | 229 |
Realized (loss) gain included in earnings | 51 | 51 |
Assets - Ending balance | 331 | 280 |
Liabilities - Beginning balance | 66 | 269 |
Realized loss (gain) included in earnings | 1,536 | (203) |
Liabilities - Ending balance | $ 1,602 | $ 66 |
Fair Value Measurements - Ass_2
Fair Value Measurements - Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis (Details) - Non Recurring $ in Thousands | Dec. 31, 2019USD ($) |
Other real estate owned | $ 1,487 |
Assets measured at a fair value | 47,246 |
Commercial | |
Impaired loans | 10,100 |
Income Producing - Commercial Real Estate | |
Impaired loans | 11,948 |
Owner Occupied - Commercial Real Estate | |
Impaired loans | 6,934 |
Real Estate Mortgage Residential | |
Impaired loans | 4,981 |
Construction - Commercial and Residential | |
Impaired loans | 11,409 |
Home Equity | |
Impaired loans | 387 |
Fair Value, Inputs, Level 3 | |
Other real estate owned | 1,487 |
Assets measured at a fair value | 47,246 |
Fair Value, Inputs, Level 3 | Commercial | |
Impaired loans | 10,100 |
Fair Value, Inputs, Level 3 | Income Producing - Commercial Real Estate | |
Impaired loans | 11,948 |
Fair Value, Inputs, Level 3 | Owner Occupied - Commercial Real Estate | |
Impaired loans | 6,934 |
Fair Value, Inputs, Level 3 | Real Estate Mortgage Residential | |
Impaired loans | 4,981 |
Fair Value, Inputs, Level 3 | Construction - Commercial and Residential | |
Impaired loans | 11,409 |
Fair Value, Inputs, Level 3 | Home Equity | |
Impaired loans | $ 387 |
Fair Value Measurements - Estim
Fair Value Measurements - Estimated fair value of company's financial instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
Federal funds sold | $ 28,277 | $ 38,987 | |
Interest bearing deposits with other banks | 904,160 | 195,447 | |
Investment securities | 858,916 | 843,363 | |
Bank owned life insurance | 76,139 | 75,724 | |
Derivative asset | 3,165 | 311 | |
Interest bearing deposits | 931,597 | 863,856 | |
Customer repurchase agreements | 31,377 | 30,980 | |
Derivative liability | 6,459 | 611 | |
Carrying Value | |||
Cash and due from banks | 7,177 | 7,539 | |
Federal funds sold | 28,277 | 38,987 | |
Interest bearing deposits with other banks | 904,160 | 195,447 | |
Investment securities | 858,916 | 843,363 | |
Federal Reserve and Federal Home Loan Bank stock | 39,988 | 35,194 | |
Loans held for sale | 60,036 | 56,707 | |
Loans | 7,744,537 | 7,472,090 | |
Bank owned life insurance | 76,139 | 75,724 | |
Annuity investment | 14,675 | 14,697 | |
Noninterest bearing deposits | 1,994,209 | 2,064,367 | |
Interest bearing deposits | 4,882,092 | 3,876,985 | |
Certificates of deposit | 1,265,267 | 1,283,039 | |
Customer repurchase agreements | 31,377 | 30,980 | |
Borrowings | 567,784 | 467,687 | |
Derivative liability | 152 | 86 | |
Carrying Value | Interest Rate Swap | |||
Derivative liability | 1,695 | 203 | |
Carrying Value | Mortgage Banking Derivative | |||
Derivative liability | 66 | $ 1,602 | |
Carrying Value | Interest Rate Caps | |||
Derivative asset | 331 | 280 | |
Derivative liability | 2,975 | 312 | |
Fair Value | |||
Cash and due from banks | 7,177 | 7,539 | |
Federal funds sold | 28,277 | 38,987 | |
Interest bearing deposits with other banks | 904,160 | 195,447 | |
Investment securities | 858,916 | 843,363 | |
Federal Reserve and Federal Home Loan Bank stock | 39,988 | 35,194 | |
Loans held for sale | 60,036 | 56,707 | |
Loans | 7,956,500 | 7,550,249 | |
Bank owned life insurance | 76,139 | 75,724 | |
Annuity investment | 14,675 | 14,697 | |
Noninterest bearing deposits | 1,994,209 | 2,064,367 | |
Interest bearing deposits | 4,882,092 | 3,876,985 | |
Certificates of deposit | 1,282,095 | 1,291,688 | |
Customer repurchase agreements | 31,377 | 30,980 | |
Borrowings | 548,154 | 328,330 | |
Derivative liability | 152 | 86 | |
Fair Value | Interest Rate Swap | |||
Derivative liability | 1,695 | 203 | |
Fair Value | Mortgage Banking Derivative | |||
Derivative liability | 66 | 1,602 | |
Fair Value | Interest Rate Caps | |||
Derivative asset | 331 | 280 | |
Derivative liability | 2,975 | 312 | |
Fair Value | Fair Value, Inputs, Level 2 | |||
Cash and due from banks | 7,177 | 7,539 | |
Federal funds sold | 28,277 | 38,987 | |
Interest bearing deposits with other banks | 904,160 | 195,447 | |
Investment securities | 805,734 | 832,432 | |
Federal Reserve and Federal Home Loan Bank stock | 39,988 | 35,194 | |
Loans held for sale | 60,036 | 56,707 | |
Bank owned life insurance | 76,139 | 75,724 | |
Annuity investment | 14,675 | 14,697 | |
Noninterest bearing deposits | 1,994,209 | 2,064,367 | |
Interest bearing deposits | 4,882,092 | 3,876,985 | |
Certificates of deposit | 1,282,095 | 1,291,688 | |
Customer repurchase agreements | 31,377 | 30,980 | |
Borrowings | 548,154 | 328,330 | |
Derivative liability | 152 | 86 | |
Fair Value | Fair Value, Inputs, Level 2 | Interest Rate Swap | |||
Derivative liability | 1,695 | 203 | |
Fair Value | Fair Value, Inputs, Level 2 | Interest Rate Caps | |||
Derivative asset | 331 | 280 | |
Derivative liability | 2,975 | 312 | |
Fair Value | Fair Value, Inputs, Level 3 | |||
Investment securities | 53,182 | 10,931 | |
Loans | $ 7,956,500 | 7,550,249 | |
Fair Value | Fair Value, Inputs, Level 3 | Mortgage Banking Derivative | |||
Derivative liability | $ 66 | $ 1,602 |
Supplemental Executive Retire_2
Supplemental Executive Retirement Plan (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2020USD ($)installmentage | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2013USD ($) | |
Defined benefit plan, net periodic benefit cost | $ 108 | $ 101 | ||
Supplemental Executive Retirement and Death Benefit Agreements | ||||
Time period for calculating base salary under SERP agreements | 5 years | |||
Retirement age | age | 67 | |||
Share-based compensation arrangement by share-based payment award, award vesting period | 6 years | |||
Retirement plan monthly instalments | installment | 180 | |||
Purchased Fixed Annuity for Financing Retirement Benefits | Supplemental Executive Retirement and Death Benefit Agreements | ||||
Other investments | $ 2,600 | $ 11,400 | ||
Annuity contracts accrued income | $ 40 | $ 32 | ||
Purchased Fixed Annuity for Financing Retirement Benefits | Supplemental Executive Retirement and Death Benefit Agreements | Other Assets | ||||
Cash surrender value of life insurance | $ 14,700 |