Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 31, 2020 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-35913 | |
Entity Registrant Name | TRISTATE CAPITAL HOLDINGS, INC. | |
Entity Incorporation, State or Country Code | PA | |
Entity Tax Identification Number | 20-4929029 | |
Entity Address, Address Line One | One Oxford Centre | |
Entity Address, Address Line Two | 301 Grant Street, Suite 2700 | |
Entity Address, City or Town | Pittsburgh, | |
Entity Address, State or Province | PA | |
City Area Code | (412) | |
Local Phone Number | 304-0304 | |
Entity Address, Postal Zip Code | 15219 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 29,857,550 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year End Date | --12-31 | |
Entity Central Index Key | 0001380846 | |
Common Stock | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Common Stock, no par value | |
Trading Symbol | TSC | |
Security Exchange Name | NASDAQ | |
Series A depositary share | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Depositary Shares, Each Representing a 1/40th Interest in a Share of 6.75% Fixed-to-Floating Rate Series A Non-Cumulative Perpetual Preferred Stock | |
Trading Symbol | TSCAP | |
Security Exchange Name | NASDAQ | |
Series B depositary share | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Depositary Shares, Each Representing a 1/40th Interest in a Share of 6.375% Fixed-to-Floating Rate Series B Non-Cumulative Perpetual Preferred Stock | |
Trading Symbol | TSCBP | |
Security Exchange Name | NASDAQ |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statements of Financial Condition - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
ASSETS | ||
Cash | $ 356 | $ 357 |
Interest-earning deposits with other institutions | 719,753 | 395,860 |
Federal funds sold | 4,833 | 7,638 |
Cash and cash equivalents | 724,942 | 403,855 |
Debt securities available-for-sale, at fair value | 563,777 | 248,782 |
Debt securities held-to-maturity, at cost | 235,083 | 196,044 |
Federal Home Loan Bank stock | 13,280 | 24,324 |
Total investment securities | 812,140 | 469,150 |
Loans and leases held-for-investment | 7,170,770 | 6,577,559 |
Allowance for loan and lease losses | (23,276) | (14,108) |
Loans and leases held-for-investment, net | 7,147,494 | 6,563,451 |
Accrued interest receivable | 18,534 | 22,326 |
Investment management fees receivable, net | 6,907 | 7,560 |
Goodwill | 41,660 | 41,660 |
Intangible assets, net of accumulated amortization of $11,425 and $10,437, respectively | 23,207 | 24,194 |
Office properties and equipment, net of accumulated depreciation of $15,010 and $13,976, respectively | 10,818 | 9,569 |
Operating lease right-of-use asset | 22,178 | 22,589 |
Bank owned life insurance | 70,901 | 70,044 |
Prepaid expenses and other assets | 251,060 | 131,412 |
Total assets | 9,129,841 | 7,765,810 |
Liabilities: | ||
Deposits | 7,831,471 | 6,634,613 |
Borrowings, net | 395,552 | 355,000 |
Accrued interest payable on deposits and borrowings | 3,771 | 5,490 |
Deferred tax liability, net | 5,129 | 6,931 |
Operating lease liability | 23,426 | 23,644 |
Other accrued expenses and other liabilities | 237,661 | 118,851 |
Total liabilities | 8,497,010 | 7,144,529 |
Shareholders’ Equity: | ||
Common stock, no par value; Shares authorized - 45,000,000; Shares issued - 32,093,460 and 31,482,408, respectively; Shares outstanding - 29,851,550 and 29,355,986, respectively | 295,820 | 295,349 |
Additional paid-in capital | 25,088 | 23,095 |
Retained earnings | 237,796 | 218,449 |
Accumulated other comprehensive income (loss), net | (6,530) | 1,132 |
Treasury stock (2,241,910 and 2,126,422 shares, respectively) | (35,422) | (32,823) |
Total shareholders’ equity | 632,831 | 621,281 |
Total liabilities and shareholders’ equity | 9,129,841 | 7,765,810 |
Series A preferred stock | ||
Shareholders’ Equity: | ||
Preferred stock, no par value; Shares authorized - 150,000; Series A Shares issued and outstanding - 40,250 and 40,250, respectively, Series B Shares issued and outstanding - 80,500 and 80,500, respectively | 38,468 | 38,468 |
Series B preferred stock | ||
Shareholders’ Equity: | ||
Preferred stock, no par value; Shares authorized - 150,000; Series A Shares issued and outstanding - 40,250 and 40,250, respectively, Series B Shares issued and outstanding - 80,500 and 80,500, respectively | $ 77,611 | $ 77,611 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Accumulated amortization | $ 11,425 | $ 10,437 |
Accumulated depreciation | $ 15,010 | $ 13,976 |
Shares Authorized, Preferred Stock (in shares) | 150,000 | 150,000 |
Shares Authorized, Common Stock (in shares) | 45,000,000 | 45,000,000 |
Shares Issued, Common Stock (in shares) | 32,093,460 | 31,482,408 |
Shares Outstanding, Common Stock (in shares) | 29,851,550 | 29,355,986 |
Treasury Stock (in shares) | 2,241,910 | 2,126,422 |
Series A preferred stock | ||
Shares Issued, Preferred Stock (in shares) | 40,250 | 40,250 |
Shares Outstanding, Preferred Stock (in shares) | 40,250 | 40,250 |
Series B preferred stock | ||
Shares Issued, Preferred Stock (in shares) | 80,500 | 80,500 |
Shares Outstanding, Preferred Stock (in shares) | 80,500 | 80,500 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Interest income: | ||||
Loans and leases | $ 47,377 | $ 60,579 | $ 106,295 | $ 117,841 |
Investments | 3,940 | 4,151 | 7,841 | 8,504 |
Interest-earning deposits | 344 | 1,609 | 1,727 | 2,896 |
Total interest income | 51,661 | 66,339 | 115,863 | 129,241 |
Interest expense: | ||||
Deposits | 15,953 | 32,155 | 43,197 | 61,488 |
Borrowings | 2,224 | 2,881 | 4,260 | 6,078 |
Total interest expense | 18,177 | 35,036 | 47,457 | 67,566 |
Net interest income | 33,484 | 31,303 | 68,406 | 61,675 |
Provision (credit) for loan and lease losses | 6,005 | (712) | 8,998 | (1,089) |
Net interest income after provision for loan and lease losses | 27,479 | 32,015 | 59,408 | 62,764 |
Non-interest income: | ||||
Net gain on the sale and call of debt securities | 14 | 112 | 71 | 140 |
Other income | 615 | 587 | 1,231 | 1,734 |
Total non-interest income | 12,997 | 11,979 | 26,313 | 25,048 |
Non-interest expense: | ||||
Compensation and employee benefits | 16,569 | 16,985 | 34,015 | 33,760 |
Premises and equipment expense | 1,515 | 1,451 | 2,901 | 2,445 |
Professional fees | 1,109 | 1,406 | 2,579 | 2,401 |
FDIC insurance expense | 2,560 | 1,047 | 4,730 | 2,468 |
General insurance expense | 278 | 259 | 540 | 553 |
State capital shares tax | 366 | 380 | 749 | 760 |
Travel and entertainment expense | 279 | 1,040 | 1,143 | 1,875 |
Technology and data services | 2,414 | 2,179 | 4,717 | 4,164 |
Intangible amortization expense | 486 | 502 | 988 | 1,004 |
Marketing and advertising | 686 | 536 | 1,300 | 1,144 |
Other operating expenses | 1,834 | 1,800 | 3,578 | 3,683 |
Total non-interest expense | 28,096 | 27,585 | 57,240 | 54,257 |
Income before tax | 12,380 | 16,409 | 28,481 | 33,555 |
Income tax expense | 1,979 | 1,718 | 5,185 | 4,300 |
Net income | 10,401 | 14,691 | 23,296 | 29,255 |
Preferred stock dividends | 1,962 | 1,150 | 3,924 | 1,829 |
Net income available to common shareholders | $ 8,439 | $ 13,541 | $ 19,372 | $ 27,426 |
Earnings per common share: | ||||
Basic (in usd per share) | $ 0.30 | $ 0.49 | $ 0.69 | $ 0.98 |
Diluted (in usd per share) | $ 0.30 | $ 0.47 | $ 0.68 | $ 0.95 |
Investment management fees | ||||
Non-interest income: | ||||
Total non-interest income | $ 7,738 | $ 9,254 | $ 15,376 | $ 18,678 |
Service charges on deposits | ||||
Non-interest income: | ||||
Total non-interest income | 315 | 78 | 528 | 214 |
Swap fees | ||||
Non-interest income: | ||||
Total non-interest income | 3,853 | 1,692 | 8,226 | 3,495 |
Commitment and other loan fees | ||||
Non-interest income: | ||||
Total non-interest income | $ 462 | $ 256 | $ 881 | $ 787 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 10,401 | $ 14,691 | $ 23,296 | $ 29,255 |
Other comprehensive income (loss): | ||||
Unrealized holding gains (losses) on debt securities, net of tax expense (benefit) of $2,791, $427, $(206) and $1,194, respectively | 8,375 | 1,259 | (1,048) | 3,689 |
Reclassification adjustment for gains included in net income on debt securities, net of tax expense of $(2), $(26), $(5) and $(30), respectively | (5) | (83) | (16) | (96) |
Unrealized holding losses on derivatives, net of tax benefit of $(379), $(506), $(2,223) and $(556), respectively | (1,200) | (1,612) | (7,067) | (1,769) |
Reclassification adjustment for losses (gains) included in net income on derivatives, net of tax benefit (expense) of $111, $(134), $150 and $(268), respectively | 349 | (426) | 469 | (853) |
Other comprehensive income (loss) | 7,519 | (862) | (7,662) | 971 |
Total comprehensive income | $ 17,920 | $ 13,829 | $ 15,634 | $ 30,226 |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Tax expense (benefit) on unrealized holding gains (losses) on debt securities | $ 2,791 | $ 427 | $ (206) | $ 1,194 |
Tax benefit (expense) on debt securities losses (gains) reclassified from other comprehensive income | (2) | (26) | (5) | (30) |
Tax expense (benefit) on unrealized holding gains (losses) on derivatives | (379) | (506) | (2,223) | (556) |
Tax benefit (expense) on derivative losses (gains) reclassified from other comprehensive income | $ 111 | $ (134) | $ 150 | $ (268) |
Unaudited Condensed Consolida_6
Unaudited Condensed Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Total | Preferred Stock | Common Stock | Additional Paid-in-Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss), Net | Treasury Stock |
Beginning balance at Dec. 31, 2018 | $ 479,354 | $ 38,468 | $ 293,355 | $ 15,364 | $ 164,009 | $ (1,331) | $ (30,511) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 29,255 | 29,255 | |||||
Other comprehensive income (loss) | 971 | 971 | |||||
Issuance of preferred stock, net of offering costs | 77,674 | 77,674 | |||||
Preferred stock dividends | (1,829) | (1,829) | |||||
Exercise of stock options | 257 | 482 | (225) | ||||
Purchase of treasury stock | (744) | (744) | |||||
Stock-based compensation | 4,043 | 4,043 | |||||
Ending balance at Jun. 30, 2019 | 588,981 | 116,142 | 293,837 | 19,182 | 191,435 | (360) | (31,255) |
Beginning balance at Mar. 31, 2019 | 496,557 | 38,468 | 293,697 | 16,940 | 177,894 | 502 | (30,944) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 14,691 | 14,691 | |||||
Other comprehensive income (loss) | (862) | (862) | |||||
Issuance of preferred stock, net of offering costs | 77,674 | 77,674 | |||||
Preferred stock dividends | (1,150) | (1,150) | |||||
Exercise of stock options | 69 | 140 | (71) | ||||
Purchase of treasury stock | (311) | (311) | |||||
Stock-based compensation | 2,313 | 2,313 | |||||
Ending balance at Jun. 30, 2019 | 588,981 | 116,142 | 293,837 | 19,182 | 191,435 | (360) | (31,255) |
Beginning balance at Dec. 31, 2019 | 621,281 | 116,079 | 295,349 | 23,095 | 218,449 | 1,132 | (32,823) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 23,296 | 23,296 | |||||
Other comprehensive income (loss) | (7,662) | (7,662) | |||||
Preferred stock dividends | (3,924) | (3,924) | |||||
Exercise of stock options | 211 | 471 | (260) | ||||
Purchase of treasury stock | (2,734) | (2,734) | |||||
Treasury stock reissuance | 110 | (25) | 135 | ||||
Cancellation of stock options | (2,484) | (2,484) | |||||
Stock-based compensation | 4,737 | 4,737 | |||||
Ending balance at Jun. 30, 2020 | 632,831 | 116,079 | 295,820 | 25,088 | 237,796 | (6,530) | (35,422) |
Beginning balance at Mar. 31, 2020 | 614,380 | 116,079 | 295,587 | 22,783 | 229,382 | (14,049) | (35,402) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 10,401 | 10,401 | |||||
Other comprehensive income (loss) | 7,519 | 7,519 | |||||
Preferred stock dividends | (1,962) | (1,962) | |||||
Exercise of stock options | 120 | 233 | (113) | ||||
Purchase of treasury stock | (155) | (155) | |||||
Treasury stock reissuance | 110 | (25) | 135 | ||||
Cancellation of stock options | 0 | 0 | |||||
Stock-based compensation | 2,418 | 2,418 | |||||
Ending balance at Jun. 30, 2020 | $ 632,831 | $ 116,079 | $ 295,820 | $ 25,088 | $ 237,796 | $ (6,530) | $ (35,422) |
Unaudited Condensed Consolida_7
Unaudited Condensed Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Preferred Stock | ||
Offering costs | $ 2,826 | $ 2,826 |
Unaudited Condensed Consolida_8
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 23,296 | $ 29,255 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and intangible amortization expense | 2,022 | 1,807 |
Amortization of deferred financing costs | 33 | 84 |
Provision (credit) for loan and lease losses | 8,998 | (1,089) |
Stock-based compensation expense | 4,737 | 4,043 |
Net gain on the sale or call of debt securities available-for-sale | (22) | (126) |
Net gain on the call of debt securities held-to-maturity | (49) | (14) |
Income from equity securities | 0 | (850) |
Income from debt securities trading | (239) | 0 |
Purchase of debt securities trading | (20,932) | 0 |
Proceeds from the sale of debt securities trading | 21,171 | 0 |
Net amortization of premiums and discounts on debt securities | 295 | 21 |
Decrease (increase) in investment management fees receivable, net | 653 | (508) |
Decrease (increase) in accrued interest receivable | 3,792 | (1,255) |
Increase (decrease) in accrued interest payable | (1,719) | 2,467 |
Bank owned life insurance income | (857) | (855) |
Increase in income taxes payable | 455 | 339 |
Decrease in prepaid income taxes | 3,941 | 9,130 |
Deferred tax provision | 482 | 464 |
Decrease in accounts payable and other accrued expenses | (9,388) | (15,269) |
Cash received for reimbursement of leasehold improvements | 2,196 | 0 |
Other, net | (1,701) | (1,684) |
Net cash provided by operating activities | 37,164 | 25,960 |
Cash flows from investing activities: | ||
Purchase of debt securities available-for-sale | (400,451) | (52,120) |
Purchase of debt securities held-to-maturity | (287,826) | (61,905) |
Proceeds from the sale of debt securities available-for-sale | 56,038 | 4,993 |
Proceeds from the sale of equity securities | 0 | 8,844 |
Principal repayments and maturities of debt securities available-for-sale | 27,993 | 20,837 |
Principal repayments and maturities of debt securities held-to-maturity | 248,714 | 118,941 |
Investment in low income housing and historic tax credits | (6,194) | (6,193) |
Investment in small business investment companies | (150) | 0 |
Net redemption of Federal Home Loan Bank stock | 11,043 | 1,547 |
Net increase in loans and leases | (593,041) | (530,163) |
Proceeds from the sale of other real estate owned | 1,527 | 0 |
Additions to office properties and equipment | (2,285) | (2,167) |
Net cash used in investing activities | (944,632) | (497,386) |
Cash flows from financing activities: | ||
Net increase in deposit accounts | 1,196,858 | 736,522 |
Net decrease in Federal Home Loan Bank advances | (55,000) | (65,000) |
Net decrease in line of credit advances | 0 | |
Net decrease in line of credit advances | (4,250) | |
Net proceeds from issuance of subordinated notes payable | 95,518 | 0 |
Net proceeds from issuance of preferred stock | 0 | 77,674 |
Net proceeds from exercise of stock options | 211 | 257 |
Cancellation of stock options | (2,484) | 0 |
Payment of contingent consideration | 0 | (2,920) |
Purchase of treasury stock, net of reissuance | (2,624) | (744) |
Dividends paid on preferred stock | (3,924) | (1,829) |
Net cash provided by financing activities | 1,228,555 | 739,710 |
Net change in cash and cash equivalents during the period | 321,087 | 268,284 |
Cash and cash equivalents at beginning of the period | 403,855 | 189,985 |
Cash and cash equivalents at end of the period | 724,942 | 458,269 |
Cash paid (received) during the period for: | ||
Interest expense | 49,274 | 65,015 |
Income taxes | 307 | (5,633) |
Other non-cash activity: | ||
Operating lease right-of-use asset adjustment | $ (411) | $ 23,778 |
Basis of Information and Summar
Basis of Information and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
BASIS OF INFORMATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BASIS OF INFORMATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF OPERATION TriState Capital Holdings, Inc. ( “we,” “us,” “our,” the “holding company,” the “parent company,” or the “Company”) is a registered bank holding company pursuant to the Bank Holding Company Act of 1956, as amended. The Company has three wholly owned subsidiaries: TriState Capital Bank, a Pennsylvania-chartered state bank (the “Bank”); Chartwell Investment Partners, LLC, a registered investment adviser (“Chartwell”); and Chartwell TSC Securities Corp., a registered broker/dealer (“CTSC Securities”). The Bank was established to serve the commercial banking needs of regionally located middle-market businesses and financial services providers and the private banking needs of high-net-worth individuals nation-wide. The Bank has two wholly owned subsidiaries: TSC Equipment Finance LLC (“TSC Equipment Finance”), established to hold and manage loans and leases of our equipment finance business, and Meadowood Asset Management, LLC (“Meadowood”), established to hold and manage other real estate owned by the bank and/or foreclosed properties for the Bank. Chartwell provides investment management services primarily to institutional investors, mutual funds and individual investors. CTSC Securities supports marketing efforts for the proprietary investment products provided by Chartwell, including shares of mutual funds advised and/or administered by Chartwell. The Company and the Bank are subject to regulatory examination by the Federal Deposit Insurance Corporation (“FDIC”), the Pennsylvania Department of Banking and Securities and the Board of Governors of the Federal Reserve System and its Reserve Banks, which we refer to as the Federal Reserve. Chartwell is a registered investment adviser regulated by the Securities and Exchange Commission (“SEC”). CTSC Securities is regulated by the SEC and the Financial Industry Regulatory Authority, Inc. (“FINRA”). The Bank conducts business through its main office located in Pittsburgh, Pennsylvania, as well as its four additional representative offices in Cleveland, Ohio; Philadelphia, Pennsylvania; Edison, New Jersey; and New York, New York. Chartwell conducts business through its office located in Berwyn, Pennsylvania, and CTSC Securities conducts business through its office located in Pittsburgh, Pennsylvania. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States of America requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities, disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of related revenues and expenses during the reporting period. Although our current estimates contemplate current conditions and how we expect them to change in the future, it is reasonably possible that actual conditions could be different than those anticipated in the estimates, which could materially affect the financial results of our operations and financial condition. Material estimates that are particularly susceptible to significant changes relate to the determination of the allowance for loan and lease losses, valuation of goodwill and other intangible assets and their evaluation for impairment, and deferred income taxes and their related recoverability, each of which is discussed later in this section. CONSOLIDATION Our consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, the Bank, Chartwell and CTSC Securities, after elimination of inter-company accounts and transactions. The accounts of the Bank, in turn, include its wholly owned subsidiaries, TSC Equipment Finance and Meadowood, after elimination of inter-company accounts and transactions. The unaudited condensed consolidated financial statements of the Company presented herein have been prepared pursuant to SEC rules for Quarterly Reports on Form 10-Q and do not include all of the information and note disclosures required by GAAP for a full year presentation. In the opinion of management, all adjustments (consisting of normal, recurring adjustments) and disclosures considered necessary for the fair presentation of the accompanying unaudited condensed consolidated financial statements have been included. Interim results are not necessarily reflective of the results of the entire year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company and the related notes for the fiscal year ended December 31, 2019 , included in the Company’s Annual Report on Form 10-K filed with the SEC on February 24, 2020 . CASH AND CASH EQUIVALENTS For purposes of reporting cash flows, the Company has defined cash and cash equivalents as cash, interest-earning deposits with other institutions, federal funds sold and short-term investments that have an original maturity of 90 days or less. BUSINESS COMBINATIONS The Company accounts for business combinations using the acquisition method of accounting. Under this method of accounting, the acquired company’s net assets are recorded at fair value as of the date of acquisition, and the results of operations of the acquired company are combined with our results from that date forward. Acquisition costs are expensed when incurred. The difference between the purchase price, which includes an initial measurement of any contingent earn out, and the fair value of the net assets acquired (including identified intangibles) is recorded as goodwill in the consolidated statements of financial condition. A change in the initial estimate of any contingent earn out amount is recorded to non-interest expense in the consolidated statements of income. INVESTMENT SECURITIES The Company’s investments are classified as either: (1) held-to-maturity, which are debt securities that the Company intends to hold until maturity and are reported at amortized cost; (2) trading, which are debt securities bought and held principally for the purpose of selling them in the near term and reported at fair value, with unrealized gains and losses included in non-interest income; (3) available-for-sale, which are debt securities not classified as either held-to-maturity or trading securities and reported at fair value, with unrealized gains and losses reported as a component of accumulated other comprehensive income (loss), on an after-tax basis; or (4) equity securities, which are reported at fair value, with unrealized gains and losses included in non-interest income. The cost of securities sold is determined on a specific identification basis. Amortization of premiums and accretion of discounts are recorded to interest income on investments over the estimated life of the security utilizing the level yield method. We evaluate impaired investment securities quarterly to determine if impairments are temporary or other-than-temporary. For impaired debt and equity securities, management first determines whether it intends to sell or if it is more likely than not that it will be required to sell the impaired securities. This determination considers current and forecasted liquidity requirements, regulatory and capital requirements, and securities portfolio management. If the Company intends to sell a security with a fair value below amortized cost or if it is more likely than not that it will be required to sell such a security before recovery, an other-than-temporary impairment (“OTTI”) charge is recorded through current period earnings for the full decline in fair value below amortized cost. For debt securities that the Company does not intend to sell or it is more likely than not that it will not be required to sell before recovery, an OTTI charge is recorded through current period earnings for the amount of the valuation decline below amortized cost that is attributable to credit losses. The remaining difference between the security’s fair value and amortized cost (that is, the decline in fair value not attributable to credit losses) is recognized in other comprehensive income (loss), in the consolidated statements of comprehensive income and the shareholders’ equity section of the consolidated statements of financial condition, on an after-tax basis. FEDERAL HOME LOAN BANK STOCK The Company is a member of the Federal Home Loan Bank (“FHLB”) of Pittsburgh. Member institutions are required to invest in FHLB stock. The stock is carried at cost, which approximates its liquidation value, and it is evaluated for impairment based on the ultimate recoverability of the par value. The following matters are considered by management when evaluating the FHLB stock for impairment: the ability of the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLB; the impact of legislative and regulatory changes on the institution and its customer base; and the Company’s intent and ability to hold its FHLB stock for the foreseeable future. Management believes the Company’s holdings in the FHLB stock were recoverable at par value as of June 30, 2020 and December 31, 2019 . Cash and stock dividends are reported as interest income on investments in the consolidated statements of income. LOANS AND LEASES Loans and leases held-for-investment are stated at unpaid principal balances, net of deferred loan fees and costs. Loans held-for-sale are stated at the lower of cost or fair value. Interest income on loans is accrued at the contractual rate on the principal amount outstanding. Deferred loan fees and costs are amortized to interest income over the estimated life of the loan, taking into consideration scheduled payments and prepayments. The Company considers a loan to be a troubled debt restructuring (“TDR”) when there is a concession made to a financially troubled borrower without adequate consideration provided to the Company. Once a loan is deemed to be a TDR, the Company considers whether the loan should be placed on non-accrual status. In assessing accrual status, the Company considers the likelihood that repayment and performance according to the original contractual terms will be achieved, as well as the borrower’s historical payment performance. A loan is designated and reported as a TDR until such loan is either paid off or sold, unless the restructuring agreement specifies an interest rate equal to or greater than the rate that would be accepted at the time of the restructuring for a new loan with comparable risk and it is fully expected that the remaining principal and interest will be collected according to the restructured agreement. The recognition of interest income on a loan is discontinued when, in management’s opinion, it is probable the borrower is unable to meet payments as they become due or when the loan becomes 90 days past due, whichever occurs first, at which time the loan is placed on non-accrual status. All accrued and unpaid interest on such loans is then reversed. The interest ultimately collected is applied to reduce principal if there is doubt about the collectability of principal. If a borrower brings a loan current for which accrued interest has been reversed, then the recognition of interest income on the loan is resumed once the loan has been current for a period of six consecutive months or greater. The Company is a party to financial instruments with off-balance sheet risk, such as commitments to extend credit, in the normal course of business to meet the financing needs of its customers. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the lending agreement with such customer. Commitments generally have fixed expiration dates or other termination clauses (i.e., loans due on demand) and may require payment of a fee. Since some of the commitments are expected to expire without being drawn upon, the unfunded commitment amount does not necessarily represent future cash requirements. The Company evaluates each customer’s credit-worthiness on a case-by-case basis using the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. The amount of collateral obtained, if deemed necessary by the Company upon extension of a commitment, is based on management’s credit evaluation of the borrower. OTHER REAL ESTATE OWNED Real estate owned, other than bank premises, is recorded at fair value less estimated selling costs. Fair value is determined based on an independent appraisal. Expenses related to holding the property are charged against earnings when incurred. Depreciation is not recorded on other real estate owned (“OREO”) properties. ALLOWANCE FOR LOAN AND LEASE LOSSES The allowance for loan and lease losses is established through provisions for loan and lease losses that are recorded in the consolidated statements of income. Loans and leases are charged off against the allowance for loan and lease losses when management believes that the principal is uncollectible. If, at a later time, amounts are recovered with respect to loans and leases previously charged off, the recovered amount is credited to the allowance for loan and lease losses. In management’s judgment, the allowance was appropriate to cover probable losses inherent in the loan and lease portfolio as of June 30, 2020 and December 31, 2019 . Management’s judgment takes into consideration general economic conditions, diversification and seasoning of the loan portfolio, historic loss experience, identified credit problems, delinquency levels and adequacy of collateral. Although management believes it has used the best information available to it in making such determinations, and that the present allowance for loan and lease losses is adequate, future adjustments to the allowance may be necessary, and net income may be adversely affected if circumstances differ substantially from the assumptions used in determining the level of the allowance. In addition, as an integral part of their periodic examination, certain regulatory agencies review the adequacy of the Bank’s allowance for loan and lease losses and may direct the Bank to make additions to the allowance based on their judgments about information available to them at the time of their examination. The two components of the allowance for loan and lease losses represent estimates of general reserves based upon Accounting Standards Codification (“ASC”) Topic 450, Contingencies; and specific reserves based upon ASC Topic 310, Receivables. ASC Topic 450 applies to homogeneous loan pools such as commercial loans, consumer lines of credit and residential mortgages that are not individually evaluated for impairment. ASC Topic 310 is applied to commercial and consumer loans that are individually evaluated for impairment. In management’s opinion, a loan or lease is impaired, based upon current information and events, when it is probable that the loan or lease will not be repaid according to its original contractual terms, including both principal and interest, or if a loan is designated as a TDR. Management performs individual assessments of impaired loans and leases to determine the existence of loss exposure based upon a discounted cash flows method or where a loan is collateral dependent, based upon the fair value of the collateral less estimated selling costs. During the six months ended June 30, 2020 , certain loan modifications were done in accordance with Section 4013 of the CARES Act and the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus. Accordingly, these loans and leases were not categorized as TDRs. In estimating probable loan and lease loss of general reserves, management considers numerous factors, including historical charge-offs and subsequent recoveries. Management also considers qualitative factors that influence our credit quality, including, but not limited to, delinquency and non-performing loan trends, changes in loan underwriting guidelines and credit policies, and the results of internal loan reviews. Finally, management considers the impact of changes in current local and regional economic conditions in the markets that we serve. Management bases the computation of the allowance for loan and lease losses of general reserves on two factors: the primary factor and the secondary factor. The primary factor is based on the inherent risk identified by management within each of the Company’s three loan portfolios based on the historical loss experience of each loan portfolio in addition to the loss emergence period. Management has developed a methodology that is applied to each of the three primary loan portfolios: private banking loans, commercial and industrial (“C&I”) loans and leases, and commercial real estate (“CRE”) loans. As the loan loss history, mix and risk ratings of each loan portfolio change, the primary factor adjusts accordingly. The allowance for loan and lease losses related to the primary factor is based on our estimates as to probable losses for each loan portfolio. The secondary factor is intended to capture risks related to events and circumstances that management believes have an impact on the future performance of the loan portfolio. Although this factor is more subjective in nature, the methodology focuses on internal and external trends in pre-specified categories, or risk factors, and applies a quantitative percentage that drives the secondary factor. Nine risk factors have been identified and each risk factor is assigned a reserve level based on management’s judgment as to the probable impact of each risk factor on each loan portfolio and is monitored on a quarterly basis. As the trend in any risk factor changes, a corresponding change occurs in the reserve associated with each respective risk factor, such that the secondary factor remains current to changes in each loan portfolio. The Company also maintains a reserve for losses on unfunded commitments. This reserve is reflected as a component of other liabilities and, in management’s judgment, is sufficient to cover probable losses inherent in the loan commitments. Management tracks the level and trends in unused commitments and takes into consideration the same factors as those considered for purposes of the allowance for loan and lease losses on outstanding loans. INVESTMENT MANAGEMENT FEES The Company recognizes investment management fee revenue when advisory services are performed. Fees are based on assets under management and are calculated pursuant to individual client contracts. Investment management fees are generally received on a quarterly basis. Certain incremental costs incurred to acquire some of our investment management contracts are deferred and amortized to non-interest expense over the estimated life of the contract. Investment management fees receivable represent amounts due for contractual investment management services provided to the Company’s clients, primarily institutional investors, mutual funds and individual investors. Management performs credit evaluations of its customers’ financial condition when it is deemed to be necessary and does not require collateral. The Company provides an allowance for uncollectible accounts based on specifically identified receivables. Bad debt expense is recorded to other non-interest expense on the consolidated statements of income and the allowance for uncollectible accounts is recorded to investment management fees receivable, net on the consolidated statements of financial position. Investment management fees receivable are considered delinquent when payment is not received within contractual terms and are charged off against the allowance for uncollectible accounts when management determines that recovery is unlikely and the Company ceases its collection efforts. There was no bad debt expense recorded for the six months ended June 30, 2020 , and 2019 and no allowance for uncollectible accounts as of June 30, 2020 and December 31, 2019 . GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Goodwill is not amortized and is subject to at least annual assessments for impairment by applying a fair value based test. The Company reviews goodwill annually and again at any quarter-end if a material event occurs during the quarter that may affect goodwill. If goodwill testing is required, an assessment of qualitative factors can be completed before performing a goodwill impairment test. If an assessment of qualitative factors determines it is more likely than not that the fair value of a reporting unit exceeds its carrying amount, then a goodwill impairment test is not required. Goodwill is evaluated for potential impairment by determining if the fair value has fallen below carrying value. Other intangible assets represent purchased assets that may lack physical substance but can be distinguished from goodwill because of contractual or other legal rights. The Company has determined that certain of its acquired mutual fund client relationships meet the criteria to be considered indefinite-lived assets because the Company expects both the renewal of these contracts and the cash flows generated by these assets to continue indefinitely. Accordingly, the Company does not amortize these intangible assets, but instead reviews these assets annually or more frequently whenever events or circumstances occur indicating that the recorded indefinite-lived assets may be impaired. Each reporting period, the Company assesses whether events or circumstances have occurred which indicate that the indefinite life criteria are no longer met. If the indefinite life criteria are no longer met, the Company assesses whether the carrying value of these assets exceeds its fair value. If the carrying value exceeds the fair value of the asset, an impairment loss is recorded in an amount equal to any such excess and the assets are reclassified to finite-lived. Other intangible assets that the Company has determined to have finite lives, such as its trade names, client lists and non-compete agreements are amortized over their estimated useful lives. These finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives, which range from four to 25 years. Finite-lived intangibles are evaluated for impairment on an annual basis or more frequently whenever events or circumstances occur indicating that the carrying amount may not be recoverable. OFFICE PROPERTIES AND EQUIPMENT Office properties and equipment are stated at cost less accumulated depreciation. Office properties include furniture, fixtures and leasehold improvements. Equipment includes computer equipment and internal use software. Depreciation is computed utilizing the straight-line method over the estimated useful lives of the related assets, except for leasehold improvements, which are amortized over the terms of the respective leases or the estimated useful lives of the improvements, whichever is shorter. Estimated useful lives are dependent upon the nature and condition of the asset and range from three to 10 years. Repairs and maintenance are charged to expense as incurred, while improvements that extend the useful life are capitalized and depreciated to non-interest expense over the estimated remaining life of the asset. OPERATING LEASES The Company is a lessee in noncancellable operating leases, primarily for its office spaces and other office equipment. The Company accounts for leases in accordance with ASC Topic 842, “Leases,” and records operating leases as a right-of-use asset and an offsetting lease liability in the consolidated statements of financial condition at the present value of the unpaid lease payments. The Company generally uses its incremental borrowing rate as the discount rate for operating leases. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. For operating leases, the right-of-use asset is subsequently measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received. Lease expense for lease payments is recognized on a straight-line basis over the lease term. BANK OWNED LIFE INSURANCE Bank owned life insurance (“BOLI”) policies on certain officers and employees are recorded at net cash surrender value on the consolidated statements of financial condition. Upon termination of a BOLI policy, the Company receives the cash surrender value. BOLI benefits are payable to the Company upon the death of the insured. Changes in net cash surrender value are recognized as non-interest income in the consolidated statements of income. DEPOSITS Deposits are stated at principal outstanding. Interest on deposits is accrued and charged to interest expense daily and is paid or credited in accordance with the terms of the respective accounts. BORROWINGS The Company records FHLB advances, line of credit borrowings and subordinated notes payable at their principal amount net of debt issuance costs. Interest expense is recognized based on the coupon rate of the obligations. Costs associated with the acquisition of subordinated notes payable are amortized to interest expense over the expected term of the borrowing. INCOME TAXES The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the tax effects of differences between the financial statement and tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities with regard to a change in tax rates is recognized in income in the period that includes the enactment date. Management assesses all available evidence to determine the amount of deferred tax assets that are more likely than not to be realized. The available evidence used in connection with the assessments includes taxable income in prior periods, projected taxable income, potential tax planning strategies and projected reversals of deferred tax items. These assessments involve a degree of subjectivity and may undergo significant change. Changes to the evidence used in the assessments could have a material adverse effect on the Company’s results of operations in the period in which they occur. The Company considers uncertain tax positions that it has taken or expects to take on a tax return. Any interest and penalties related to unrecognized tax benefits would be recognized in income tax expense in the consolidated statements of income. EARNINGS PER COMMON SHARE Earnings per common share (“EPS”) is computed using the two-class method, where net income is reduced by dividends declared on our preferred stock to derive net income available to common shareholders. Basic EPS is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding for the period, excluding non-vested restricted stock. Diluted EPS reflects the potential dilution upon the exercise of stock options and the vesting of restricted stock awards granted utilizing the treasury stock method. STOCK-BASED COMPENSATION The Company accounts for its stock-based compensation awards based on estimated fair values of stock-based awards made to employees and directors. Compensation cost for all stock-based payments is based on the estimated grant-date fair value. The value of the portion of the award that is ultimately expected to vest is included in compensation and employee benefits expense in the consolidated statements of income and recorded as a component of additional paid-in capital. Compensation expense for all awards is recognized on a straight-line basis over the requisite service period for the entire grant. DERIVATIVES AND HEDGING ACTIVITIES All derivatives are evaluated at inception as to whether or not they are hedging or non-hedging activities. All derivatives are recognized as either assets or liabilities on the consolidated statements of financial condition and measured at fair value. For derivatives designated as fair value hedges, changes in the fair value of the derivative and the hedged item related to the hedged risk are recognized in earnings. Any hedge ineffectiveness would be recognized in the income statement line item pertaining to the hedged item. For derivatives designated as cash flow hedges, changes in fair value of the effective portion of the cash flow hedges are reported in accumulated other comprehensive income (loss). When the cash flows associated with the hedged item are realized, the gain or loss included in accumulated other comprehensive income (loss) is recognized in the consolidated statements of income. The Company also has interest rate derivative positions that are not designated as hedging instruments. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings. The Company executes interest rate derivatives with its commercial banking customers to facilitate their respective risk management strategies which generate swap fee income. Those derivatives are simultaneously and economically hedged by offsetting derivatives that the Company executes with a third party, such that the Company eliminates its interest rate exposure resulting from such transactions and are not designated as hedging instruments. Swap fees are based on the notional amount and weighted maturity of each individual transaction and are collected and recorded to non-interest income in the consolidated statements of income when the transaction is executed. FAIR VALUE MEASUREMENT Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability in a principal or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date, using assumptions market participants would use when pricing such an asset or liability. An orderly transaction assumes exposure to the market for a customary period for marketing activities prior to the measurement date and not a forced liquidation or distressed sale. Fair value measurement and disclosure guidance provides a three-level hierarchy that prioritizes the inputs of valuation techniques used to measure fair value into three broad categories: • Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities. • Level 2 – Observable inputs such as quoted prices for similar assets and liabilities in active markets, quoted prices for similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. • Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs. Fair value must be recorded for certain assets and liabilities every reporting period on a recurring basis or, under certain circumstances, on a non-recurring basis. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Unrealized holding gains and the non-credit component of unrealized losses on the Company’s debt securities available-for-sale are included in accumulated other comprehensive income (loss), net of applicable income taxes. Also included in accumulated other comprehensive income (loss) is the remaining unamortized balance of the unrealized holding gains (non-credit losses) net of applicable income taxes, that existed on the transfer date for debt securities reclassified into the held-to-maturity category from the available-for-sale category. Unrealized holding gains (losses) on the effective portion of the Company’s cash flow hedge derivatives are included in accumulated other comprehensiv |
Investment Securities
Investment Securities | 6 Months Ended |
Jun. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT SECURITIES | INVESTMENT SECURITIES Debt securities available-for-sale and held-to-maturity were comprised of the following: June 30, 2020 (Dollars in thousands) Amortized Gross Unrealized Gross Unrealized Estimated Debt securities available-for-sale: Corporate bonds $ 234,193 $ 4,198 $ 1,706 $ 236,685 Trust preferred securities 18,158 — 1,513 16,645 Agency collateralized mortgage obligations 23,806 13 59 23,760 Agency mortgage-backed securities 276,776 1,133 464 277,445 Agency debentures 8,428 814 — 9,242 Total debt securities available-for-sale 561,361 6,158 3,742 563,777 Debt securities held-to-maturity: Corporate bonds 23,676 637 — 24,313 Agency debentures 193,466 1,127 64 194,529 Municipal bonds 13,606 135 — 13,741 Agency mortgage-backed securities 4,335 753 — 5,088 Total debt securities held-to-maturity 235,083 2,652 64 237,671 Total debt securities $ 796,444 $ 8,810 $ 3,806 $ 801,448 December 31, 2019 (Dollars in thousands) Amortized Gross Unrealized Gross Unrealized Estimated Debt securities available-for-sale: Corporate bonds $ 172,704 $ 2,821 $ 107 $ 175,418 Trust preferred securities 18,092 216 48 18,260 Agency collateralized mortgage obligations 27,262 11 80 27,193 Agency mortgage-backed securities 18,058 451 — 18,509 Agency debentures 8,961 441 — 9,402 Total debt securities available-for-sale 245,077 3,940 235 248,782 Debt securities held-to-maturity: Corporate bonds 24,678 619 — 25,297 Agency debentures 149,912 628 935 149,605 Municipal bonds 17,094 144 — 17,238 Agency mortgage-backed securities 4,360 255 — 4,615 Total debt securities held-to-maturity 196,044 1,646 935 196,755 Total debt securities $ 441,121 $ 5,586 $ 1,170 $ 445,537 Interest income on investment securities was as follows: Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2020 2019 2020 2019 Taxable interest income $ 3,609 $ 3,641 $ 7,001 $ 7,513 Non-taxable interest income 26 101 137 205 Dividend income 305 409 703 786 Total interest income on investment securities $ 3,940 $ 4,151 $ 7,841 $ 8,504 As of June 30, 2020 , the contractual maturities of the debt securities were: June 30, 2020 Available-for-Sale Held-to-Maturity (Dollars in thousands) Amortized Estimated Amortized Estimated Due in less than one year $ 44,006 $ 44,343 $ 4,519 $ 4,529 Due from one to five years 113,409 116,540 68,692 69,267 Due from five to ten years 105,683 104,054 149,165 149,602 Due after ten years 298,263 298,840 12,707 14,273 Total debt securities $ 561,361 $ 563,777 $ 235,083 $ 237,671 The $298.8 million fair value of debt securities available-for-sale with a contractual maturity due after 10 years as of June 30, 2020 , included $33.0 million , or 11.0% , that are floating-rate securities. The $149.2 million amortized cost of debt securities held-to-maturity with a contractual maturity due from five to 10 years as of June 30, 2020 , included $17.3 million that have call provisions within the next five years that would either mature, if called, or become floating-rate securities after the call date. Prepayments may shorten the contractual lives of the collateralized mortgage obligations, mortgage-backed securities and collateralized loan obligations. Proceeds from the sale and call of debt securities available-for-sale and held-to-maturity and related gross realized gains and losses were: Available-for-Sale Held-to-Maturity Available-for-Sale Held-to-Maturity Three Months Ended June 30, Three Months Ended June 30, Six Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2020 2019 2020 2019 2020 2019 2020 2019 Proceeds from sales $ 6,071 $ 4,993 $ — $ — $ 56,038 $ 4,993 $ — $ — Proceeds from calls 3,580 2,858 125,405 95,835 3,580 4,082 247,758 117,295 Total proceeds $ 9,651 $ 7,851 $ 125,405 $ 95,835 $ 59,618 $ 9,075 $ 247,758 $ 117,295 Gross realized gains $ 6 $ 109 $ 8 $ 3 $ 21 $ 126 $ 50 $ 14 Gross realized losses — — — — — — — — Net realized gains $ 6 $ 109 $ 8 $ 3 $ 21 $ 126 $ 50 $ 14 Debt securities available-for-sale of $2.6 million as of June 30, 2020 , were held in safekeeping at the FHLB and were included in the calculation of borrowing capacity. Additionally, there were $35.1 million of debt securities held-to-maturity that were pledged as collateral for certain deposit relationships. The following tables show the fair value and gross unrealized losses on temporarily impaired debt securities available-for-sale and held-to-maturity, by investment category and length of time that the individual securities have been in a continuous unrealized loss position as of June 30, 2020 and December 31, 2019 , respectively: June 30, 2020 Less than 12 Months 12 Months or More Total (Dollars in thousands) Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses Debt securities available-for-sale: Corporate bonds $ 46,666 $ 954 $ 19,248 $ 752 $ 65,914 $ 1,706 Trust preferred securities 16,644 1,513 — — 16,644 1,513 Agency collateralized mortgage obligations 1,794 2 19,186 57 20,980 59 Agency mortgage-backed securities 140,612 464 — — 140,612 464 Total debt securities available-for-sale 205,716 2,933 38,434 809 244,150 3,742 Debt securities held-to-maturity: Corporate bonds — — — — — — Agency debentures 20,014 64 — — 20,014 64 Total debt securities held-to-maturity 20,014 64 — — 20,014 64 Total temporarily impaired debt securities (1) $ 225,730 $ 2,997 $ 38,434 $ 809 $ 264,164 $ 3,806 (1) The number of investment positions with unrealized losses totaled 36 for available-for-sale securities and 1 for held-to-maturity securities. December 31, 2019 Less than 12 Months 12 Months or More Total (Dollars in thousands) Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses Debt securities available-for-sale: Corporate bonds $ 4,942 $ 58 $ 19,951 $ 49 $ 24,893 $ 107 Trust preferred securities — — 4,417 48 4,417 48 Agency collateralized mortgage obligations 22,117 66 2,544 14 24,661 80 Total debt securities available-for-sale 27,059 124 26,912 111 53,971 235 Debt securities held-to-maturity: Agency debentures 87,879 935 — — 87,879 935 Total debt securities held-to-maturity 87,879 935 — — 87,879 935 Total temporarily impaired debt securities (1) $ 114,938 $ 1,059 $ 26,912 $ 111 $ 141,850 $ 1,170 (1) The number of investment positions with unrealized losses totaled 86 for available-for-sale securities and 53 for held-to-maturity securities. The changes in the fair values of our municipal bonds, agency debentures, agency collateralized mortgage obligations and agency mortgage-backed securities are primarily the result of interest rate fluctuations. To assess for credit impairment, management evaluates the underlying issuer’s financial performance and the related credit rating information through a review of publicly available financial statements and other publicly available information. The most recent assessment for credit impairment did not identify any issues related to the ultimate repayment of principal and interest on these debt securities. In addition, the Company has the ability and intent to hold debt securities in an unrealized loss position until recovery of their amortized cost. Based on this, the Company considers all of the unrealized losses to be temporary. There were no outstanding debt securities classified as trading as of June 30, 2020 and December 31, 2019 . There was $13.3 million and $24.3 million in FHLB stock outstanding as of June 30, 2020 and December 31, 2019 , respectively. |
Loans and Leases
Loans and Leases | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
LOANS AND LEASES | LOANS AND LEASES The Company generates loans through the private banking and middle-market banking channels. The private banking channel primarily includes loans made to high-net-worth individuals, trusts and businesses that are typically secured by cash, marketable securities and/or cash value life insurance. The middle-market banking channel consists of our C&I loan and lease portfolio and CRE loan portfolio, which serve middle-market businesses and real estate developers in our primary markets and certain financial services companies with whom we have multiple relationship components. Loans and leases held-for-investment were comprised of the following: June 30, 2020 (Dollars in thousands) Private Commercial Commercial Total Loans and leases held-for-investment, before deferred fees and costs $ 4,055,115 $ 1,148,137 $ 1,959,537 $ 7,162,789 Deferred loan costs (fees) 8,001 4,743 (4,763 ) 7,981 Loans and leases held-for-investment, net of deferred fees and costs 4,063,116 1,152,880 1,954,774 7,170,770 Allowance for loan and lease losses (2,151 ) (7,546 ) (13,579 ) (23,276 ) Loans and leases held-for-investment, net $ 4,060,965 $ 1,145,334 $ 1,941,195 $ 7,147,494 December 31, 2019 (Dollars in thousands) Private Commercial Commercial Total Loans and leases held-for-investment, before deferred fees and costs $ 3,688,779 $ 1,080,767 $ 1,801,375 $ 6,570,921 Deferred loan costs (fees) 6,623 4,942 (4,927 ) 6,638 Loans and leases held-for-investment, net of deferred fees and costs 3,695,402 1,085,709 1,796,448 6,577,559 Allowance for loan and lease losses (1,973 ) (5,262 ) (6,873 ) (14,108 ) Loans and leases held-for-investment, net $ 3,693,429 $ 1,080,447 $ 1,789,575 $ 6,563,451 The Company’s customers have unused loan commitments or other line of credit availability based on the value of eligible collateral or other terms and conditions under their loan agreements . Often these commitments or other line of credit availability are not fully utilized and therefore the total amount does not necessarily represent future cash requirements. The amount of unfunded commitments or other line of credit availability, including standby letters of credit, as of June 30, 2020 and December 31, 2019 , was $5.63 billion and $4.91 billion , respectively. These unfunded commitments included $4.50 billion and $3.87 billion of commitments that were due on demand with no stated maturity as of June 30, 2020 and December 31, 2019 , respectively. The interest rate for each commitment and demand line of credit is established at origination and may be based on the prevailing index rate market conditions at the time of funding. The reserve for losses on unfunded commitments was $1.0 million and $645,000 as of June 30, 2020 and December 31, 2019 , respectively, which includes reserves for probable losses on unfunded loan commitments, including standby letters of credit and also risk participations. The total unfunded commitments above included loans in the process of origination totaling approximately $37.7 million and $20.7 million as of June 30, 2020 and December 31, 2019 , respectively, which extend over varying periods of time. The Company issues standby letters of credit in the normal course of business. Standby letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. Standby letters of credit generally are contingent upon the failure of the customer to perform according to the terms of the underlying contract with the third party. The Company would be required to perform under a standby letter of credit when drawn upon by the guaranteed party in the case of non-performance by the Company’s customer. Collateral may be obtained based on management’s credit assessment of the customer. The amount of unfunded commitments related to standby letters of credit as of June 30, 2020 and December 31, 2019 , included in the total unfunded commitments above, was $74.1 million and $72.8 million , respectively. Should the Company be obligated to perform under any standby letters of credit, the Company will seek repayment from the customer for amounts paid. During the six months ended June 30, 2020 and 2019 , there were draws on letters of credit totaling $45,000 and $85,000 , respectively, which were repaid by the borrowers. Most of these commitments are expected to expire without being drawn upon and the total amount does not necessarily represent future cash requirements. The potential liability for losses on standby letters of credit was included in the reserve for losses on unfunded commitments. The Company has entered into risk participation agreements with financial institution counterparties for interest rate swaps related to loans in which we are a participant. The risk participation agreements provide credit protection to the financial institution counterparties should the customers fail to perform on their interest rate derivative contracts. The potential liability for outstanding obligations was included in the reserve for losses on unfunded commitments. |
Allowance for Loan and Lease Lo
Allowance for Loan and Lease Losses | 6 Months Ended |
Jun. 30, 2020 | |
Allowance for Loan and Lease Losses [Abstract] | |
ALLOWANCE FOR LOAN AND LEASE LOSSES | ALLOWANCE FOR LOAN AND LEASE LOSSES Our allowance for loan and lease losses represents our estimate of probable loan and lease losses inherent in the portfolio at a specific point in time. This estimate includes losses associated with specifically identified loans and leases, as well as estimated probable credit losses inherent in the remainder of the loan and lease portfolio. Additions are made to the allowance through both periodic provisions recorded in the consolidated statements of income and recoveries of losses previously incurred. Reductions to the allowance occur as loans and leases are charged off or when the credit history of any of the Company’s three loan portfolios (private banking loans, C&I loans and leases, and CRE loans) improves . Management evaluates the adequacy of the allowance quarterly, and in doing so relies on various factors including, but not limited to, assessment of historical loss experience, delinquency and non-accrual trends, portfolio growth, underlying collateral coverage and current economic conditions. This evaluation is subjective and requires material estimates that may change over time. In addition, management evaluates the overall methodology for the allowance for loan and lease losses on an annual basis. The calculation of the allowance for loan and lease losses takes into consideration the inherent risk identified within each of the Company’s three loan portfolios. In addition, management considers the historical loss experience of each loan portfolio to ensure that the allowance for loan and lease losses is sufficient to cover probable losses inherent in such loan portfolios. Refer to Note 1, Summary of Significant Accounting Policies , to our unaudited condensed consolidated financial statements for more details on the Company’s allowance for loan and lease losses policy. The following discusses key characteristics and risks within each primary loan portfolio: Private Banking Loans Our private banking lending activities are conducted on a national basis. This loan portfolio primarily includes loans made to high-net-worth individuals, trusts and businesses that are typically secured by cash, marketable securities and/or cash value life insurance. This portfolio also has some loans that are secured by residential real estate or other financial assets, lines of credit and unsecured loans. The primary sources of repayment for these loans are the income and/or assets of the borrower. The underlying collateral is the most important indicator of risk for this loan portfolio. The overall lower risk profile of this portfolio is driven by loans secured by cash, marketable securities and/or cash value life insurance, which were 98.0% and 97.4% of total private banking loans as of June 30, 2020 and December 31, 2019 , respectively. Commercial Banking: Commercial and Industrial Loans and Leases This loan portfolio primarily includes loans and leases made to financial and other service companies or manufacturers generally for the purposes of financing production, operating capacity, accounts receivable, inventory, equipment, acquisitions and recapitalizations. Cash flow from the borrower’s operations is the primary source of repayment for these loans and leases, except for certain commercial loans that are secured by marketable securities. The borrower’s industry and local and regional economic conditions are important indicators of risk for this loan portfolio. Collateral for these types of loans at times does not have sufficient value in a distressed or liquidation scenario to satisfy the outstanding debt. C&I loans collateralized by marketable securities are treated the same as private banking loans for purposes of the allowance for loan and lease loss calculation. Commercial Banking: Commercial Real Estate Loans This loan portfolio includes loans secured by commercial purpose real estate, including both owner-occupied properties and investment properties for various purposes including office, industrial, multifamily, retail, hospitality, healthcare and self-storage. The primary source of repayment for CRE loans secured by owner-occupied properties is cash flow from the borrower’s operations. Individual project cash flows, global cash flows and liquidity from the developer, or the sale of the property are the primary sources of repayment for CRE loans secured by investment properties. Also included are commercial construction loans to finance the construction or renovation of structures as well as to finance the acquisition and development of raw land for various purposes. The increased level of risk for these loans is generally confined to the construction period. If problems arise, the project may not be completed, and as such, may not provide sufficient cash flow on its own to service the debt or have sufficient value in a liquidation to cover the outstanding principal. The underlying purpose and collateral of the loans are important indicators of risk for this loan portfolio. Additional risks exist and are dependent on several factors such as the condition of the local and regional economies, whether or not the project is owner-occupied, the type of project, and the experience and resources of the developer. On a monthly basis, management monitors various credit quality indicators for the loan portfolio, including delinquency, non-performing status, changes in risk ratings, changes in the underlying performance of the borrowers and other relevant factors. On a daily basis, the Company monitors the collateral of loans secured by cash, marketable securities and/or cash value life insurance within the private banking portfolio, which further reduces the risk profile of that portfolio. Refer to Note 1, Summary of Significant Accounting Policies , to our unaudited condensed consolidated financial statements for the Company’s policy for determining past due status of loans. Loan risk ratings are assigned based upon the creditworthiness of the borrower and the quality of the collateral for loans secured by marketable securities. Loan risk ratings are reviewed on an ongoing basis according to internal policies. Loans within the pass rating are believed to have a lower risk of loss than loans that are risk rated as special mention, substandard or doubtful, which are believed to have an increasing risk of loss. Our internal risk ratings are consistent with regulatory guidance. Management also monitors the loan portfolio through a formal periodic review process. All non-pass rated loans are reviewed monthly and higher risk-rated loans within the pass category are reviewed three times a year. The Company’s risk ratings are consistent with regulatory guidance and are as follows: Pass – The loan is currently performing in accordance with its contractual terms. Special Mention – A special mention loan has potential weaknesses that warrant management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects or in our credit position at some future date. Economic and market conditions beyond the customer’s control may in the future necessitate this classification. Substandard – A substandard loan is not adequately protected by the net worth and/or paying capacity of the obligor or by the collateral pledged, if any. Substandard loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. These loans are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Doubtful – A doubtful loan has all the weaknesses inherent in a loan categorized as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. The following tables present the recorded investment in loans by credit quality indicator: June 30, 2020 (Dollars in thousands) Private Commercial Commercial Total Pass $ 4,059,835 $ 1,144,623 $ 1,933,301 $ 7,137,759 Special mention — 7,798 4,625 12,423 Substandard 3,281 459 16,848 20,588 Loans and leases held-for-investment $ 4,063,116 $ 1,152,880 $ 1,954,774 $ 7,170,770 December 31, 2019 (Dollars in thousands) Private Commercial Commercial Total Pass $ 3,691,866 $ 1,069,932 $ 1,780,768 $ 6,542,566 Special mention — 15,777 14,284 30,061 Substandard 3,536 — 1,396 4,932 Loans and leases held-for-investment $ 3,695,402 $ 1,085,709 $ 1,796,448 $ 6,577,559 Changes in the allowance for loan and lease losses were as follows for the three months ended June 30, 2020 and 2019 : Three Months Ended June 30, 2020 (Dollars in thousands) Private Commercial Commercial Total Balance, beginning of period $ 2,174 $ 6,685 $ 8,445 $ 17,304 Provision for loan and lease losses 148 723 5,134 6,005 Charge-offs (171 ) — — (171 ) Recoveries — 138 — 138 Balance, end of period $ 2,151 $ 7,546 $ 13,579 $ 23,276 Three Months Ended June 30, 2019 (Dollars in thousands) Private Commercial Commercial Total Balance, beginning of period $ 2,001 $ 7,041 $ 5,670 $ 14,712 Provision (credit) for loan and lease losses 139 (1,146 ) 295 (712 ) Charge-offs — — — — Recoveries — 16 — 16 Balance, end of period $ 2,140 $ 5,911 $ 5,965 $ 14,016 Changes in the allowance for loan and lease losses were as follows for the six months ended June 30, 2020 and 2019 : Six Months Ended June 30, 2020 (Dollars in thousands) Private Commercial Commercial Total Balance, beginning of period $ 1,973 $ 5,262 $ 6,873 $ 14,108 Provision for loan and lease losses 349 1,943 6,706 8,998 Charge-offs (171 ) — — (171 ) Recoveries — 341 — 341 Balance, end of period $ 2,151 $ 7,546 $ 13,579 $ 23,276 Six Months Ended June 30, 2019 (Dollars in thousands) Private Commercial Commercial Total Balance, beginning of period $ 1,942 $ 5,764 $ 5,502 $ 13,208 Provision (credit) for loan and lease losses 198 (1,750 ) 463 (1,089 ) Charge-offs — — — — Recoveries — 1,897 — 1,897 Balance, end of period $ 2,140 $ 5,911 $ 5,965 $ 14,016 The following tables present the age analysis of past due loans and leases segregated by class: June 30, 2020 (Dollars in thousands) 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due Current Total Private banking $ — $ — $ — $ — $ 4,063,116 $ 4,063,116 Commercial and industrial — — — — 1,152,880 1,152,880 Commercial real estate — — — — 1,954,774 1,954,774 Loans and leases held-for-investment $ — $ — $ — $ — $ 7,170,770 $ 7,170,770 December 31, 2019 (Dollars in thousands) 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due Current Total Private banking $ 261 $ — $ 184 $ 445 $ 3,694,957 $ 3,695,402 Commercial and industrial — — — — 1,085,709 1,085,709 Commercial real estate — — — — 1,796,448 1,796,448 Loans and leases held-for-investment $ 261 $ — $ 184 $ 445 $ 6,577,114 $ 6,577,559 Non-Performing and Impaired Loans Management monitors the delinquency status of the Company’s loan portfolio on a monthly basis. Loans are considered non-performing when interest and principal are 90 days or more past due or management has determined that it is probable the borrower is unable to meet payments as they become due. The risk of loss is generally highest for non-performing loans. Management determines loans to be impaired when, based upon current information and events, it is probable that the loan will not be repaid according to the original contractual terms of the loan agreement, including both principal and interest, or if a loan is designated as a TDR. Refer to Note 1, Summary of Significant Accounting Policies , to our unaudited condensed consolidated financial statements for the Company’s policy on evaluating loans for impairment and interest income. The following tables present the Company’s investment in loans considered to be impaired and related information on those impaired loans: As of and for the Six Months Ended June 30, 2020 (Dollars in thousands) Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized With a related allowance recorded: Private banking $ — $ — $ — $ — $ — Commercial and industrial 459 457 69 459 — Commercial real estate 6,311 6,315 947 6,311 — Total with a related allowance recorded 6,770 6,772 1,016 6,770 — Without a related allowance recorded: Private banking 10 10 — 12 — Commercial and industrial — — — — — Commercial real estate — — — — — Total without a related allowance recorded 10 10 — 12 — Total: Private banking 10 10 — 12 — Commercial and industrial 459 457 69 459 — Commercial real estate 6,311 6,315 947 6,311 — Total $ 6,780 $ 6,782 $ 1,016 $ 6,782 $ — As of and for the Twelve Months Ended December 31, 2019 (Dollars in thousands) Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized With a related allowance recorded: Private banking $ 171 $ 193 $ 171 $ 171 $ — Commercial and industrial — — — — — Commercial real estate — — — — — Total with a related allowance recorded 171 193 171 171 — Without a related allowance recorded: Private banking 13 13 — 13 — Commercial and industrial — — — — — Commercial real estate — — — — — Total without a related allowance recorded 13 13 — 13 — Total: Private banking 184 206 171 184 — Commercial and industrial — — — — — Commercial real estate — — — — — Total $ 184 $ 206 $ 171 $ 184 $ — Impaired loans as of June 30, 2020 and December 31, 2019 , were $6.8 million and $184,000 , respectively. There was no interest income recognized on impaired loans that were also on non-accrual status for the six months ended June 30, 2020 , and the twelve months ended December 31, 2019 . As of June 30, 2020 and December 31, 2019 , there were no loans 90 days or more past due and still accruing interest income. Impaired loans are evaluated using a discounted cash flow method or based on the fair value of the collateral less estimated selling costs. Based on those evaluations there were specific reserves totaling $1.0 million and $171,000 as of June 30, 2020 and December 31, 2019 , respectively. The following tables present the allowance for loan and lease losses and recorded investment in loans by class: June 30, 2020 (Dollars in thousands) Private Commercial Commercial Total Allowance for loan and lease losses: Individually evaluated for impairment $ — $ 69 $ 947 $ 1,016 Collectively evaluated for impairment 2,151 7,477 12,632 22,260 Total allowance for loan and lease losses $ 2,151 $ 7,546 $ 13,579 $ 23,276 Loans and leases held-for-investment: Individually evaluated for impairment $ 10 $ 459 $ 6,311 $ 6,780 Collectively evaluated for impairment 4,063,106 1,152,421 1,948,463 7,163,990 Loans and leases held-for-investment $ 4,063,116 $ 1,152,880 $ 1,954,774 $ 7,170,770 December 31, 2019 (Dollars in thousands) Private Commercial Commercial Total Allowance for loan and lease losses: Individually evaluated for impairment $ 171 $ — $ — $ 171 Collectively evaluated for impairment 1,802 5,262 6,873 13,937 Total allowance for loan and lease losses $ 1,973 $ 5,262 $ 6,873 $ 14,108 Loans and leases held-for-investment: Individually evaluated for impairment $ 184 $ — $ — $ 184 Collectively evaluated for impairment 3,695,218 1,085,709 1,796,448 6,577,375 Loans and leases held-for-investment $ 3,695,402 $ 1,085,709 $ 1,796,448 $ 6,577,559 Troubled Debt Restructuring The aggregate recorded investment of impaired loans with terms modified through a TDR was $0 and $171,000 as of June 30, 2020 and December 31, 2019 , respectively, which were also on non-accrual. There were no unused commitments on loans designated as TDRs as of June 30, 2020 and December 31, 2019 . The modifications made to restructured loans typically consist of an extension of the payment terms or the deferral of principal payments. There were no loans modified as TDRs within 12 months of the corresponding balance sheet date with a payment default during the three and six months ended June 30, 2020 and 2019 . There were no loans newly designated as TDRs during the three and six months ended June 30, 2020 and 2019 . Other Real Estate Owned As of June 30, 2020 and December 31, 2019 , the balance of the OREO was $2.7 million and $4.3 million , respectively. During the six months ended June 30, 2020 , a property was sold from OREO for $1.5 million with a net gain of $65,000 . There were no residential mortgage loans in the process of foreclosure as of June 30, 2020 . |
Deposits
Deposits | 6 Months Ended |
Jun. 30, 2020 | |
Deposits [Abstract] | |
DEPOSITS | DEPOSITS As of June 30, 2020 and December 31, 2019 , deposits were comprised of the following: Interest Rate Weighted Average Balance (Dollars in thousands) June 30, June 30, December 31, June 30, December 31, Demand and savings accounts: Noninterest-bearing checking accounts — — — $ 422,341 $ 356,102 Interest-bearing checking accounts 0.05 to 1.70% 0.44% 1.57% 2,664,864 1,398,264 Money market deposit accounts 0.10 to 3.25% 0.71% 1.84% 3,547,518 3,426,745 Total demand and savings accounts 6,634,723 5,181,111 Certificates of deposit 0.15 to 3.25% 1.51% 2.24% 1,196,748 1,453,502 Total deposits $ 7,831,471 $ 6,634,613 Weighted average rate on interest-bearing accounts 0.74% 1.87% As of June 30, 2020 and December 31, 2019 , the Bank had total brokered deposits of $812.1 million and $766.6 million , respectively. Reciprocal deposits through Certificate of Deposit Account Registry Service ® (“CDARS ® ”) and Insured Cash Sweep ® (“ICS ® ”) totaled $1.33 billion and $857.9 million as of June 30, 2020 and December 31, 2019 , respectively, and were considered non-brokered. As of June 30, 2020 and December 31, 2019 , certificates of deposit with balances of $100,000 or more, excluding brokered and reciprocal deposits, totaled $516.2 million and $551.5 million , respectively. As of June 30, 2020 and December 31, 2019 , certificates of deposit with balances of $250,000 or more, excluding brokered and reciprocal deposits, totaled $185.1 million and $233.5 million . The contractual maturity of certificates of deposit was as follows: (Dollars in thousands) June 30, December 31, 12 months or less $ 1,083,693 $ 1,244,838 12 months to 24 months 96,517 168,437 24 months to 36 months 16,538 40,227 Total $ 1,196,748 $ 1,453,502 Interest expense on deposits was as follows: Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2020 2019 2020 2019 Interest-bearing checking accounts $ 2,719 $ 4,965 $ 7,933 $ 9,508 Money market deposit accounts 7,377 18,200 22,031 34,739 Certificates of deposit 5,857 8,990 13,233 17,241 Total interest expense on deposits $ 15,953 $ 32,155 $ 43,197 $ 61,488 |
Borrowings
Borrowings | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
BORROWINGS | BORROWINGS As of June 30, 2020 and December 31, 2019 , borrowings were comprised of the following: June 30, 2020 December 31, 2019 (Dollars in thousands) Interest Rate Ending Balance Maturity Date Interest Rate Ending Balance Maturity Date FHLB borrowings: FHLB line of credit —% $ — 1.81% $ 55,000 5/1/2020 Issued 4/8/2020 0.60% 50,000 7/8/2020 —% — Issued 6/1/2020 0.46% 150,000 9/1/2020 —% — Issued 6/2/2020 0.46% 50,000 9/2/2020 —% — Issued 6/22/2020 0.47% 50,000 9/21/2020 —% — Issued 12/12/2019 —% — 1.85% 100,000 1/13/2020 Issued 12/2/2019 —% — 1.91% 150,000 3/2/2020 Issued 10/8/2019 —% — 2.00% 50,000 1/8/2020 Subordinated notes payable (net of debt issuance costs of $1,948 and $0, respectively) 5.75% 95,552 5/15/2030 —% — Total borrowings, net $ 395,552 $ 355,000 During the three months ended June 30, 2020 , the Company completed a private placement of subordinated notes payable, raising aggregate proceeds of $97.5 million . The subordinated notes have a term of 10 years at a fixed-to-floating rate of 5.75% . The subordinated notes qualify under federal regulatory rules as Tier 2 capital for the holding company. The Bank’s FHLB borrowing capacity is based on the collateral value of certain securities held in safekeeping at the FHLB and loans pledged to the FHLB. The Bank submits a quarterly Qualifying Collateral Report (“QCR”) to the FHLB to update the value of the loans pledged. As of June 30, 2020 , the Bank’s borrowing capacity is based on the information provided in the March 31, 2020 , QCR filing. As of June 30, 2020 , the Bank had securities held in safekeeping at the FHLB with a fair value of $2.6 million , combined with pledged loans of $1.17 billion , for a gross borrowing capacity of $837.5 million , of which $300.0 million was outstanding in advances. As of December 31, 2019 , there was $355.0 million outstanding in advances from the FHLB. When the Bank borrows from the FHLB, interest is charged at the FHLB’s posted rates at the time of the borrowing. The Bank maintains an unsecured line of credit of $10.0 million with M&T Bank and an unsecured line of credit of $20.0 million with Texas Capital Bank. As of June 30, 2020 and December 31, 2019 , there were no outstanding borrowings under these lines of credit and they are available to the Bank at the lenders’ discretion. In addition, the Bank maintains an $8.0 million unsecured line of credit with PNC Bank for private label credit card facilities for certain existing commercial clients of the Bank, of which $3.2 million in notional value of credit cards have been issued. The clients of the Bank are responsible for repaying any balances due on these credit cards directly to PNC, however if the customer fails to repay PNC, the Bank could be required to satisfy the obligation to PNC and initiate collection from our customer as part of the existing credit facility of that customer. The holding company maintains an unsecured line of credit of $75.0 million with Texas Capital Bank. As of June 30, 2020 and December 31, 2019 , there was no outstanding balance under this line of credit. Interest expense on borrowings was as follows: Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2020 2019 2020 2019 FHLB borrowings $ 1,284 $ 2,334 $ 3,319 $ 4,920 Line of credit borrowings 260 10 261 68 Subordinated notes payable 680 537 680 1,090 Total interest expense on borrowings $ 2,224 $ 2,881 $ 4,260 $ 6,078 |
Stock Transactions
Stock Transactions | 6 Months Ended |
Jun. 30, 2020 | |
Common Stock, Number of Shares, Par Value and Other Disclosures [Abstract] | |
STOCK TRANSACTIONS | STOCK TRANSACTIONS In May 2019, the Company completed the issuance and sale of a registered, underwritten public offering of 3,220,000 depositary shares, each representing a 1/40th interest in a share of its 6.375% Fixed-to-Floating Rate Series B Non-Cumulative Perpetual Preferred Stock, no par value (the “Series B Preferred Stock”), with a liquidation preference of $1,000 per share (equivalent to $25 per depository share). The Company received net proceeds of $77.6 million from the sale of 80,500 shares of its Series B Preferred Stock (equivalent to 3,220,000 depositary shares), after deducting underwriting discounts, commissions and direct offering expenses. The preferred stock provides Tier 1 capital for the holding company under federal regulatory capital rules. When, as, and if declared by the board of directors (the “Board”) of the Company, dividends will be payable on the Series B Preferred Stock from the date of issuance to, but excluding July 1, 2026, at a rate of 6.375% per annum, payable quarterly, in arrears, and from and including July 1, 2026, dividends will accrue and be payable at a floating rate equal to three-month LIBOR plus a spread of 408.8 basis points per annum (subject to potential adjustment as provided in the definition of three-month LIBOR), payable quarterly, in arrears. The Company may redeem the Series B Preferred Stock at its option, subject to regulatory approval, on or after July 1, 2024, as described in the prospectus supplement relating to the offering filed with the SEC on May 23, 2019. In March 2018, the Company completed the issuance and sale of a registered, underwritten public offering of 1,610,000 depositary shares, each representing a 1/40th interest in a share of its 6.75% Fixed-to-Floating Rate Series A Non-Cumulative Perpetual Preferred Stock, no par value (the “Series A Preferred Stock”), with a liquidation preference of $1,000 per share (equivalent to $25 per depository share). The Company received net proceeds of $38.5 million from the sale of 40,250 shares of its Series A Preferred Stock (equivalent to 1,610,000 depositary shares), after deducting underwriting discounts, commissions and direct offering expenses. The preferred stock provides Tier 1 capital for the holding company under federal regulatory capital rules. When, as, and if declared by the Board, dividends will be payable on the Series A Preferred Stock from the date of issuance to, but excluding April 1, 2023, at a rate of 6.75% per annum, payable quarterly, in arrears, and from and including April 1, 2023, dividends will accrue and be payable at a floating rate equal to three-month LIBOR plus a spread of 398.5 basis points per annum (subject to potential adjustment), payable quarterly, in arrears. The Company may redeem the Series A Preferred Stock at its option, subject to regulatory approval, on or after April 1, 2023, as described in the prospectus supplement relating to the offering filed with the SEC on March 19, 2018. During the six months ended June 30, 2020 , the Company paid dividends of $1.4 million on its Series A Preferred Stock and $2.6 million on its Series B Preferred Stock. During the six months ended June 30, 2019 , the Company paid dividends of $1.4 million on its Series A Preferred Stock and $471,000 on its Series B Preferred Stock. Under authorization by the Board, the Company was permitted to repurchase its common stock up to prescribed amounts, of which $9.8 million remained available as of June 30, 2020 . The Board also authorized the Company to utilize some of the share repurchase program authorizations to cancel certain options to purchase shares of its common stock granted by the Company. During the six months ended June 30, 2020 , the Company repurchased 40,000 shares for approximately $670,000 , at an average cost of $16.76 per share, which are held as treasury stock. During the six months ended June 30, 2019 , the Company repurchased 35,000 shares for approximately $744,000 , at an average cost of $21.26 per share, which are held as treasury stock. In addition to the shares purchased in the market, treasury shares increased 83,988 , or approximately $2.1 million , in connection with the net settlement of equity awards exercised or vested during the six months ended June 30, 2020 . The Company also reissued 8,500 shares of treasury stock for approximately $135,000 during the six months ended June 30, 2020 . Under prior authorization of the Board, stock option cancellation programs were approved to allow for certain outstanding and vested stock option awards to be canceled by the option holder at a price based on the closing day’s stock price less the option exercise price. During the six months ended June 30, 2020 , there were 212,447 options canceled for approximately $2.5 million , which was recorded as a reduction to additional paid-in capital. The tables below show the changes in the Company’s preferred and common shares outstanding during the periods indicated: Number of Number of Number of Balance, December 31, 2018 40,250 28,878,674 2,014,910 Issuance of preferred stock 80,500 — — Issuance of restricted common stock — 542,703 — Forfeitures of restricted common stock — (69,605 ) — Exercise of stock options — 22,380 — Purchase of treasury stock through open market transactions — (35,000 ) 35,000 Increase in treasury stock related to equity awards — — — Balance, June 30, 2019 120,750 29,339,152 2,049,910 Balance, December 31, 2019 120,750 29,355,986 2,126,422 Issuance of restricted common stock — 597,070 — Forfeitures of restricted common stock — (11,018 ) — Exercise of stock options — 25,000 — Purchase of treasury stock through open market transactions — (40,000 ) 40,000 Increase in treasury stock related to equity awards — (83,988 ) 83,988 Reissuance of treasury stock — 8,500 (8,500 ) Balance, June 30, 2020 120,750 29,851,550 2,241,910 |
Regulatory Capital
Regulatory Capital | 6 Months Ended |
Jun. 30, 2020 | |
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | |
REGULATORY CAPITAL | REGULATORY CAPITAL The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory – and possibly additional discretionary – actions by regulators that, if undertaken, could have a direct material effect on the Company’s and the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of the Company’s and the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Company’s and the Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weighting and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the tables below) of Common Equity Tier 1 (“CET 1”), Tier 1 and Total risk-based capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital to average assets (as defined). As of June 30, 2020 and December 31, 2019 , TriState Capital Holdings, Inc. and TriState Capital Bank exceeded all capital adequacy requirements to which they were subjected. Financial depository institutions are categorized as well capitalized if they meet minimum capital ratios as set forth in the tables below. The Bank exceeded the capital ratios necessary to be well capitalized under the regulatory framework for prompt corrective action. There have been no conditions or events since the filing of the most recent Call Report that management believes have changed the Bank’s capital, as presented in the tables below. A banking organization is also subject to certain limitations on capital distributions and discretionary bonus payments to executive officers if the organization does not maintain the necessary capital conservation buffer - a common equity tier 1 risk-based capital ratio of 2.5% or more, in addition to the minimum capital adequacy levels shown in the tables below. Both the Company and the Bank were above the levels required to avoid limitations on capital distributions and discretionary bonus payments. The following tables set forth certain information concerning the Company’s and the Bank’s regulatory capital as of June 30, 2020 and December 31, 2019 : June 30, 2020 Actual For Capital Adequacy Purposes To be Well Capitalized Under Prompt Corrective Action Provisions (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Total risk-based capital ratio Company $ 699,015 12.89 % $ 433,732 8.00 % N/A N/A Bank $ 677,080 12.52 % $ 432,764 8.00 % $ 540,955 10.00 % Tier 1 risk-based capital ratio Company $ 579,146 10.68 % $ 325,299 6.00 % N/A N/A Bank $ 652,763 12.07 % $ 324,573 6.00 % $ 432,764 8.00 % Common equity tier 1 risk-based capital ratio Company $ 463,067 8.54 % $ 243,975 4.50 % N/A N/A Bank $ 652,763 12.07 % $ 243,430 4.50 % $ 351,621 6.50 % Tier 1 leverage ratio Company $ 579,146 6.30 % $ 367,538 4.00 % N/A N/A Bank $ 652,763 7.11 % $ 367,000 4.00 % $ 458,750 5.00 % December 31, 2019 Actual For Capital Adequacy Purposes To be Well Capitalized Under Prompt Corrective Action Provisions (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Total risk-based capital ratio Company $ 572,221 12.05 % $ 379,911 8.00 % N/A N/A Bank $ 547,532 11.57 % $ 378,623 8.00 % $ 473,279 10.00 % Tier 1 risk-based capital ratio Company $ 558,068 11.75 % $ 284,933 6.00 % N/A N/A Bank $ 532,779 11.26 % $ 283,967 6.00 % $ 378,623 8.00 % Common equity tier 1 risk-based capital ratio Company $ 442,385 9.32 % $ 213,700 4.50 % N/A N/A Bank $ 532,779 11.26 % $ 212,975 4.50 % $ 307,631 6.50 % Tier 1 leverage ratio Company $ 558,068 7.54 % $ 296,038 4.00 % N/A N/A Bank $ 532,779 7.22 % $ 295,277 4.00 % $ 369,097 5.00 % |
Earnings Per Common Share
Earnings Per Common Share | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS PER COMMON SHARE | EARNINGS PER COMMON SHARE The computation of basic and diluted earnings per common share for the periods presented was as follows: Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands, except per share data) 2020 2019 2020 2019 Net income available to common shareholders $ 8,439 $ 13,541 $ 19,372 $ 27,426 Weighted average common shares outstanding: Basic 28,223,085 27,887,599 28,201,837 27,860,370 Restricted stock - dilutive 221,456 562,226 324,498 550,903 Stock options - dilutive 83,420 340,848 161,469 336,445 Diluted 28,527,961 28,790,673 28,687,804 28,747,718 Earnings per common share: Basic $ 0.30 $ 0.49 $ 0.69 $ 0.98 Diluted $ 0.30 $ 0.47 $ 0.68 $ 0.95 Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Anti-dilutive shares (1) 869,746 6,000 566,498 13,000 (1) Includes stock options and/or restricted stock not considered for the calculation of diluted EPS as their inclusion would have been anti-dilutive. |
Derivatives and Hedging Activit
Derivatives and Hedging Activity | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES AND HEDGING ACTIVITY | DERIVATIVES AND HEDGING ACTIVITY RISK MANAGEMENT OBJECTIVE OF USING 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 debt funding and through the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing and duration of the Company’s known or expected cash payments related to certain of the Company’s FHLB borrowings and to manage the volatility of the change in fair value related to certain of the Company’s equity investments. The Company also has derivatives that are a result of a service the Company provides to certain qualifying customers while at the same time the Company enters into an offsetting derivative transaction in order to eliminate its interest rate risk exposure resulting from such transactions. FAIR VALUES OF DERIVATIVE INSTRUMENTS ON THE STATEMENTS OF FINANCIAL CONDITION The tables below present the fair value of the Company’s derivative financial instruments as well as their classification on the unaudited condensed consolidated statements of financial condition as of June 30, 2020 and December 31, 2019 : Asset Derivatives Liability Derivatives as of June 30, 2020 as of June 30, 2020 (Dollars in thousands) Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments: Interest rate products Other assets $ — Other liabilities $ 11,161 Derivatives not designated as hedging instruments: Interest rate products Other assets 171,967 Other liabilities 172,091 Total Other assets $ 171,967 Other liabilities $ 183,252 Asset Derivatives Liability Derivatives as of December 31, 2019 as of December 31, 2019 (Dollars in thousands) Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments: Interest rate products Other assets $ — Other liabilities $ 2,184 Derivatives not designated as hedging instruments: Interest rate products Other assets 55,241 Other liabilities 55,289 Total Other assets $ 55,241 Other liabilities $ 57,473 The following tables show the impact legally enforceable master netting agreements had on the Company’s derivative financial instruments as of June 30, 2020 and December 31, 2019 : Offsetting of Derivative Assets Gross Amounts of Recognized Assets Gross Amounts Offset in the Statement of Financial Position Net Amounts of Assets Gross Amounts Not Offset in the Statement of Financial Position Net Amount (Dollars in thousands) Financial Instruments Cash Collateral Received June 30, 2020 $ 171,967 $ — $ 171,967 $ — $ — $ 171,967 December 31, 2019 $ 55,241 $ — $ 55,241 $ (850 ) $ — $ 54,391 Offsetting of Derivative Liabilities Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Statement of Financial Position Net Amounts of Liabilities Gross Amounts Not Offset in the Statement of Financial Position Net Amount (Dollars in thousands) Financial Instruments Cash Collateral Posted June 30, 2020 $ 183,252 $ — $ 183,252 $ — $ (183,227 ) $ 25 December 31, 2019 $ 57,473 $ — $ 57,473 $ (850 ) $ (55,753 ) $ 870 CASH FLOW HEDGES OF INTEREST RATE RISK The Company’s objectives in using certain interest rate derivatives are to add stability to net interest income and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. The Company has entered into derivative contracts to hedge the variable cash flows associated with certain FHLB borrowings. These interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company effectively making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (loss) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. The Company’s cash flow hedge derivatives did not have any hedge ineffectiveness recognized in earnings during the six months ended June 30, 2020 . Characteristics of the Company’s interest rate derivative transactions designated as cash flow hedges of interest rate risk as of June 30, 2020 , were as follows: (Dollars in thousands) Notional Effective (1) Estimated Increase/ Maturity Remaining Term Interest rate products: Issued 1/8/2018 $ 50,000 2.21% $ 501 1/8/2021 6 Issued 5/30/2019 50,000 2.05% 903 6/1/2022 23 Issued 5/30/2019 50,000 2.03% 895 6/1/2023 35 Issued 5/30/2019 50,000 2.04% 901 6/1/2024 47 Issued 3/2/2020 50,000 0.98% 364 3/2/2025 56 Issued 3/20/2020 50,000 0.60% 174 3/20/2025 57 Total $ 300,000 $ 3,738 (1) The effective rate is adjusted for the difference between the three-month FHLB advance rate and three-month LIBOR. The tables below present the effective portion of the Company’s cash flow hedge instruments in the unaudited condensed consolidated statements of income and accumulated other comprehensive income (loss): Three Months Ended June 30, Three Months Ended June 30, (Dollars in thousands) 2020 2019 2020 2019 Derivatives designated as hedging instruments: Location of Gain (Loss) Recognized in Income on Derivatives Realized Gain (Loss) Recognized in Income on Derivatives Unrealized Gain (Loss) Recognized in Accumulated Other Comprehensive Income on Derivatives Interest rate products Interest expense $ (460 ) $ 560 $ (1,578 ) $ (2,118 ) Six Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2020 2019 2020 2019 Derivatives designated as hedging instruments: Location of Gain (Loss) Recognized in Income on Derivatives Realized Gain (Loss) Recognized in Income on Derivatives Unrealized Gain (Loss) Recognized in Accumulated Other Comprehensive Income on Derivatives Interest rate products Interest expense $ (619 ) $ 1,121 $ (9,290 ) $ (2,325 ) NON-DESIGNATED HEDGES The Company does not use derivatives for trading or speculative purposes. Derivatives not designated as hedges are not speculative and primarily result from a service the Company provides to certain customers. The Company executes interest rate derivatives with its commercial banking customers to facilitate their respective risk management strategies. Those derivatives are simultaneously and economically hedged by offsetting derivatives that the Company executes with a third party, such that the Company eliminates its interest rate exposure resulting from such transactions. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings. As of June 30, 2020 , the Company had interest rate derivative transactions with an aggregate notional amount of $3.29 billion related to this program. The table below presents the effect of the Company’s non-designated hedge instruments in the unaudited condensed consolidated statements of income: Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2020 2019 2020 2019 Derivatives not designated as hedging instruments: Location of Gain (Loss) Recognized in Income on Derivatives Amount of Gain (Loss) Recognized in Income on Derivatives Amount of Gain (Loss) Recognized in Income on Derivatives Interest rate products Non-interest income $ (4 ) $ (22 ) $ (66 ) $ (42 ) Equity products Non-interest income — (77 ) — (77 ) Total $ (4 ) $ (99 ) $ (66 ) $ (119 ) 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, 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. The Company has agreements with certain of its derivative counterparties that contain a provision where, if either the Company or the counterparty fails to maintain its status as a well/adequately capitalized institution, then the Company or the counterparty could be required to terminate any outstanding derivative positions and settle its obligations under the agreement. As of June 30, 2020 , the termination value of derivatives for which the Company had master netting arrangements with the counterparty and in a net liability position was $183.3 million , including accrued interest. As of June 30, 2020 , the Company has minimum collateral posting thresholds with certain of its derivative counterparties and has posted collateral of $184.9 million . If the Company had breached any of these provisions as of June 30, 2020 , it could have been required to settle its obligations under the agreements at their termination value. |
Disclosures About Fair Value of
Disclosures About Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS | DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS Fair value estimates of financial instruments are based on the present value of expected future cash flows, quoted market prices of similar financial instruments, if available, and other valuation techniques. These valuations are significantly affected by discount rates, cash flow assumptions and risk assumptions used. Therefore, fair value estimates may not be substantiated by comparison to independent markets and are not intended to reflect the proceeds that may be realized in an immediate settlement of instruments. Accordingly, the aggregate fair value amounts presented below do not represent the underlying value of the Company. FAIR VALUE MEASUREMENTS In accordance with U.S. GAAP, the Company must account for certain financial assets and liabilities at fair value on a recurring and non-recurring basis. The Company utilizes a three-level fair value hierarchy of valuation techniques to estimate the fair value of its financial assets and liabilities based on whether the inputs to those valuation techniques are observable or unobservable. The fair value hierarchy gives the highest priority to quoted prices with readily available independent data in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable market inputs (Level 3). When various inputs for measurement fall within multiple levels of the fair value hierarchy, the lowest level input that has a significant impact on fair value measurement is used. Financial assets and liabilities are categorized based upon the following characteristics or inputs to the valuation techniques: • Level 1 – Financial assets and liabilities for which inputs are observable and are obtained from reliable quoted prices for identical assets or liabilities in actively traded markets. This is the most reliable fair value measurement and includes, for example, active exchange-traded equity securities. • Level 2 – Financial assets and liabilities for which values are based on quoted prices in markets that are not active or for which values are based on similar assets or liabilities that are actively traded. Level 2 also includes pricing models in which the inputs are corroborated by market data, for example, matrix pricing. • Level 3 – Financial assets and liabilities for which values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Level 3 inputs include assumptions of a source independent of the reporting entity or the reporting entity’s own assumptions that are supported by little or no market activity or observable inputs. The Company is responsible for the valuation process and as part of this process may use data from outside sources in establishing fair value. The Company performs due diligence to understand the inputs used or how the data was calculated or derived and corroborates the reasonableness of external inputs in the valuation process. RECURRING FAIR VALUE MEASUREMENTS The following tables represent assets and liabilities measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019 : June 30, 2020 (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets / Financial assets: Debt securities available-for-sale: Corporate bonds $ — $ 236,685 $ — $ 236,685 Trust preferred securities — 16,645 — 16,645 Agency collateralized mortgage obligations — 23,760 — 23,760 Agency mortgage-backed securities — 277,445 — 277,445 Agency debentures — 9,242 — 9,242 Interest rate swaps — 171,967 — 171,967 Total financial assets — 735,744 — 735,744 Financial liabilities: Interest rate swaps — 183,252 — 183,252 Total financial liabilities $ — $ 183,252 $ — $ 183,252 December 31, 2019 (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets / Financial assets: Debt securities available-for-sale: Corporate bonds $ — $ 175,418 $ — $ 175,418 Trust preferred securities — 18,260 — 18,260 Agency collateralized mortgage obligations — 27,193 — 27,193 Agency mortgage-backed securities — 18,509 — 18,509 Agency debentures — 9,402 — 9,402 Interest rate swaps — 55,241 — 55,241 Total financial assets — 304,023 — 304,023 Financial liabilities: Interest rate swaps — 57,473 — 57,473 Total financial liabilities $ — $ 57,473 $ — $ 57,473 INVESTMENT SECURITIES Generally, debt securities are valued using pricing for similar securities, recently executed transactions, and other pricing models utilizing observable inputs and therefore are classified as Level 2. INTEREST RATE SWAPS The fair value of interest rate swaps is estimated using inputs that are observable or that can be corroborated by observable market data and therefore are classified as Level 2. These fair value estimations include primarily market observable inputs such as the forward LIBOR swap curve or its ongoing replacement. NON-RECURRING FAIR VALUE MEASUREMENTS Certain financial assets and financial liabilities are measured at fair value on a non-recurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. The following tables represent the balances of assets measured at fair value on a non-recurring basis as of June 30, 2020 and December 31, 2019 : June 30, 2020 (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets Loans measured for impairment, net $ — $ — $ 5,764 $ 5,764 Other real estate owned — — 2,724 2,724 Total assets $ — $ — $ 8,488 $ 8,488 December 31, 2019 (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets Loans measured for impairment, net $ — $ — $ 13 $ 13 Other real estate owned — — 4,250 4,250 Total assets $ — $ — $ 4,263 $ 4,263 As of June 30, 2020 and December 31, 2019 , the Company recorded $1.0 million and $171,000 , respectively, of specific reserves to allowance for loan and lease losses as a result of adjusting the fair value of impaired loans. IMPAIRED LOANS A loan is considered impaired when management determines it is probable that all of the principal and interest due under the original terms of the loan may not be collected or if a loan is designated as a TDR. Impairment is measured based on a discounted cash flow of ongoing operations, discounted at the loan’s original effective interest rate, or a calculation of the fair value of the underlying collateral less estimated selling costs. Our policy is to obtain appraisals on collateral supporting impaired loans on an annual basis, unless circumstances dictate a shorter time frame. Appraisals are reduced by estimated costs to sell the collateral, and, under certain circumstances, additional factors that may arise and cause us to believe our recoverable value may be less than the independent appraised value. Accordingly, impaired loans are classified as Level 3. The Company measures impairment on all loans as part of the allowance for loan and lease losses. OTHER REAL ESTATE OWNED OREO is comprised of property acquired through foreclosure or voluntarily conveyed by borrowers. These assets are recorded on the date acquired at fair value, less estimated disposition costs, with the fair value being determined by appraisal. Our policy is to obtain appraisals on collateral supporting OREO on an annual basis, unless circumstances dictate a shorter time frame. Appraisals are reduced by estimated costs to sell the collateral and, under certain circumstances, additional factors that may arise and cause us to believe our recoverable value may be less than the independent appraised value. Accordingly, OREO is classified as Level 3. LEVEL 3 VALUATION The following tables present additional quantitative information about assets measured at fair value on a recurring and non-recurring basis and for which we have utilized Level 3 inputs to determine fair value as of June 30, 2020 and December 31, 2019 : June 30, 2020 (Dollars in thousands) Fair Value Valuation Techniques (1) Significant Unobservable Inputs Weighted Average Discount Rate Loans measured for impairment, net $ 5,764 Collateral Appraisal value and discount due to salability conditions 27% Other real estate owned $ 2,724 Collateral Appraisal value and discount due to salability conditions 20% (1) Fair value is generally determined through independent appraisals of the underlying collateral, which may include Level 3 inputs that are not identifiable, or by using the discounted cash flow of ongoing operations if the loan is not collateral dependent. December 31, 2019 (Dollars in thousands) Fair Value Valuation Techniques (1) Significant Unobservable Inputs Weighted Average Multiple/ Loans measured for impairment, net $ 13 Collateral Appraisal value and discount due to salability conditions —% Other real estate owned $ 4,250 Collateral Appraisal value and discount due to salability conditions 17% (1) Fair value is generally determined through independent appraisals of the underlying collateral, which may include Level 3 inputs that are not identifiable, or by using the discounted cash flow of ongoing operations if the loan is not collateral dependent. FAIR VALUE OF FINANCIAL INSTRUMENTS The following table summarizes of the carrying amounts and estimated fair values of financial instruments: June 30, 2020 December 31, 2019 (Dollars in thousands) Fair Value Carrying Estimated Carrying Estimated Financial assets: Cash and cash equivalents 1 $ 724,942 $ 724,942 $ 403,855 $ 403,855 Debt securities available-for-sale 2 563,777 563,777 248,782 248,782 Debt securities held-to-maturity 2 235,083 237,671 196,044 196,755 Federal Home Loan Bank stock 2 13,280 13,280 24,324 24,324 Loans and leases held-for-investment, net 3 7,147,494 7,198,597 6,563,451 6,548,432 Accrued interest receivable 2 18,534 18,534 22,326 22,326 Investment management fees receivable, net 2 6,907 6,907 7,560 7,560 Bank owned life insurance 2 70,901 70,901 70,044 70,044 Other real estate owned 3 2,724 2,724 4,250 4,250 Interest rate swaps 2 171,967 171,967 55,241 55,241 Financial liabilities: Deposits 2 $ 7,831,471 $ 7,861,737 $ 6,634,613 $ 6,648,546 Borrowings, net 2 395,552 397,608 355,000 355,003 Interest rate swaps 2 183,252 183,252 57,473 57,473 During the six months ended June 30, 2020 and 2019 , there were no transfers between fair value Levels 1, 2 or 3. The following methods and assumptions were used to estimate the fair value of each class of financial instruments as of June 30, 2020 and December 31, 2019 : CASH AND CASH EQUIVALENTS The carrying amount approximates fair value. INVESTMENT SECURITIES The fair values of debt securities available-for-sale, debt securities held-to-maturity, debt securities trading and equity securities are based on quoted market prices for the same or similar securities, recently executed transactions and pricing models . FEDERAL HOME LOAN BANK STOCK The carrying value of our FHLB stock, which is carried at cost, approximates fair value. LOANS AND LEASES HELD-FOR-INVESTMENT The fair value of loans and leases held-for-investment is estimated by discounting the future cash flows using market rates (utilizing both unobservable and certain observable inputs when applicable) at which similar loans would be made to borrowers with similar credit ratings over the estimated remaining maturities. Impaired loans are generally valued at the fair value of the associated collateral. ACCRUED INTEREST RECEIVABLE The carrying amount approximates fair value. INVESTMENT MANAGEMENT FEES RECEIVABLE The carrying amount approximates fair value. BANK OWNED LIFE INSURANCE The fair value of the general account BOLI is based on the insurance contract net cash surrender value. OTHER REAL ESTATE OWNED OREO is recorded at fair value, less estimated disposition costs, with the fair value being determined by appraisal. DEPOSITS The fair value of demand deposits is the amount payable on demand as of the reporting date, i.e. , their carrying amounts. The fair value of fixed maturity deposits is estimated using a discounted cash flow calculation that applies the rates currently offered for deposits of similar remaining maturities. BORROWINGS The fair value of borrowings is calculated by discounting scheduled cash flows through the estimated maturity using period end market rates for borrowings of similar remaining maturities. INTEREST RATE SWAPS The fair value of interest rate swaps is estimated through the assistance of an independent third party and compared to the fair value determined by the swap counterparty to establish reasonableness. OFF-BALANCE SHEET INSTRUMENTS Fair values for the Company’s off-balance sheet instruments, which consist of unfunded lending commitments, demand lines of credit, standby letters of credit and risk participation agreements related to interest rate swap agreements, are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. Management believes that the fair value of these off-balance sheet instruments is not significant. |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following tables show the changes in accumulated other comprehensive income (loss) net of tax, for the periods presented: Three Months Ended June 30, 2020 2019 (Dollars in thousands) Debt Securities Derivatives Total Debt Securities Derivatives Total Balance, beginning of period $ (6,678 ) $ (7,371 ) $ (14,049 ) $ 54 $ 448 $ 502 Change in unrealized holding gains (losses) 8,375 (1,200 ) 7,175 1,259 (1,612 ) (353 ) Losses (gains) reclassified from other comprehensive income (5 ) 349 344 (83 ) (426 ) (509 ) Net other comprehensive income (loss) 8,370 (851 ) 7,519 1,176 (2,038 ) (862 ) Balance, end of period $ 1,692 $ (8,222 ) $ (6,530 ) $ 1,230 $ (1,590 ) $ (360 ) Six Months Ended June 30, 2020 2019 (Dollars in thousands) Debt Securities Derivatives Total Debt Securities Derivatives Total Balance, beginning of period $ 2,756 $ (1,624 ) $ 1,132 $ (2,363 ) $ 1,032 $ (1,331 ) Change in unrealized holding gains (losses) (1,048 ) (7,067 ) (8,115 ) 3,689 (1,769 ) 1,920 Losses (gains) reclassified from other comprehensive income (16 ) 469 453 (96 ) (853 ) (949 ) Net other comprehensive income (loss) (1,064 ) (6,598 ) (7,662 ) 3,593 (2,622 ) 971 Balance, end of period $ 1,692 $ (8,222 ) $ (6,530 ) $ 1,230 $ (1,590 ) $ (360 ) |
Contingent Liabilities
Contingent Liabilities | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENT LIABILITIES | CONTINGENT LIABILITIES From time to time the Company is a party to various litigation matters incidental to the conduct of its business. The Company is not aware of any material unasserted claims. In the opinion of management, there are no potential claims that would have a material adverse effect on the Company’s financial position, liquidity or results of operations. |
Segments
Segments | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
SEGMENTS | SEGMENTS The Company operates two reportable segments: Bank and Investment Management. • The Bank segment provides commercial banking services to middle-market businesses and private banking services to high-net-worth individuals through the Bank subsidiary. • The Investment Management segment provides advisory and sub-advisory investment management services primarily to institutional investors, mutual funds and individual investors through the Chartwell subsidiary. It also supports marketing efforts for Chartwell’s proprietary investment products through the CTSC Securities subsidiary. The following tables provide financial information for the two segments of the Company as of and for the periods indicated. The information provided under the caption “Parent and Other” represents general operating activity of the Company not considered to be a reportable segment, which includes parent company activity as well as eliminations and adjustments that are necessary for purposes of reconciliation to the consolidated amounts. (Dollars in thousands) June 30, December 31, Assets: Bank $ 9,057,476 $ 7,686,981 Investment management 82,966 83,295 Parent and other (10,601 ) (4,466 ) Total assets $ 9,129,841 $ 7,765,810 Three Months Ended June 30, 2020 Three Months Ended June 30, 2019 (Dollars in thousands) Bank Investment Parent Consolidated Bank Investment Parent Consolidated Income statement data: Interest income $ 51,661 $ — $ — $ 51,661 $ 66,311 $ — $ 28 $ 66,339 Interest expense 17,251 — 926 18,177 34,517 — 519 35,036 Net interest income (loss) 34,410 — (926 ) 33,484 31,794 — (491 ) 31,303 Provision (credit) for loan and lease losses 6,005 — — 6,005 (712 ) — — (712 ) Net interest income (loss) after provision for loan and lease losses 28,405 — (926 ) 27,479 32,506 — (491 ) 32,015 Non-interest income: Investment management fees — 7,897 (159 ) 7,738 — 9,364 (110 ) 9,254 Net gain on the sale and call of debt securities 14 — — 14 112 — — 112 Other non-interest income 5,215 30 — 5,245 2,478 4 131 2,613 Total non-interest income (loss) 5,229 7,927 (159 ) 12,997 2,590 9,368 21 11,979 Non-interest expense: Intangible amortization expense — 486 — 486 — 502 — 502 Other non-interest expense 19,967 7,003 640 27,610 18,903 7,930 250 27,083 Total non-interest expense 19,967 7,489 640 28,096 18,903 8,432 250 27,585 Income (loss) before tax 13,667 438 (1,725 ) 12,380 16,193 936 (720 ) 16,409 Income tax expense (benefit) 2,173 102 (296 ) 1,979 1,658 264 (204 ) 1,718 Net income (loss) $ 11,494 $ 336 $ (1,429 ) $ 10,401 $ 14,535 $ 672 $ (516 ) $ 14,691 Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 (Dollars in thousands) Bank Investment Parent Consolidated Bank Investment Parent Consolidated Income statement data: Interest income $ 115,863 $ — $ — $ 115,863 $ 129,142 $ — $ 99 $ 129,241 Interest expense 46,547 — 910 47,457 66,436 — 1,130 67,566 Net interest income (loss) 69,316 — (910 ) 68,406 62,706 — (1,031 ) 61,675 Provision (credit) for loan and lease losses 8,998 — — 8,998 (1,089 ) — — (1,089 ) Net interest income (loss) after provision for loan and lease losses 60,318 — (910 ) 59,408 63,795 — (1,031 ) 62,764 Non-interest income: Investment management fees — 15,662 (286 ) 15,376 — 18,896 (218 ) 18,678 Net gain on the sale and call of debt securities 71 — — 71 140 — — 140 Other non-interest income 10,866 — — 10,866 5,355 25 850 6,230 Total non-interest income (loss) 10,937 15,662 (286 ) 26,313 5,495 18,921 632 25,048 Non-interest expense: Intangible amortization expense — 988 — 988 — 1,004 — 1,004 Other non-interest expense 41,000 13,630 1,622 56,252 37,923 14,987 343 53,253 Total non-interest expense 41,000 14,618 1,622 57,240 37,923 15,991 343 54,257 Income (loss) before tax 30,255 1,044 (2,818 ) 28,481 31,367 2,930 (742 ) 33,555 Income tax expense (benefit) 5,521 130 (466 ) 5,185 3,683 827 (210 ) 4,300 Net income (loss) $ 24,734 $ 914 $ (2,352 ) $ 23,296 $ 27,684 $ 2,103 $ (532 ) $ 29,255 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On July 13, 2020, the Board declared a dividend payable of approximately $679,000 , or $0.42 per depositary share, on the Company’s Series A Preferred Stock and a dividend payable of approximately $1.3 million , or $0.40 per depositary share, on the Company’s Series B Preferred Stock, each of which is payable on October 1, 2020 , to preferred shareholders of record as of the close of business on September 15, 2020 . |
Basis of Information and Summ_2
Basis of Information and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Nature of operation | NATURE OF OPERATION TriState Capital Holdings, Inc. ( “we,” “us,” “our,” the “holding company,” the “parent company,” or the “Company”) is a registered bank holding company pursuant to the Bank Holding Company Act of 1956, as amended. The Company has three wholly owned subsidiaries: TriState Capital Bank, a Pennsylvania-chartered state bank (the “Bank”); Chartwell Investment Partners, LLC, a registered investment adviser (“Chartwell”); and Chartwell TSC Securities Corp., a registered broker/dealer (“CTSC Securities”). The Bank was established to serve the commercial banking needs of regionally located middle-market businesses and financial services providers and the private banking needs of high-net-worth individuals nation-wide. The Bank has two wholly owned subsidiaries: TSC Equipment Finance LLC (“TSC Equipment Finance”), established to hold and manage loans and leases of our equipment finance business, and Meadowood Asset Management, LLC (“Meadowood”), established to hold and manage other real estate owned by the bank and/or foreclosed properties for the Bank. Chartwell provides investment management services primarily to institutional investors, mutual funds and individual investors. CTSC Securities supports marketing efforts for the proprietary investment products provided by Chartwell, including shares of mutual funds advised and/or administered by Chartwell. The Company and the Bank are subject to regulatory examination by the Federal Deposit Insurance Corporation (“FDIC”), the Pennsylvania Department of Banking and Securities and the Board of Governors of the Federal Reserve System and its Reserve Banks, which we refer to as the Federal Reserve. Chartwell is a registered investment adviser regulated by the Securities and Exchange Commission (“SEC”). CTSC Securities is regulated by the SEC and the Financial Industry Regulatory Authority, Inc. (“FINRA”). The Bank conducts business through its main office located in Pittsburgh, Pennsylvania, as well as its four additional representative offices in Cleveland, Ohio; Philadelphia, Pennsylvania; Edison, New Jersey; and New York, New York. Chartwell conducts business through its office located in Berwyn, Pennsylvania, and CTSC Securities conducts business through its office located in Pittsburgh, Pennsylvania. |
Use of estimates | USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States of America requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities, disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of related revenues and expenses during the reporting period. Although our current estimates contemplate current conditions and how we expect them to change in the future, it is reasonably possible that actual conditions could be different than those anticipated in the estimates, which could materially affect the financial results of our operations and financial condition. Material estimates that are particularly susceptible to significant changes relate to the determination of the allowance for loan and lease losses, valuation of goodwill and other intangible assets and their evaluation for impairment, and deferred income taxes and their related recoverability, each of which is discussed later in this section. |
Consolidation | CONSOLIDATION Our consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, the Bank, Chartwell and CTSC Securities, after elimination of inter-company accounts and transactions. The accounts of the Bank, in turn, include its wholly owned subsidiaries, TSC Equipment Finance and Meadowood, after elimination of inter-company accounts and transactions. The unaudited condensed consolidated financial statements of the Company presented herein have been prepared pursuant to SEC rules for Quarterly Reports on Form 10-Q and do not include all of the information and note disclosures required by GAAP for a full year presentation. In the opinion of management, all adjustments (consisting of normal, recurring adjustments) and disclosures considered necessary for the fair presentation of the accompanying unaudited condensed consolidated financial statements have been included. Interim results are not necessarily reflective of the results of the entire year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company and the related notes for the fiscal year ended December 31, 2019 , included in the Company’s Annual Report on Form 10-K filed with the SEC on February 24, 2020 . |
Cash and cash equivalents | CASH AND CASH EQUIVALENTS For purposes of reporting cash flows, the Company has defined cash and cash equivalents as cash, interest-earning deposits with other institutions, federal funds sold and short-term investments that have an original maturity of 90 days or less. |
Business combinations | BUSINESS COMBINATIONS The Company accounts for business combinations using the acquisition method of accounting. Under this method of accounting, the acquired company’s net assets are recorded at fair value as of the date of acquisition, and the results of operations of the acquired company are combined with our results from that date forward. Acquisition costs are expensed when incurred. The difference between the purchase price, which includes an initial measurement of any contingent earn out, and the fair value of the net assets acquired (including identified intangibles) is recorded as goodwill in the consolidated statements of financial condition. A change in the initial estimate of any contingent earn out amount is recorded to non-interest expense in the consolidated statements of income. |
Investment securities | INVESTMENT SECURITIES The Company’s investments are classified as either: (1) held-to-maturity, which are debt securities that the Company intends to hold until maturity and are reported at amortized cost; (2) trading, which are debt securities bought and held principally for the purpose of selling them in the near term and reported at fair value, with unrealized gains and losses included in non-interest income; (3) available-for-sale, which are debt securities not classified as either held-to-maturity or trading securities and reported at fair value, with unrealized gains and losses reported as a component of accumulated other comprehensive income (loss), on an after-tax basis; or (4) equity securities, which are reported at fair value, with unrealized gains and losses included in non-interest income. The cost of securities sold is determined on a specific identification basis. Amortization of premiums and accretion of discounts are recorded to interest income on investments over the estimated life of the security utilizing the level yield method. We evaluate impaired investment securities quarterly to determine if impairments are temporary or other-than-temporary. For impaired debt and equity securities, management first determines whether it intends to sell or if it is more likely than not that it will be required to sell the impaired securities. This determination considers current and forecasted liquidity requirements, regulatory and capital requirements, and securities portfolio management. If the Company intends to sell a security with a fair value below amortized cost or if it is more likely than not that it will be required to sell such a security before recovery, an other-than-temporary impairment (“OTTI”) charge is recorded through current period earnings for the full decline in fair value below amortized cost. For debt securities that the Company does not intend to sell or it is more likely than not that it will not be required to sell before recovery, an OTTI charge is recorded through current period earnings for the amount of the valuation decline below amortized cost that is attributable to credit losses. The remaining difference between the security’s fair value and amortized cost (that is, the decline in fair value not attributable to credit losses) is recognized in other comprehensive income (loss), in the consolidated statements of comprehensive income and the shareholders’ equity section of the consolidated statements of financial condition, on an after-tax basis. |
Federal Home Loan Bank stock | FEDERAL HOME LOAN BANK STOCK The Company is a member of the Federal Home Loan Bank (“FHLB”) of Pittsburgh. Member institutions are required to invest in FHLB stock. The stock is carried at cost, which approximates its liquidation value, and it is evaluated for impairment based on the ultimate recoverability of the par value. The following matters are considered by management when evaluating the FHLB stock for impairment: the ability of the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLB; the impact of legislative and regulatory changes on the institution and its customer base; and the Company’s intent and ability to hold its FHLB stock for the foreseeable future. Management believes the Company’s holdings in the FHLB stock were recoverable at par value as of June 30, 2020 and December 31, 2019 . Cash and stock dividends are reported as interest income on investments in the consolidated statements of income. |
Loans and leases | LOANS AND LEASES Loans and leases held-for-investment are stated at unpaid principal balances, net of deferred loan fees and costs. Loans held-for-sale are stated at the lower of cost or fair value. Interest income on loans is accrued at the contractual rate on the principal amount outstanding. Deferred loan fees and costs are amortized to interest income over the estimated life of the loan, taking into consideration scheduled payments and prepayments. The Company considers a loan to be a troubled debt restructuring (“TDR”) when there is a concession made to a financially troubled borrower without adequate consideration provided to the Company. Once a loan is deemed to be a TDR, the Company considers whether the loan should be placed on non-accrual status. In assessing accrual status, the Company considers the likelihood that repayment and performance according to the original contractual terms will be achieved, as well as the borrower’s historical payment performance. A loan is designated and reported as a TDR until such loan is either paid off or sold, unless the restructuring agreement specifies an interest rate equal to or greater than the rate that would be accepted at the time of the restructuring for a new loan with comparable risk and it is fully expected that the remaining principal and interest will be collected according to the restructured agreement. The recognition of interest income on a loan is discontinued when, in management’s opinion, it is probable the borrower is unable to meet payments as they become due or when the loan becomes 90 days past due, whichever occurs first, at which time the loan is placed on non-accrual status. All accrued and unpaid interest on such loans is then reversed. The interest ultimately collected is applied to reduce principal if there is doubt about the collectability of principal. If a borrower brings a loan current for which accrued interest has been reversed, then the recognition of interest income on the loan is resumed once the loan has been current for a period of six consecutive months or greater. The Company is a party to financial instruments with off-balance sheet risk, such as commitments to extend credit, in the normal course of business to meet the financing needs of its customers. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the lending agreement with such customer. Commitments generally have fixed expiration dates or other termination clauses (i.e., loans due on demand) and may require payment of a fee. Since some of the commitments are expected to expire without being drawn upon, the unfunded commitment amount does not necessarily represent future cash requirements. The Company evaluates each customer’s credit-worthiness on a case-by-case basis using the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. The amount of collateral obtained, if deemed necessary by the Company upon extension of a commitment, is based on management’s credit evaluation of the borrower. |
Other real estate owned | OTHER REAL ESTATE OWNED Real estate owned, other than bank premises, is recorded at fair value less estimated selling costs. Fair value is determined based on an independent appraisal. Expenses related to holding the property are charged against earnings when incurred. Depreciation is not recorded on other real estate owned (“OREO”) properties. |
Allowance for loan and lease losses | ALLOWANCE FOR LOAN AND LEASE LOSSES The allowance for loan and lease losses is established through provisions for loan and lease losses that are recorded in the consolidated statements of income. Loans and leases are charged off against the allowance for loan and lease losses when management believes that the principal is uncollectible. If, at a later time, amounts are recovered with respect to loans and leases previously charged off, the recovered amount is credited to the allowance for loan and lease losses. In management’s judgment, the allowance was appropriate to cover probable losses inherent in the loan and lease portfolio as of June 30, 2020 and December 31, 2019 . Management’s judgment takes into consideration general economic conditions, diversification and seasoning of the loan portfolio, historic loss experience, identified credit problems, delinquency levels and adequacy of collateral. Although management believes it has used the best information available to it in making such determinations, and that the present allowance for loan and lease losses is adequate, future adjustments to the allowance may be necessary, and net income may be adversely affected if circumstances differ substantially from the assumptions used in determining the level of the allowance. In addition, as an integral part of their periodic examination, certain regulatory agencies review the adequacy of the Bank’s allowance for loan and lease losses and may direct the Bank to make additions to the allowance based on their judgments about information available to them at the time of their examination. The two components of the allowance for loan and lease losses represent estimates of general reserves based upon Accounting Standards Codification (“ASC”) Topic 450, Contingencies; and specific reserves based upon ASC Topic 310, Receivables. ASC Topic 450 applies to homogeneous loan pools such as commercial loans, consumer lines of credit and residential mortgages that are not individually evaluated for impairment. ASC Topic 310 is applied to commercial and consumer loans that are individually evaluated for impairment. In management’s opinion, a loan or lease is impaired, based upon current information and events, when it is probable that the loan or lease will not be repaid according to its original contractual terms, including both principal and interest, or if a loan is designated as a TDR. Management performs individual assessments of impaired loans and leases to determine the existence of loss exposure based upon a discounted cash flows method or where a loan is collateral dependent, based upon the fair value of the collateral less estimated selling costs. During the six months ended June 30, 2020 , certain loan modifications were done in accordance with Section 4013 of the CARES Act and the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus. Accordingly, these loans and leases were not categorized as TDRs. In estimating probable loan and lease loss of general reserves, management considers numerous factors, including historical charge-offs and subsequent recoveries. Management also considers qualitative factors that influence our credit quality, including, but not limited to, delinquency and non-performing loan trends, changes in loan underwriting guidelines and credit policies, and the results of internal loan reviews. Finally, management considers the impact of changes in current local and regional economic conditions in the markets that we serve. Management bases the computation of the allowance for loan and lease losses of general reserves on two factors: the primary factor and the secondary factor. The primary factor is based on the inherent risk identified by management within each of the Company’s three loan portfolios based on the historical loss experience of each loan portfolio in addition to the loss emergence period. Management has developed a methodology that is applied to each of the three primary loan portfolios: private banking loans, commercial and industrial (“C&I”) loans and leases, and commercial real estate (“CRE”) loans. As the loan loss history, mix and risk ratings of each loan portfolio change, the primary factor adjusts accordingly. The allowance for loan and lease losses related to the primary factor is based on our estimates as to probable losses for each loan portfolio. The secondary factor is intended to capture risks related to events and circumstances that management believes have an impact on the future performance of the loan portfolio. Although this factor is more subjective in nature, the methodology focuses on internal and external trends in pre-specified categories, or risk factors, and applies a quantitative percentage that drives the secondary factor. Nine risk factors have been identified and each risk factor is assigned a reserve level based on management’s judgment as to the probable impact of each risk factor on each loan portfolio and is monitored on a quarterly basis. As the trend in any risk factor changes, a corresponding change occurs in the reserve associated with each respective risk factor, such that the secondary factor remains current to changes in each loan portfolio. The Company also maintains a reserve for losses on unfunded commitments. This reserve is reflected as a component of other liabilities and, in management’s judgment, is sufficient to cover probable losses inherent in the loan commitments. Management tracks the level and trends in unused commitments and takes into consideration the same factors as those considered for purposes of the allowance for loan and lease losses on outstanding loans. |
Investment management fees | INVESTMENT MANAGEMENT FEES The Company recognizes investment management fee revenue when advisory services are performed. Fees are based on assets under management and are calculated pursuant to individual client contracts. Investment management fees are generally received on a quarterly basis. Certain incremental costs incurred to acquire some of our investment management contracts are deferred and amortized to non-interest expense over the estimated life of the contract. |
Goodwill and other intangible assets | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Goodwill is not amortized and is subject to at least annual assessments for impairment by applying a fair value based test. The Company reviews goodwill annually and again at any quarter-end if a material event occurs during the quarter that may affect goodwill. If goodwill testing is required, an assessment of qualitative factors can be completed before performing a goodwill impairment test. If an assessment of qualitative factors determines it is more likely than not that the fair value of a reporting unit exceeds its carrying amount, then a goodwill impairment test is not required. Goodwill is evaluated for potential impairment by determining if the fair value has fallen below carrying value. Other intangible assets represent purchased assets that may lack physical substance but can be distinguished from goodwill because of contractual or other legal rights. The Company has determined that certain of its acquired mutual fund client relationships meet the criteria to be considered indefinite-lived assets because the Company expects both the renewal of these contracts and the cash flows generated by these assets to continue indefinitely. Accordingly, the Company does not amortize these intangible assets, but instead reviews these assets annually or more frequently whenever events or circumstances occur indicating that the recorded indefinite-lived assets may be impaired. Each reporting period, the Company assesses whether events or circumstances have occurred which indicate that the indefinite life criteria are no longer met. If the indefinite life criteria are no longer met, the Company assesses whether the carrying value of these assets exceeds its fair value. If the carrying value exceeds the fair value of the asset, an impairment loss is recorded in an amount equal to any such excess and the assets are reclassified to finite-lived. Other intangible assets that the Company has determined to have finite lives, such as its trade names, client lists and non-compete agreements are amortized over their estimated useful lives. These finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives, which range from four to 25 years. Finite-lived intangibles are evaluated for impairment on an annual basis or more frequently whenever events or circumstances occur indicating that the carrying amount may not be recoverable. |
Office properties and equipment | OFFICE PROPERTIES AND EQUIPMENT Office properties and equipment are stated at cost less accumulated depreciation. Office properties include furniture, fixtures and leasehold improvements. Equipment includes computer equipment and internal use software. Depreciation is computed utilizing the straight-line method over the estimated useful lives of the related assets, except for leasehold improvements, which are amortized over the terms of the respective leases or the estimated useful lives of the improvements, whichever is shorter. Estimated useful lives are dependent upon the nature and condition of the asset and range from three to 10 years. Repairs and maintenance are charged to expense as incurred, while improvements that extend the useful life are capitalized and depreciated to non-interest expense over the estimated remaining life of the asset. |
Operating leases | OPERATING LEASES The Company is a lessee in noncancellable operating leases, primarily for its office spaces and other office equipment. The Company accounts for leases in accordance with ASC Topic 842, “Leases,” and records operating leases as a right-of-use asset and an offsetting lease liability in the consolidated statements of financial condition at the present value of the unpaid lease payments. The Company generally uses its incremental borrowing rate as the discount rate for operating leases. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. For operating leases, the right-of-use asset is subsequently measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received. Lease expense for lease payments is recognized on a straight-line basis over the lease term. |
Bank owned life insurance | BANK OWNED LIFE INSURANCE Bank owned life insurance (“BOLI”) policies on certain officers and employees are recorded at net cash surrender value on the consolidated statements of financial condition. Upon termination of a BOLI policy, the Company receives the cash surrender value. BOLI benefits are payable to the Company upon the death of the insured. Changes in net cash surrender value are recognized as non-interest income in the consolidated statements of income. |
Deposits | DEPOSITS Deposits are stated at principal outstanding. Interest on deposits is accrued and charged to interest expense daily and is paid or credited in accordance with the terms of the respective accounts. |
Borrowings | BORROWINGS The Company records FHLB advances, line of credit borrowings and subordinated notes payable at their principal amount net of debt issuance costs. Interest expense is recognized based on the coupon rate of the obligations. Costs associated with the acquisition of subordinated notes payable are amortized to interest expense over the expected term of the borrowing. |
Income taxes | INCOME TAXES The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the tax effects of differences between the financial statement and tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities with regard to a change in tax rates is recognized in income in the period that includes the enactment date. Management assesses all available evidence to determine the amount of deferred tax assets that are more likely than not to be realized. The available evidence used in connection with the assessments includes taxable income in prior periods, projected taxable income, potential tax planning strategies and projected reversals of deferred tax items. These assessments involve a degree of subjectivity and may undergo significant change. Changes to the evidence used in the assessments could have a material adverse effect on the Company’s results of operations in the period in which they occur. The Company considers uncertain tax positions that it has taken or expects to take on a tax return. Any interest and penalties related to unrecognized tax benefits would be recognized in income tax expense in the consolidated statements of income. |
Earnings per common share | EARNINGS PER COMMON SHARE Earnings per common share (“EPS”) is computed using the two-class method, where net income is reduced by dividends declared on our preferred stock to derive net income available to common shareholders. Basic EPS is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding for the period, excluding non-vested restricted stock. Diluted EPS reflects the potential dilution upon the exercise of stock options and the vesting of restricted stock awards granted utilizing the treasury stock method. |
Stock-based compensation | STOCK-BASED COMPENSATION The Company accounts for its stock-based compensation awards based on estimated fair values of stock-based awards made to employees and directors. Compensation cost for all stock-based payments is based on the estimated grant-date fair value. The value of the portion of the award that is ultimately expected to vest is included in compensation and employee benefits expense in the consolidated statements of income and recorded as a component of additional paid-in capital. Compensation expense for all awards is recognized on a straight-line basis over the requisite service period for the entire grant. |
Derivatives and hedging activities | DERIVATIVES AND HEDGING ACTIVITIES All derivatives are evaluated at inception as to whether or not they are hedging or non-hedging activities. All derivatives are recognized as either assets or liabilities on the consolidated statements of financial condition and measured at fair value. For derivatives designated as fair value hedges, changes in the fair value of the derivative and the hedged item related to the hedged risk are recognized in earnings. Any hedge ineffectiveness would be recognized in the income statement line item pertaining to the hedged item. For derivatives designated as cash flow hedges, changes in fair value of the effective portion of the cash flow hedges are reported in accumulated other comprehensive income (loss). When the cash flows associated with the hedged item are realized, the gain or loss included in accumulated other comprehensive income (loss) is recognized in the consolidated statements of income. The Company also has interest rate derivative positions that are not designated as hedging instruments. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings. The Company executes interest rate derivatives with its commercial banking customers to facilitate their respective risk management strategies which generate swap fee income. Those derivatives are simultaneously and economically hedged by offsetting derivatives that the Company executes with a third party, such that the Company eliminates its interest rate exposure resulting from such transactions and are not designated as hedging instruments. Swap fees are based on the notional amount and weighted maturity of each individual transaction and are collected and recorded to non-interest income in the consolidated statements of income when the transaction is executed. |
Fair value measurement | FAIR VALUE MEASUREMENT Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability in a principal or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date, using assumptions market participants would use when pricing such an asset or liability. An orderly transaction assumes exposure to the market for a customary period for marketing activities prior to the measurement date and not a forced liquidation or distressed sale. Fair value measurement and disclosure guidance provides a three-level hierarchy that prioritizes the inputs of valuation techniques used to measure fair value into three broad categories: • Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities. • Level 2 – Observable inputs such as quoted prices for similar assets and liabilities in active markets, quoted prices for similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. • Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs. Fair value must be recorded for certain assets and liabilities every reporting period on a recurring basis or, under certain circumstances, on a non-recurring basis. |
Accumulated other comprehensive income (loss) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Unrealized holding gains and the non-credit component of unrealized losses on the Company’s debt securities available-for-sale are included in accumulated other comprehensive income (loss), net of applicable income taxes. Also included in accumulated other comprehensive income (loss) is the remaining unamortized balance of the unrealized holding gains (non-credit losses) net of applicable income taxes, that existed on the transfer date for debt securities reclassified into the held-to-maturity category from the available-for-sale category. Unrealized holding gains (losses) on the effective portion of the Company’s cash flow hedge derivatives are included in accumulated other comprehensive income (loss), net of applicable income taxes, which will be reclassified to interest expense as interest payments are made on the Company’s debt. Income tax effects in accumulated other comprehensive income (loss) are released as investments are sold or matured and as liabilities are extinguished. |
Treasury stock | TREASURY STOCK The repurchase of the Company’s common stock is recorded at cost. At the time of reissuance, the treasury stock account is reduced using the average cost method. Gains and losses on the reissuance of common stock are recorded in additional paid-in capital, to the extent additional paid-in capital from any previous net gains on treasury share transactions exists. Any net deficiency is charged to retained earnings. |
Reclassification | RECLASSIFICATION Certain items previously reported have been reclassified to conform with the current year’s reporting presentation and are considered immaterial. During the six months ended June 30, 2020 , the Company made changes to certain Non-Interest Expense line items appearing on the Unaudited Condensed Consolidated Statement of Income to better align with and provide additional clarity on how management views the business. All prior periods have been adjusted to conform the changes and provide comparability to the new presentation. Marketing and Advertising, which was previously a component of Other Operating Expenses, is now presented separately. Technology and Data Services is also presented separately and includes data processing expense, data and information services and certain software costs. These costs were previously included in Premises and Equipment. Telephone expense, which was previously reported as Other Operating Expense, is now presented in Premises and Equipment Expense. Finally Premises and Occupancy Costs was renamed to Premise and Equipment Expense. |
Investment Securities (Tables)
Investment Securities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of investment securities available-for-sale | Debt securities available-for-sale and held-to-maturity were comprised of the following: June 30, 2020 (Dollars in thousands) Amortized Gross Unrealized Gross Unrealized Estimated Debt securities available-for-sale: Corporate bonds $ 234,193 $ 4,198 $ 1,706 $ 236,685 Trust preferred securities 18,158 — 1,513 16,645 Agency collateralized mortgage obligations 23,806 13 59 23,760 Agency mortgage-backed securities 276,776 1,133 464 277,445 Agency debentures 8,428 814 — 9,242 Total debt securities available-for-sale 561,361 6,158 3,742 563,777 Debt securities held-to-maturity: Corporate bonds 23,676 637 — 24,313 Agency debentures 193,466 1,127 64 194,529 Municipal bonds 13,606 135 — 13,741 Agency mortgage-backed securities 4,335 753 — 5,088 Total debt securities held-to-maturity 235,083 2,652 64 237,671 Total debt securities $ 796,444 $ 8,810 $ 3,806 $ 801,448 December 31, 2019 (Dollars in thousands) Amortized Gross Unrealized Gross Unrealized Estimated Debt securities available-for-sale: Corporate bonds $ 172,704 $ 2,821 $ 107 $ 175,418 Trust preferred securities 18,092 216 48 18,260 Agency collateralized mortgage obligations 27,262 11 80 27,193 Agency mortgage-backed securities 18,058 451 — 18,509 Agency debentures 8,961 441 — 9,402 Total debt securities available-for-sale 245,077 3,940 235 248,782 Debt securities held-to-maturity: Corporate bonds 24,678 619 — 25,297 Agency debentures 149,912 628 935 149,605 Municipal bonds 17,094 144 — 17,238 Agency mortgage-backed securities 4,360 255 — 4,615 Total debt securities held-to-maturity 196,044 1,646 935 196,755 Total debt securities $ 441,121 $ 5,586 $ 1,170 $ 445,537 |
Schedule of investment securities held-to-maturity | Debt securities available-for-sale and held-to-maturity were comprised of the following: June 30, 2020 (Dollars in thousands) Amortized Gross Unrealized Gross Unrealized Estimated Debt securities available-for-sale: Corporate bonds $ 234,193 $ 4,198 $ 1,706 $ 236,685 Trust preferred securities 18,158 — 1,513 16,645 Agency collateralized mortgage obligations 23,806 13 59 23,760 Agency mortgage-backed securities 276,776 1,133 464 277,445 Agency debentures 8,428 814 — 9,242 Total debt securities available-for-sale 561,361 6,158 3,742 563,777 Debt securities held-to-maturity: Corporate bonds 23,676 637 — 24,313 Agency debentures 193,466 1,127 64 194,529 Municipal bonds 13,606 135 — 13,741 Agency mortgage-backed securities 4,335 753 — 5,088 Total debt securities held-to-maturity 235,083 2,652 64 237,671 Total debt securities $ 796,444 $ 8,810 $ 3,806 $ 801,448 December 31, 2019 (Dollars in thousands) Amortized Gross Unrealized Gross Unrealized Estimated Debt securities available-for-sale: Corporate bonds $ 172,704 $ 2,821 $ 107 $ 175,418 Trust preferred securities 18,092 216 48 18,260 Agency collateralized mortgage obligations 27,262 11 80 27,193 Agency mortgage-backed securities 18,058 451 — 18,509 Agency debentures 8,961 441 — 9,402 Total debt securities available-for-sale 245,077 3,940 235 248,782 Debt securities held-to-maturity: Corporate bonds 24,678 619 — 25,297 Agency debentures 149,912 628 935 149,605 Municipal bonds 17,094 144 — 17,238 Agency mortgage-backed securities 4,360 255 — 4,615 Total debt securities held-to-maturity 196,044 1,646 935 196,755 Total debt securities $ 441,121 $ 5,586 $ 1,170 $ 445,537 |
Interest income on investment securities | Interest income on investment securities was as follows: Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2020 2019 2020 2019 Taxable interest income $ 3,609 $ 3,641 $ 7,001 $ 7,513 Non-taxable interest income 26 101 137 205 Dividend income 305 409 703 786 Total interest income on investment securities $ 3,940 $ 4,151 $ 7,841 $ 8,504 |
Schedule of contractual maturities of debt securities | As of June 30, 2020 , the contractual maturities of the debt securities were: June 30, 2020 Available-for-Sale Held-to-Maturity (Dollars in thousands) Amortized Estimated Amortized Estimated Due in less than one year $ 44,006 $ 44,343 $ 4,519 $ 4,529 Due from one to five years 113,409 116,540 68,692 69,267 Due from five to ten years 105,683 104,054 149,165 149,602 Due after ten years 298,263 298,840 12,707 14,273 Total debt securities $ 561,361 $ 563,777 $ 235,083 $ 237,671 |
Schedule of proceeds and realized gains and losses from investments securities | Proceeds from the sale and call of debt securities available-for-sale and held-to-maturity and related gross realized gains and losses were: Available-for-Sale Held-to-Maturity Available-for-Sale Held-to-Maturity Three Months Ended June 30, Three Months Ended June 30, Six Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2020 2019 2020 2019 2020 2019 2020 2019 Proceeds from sales $ 6,071 $ 4,993 $ — $ — $ 56,038 $ 4,993 $ — $ — Proceeds from calls 3,580 2,858 125,405 95,835 3,580 4,082 247,758 117,295 Total proceeds $ 9,651 $ 7,851 $ 125,405 $ 95,835 $ 59,618 $ 9,075 $ 247,758 $ 117,295 Gross realized gains $ 6 $ 109 $ 8 $ 3 $ 21 $ 126 $ 50 $ 14 Gross realized losses — — — — — — — — Net realized gains $ 6 $ 109 $ 8 $ 3 $ 21 $ 126 $ 50 $ 14 |
Schedule of fair value and gross unrealized losses on investment debt securities | The following tables show the fair value and gross unrealized losses on temporarily impaired debt securities available-for-sale and held-to-maturity, by investment category and length of time that the individual securities have been in a continuous unrealized loss position as of June 30, 2020 and December 31, 2019 , respectively: June 30, 2020 Less than 12 Months 12 Months or More Total (Dollars in thousands) Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses Debt securities available-for-sale: Corporate bonds $ 46,666 $ 954 $ 19,248 $ 752 $ 65,914 $ 1,706 Trust preferred securities 16,644 1,513 — — 16,644 1,513 Agency collateralized mortgage obligations 1,794 2 19,186 57 20,980 59 Agency mortgage-backed securities 140,612 464 — — 140,612 464 Total debt securities available-for-sale 205,716 2,933 38,434 809 244,150 3,742 Debt securities held-to-maturity: Corporate bonds — — — — — — Agency debentures 20,014 64 — — 20,014 64 Total debt securities held-to-maturity 20,014 64 — — 20,014 64 Total temporarily impaired debt securities (1) $ 225,730 $ 2,997 $ 38,434 $ 809 $ 264,164 $ 3,806 (1) The number of investment positions with unrealized losses totaled 36 for available-for-sale securities and 1 for held-to-maturity securities. December 31, 2019 Less than 12 Months 12 Months or More Total (Dollars in thousands) Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses Debt securities available-for-sale: Corporate bonds $ 4,942 $ 58 $ 19,951 $ 49 $ 24,893 $ 107 Trust preferred securities — — 4,417 48 4,417 48 Agency collateralized mortgage obligations 22,117 66 2,544 14 24,661 80 Total debt securities available-for-sale 27,059 124 26,912 111 53,971 235 Debt securities held-to-maturity: Agency debentures 87,879 935 — — 87,879 935 Total debt securities held-to-maturity 87,879 935 — — 87,879 935 Total temporarily impaired debt securities (1) $ 114,938 $ 1,059 $ 26,912 $ 111 $ 141,850 $ 1,170 (1) The number of investment positions with unrealized losses totaled 86 for available-for-sale securities and 53 for held-to-maturity securities. |
Loans and Leases (Tables)
Loans and Leases (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Schedule of loans receivable | Loans and leases held-for-investment were comprised of the following: June 30, 2020 (Dollars in thousands) Private Commercial Commercial Total Loans and leases held-for-investment, before deferred fees and costs $ 4,055,115 $ 1,148,137 $ 1,959,537 $ 7,162,789 Deferred loan costs (fees) 8,001 4,743 (4,763 ) 7,981 Loans and leases held-for-investment, net of deferred fees and costs 4,063,116 1,152,880 1,954,774 7,170,770 Allowance for loan and lease losses (2,151 ) (7,546 ) (13,579 ) (23,276 ) Loans and leases held-for-investment, net $ 4,060,965 $ 1,145,334 $ 1,941,195 $ 7,147,494 December 31, 2019 (Dollars in thousands) Private Commercial Commercial Total Loans and leases held-for-investment, before deferred fees and costs $ 3,688,779 $ 1,080,767 $ 1,801,375 $ 6,570,921 Deferred loan costs (fees) 6,623 4,942 (4,927 ) 6,638 Loans and leases held-for-investment, net of deferred fees and costs 3,695,402 1,085,709 1,796,448 6,577,559 Allowance for loan and lease losses (1,973 ) (5,262 ) (6,873 ) (14,108 ) Loans and leases held-for-investment, net $ 3,693,429 $ 1,080,447 $ 1,789,575 $ 6,563,451 |
Allowance for Loan and Lease _2
Allowance for Loan and Lease Losses (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Allowance for Loan and Lease Losses [Abstract] | |
Schedule of investment in loans by credit quality indicator | The following tables present the recorded investment in loans by credit quality indicator: June 30, 2020 (Dollars in thousands) Private Commercial Commercial Total Pass $ 4,059,835 $ 1,144,623 $ 1,933,301 $ 7,137,759 Special mention — 7,798 4,625 12,423 Substandard 3,281 459 16,848 20,588 Loans and leases held-for-investment $ 4,063,116 $ 1,152,880 $ 1,954,774 $ 7,170,770 December 31, 2019 (Dollars in thousands) Private Commercial Commercial Total Pass $ 3,691,866 $ 1,069,932 $ 1,780,768 $ 6,542,566 Special mention — 15,777 14,284 30,061 Substandard 3,536 — 1,396 4,932 Loans and leases held-for-investment $ 3,695,402 $ 1,085,709 $ 1,796,448 $ 6,577,559 |
Schedule of change in allowance for loan losses | Changes in the allowance for loan and lease losses were as follows for the three months ended June 30, 2020 and 2019 : Three Months Ended June 30, 2020 (Dollars in thousands) Private Commercial Commercial Total Balance, beginning of period $ 2,174 $ 6,685 $ 8,445 $ 17,304 Provision for loan and lease losses 148 723 5,134 6,005 Charge-offs (171 ) — — (171 ) Recoveries — 138 — 138 Balance, end of period $ 2,151 $ 7,546 $ 13,579 $ 23,276 Three Months Ended June 30, 2019 (Dollars in thousands) Private Commercial Commercial Total Balance, beginning of period $ 2,001 $ 7,041 $ 5,670 $ 14,712 Provision (credit) for loan and lease losses 139 (1,146 ) 295 (712 ) Charge-offs — — — — Recoveries — 16 — 16 Balance, end of period $ 2,140 $ 5,911 $ 5,965 $ 14,016 Changes in the allowance for loan and lease losses were as follows for the six months ended June 30, 2020 and 2019 : Six Months Ended June 30, 2020 (Dollars in thousands) Private Commercial Commercial Total Balance, beginning of period $ 1,973 $ 5,262 $ 6,873 $ 14,108 Provision for loan and lease losses 349 1,943 6,706 8,998 Charge-offs (171 ) — — (171 ) Recoveries — 341 — 341 Balance, end of period $ 2,151 $ 7,546 $ 13,579 $ 23,276 Six Months Ended June 30, 2019 (Dollars in thousands) Private Commercial Commercial Total Balance, beginning of period $ 1,942 $ 5,764 $ 5,502 $ 13,208 Provision (credit) for loan and lease losses 198 (1,750 ) 463 (1,089 ) Charge-offs — — — — Recoveries — 1,897 — 1,897 Balance, end of period $ 2,140 $ 5,911 $ 5,965 $ 14,016 |
Schedule of past due loans segregated by class of loan | The following tables present the age analysis of past due loans and leases segregated by class: June 30, 2020 (Dollars in thousands) 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due Current Total Private banking $ — $ — $ — $ — $ 4,063,116 $ 4,063,116 Commercial and industrial — — — — 1,152,880 1,152,880 Commercial real estate — — — — 1,954,774 1,954,774 Loans and leases held-for-investment $ — $ — $ — $ — $ 7,170,770 $ 7,170,770 December 31, 2019 (Dollars in thousands) 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due Current Total Private banking $ 261 $ — $ 184 $ 445 $ 3,694,957 $ 3,695,402 Commercial and industrial — — — — 1,085,709 1,085,709 Commercial real estate — — — — 1,796,448 1,796,448 Loans and leases held-for-investment $ 261 $ — $ 184 $ 445 $ 6,577,114 $ 6,577,559 |
Schedule of investment in loans considered to be impaired | The following tables present the Company’s investment in loans considered to be impaired and related information on those impaired loans: As of and for the Six Months Ended June 30, 2020 (Dollars in thousands) Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized With a related allowance recorded: Private banking $ — $ — $ — $ — $ — Commercial and industrial 459 457 69 459 — Commercial real estate 6,311 6,315 947 6,311 — Total with a related allowance recorded 6,770 6,772 1,016 6,770 — Without a related allowance recorded: Private banking 10 10 — 12 — Commercial and industrial — — — — — Commercial real estate — — — — — Total without a related allowance recorded 10 10 — 12 — Total: Private banking 10 10 — 12 — Commercial and industrial 459 457 69 459 — Commercial real estate 6,311 6,315 947 6,311 — Total $ 6,780 $ 6,782 $ 1,016 $ 6,782 $ — As of and for the Twelve Months Ended December 31, 2019 (Dollars in thousands) Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized With a related allowance recorded: Private banking $ 171 $ 193 $ 171 $ 171 $ — Commercial and industrial — — — — — Commercial real estate — — — — — Total with a related allowance recorded 171 193 171 171 — Without a related allowance recorded: Private banking 13 13 — 13 — Commercial and industrial — — — — — Commercial real estate — — — — — Total without a related allowance recorded 13 13 — 13 — Total: Private banking 184 206 171 184 — Commercial and industrial — — — — — Commercial real estate — — — — — Total $ 184 $ 206 $ 171 $ 184 $ — |
Schedule of allowance for credit losses and investment in loans by class | The following tables present the allowance for loan and lease losses and recorded investment in loans by class: June 30, 2020 (Dollars in thousands) Private Commercial Commercial Total Allowance for loan and lease losses: Individually evaluated for impairment $ — $ 69 $ 947 $ 1,016 Collectively evaluated for impairment 2,151 7,477 12,632 22,260 Total allowance for loan and lease losses $ 2,151 $ 7,546 $ 13,579 $ 23,276 Loans and leases held-for-investment: Individually evaluated for impairment $ 10 $ 459 $ 6,311 $ 6,780 Collectively evaluated for impairment 4,063,106 1,152,421 1,948,463 7,163,990 Loans and leases held-for-investment $ 4,063,116 $ 1,152,880 $ 1,954,774 $ 7,170,770 December 31, 2019 (Dollars in thousands) Private Commercial Commercial Total Allowance for loan and lease losses: Individually evaluated for impairment $ 171 $ — $ — $ 171 Collectively evaluated for impairment 1,802 5,262 6,873 13,937 Total allowance for loan and lease losses $ 1,973 $ 5,262 $ 6,873 $ 14,108 Loans and leases held-for-investment: Individually evaluated for impairment $ 184 $ — $ — $ 184 Collectively evaluated for impairment 3,695,218 1,085,709 1,796,448 6,577,375 Loans and leases held-for-investment $ 3,695,402 $ 1,085,709 $ 1,796,448 $ 6,577,559 |
Deposits (Tables)
Deposits (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Deposits [Abstract] | |
Schedule of deposits | As of June 30, 2020 and December 31, 2019 , deposits were comprised of the following: Interest Rate Weighted Average Balance (Dollars in thousands) June 30, June 30, December 31, June 30, December 31, Demand and savings accounts: Noninterest-bearing checking accounts — — — $ 422,341 $ 356,102 Interest-bearing checking accounts 0.05 to 1.70% 0.44% 1.57% 2,664,864 1,398,264 Money market deposit accounts 0.10 to 3.25% 0.71% 1.84% 3,547,518 3,426,745 Total demand and savings accounts 6,634,723 5,181,111 Certificates of deposit 0.15 to 3.25% 1.51% 2.24% 1,196,748 1,453,502 Total deposits $ 7,831,471 $ 6,634,613 Weighted average rate on interest-bearing accounts 0.74% 1.87% |
Schedule of maturities of time deposits | The contractual maturity of certificates of deposit was as follows: (Dollars in thousands) June 30, December 31, 12 months or less $ 1,083,693 $ 1,244,838 12 months to 24 months 96,517 168,437 24 months to 36 months 16,538 40,227 Total $ 1,196,748 $ 1,453,502 |
Schedule of interest expense on deposits by type of deposit | Interest expense on deposits was as follows: Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2020 2019 2020 2019 Interest-bearing checking accounts $ 2,719 $ 4,965 $ 7,933 $ 9,508 Money market deposit accounts 7,377 18,200 22,031 34,739 Certificates of deposit 5,857 8,990 13,233 17,241 Total interest expense on deposits $ 15,953 $ 32,155 $ 43,197 $ 61,488 |
Borrowings (Tables)
Borrowings (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of borrowings | As of June 30, 2020 and December 31, 2019 , borrowings were comprised of the following: June 30, 2020 December 31, 2019 (Dollars in thousands) Interest Rate Ending Balance Maturity Date Interest Rate Ending Balance Maturity Date FHLB borrowings: FHLB line of credit —% $ — 1.81% $ 55,000 5/1/2020 Issued 4/8/2020 0.60% 50,000 7/8/2020 —% — Issued 6/1/2020 0.46% 150,000 9/1/2020 —% — Issued 6/2/2020 0.46% 50,000 9/2/2020 —% — Issued 6/22/2020 0.47% 50,000 9/21/2020 —% — Issued 12/12/2019 —% — 1.85% 100,000 1/13/2020 Issued 12/2/2019 —% — 1.91% 150,000 3/2/2020 Issued 10/8/2019 —% — 2.00% 50,000 1/8/2020 Subordinated notes payable (net of debt issuance costs of $1,948 and $0, respectively) 5.75% 95,552 5/15/2030 —% — Total borrowings, net $ 395,552 $ 355,000 |
Schedule of interest expense on borrowings | Interest expense on borrowings was as follows: Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2020 2019 2020 2019 FHLB borrowings $ 1,284 $ 2,334 $ 3,319 $ 4,920 Line of credit borrowings 260 10 261 68 Subordinated notes payable 680 537 680 1,090 Total interest expense on borrowings $ 2,224 $ 2,881 $ 4,260 $ 6,078 |
Stock Transactions (Tables)
Stock Transactions (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Common Stock, Number of Shares, Par Value and Other Disclosures [Abstract] | |
Schedule of preferred and common shares, activity | The tables below show the changes in the Company’s preferred and common shares outstanding during the periods indicated: Number of Number of Number of Balance, December 31, 2018 40,250 28,878,674 2,014,910 Issuance of preferred stock 80,500 — — Issuance of restricted common stock — 542,703 — Forfeitures of restricted common stock — (69,605 ) — Exercise of stock options — 22,380 — Purchase of treasury stock through open market transactions — (35,000 ) 35,000 Increase in treasury stock related to equity awards — — — Balance, June 30, 2019 120,750 29,339,152 2,049,910 Balance, December 31, 2019 120,750 29,355,986 2,126,422 Issuance of restricted common stock — 597,070 — Forfeitures of restricted common stock — (11,018 ) — Exercise of stock options — 25,000 — Purchase of treasury stock through open market transactions — (40,000 ) 40,000 Increase in treasury stock related to equity awards — (83,988 ) 83,988 Reissuance of treasury stock — 8,500 (8,500 ) Balance, June 30, 2020 120,750 29,851,550 2,241,910 |
Regulatory Capital (Tables)
Regulatory Capital (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | |
Schedule of compliance with regulatory capital requirements under banking regulations | The following tables set forth certain information concerning the Company’s and the Bank’s regulatory capital as of June 30, 2020 and December 31, 2019 : June 30, 2020 Actual For Capital Adequacy Purposes To be Well Capitalized Under Prompt Corrective Action Provisions (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Total risk-based capital ratio Company $ 699,015 12.89 % $ 433,732 8.00 % N/A N/A Bank $ 677,080 12.52 % $ 432,764 8.00 % $ 540,955 10.00 % Tier 1 risk-based capital ratio Company $ 579,146 10.68 % $ 325,299 6.00 % N/A N/A Bank $ 652,763 12.07 % $ 324,573 6.00 % $ 432,764 8.00 % Common equity tier 1 risk-based capital ratio Company $ 463,067 8.54 % $ 243,975 4.50 % N/A N/A Bank $ 652,763 12.07 % $ 243,430 4.50 % $ 351,621 6.50 % Tier 1 leverage ratio Company $ 579,146 6.30 % $ 367,538 4.00 % N/A N/A Bank $ 652,763 7.11 % $ 367,000 4.00 % $ 458,750 5.00 % December 31, 2019 Actual For Capital Adequacy Purposes To be Well Capitalized Under Prompt Corrective Action Provisions (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Total risk-based capital ratio Company $ 572,221 12.05 % $ 379,911 8.00 % N/A N/A Bank $ 547,532 11.57 % $ 378,623 8.00 % $ 473,279 10.00 % Tier 1 risk-based capital ratio Company $ 558,068 11.75 % $ 284,933 6.00 % N/A N/A Bank $ 532,779 11.26 % $ 283,967 6.00 % $ 378,623 8.00 % Common equity tier 1 risk-based capital ratio Company $ 442,385 9.32 % $ 213,700 4.50 % N/A N/A Bank $ 532,779 11.26 % $ 212,975 4.50 % $ 307,631 6.50 % Tier 1 leverage ratio Company $ 558,068 7.54 % $ 296,038 4.00 % N/A N/A Bank $ 532,779 7.22 % $ 295,277 4.00 % $ 369,097 5.00 % |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share, basic and diluted | The computation of basic and diluted earnings per common share for the periods presented was as follows: Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands, except per share data) 2020 2019 2020 2019 Net income available to common shareholders $ 8,439 $ 13,541 $ 19,372 $ 27,426 Weighted average common shares outstanding: Basic 28,223,085 27,887,599 28,201,837 27,860,370 Restricted stock - dilutive 221,456 562,226 324,498 550,903 Stock options - dilutive 83,420 340,848 161,469 336,445 Diluted 28,527,961 28,790,673 28,687,804 28,747,718 Earnings per common share: Basic $ 0.30 $ 0.49 $ 0.69 $ 0.98 Diluted $ 0.30 $ 0.47 $ 0.68 $ 0.95 |
Schedule of antidilutive securities excluded from computation of earnings per share | Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Anti-dilutive shares (1) 869,746 6,000 566,498 13,000 (1) Includes stock options and/or restricted stock not considered for the calculation of diluted EPS as their inclusion would have been anti-dilutive. |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activity (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of derivative instruments in statement of financial position, fair value | The tables below present the fair value of the Company’s derivative financial instruments as well as their classification on the unaudited condensed consolidated statements of financial condition as of June 30, 2020 and December 31, 2019 : Asset Derivatives Liability Derivatives as of June 30, 2020 as of June 30, 2020 (Dollars in thousands) Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments: Interest rate products Other assets $ — Other liabilities $ 11,161 Derivatives not designated as hedging instruments: Interest rate products Other assets 171,967 Other liabilities 172,091 Total Other assets $ 171,967 Other liabilities $ 183,252 Asset Derivatives Liability Derivatives as of December 31, 2019 as of December 31, 2019 (Dollars in thousands) Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments: Interest rate products Other assets $ — Other liabilities $ 2,184 Derivatives not designated as hedging instruments: Interest rate products Other assets 55,241 Other liabilities 55,289 Total Other assets $ 55,241 Other liabilities $ 57,473 |
Schedule of offsetting derivative assets | The following tables show the impact legally enforceable master netting agreements had on the Company’s derivative financial instruments as of June 30, 2020 and December 31, 2019 : Offsetting of Derivative Assets Gross Amounts of Recognized Assets Gross Amounts Offset in the Statement of Financial Position Net Amounts of Assets Gross Amounts Not Offset in the Statement of Financial Position Net Amount (Dollars in thousands) Financial Instruments Cash Collateral Received June 30, 2020 $ 171,967 $ — $ 171,967 $ — $ — $ 171,967 December 31, 2019 $ 55,241 $ — $ 55,241 $ (850 ) $ — $ 54,391 |
Schedule of offsetting derivative liabilities | Offsetting of Derivative Liabilities Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Statement of Financial Position Net Amounts of Liabilities Gross Amounts Not Offset in the Statement of Financial Position Net Amount (Dollars in thousands) Financial Instruments Cash Collateral Posted June 30, 2020 $ 183,252 $ — $ 183,252 $ — $ (183,227 ) $ 25 December 31, 2019 $ 57,473 $ — $ 57,473 $ (850 ) $ (55,753 ) $ 870 |
Schedule of interest rate derivative transactions | Characteristics of the Company’s interest rate derivative transactions designated as cash flow hedges of interest rate risk as of June 30, 2020 , were as follows: (Dollars in thousands) Notional Effective (1) Estimated Increase/ Maturity Remaining Term Interest rate products: Issued 1/8/2018 $ 50,000 2.21% $ 501 1/8/2021 6 Issued 5/30/2019 50,000 2.05% 903 6/1/2022 23 Issued 5/30/2019 50,000 2.03% 895 6/1/2023 35 Issued 5/30/2019 50,000 2.04% 901 6/1/2024 47 Issued 3/2/2020 50,000 0.98% 364 3/2/2025 56 Issued 3/20/2020 50,000 0.60% 174 3/20/2025 57 Total $ 300,000 $ 3,738 (1) The effective rate is adjusted for the difference between the three-month FHLB advance rate and three-month LIBOR. |
Schedule of derivative instruments, gain (loss) in statement of financial performance | The tables below present the effective portion of the Company’s cash flow hedge instruments in the unaudited condensed consolidated statements of income and accumulated other comprehensive income (loss): Three Months Ended June 30, Three Months Ended June 30, (Dollars in thousands) 2020 2019 2020 2019 Derivatives designated as hedging instruments: Location of Gain (Loss) Recognized in Income on Derivatives Realized Gain (Loss) Recognized in Income on Derivatives Unrealized Gain (Loss) Recognized in Accumulated Other Comprehensive Income on Derivatives Interest rate products Interest expense $ (460 ) $ 560 $ (1,578 ) $ (2,118 ) Six Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2020 2019 2020 2019 Derivatives designated as hedging instruments: Location of Gain (Loss) Recognized in Income on Derivatives Realized Gain (Loss) Recognized in Income on Derivatives Unrealized Gain (Loss) Recognized in Accumulated Other Comprehensive Income on Derivatives Interest rate products Interest expense $ (619 ) $ 1,121 $ (9,290 ) $ (2,325 ) The table below presents the effect of the Company’s non-designated hedge instruments in the unaudited condensed consolidated statements of income: Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2020 2019 2020 2019 Derivatives not designated as hedging instruments: Location of Gain (Loss) Recognized in Income on Derivatives Amount of Gain (Loss) Recognized in Income on Derivatives Amount of Gain (Loss) Recognized in Income on Derivatives Interest rate products Non-interest income $ (4 ) $ (22 ) $ (66 ) $ (42 ) Equity products Non-interest income — (77 ) — (77 ) Total $ (4 ) $ (99 ) $ (66 ) $ (119 ) |
Disclosures About Fair Value _2
Disclosures About Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value, assets and liabilities measured on recurring basis | The following tables represent assets and liabilities measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019 : June 30, 2020 (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets / Financial assets: Debt securities available-for-sale: Corporate bonds $ — $ 236,685 $ — $ 236,685 Trust preferred securities — 16,645 — 16,645 Agency collateralized mortgage obligations — 23,760 — 23,760 Agency mortgage-backed securities — 277,445 — 277,445 Agency debentures — 9,242 — 9,242 Interest rate swaps — 171,967 — 171,967 Total financial assets — 735,744 — 735,744 Financial liabilities: Interest rate swaps — 183,252 — 183,252 Total financial liabilities $ — $ 183,252 $ — $ 183,252 December 31, 2019 (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets / Financial assets: Debt securities available-for-sale: Corporate bonds $ — $ 175,418 $ — $ 175,418 Trust preferred securities — 18,260 — 18,260 Agency collateralized mortgage obligations — 27,193 — 27,193 Agency mortgage-backed securities — 18,509 — 18,509 Agency debentures — 9,402 — 9,402 Interest rate swaps — 55,241 — 55,241 Total financial assets — 304,023 — 304,023 Financial liabilities: Interest rate swaps — 57,473 — 57,473 Total financial liabilities $ — $ 57,473 $ — $ 57,473 |
Schedule of fair value measurements, nonrecurring | The following tables represent the balances of assets measured at fair value on a non-recurring basis as of June 30, 2020 and December 31, 2019 : June 30, 2020 (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets Loans measured for impairment, net $ — $ — $ 5,764 $ 5,764 Other real estate owned — — 2,724 2,724 Total assets $ — $ — $ 8,488 $ 8,488 December 31, 2019 (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets Loans measured for impairment, net $ — $ — $ 13 $ 13 Other real estate owned — — 4,250 4,250 Total assets $ — $ — $ 4,263 $ 4,263 |
Schedule of fair value inputs, assets, quantitative information | The following tables present additional quantitative information about assets measured at fair value on a recurring and non-recurring basis and for which we have utilized Level 3 inputs to determine fair value as of June 30, 2020 and December 31, 2019 : June 30, 2020 (Dollars in thousands) Fair Value Valuation Techniques (1) Significant Unobservable Inputs Weighted Average Discount Rate Loans measured for impairment, net $ 5,764 Collateral Appraisal value and discount due to salability conditions 27% Other real estate owned $ 2,724 Collateral Appraisal value and discount due to salability conditions 20% (1) Fair value is generally determined through independent appraisals of the underlying collateral, which may include Level 3 inputs that are not identifiable, or by using the discounted cash flow of ongoing operations if the loan is not collateral dependent. December 31, 2019 (Dollars in thousands) Fair Value Valuation Techniques (1) Significant Unobservable Inputs Weighted Average Multiple/ Loans measured for impairment, net $ 13 Collateral Appraisal value and discount due to salability conditions —% Other real estate owned $ 4,250 Collateral Appraisal value and discount due to salability conditions 17% (1) Fair value is generally determined through independent appraisals of the underlying collateral, which may include Level 3 inputs that are not identifiable, or by using the discounted cash flow of ongoing operations if the loan is not collateral dependent. |
Schedule of fair and carrying value of financial assets and liabilities | The following table summarizes of the carrying amounts and estimated fair values of financial instruments: June 30, 2020 December 31, 2019 (Dollars in thousands) Fair Value Carrying Estimated Carrying Estimated Financial assets: Cash and cash equivalents 1 $ 724,942 $ 724,942 $ 403,855 $ 403,855 Debt securities available-for-sale 2 563,777 563,777 248,782 248,782 Debt securities held-to-maturity 2 235,083 237,671 196,044 196,755 Federal Home Loan Bank stock 2 13,280 13,280 24,324 24,324 Loans and leases held-for-investment, net 3 7,147,494 7,198,597 6,563,451 6,548,432 Accrued interest receivable 2 18,534 18,534 22,326 22,326 Investment management fees receivable, net 2 6,907 6,907 7,560 7,560 Bank owned life insurance 2 70,901 70,901 70,044 70,044 Other real estate owned 3 2,724 2,724 4,250 4,250 Interest rate swaps 2 171,967 171,967 55,241 55,241 Financial liabilities: Deposits 2 $ 7,831,471 $ 7,861,737 $ 6,634,613 $ 6,648,546 Borrowings, net 2 395,552 397,608 355,000 355,003 Interest rate swaps 2 183,252 183,252 57,473 57,473 |
Changes in Accumulated Other _2
Changes in Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Schedule of changes in accumulated other comprehensive income (loss) | The following tables show the changes in accumulated other comprehensive income (loss) net of tax, for the periods presented: Three Months Ended June 30, 2020 2019 (Dollars in thousands) Debt Securities Derivatives Total Debt Securities Derivatives Total Balance, beginning of period $ (6,678 ) $ (7,371 ) $ (14,049 ) $ 54 $ 448 $ 502 Change in unrealized holding gains (losses) 8,375 (1,200 ) 7,175 1,259 (1,612 ) (353 ) Losses (gains) reclassified from other comprehensive income (5 ) 349 344 (83 ) (426 ) (509 ) Net other comprehensive income (loss) 8,370 (851 ) 7,519 1,176 (2,038 ) (862 ) Balance, end of period $ 1,692 $ (8,222 ) $ (6,530 ) $ 1,230 $ (1,590 ) $ (360 ) Six Months Ended June 30, 2020 2019 (Dollars in thousands) Debt Securities Derivatives Total Debt Securities Derivatives Total Balance, beginning of period $ 2,756 $ (1,624 ) $ 1,132 $ (2,363 ) $ 1,032 $ (1,331 ) Change in unrealized holding gains (losses) (1,048 ) (7,067 ) (8,115 ) 3,689 (1,769 ) 1,920 Losses (gains) reclassified from other comprehensive income (16 ) 469 453 (96 ) (853 ) (949 ) Net other comprehensive income (loss) (1,064 ) (6,598 ) (7,662 ) 3,593 (2,622 ) 971 Balance, end of period $ 1,692 $ (8,222 ) $ (6,530 ) $ 1,230 $ (1,590 ) $ (360 ) |
Segments (Tables)
Segments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information, by segment | The following tables provide financial information for the two segments of the Company as of and for the periods indicated. The information provided under the caption “Parent and Other” represents general operating activity of the Company not considered to be a reportable segment, which includes parent company activity as well as eliminations and adjustments that are necessary for purposes of reconciliation to the consolidated amounts. (Dollars in thousands) June 30, December 31, Assets: Bank $ 9,057,476 $ 7,686,981 Investment management 82,966 83,295 Parent and other (10,601 ) (4,466 ) Total assets $ 9,129,841 $ 7,765,810 Three Months Ended June 30, 2020 Three Months Ended June 30, 2019 (Dollars in thousands) Bank Investment Parent Consolidated Bank Investment Parent Consolidated Income statement data: Interest income $ 51,661 $ — $ — $ 51,661 $ 66,311 $ — $ 28 $ 66,339 Interest expense 17,251 — 926 18,177 34,517 — 519 35,036 Net interest income (loss) 34,410 — (926 ) 33,484 31,794 — (491 ) 31,303 Provision (credit) for loan and lease losses 6,005 — — 6,005 (712 ) — — (712 ) Net interest income (loss) after provision for loan and lease losses 28,405 — (926 ) 27,479 32,506 — (491 ) 32,015 Non-interest income: Investment management fees — 7,897 (159 ) 7,738 — 9,364 (110 ) 9,254 Net gain on the sale and call of debt securities 14 — — 14 112 — — 112 Other non-interest income 5,215 30 — 5,245 2,478 4 131 2,613 Total non-interest income (loss) 5,229 7,927 (159 ) 12,997 2,590 9,368 21 11,979 Non-interest expense: Intangible amortization expense — 486 — 486 — 502 — 502 Other non-interest expense 19,967 7,003 640 27,610 18,903 7,930 250 27,083 Total non-interest expense 19,967 7,489 640 28,096 18,903 8,432 250 27,585 Income (loss) before tax 13,667 438 (1,725 ) 12,380 16,193 936 (720 ) 16,409 Income tax expense (benefit) 2,173 102 (296 ) 1,979 1,658 264 (204 ) 1,718 Net income (loss) $ 11,494 $ 336 $ (1,429 ) $ 10,401 $ 14,535 $ 672 $ (516 ) $ 14,691 Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 (Dollars in thousands) Bank Investment Parent Consolidated Bank Investment Parent Consolidated Income statement data: Interest income $ 115,863 $ — $ — $ 115,863 $ 129,142 $ — $ 99 $ 129,241 Interest expense 46,547 — 910 47,457 66,436 — 1,130 67,566 Net interest income (loss) 69,316 — (910 ) 68,406 62,706 — (1,031 ) 61,675 Provision (credit) for loan and lease losses 8,998 — — 8,998 (1,089 ) — — (1,089 ) Net interest income (loss) after provision for loan and lease losses 60,318 — (910 ) 59,408 63,795 — (1,031 ) 62,764 Non-interest income: Investment management fees — 15,662 (286 ) 15,376 — 18,896 (218 ) 18,678 Net gain on the sale and call of debt securities 71 — — 71 140 — — 140 Other non-interest income 10,866 — — 10,866 5,355 25 850 6,230 Total non-interest income (loss) 10,937 15,662 (286 ) 26,313 5,495 18,921 632 25,048 Non-interest expense: Intangible amortization expense — 988 — 988 — 1,004 — 1,004 Other non-interest expense 41,000 13,630 1,622 56,252 37,923 14,987 343 53,253 Total non-interest expense 41,000 14,618 1,622 57,240 37,923 15,991 343 54,257 Income (loss) before tax 30,255 1,044 (2,818 ) 28,481 31,367 2,930 (742 ) 33,555 Income tax expense (benefit) 5,521 130 (466 ) 5,185 3,683 827 (210 ) 4,300 Net income (loss) $ 24,734 $ 914 $ (2,352 ) $ 23,296 $ 27,684 $ 2,103 $ (532 ) $ 29,255 |
Basis of Information and Summ_3
Basis of Information and Summary of Significant Accounting Policies - Narrative (Details) | 6 Months Ended | ||
Jun. 30, 2020USD ($)officesportfoliosubsidiary | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Significant Accounting Policies [Line Items] | |||
Number of wholly owned subsidiaries | subsidiary | 3 | ||
Number of loan portfolios | portfolio | 3 | ||
Bad debt expense | $ | $ 0 | $ 0 | |
Allowance for uncollectible accounts | $ | $ 0 | $ 0 | |
Maximum | |||
Significant Accounting Policies [Line Items] | |||
Original maturity of short-term investments (in days) | 90 days | ||
Estimated useful lives of intangible assets (in years) | 25 years | ||
Estimated useful lives of office properties and equipment (in years) | 10 years | ||
Minimum | |||
Significant Accounting Policies [Line Items] | |||
Past due period for loans (in days) | 90 days | ||
Consecutive period loan is current (in months) | 6 months | ||
Estimated useful lives of intangible assets (in years) | 4 years | ||
Estimated useful lives of office properties and equipment (in years) | 3 years | ||
Bank | |||
Significant Accounting Policies [Line Items] | |||
Number of wholly owned subsidiaries | subsidiary | 2 | ||
Number of representative offices, additional to main office | offices | 4 |
Investment Securities - Investm
Investment Securities - Investment Types (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Debt securities available-for-sale: | ||
Amortized Cost | $ 561,361 | $ 245,077 |
Gross Unrealized Appreciation | 6,158 | 3,940 |
Gross Unrealized Depreciation | 3,742 | 235 |
Debt securities available-for-sale | 563,777 | 248,782 |
Debt securities held-to-maturity: | ||
Amortized Cost | 235,083 | 196,044 |
Gross Unrealized Appreciation | 2,652 | 1,646 |
Gross Unrealized Depreciation | 64 | 935 |
Estimated Fair Value | 237,671 | 196,755 |
Amortized Cost | 796,444 | 441,121 |
Gross Unrealized Appreciation | 8,810 | 5,586 |
Gross Unrealized Depreciation | 3,806 | 1,170 |
Estimated Fair Value | 801,448 | 445,537 |
Corporate bonds | ||
Debt securities available-for-sale: | ||
Amortized Cost | 234,193 | 172,704 |
Gross Unrealized Appreciation | 4,198 | 2,821 |
Gross Unrealized Depreciation | 1,706 | 107 |
Debt securities available-for-sale | 236,685 | 175,418 |
Debt securities held-to-maturity: | ||
Amortized Cost | 23,676 | 24,678 |
Gross Unrealized Appreciation | 637 | 619 |
Gross Unrealized Depreciation | 0 | 0 |
Estimated Fair Value | 24,313 | 25,297 |
Trust preferred securities | ||
Debt securities available-for-sale: | ||
Amortized Cost | 18,158 | 18,092 |
Gross Unrealized Appreciation | 0 | 216 |
Gross Unrealized Depreciation | 1,513 | 48 |
Debt securities available-for-sale | 16,645 | 18,260 |
Agency collateralized mortgage obligations | ||
Debt securities available-for-sale: | ||
Amortized Cost | 23,806 | 27,262 |
Gross Unrealized Appreciation | 13 | 11 |
Gross Unrealized Depreciation | 59 | 80 |
Debt securities available-for-sale | 23,760 | 27,193 |
Agency mortgage-backed securities | ||
Debt securities available-for-sale: | ||
Amortized Cost | 276,776 | 18,058 |
Gross Unrealized Appreciation | 1,133 | 451 |
Gross Unrealized Depreciation | 464 | 0 |
Debt securities available-for-sale | 277,445 | 18,509 |
Debt securities held-to-maturity: | ||
Amortized Cost | 4,335 | 4,360 |
Gross Unrealized Appreciation | 753 | 255 |
Gross Unrealized Depreciation | 0 | 0 |
Estimated Fair Value | 5,088 | 4,615 |
Agency debentures | ||
Debt securities available-for-sale: | ||
Amortized Cost | 8,428 | 8,961 |
Gross Unrealized Appreciation | 814 | 441 |
Gross Unrealized Depreciation | 0 | 0 |
Debt securities available-for-sale | 9,242 | 9,402 |
Debt securities held-to-maturity: | ||
Amortized Cost | 193,466 | 149,912 |
Gross Unrealized Appreciation | 1,127 | 628 |
Gross Unrealized Depreciation | 64 | 935 |
Estimated Fair Value | 194,529 | 149,605 |
Municipal bonds | ||
Debt securities held-to-maturity: | ||
Amortized Cost | 13,606 | 17,094 |
Gross Unrealized Appreciation | 135 | 144 |
Gross Unrealized Depreciation | 0 | 0 |
Estimated Fair Value | $ 13,741 | $ 17,238 |
Investment Securities - Interes
Investment Securities - Interest Income on Investment Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Taxable interest income | $ 3,609 | $ 3,641 | $ 7,001 | $ 7,513 |
Non-taxable interest income | 26 | 101 | 137 | 205 |
Dividend income | 305 | 409 | 703 | 786 |
Total interest income on investment securities | $ 3,940 | $ 4,151 | $ 7,841 | $ 8,504 |
Investment Securities - Contrac
Investment Securities - Contractual Maturities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Available-for-sale Securities, Debt Maturities, Amortized Cost | ||
Due in less than one year | $ 44,006 | |
Due from one to five years | 113,409 | |
Due from five to ten years | 105,683 | |
Due after ten years | 298,263 | |
Amortized Cost | 561,361 | $ 245,077 |
Available-for-sale Securities, Debt Maturities, Estimated Fair Value | ||
Due in less than one year | 44,343 | |
Due from one to five years | 116,540 | |
Due from five to ten years | 104,054 | |
Due after ten years | 298,840 | |
Estimated Fair Value | 563,777 | 248,782 |
Held-to-maturity Securities, Debt Maturities, Amortized Cost | ||
Due in less than one year | 4,519 | |
Due from one to five years | 68,692 | |
Due from five to ten years | 149,165 | |
Due after ten years | 12,707 | |
Amortized Cost | 235,083 | 196,044 |
Held-to-maturity Securities, Debt Maturities, Estimated Fair Value | ||
Due in less than one year | 4,529 | |
Due from one to five years | 69,267 | |
Due from five to ten years | 149,602 | |
Due after ten years | 14,273 | |
Estimated Fair Value | $ 237,671 | $ 196,755 |
Investment Securities - Narrati
Investment Securities - Narrative (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale securities with a contractual maturity due after ten years | $ 298,840,000 | |
Floating rate available-for-sale securities with a contractual maturity due after ten years | $ 33,000,000 | |
Percent of floating rate available-for-sale securities with a contractual maturity due after ten years | 11.00% | |
Held-to-maturity securities, debt maturities due from five to ten years | $ 149,165,000 | |
Held-to-maturity securities, debt maturities due from five to ten years, callable | 17,300,000 | |
Held-to-maturity securities pledged as collateral | 35,100,000 | |
Debt securities trading | 0 | $ 0 |
Federal Home Loan Bank stock | 13,280,000 | $ 24,324,000 |
Federal Home Loan Bank | ||
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale securities available to be pledged as collateral for borrowings | $ 2,600,000 |
Investment Securities - Gains a
Investment Securities - Gains and Losses on Sales and Calls of Investment Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Proceeds from sale of available-for-sale securities | $ 6,071 | $ 4,993 | $ 56,038 | $ 4,993 |
Proceeds from call of available-for-sale securities | 3,580 | 2,858 | 3,580 | 4,082 |
Total proceeds from sale and call of available-for-sale securities | 9,651 | 7,851 | 59,618 | 9,075 |
Gross realized gains on available-for-sale securities | 6 | 109 | 21 | 126 |
Gross realized losses on available-for-sale securities | 0 | 0 | 0 | 0 |
Net realized gains on sale and call of available-for-sale securities | 6 | 109 | 21 | 126 |
Proceeds from sale of held-to-maturity securities | 0 | 0 | 0 | 0 |
Proceeds from call of held-to-maturity securities | 125,405 | 95,835 | 247,758 | 117,295 |
Total proceeds from sale and call of held-to-maturity securities | 125,405 | 95,835 | 247,758 | 117,295 |
Gross realized gains on held-to-maturity securities | 8 | 3 | 50 | 14 |
Gross realized losses on held-to-maturity securities | 0 | 0 | 0 | 0 |
Net realized gains on sale and call of held-to-maturity securities | $ 8 | $ 3 | $ 50 | $ 14 |
Investment Securities - Unreali
Investment Securities - Unrealized Losses (Details) $ in Thousands | Jun. 30, 2020USD ($)position | Dec. 31, 2019USD ($)position |
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months | $ 205,716 | $ 27,059 |
12 Months or More | 38,434 | 26,912 |
Total | 244,150 | 53,971 |
Unrealized losses, Debt securities available-for-sale | ||
Less than 12 Months | 2,933 | 124 |
12 Months or More | 809 | 111 |
Total | 3,742 | 235 |
Fair value, Debt securities held-to-maturity | ||
Less than 12 Months | 20,014 | 87,879 |
12 Months or More | 0 | 0 |
Total | 20,014 | 87,879 |
Unrealized losses, Debt securities held-to-maturity | ||
Less than 12 Months | 64 | 935 |
12 Months or More | 0 | 0 |
Total | 64 | 935 |
Less than 12 months, fair value, total impaired securities | 225,730 | 114,938 |
Less than 12 months, unrealized losses, total impaired securities | 2,997 | 1,059 |
12 months or more, fair value, total impaired securities | 38,434 | 26,912 |
12 months or more, unrealized losses, total impaired securities | 809 | 111 |
Total, fair value, total impaired securities | 264,164 | 141,850 |
Total, unrealized losses, total impaired securities | $ 3,806 | $ 1,170 |
Available-for-sale, number of positions in an unrealized loss position | position | 36 | 86 |
Held-to-maturity, number of positions in an unrealized loss position | position | 1 | 53 |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months | $ 46,666 | $ 4,942 |
12 Months or More | 19,248 | 19,951 |
Total | 65,914 | 24,893 |
Unrealized losses, Debt securities available-for-sale | ||
Less than 12 Months | 954 | 58 |
12 Months or More | 752 | 49 |
Total | 1,706 | 107 |
Fair value, Debt securities held-to-maturity | ||
Less than 12 Months | 0 | |
12 Months or More | 0 | |
Total | 0 | |
Unrealized losses, Debt securities held-to-maturity | ||
Less than 12 Months | 0 | |
12 Months or More | 0 | |
Total | 0 | |
Trust preferred securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months | 16,644 | 0 |
12 Months or More | 0 | 4,417 |
Total | 16,644 | 4,417 |
Unrealized losses, Debt securities available-for-sale | ||
Less than 12 Months | 1,513 | 0 |
12 Months or More | 0 | 48 |
Total | 1,513 | 48 |
Agency collateralized mortgage obligations | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months | 1,794 | 22,117 |
12 Months or More | 19,186 | 2,544 |
Total | 20,980 | 24,661 |
Unrealized losses, Debt securities available-for-sale | ||
Less than 12 Months | 2 | 66 |
12 Months or More | 57 | 14 |
Total | 59 | 80 |
Agency mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months | 140,612 | |
12 Months or More | 0 | |
Total | 140,612 | |
Unrealized losses, Debt securities available-for-sale | ||
Less than 12 Months | 464 | |
12 Months or More | 0 | |
Total | 464 | |
Agency debentures | ||
Fair value, Debt securities held-to-maturity | ||
Less than 12 Months | 20,014 | 87,879 |
12 Months or More | 0 | 0 |
Total | 20,014 | 87,879 |
Unrealized losses, Debt securities held-to-maturity | ||
Less than 12 Months | 64 | 935 |
12 Months or More | 0 | 0 |
Total | $ 64 | $ 935 |
Loans and Leases - Loans and Le
Loans and Leases - Loans and Leases by Class (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans and leases held-for-investment, net of deferred fees and costs | $ 7,170,770 | $ 6,577,559 | ||||
Allowance for loan and lease losses | (23,276) | $ (17,304) | (14,108) | $ (14,016) | $ (14,712) | $ (13,208) |
Loans and leases held-for-investment, net | 7,147,494 | 6,563,451 | ||||
Loans receivable | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans and leases held-for-investment, before deferred fees and costs | 7,162,789 | 6,570,921 | ||||
Deferred loan costs (fees) | 7,981 | 6,638 | ||||
Loans and leases held-for-investment, net of deferred fees and costs | 7,170,770 | 6,577,559 | ||||
Allowance for loan and lease losses | (23,276) | (14,108) | ||||
Loans and leases held-for-investment, net | 7,147,494 | 6,563,451 | ||||
Private Banking | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans and leases held-for-investment, net of deferred fees and costs | 4,063,116 | 3,695,402 | ||||
Allowance for loan and lease losses | (2,151) | (2,174) | (1,973) | (2,140) | (2,001) | (1,942) |
Private Banking | Loans receivable | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans and leases held-for-investment, before deferred fees and costs | 4,055,115 | 3,688,779 | ||||
Deferred loan costs (fees) | 8,001 | 6,623 | ||||
Loans and leases held-for-investment, net of deferred fees and costs | 4,063,116 | 3,695,402 | ||||
Allowance for loan and lease losses | (2,151) | (1,973) | ||||
Loans and leases held-for-investment, net | 4,060,965 | 3,693,429 | ||||
Commercial and Industrial | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans and leases held-for-investment, net of deferred fees and costs | 1,152,880 | 1,085,709 | ||||
Allowance for loan and lease losses | (7,546) | (6,685) | (5,262) | (5,911) | (7,041) | (5,764) |
Commercial and Industrial | Loans receivable | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans and leases held-for-investment, before deferred fees and costs | 1,148,137 | 1,080,767 | ||||
Deferred loan costs (fees) | 4,743 | 4,942 | ||||
Loans and leases held-for-investment, net of deferred fees and costs | 1,152,880 | 1,085,709 | ||||
Allowance for loan and lease losses | (7,546) | (5,262) | ||||
Loans and leases held-for-investment, net | 1,145,334 | 1,080,447 | ||||
Commercial Real Estate | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans and leases held-for-investment, net of deferred fees and costs | 1,954,774 | 1,796,448 | ||||
Allowance for loan and lease losses | (13,579) | $ (8,445) | (6,873) | $ (5,965) | $ (5,670) | $ (5,502) |
Commercial Real Estate | Loans receivable | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans and leases held-for-investment, before deferred fees and costs | 1,959,537 | 1,801,375 | ||||
Deferred loan costs (fees) | (4,763) | (4,927) | ||||
Loans and leases held-for-investment, net of deferred fees and costs | 1,954,774 | 1,796,448 | ||||
Allowance for loan and lease losses | (13,579) | (6,873) | ||||
Loans and leases held-for-investment, net | $ 1,941,195 | $ 1,789,575 |
Loans and Leases - Narrative (D
Loans and Leases - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Unused commitments | $ 5,630,000 | $ 4,910,000 | |
Unused commitments, due on demand | 4,500,000 | 3,870,000 | |
Reserve for losses on unfunded commitments | 1,000 | 645 | |
Loans in the process of origination | 37,700 | 20,700 | |
Standby letters of credit | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Unused commitments | 74,100 | $ 72,800 | |
Standby letters of credit drawn | $ 45 | $ 85 |
Allowance for Loan and Lease _3
Allowance for Loan and Lease Losses - Narrative (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020USD ($)portfolioloans | Jun. 30, 2019USD ($)loans | Jun. 30, 2020USD ($)portfoliocontract | Jun. 30, 2019USD ($)loans | Dec. 31, 2019USD ($) | |
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Number of loan portfolios | portfolio | 3 | 3 | |||
Impaired loans | $ 6,780,000 | $ 6,780,000 | $ 184,000 | ||
Interest income on impaired loans | 0 | 0 | |||
Loans 90 days or more past due and still accruing | 0 | 0 | 0 | ||
Related allowance on impaired loans | 1,016,000 | 1,016,000 | 171,000 | ||
Unused commitments for loans modified as TDRs | 0 | 0 | 0 | ||
Payment defaults for loans modified as TDRs | $ 0 | $ 0 | $ 0 | $ 0 | |
Loans newly designated as TDRs | 0 | 0 | 0 | 0 | |
Real estate acquired through foreclosure | $ 2,700,000 | $ 2,700,000 | 4,300,000 | ||
Proceeds from sale of property from other real estate owned | 1,500,000 | ||||
Gain on sale of property from other real estate owned | 65,000 | ||||
Mortgage loans in process of foreclosure | 0 | 0 | |||
Non-accrual loans | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Recorded investment | 0 | $ 0 | 171,000 | ||
Minimum | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Past due period for loans (in days) | 90 days | ||||
Private Banking | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Impaired loans | 10,000 | $ 10,000 | 184,000 | ||
Related allowance on impaired loans | $ 0 | $ 0 | $ 171,000 | ||
Concentration risk, percentage | Cash, marketable securities or cash value life insurance collateral risk | Private Banking | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Percentage of private banking loans secured by cash and marketable securities | 98.00% | 97.40% |
Allowance for Loan and Lease _4
Allowance for Loan and Lease Losses - Credit Quality Indicator (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans and leases held-for-investment | $ 7,170,770 | $ 6,577,559 |
Private Banking | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans and leases held-for-investment | 4,063,116 | 3,695,402 |
Commercial and Industrial | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans and leases held-for-investment | 1,152,880 | 1,085,709 |
Commercial Real Estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans and leases held-for-investment | 1,954,774 | 1,796,448 |
Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans and leases held-for-investment | 7,137,759 | 6,542,566 |
Pass | Private Banking | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans and leases held-for-investment | 4,059,835 | 3,691,866 |
Pass | Commercial and Industrial | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans and leases held-for-investment | 1,144,623 | 1,069,932 |
Pass | Commercial Real Estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans and leases held-for-investment | 1,933,301 | 1,780,768 |
Special mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans and leases held-for-investment | 12,423 | 30,061 |
Special mention | Private Banking | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans and leases held-for-investment | 0 | 0 |
Special mention | Commercial and Industrial | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans and leases held-for-investment | 7,798 | 15,777 |
Special mention | Commercial Real Estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans and leases held-for-investment | 4,625 | 14,284 |
Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans and leases held-for-investment | 20,588 | 4,932 |
Substandard | Private Banking | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans and leases held-for-investment | 3,281 | 3,536 |
Substandard | Commercial and Industrial | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans and leases held-for-investment | 459 | 0 |
Substandard | Commercial Real Estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans and leases held-for-investment | $ 16,848 | $ 1,396 |
Allowance for Loan and Lease _5
Allowance for Loan and Lease Losses - Changes in Allowance (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Allowance for Loan and Lease Losses [Roll Forward] | ||||
Balance, beginning of period | $ 17,304 | $ 14,712 | $ 14,108 | $ 13,208 |
Provision (credit) for loan and lease losses | 6,005 | (712) | 8,998 | (1,089) |
Charge-offs | (171) | 0 | (171) | 0 |
Recoveries | 138 | 16 | 341 | 1,897 |
Balance, end of period | 23,276 | 14,016 | 23,276 | 14,016 |
Private Banking | ||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||
Balance, beginning of period | 2,174 | 2,001 | 1,973 | 1,942 |
Provision (credit) for loan and lease losses | 148 | 139 | 349 | 198 |
Charge-offs | (171) | 0 | (171) | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Balance, end of period | 2,151 | 2,140 | 2,151 | 2,140 |
Commercial and Industrial | ||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||
Balance, beginning of period | 6,685 | 7,041 | 5,262 | 5,764 |
Provision (credit) for loan and lease losses | 723 | (1,146) | 1,943 | (1,750) |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 138 | 16 | 341 | 1,897 |
Balance, end of period | 7,546 | 5,911 | 7,546 | 5,911 |
Commercial Real Estate | ||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||
Balance, beginning of period | 8,445 | 5,670 | 6,873 | 5,502 |
Provision (credit) for loan and lease losses | 5,134 | 295 | 6,706 | 463 |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Balance, end of period | $ 13,579 | $ 5,965 | $ 13,579 | $ 5,965 |
Allowance for Loan and Lease _6
Allowance for Loan and Lease Losses - Analysis of Past Due Loans (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total Past Due | $ 0 | $ 445 |
Current | 7,170,770 | 6,577,114 |
Loans and leases held-for-investment, net of deferred fees and costs | 7,170,770 | 6,577,559 |
Private Banking | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total Past Due | 0 | 445 |
Current | 4,063,116 | 3,694,957 |
Loans and leases held-for-investment, net of deferred fees and costs | 4,063,116 | 3,695,402 |
Commercial and Industrial | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total Past Due | 0 | 0 |
Current | 1,152,880 | 1,085,709 |
Loans and leases held-for-investment, net of deferred fees and costs | 1,152,880 | 1,085,709 |
Commercial Real Estate | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total Past Due | 0 | 0 |
Current | 1,954,774 | 1,796,448 |
Loans and leases held-for-investment, net of deferred fees and costs | 1,954,774 | 1,796,448 |
30-59 Days Past Due | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total Past Due | 0 | 261 |
30-59 Days Past Due | Private Banking | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total Past Due | 0 | 261 |
30-59 Days Past Due | Commercial and Industrial | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total Past Due | 0 | 0 |
30-59 Days Past Due | Commercial Real Estate | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total Past Due | 0 | 0 |
60-89 Days Past Due | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total Past Due | 0 | 0 |
60-89 Days Past Due | Private Banking | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total Past Due | 0 | 0 |
60-89 Days Past Due | Commercial and Industrial | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total Past Due | 0 | 0 |
60-89 Days Past Due | Commercial Real Estate | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total Past Due | 0 | 0 |
90 Days or More Past Due | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total Past Due | 0 | 184 |
90 Days or More Past Due | Private Banking | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total Past Due | 0 | 184 |
90 Days or More Past Due | Commercial and Industrial | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total Past Due | 0 | 0 |
90 Days or More Past Due | Commercial Real Estate | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total Past Due | $ 0 | $ 0 |
Allowance for Loan and Lease _7
Allowance for Loan and Lease Losses - Impaired Loans (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Recorded Investment | ||
With a related allowance | $ 6,770 | $ 171 |
Without a related allowance | 10 | 13 |
Total | 6,780 | 184 |
Unpaid Principal Balance | ||
With a related allowance | 6,772 | 193 |
Without a related allowance | 10 | 13 |
Total | 6,782 | 206 |
Related Allowance | 1,016 | 171 |
Average Recorded Investment | ||
With a related allowance | 6,770 | 171 |
Without a related allowance | 12 | 13 |
Total | 6,782 | 184 |
Interest Income Recognized | ||
With a related allowance | 0 | 0 |
Without a related allowance | 0 | 0 |
Total | 0 | 0 |
Private Banking | ||
Recorded Investment | ||
With a related allowance | 0 | 171 |
Without a related allowance | 10 | 13 |
Total | 10 | 184 |
Unpaid Principal Balance | ||
With a related allowance | 0 | 193 |
Without a related allowance | 10 | 13 |
Total | 10 | 206 |
Related Allowance | 0 | 171 |
Average Recorded Investment | ||
With a related allowance | 0 | 171 |
Without a related allowance | 12 | 13 |
Total | 12 | 184 |
Interest Income Recognized | ||
With a related allowance | 0 | 0 |
Without a related allowance | 0 | 0 |
Total | 0 | 0 |
Commercial and Industrial | ||
Recorded Investment | ||
With a related allowance | 459 | 0 |
Without a related allowance | 0 | 0 |
Total | 459 | 0 |
Unpaid Principal Balance | ||
With a related allowance | 457 | 0 |
Without a related allowance | 0 | 0 |
Total | 457 | 0 |
Related Allowance | 69 | 0 |
Average Recorded Investment | ||
With a related allowance | 459 | 0 |
Without a related allowance | 0 | 0 |
Total | 459 | 0 |
Interest Income Recognized | ||
With a related allowance | 0 | 0 |
Without a related allowance | 0 | 0 |
Total | 0 | 0 |
Commercial Real Estate | ||
Recorded Investment | ||
With a related allowance | 6,311 | 0 |
Without a related allowance | 0 | 0 |
Total | 6,311 | 0 |
Unpaid Principal Balance | ||
With a related allowance | 6,315 | 0 |
Without a related allowance | 0 | 0 |
Total | 6,315 | 0 |
Related Allowance | 947 | 0 |
Average Recorded Investment | ||
With a related allowance | 6,311 | 0 |
Without a related allowance | 0 | 0 |
Total | 6,311 | 0 |
Interest Income Recognized | ||
With a related allowance | 0 | 0 |
Without a related allowance | 0 | 0 |
Total | $ 0 | $ 0 |
Allowance for Loan and Lease _8
Allowance for Loan and Lease Losses - Allowance (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Allowance for loan and lease losses: | ||
Individually evaluated for impairment | $ 1,016 | $ 171 |
Collectively evaluated for impairment | 22,260 | 13,937 |
Total allowance for loan and lease losses | 23,276 | 14,108 |
Loans and leases held-for-investment: | ||
Individually evaluated for impairment | 6,780 | 184 |
Collectively evaluated for impairment | 7,163,990 | 6,577,375 |
Loans and leases held-for-investment, net of deferred fees and costs | 7,170,770 | 6,577,559 |
Private Banking | ||
Allowance for loan and lease losses: | ||
Individually evaluated for impairment | 0 | 171 |
Collectively evaluated for impairment | 2,151 | 1,802 |
Total allowance for loan and lease losses | 2,151 | 1,973 |
Loans and leases held-for-investment: | ||
Individually evaluated for impairment | 10 | 184 |
Collectively evaluated for impairment | 4,063,106 | 3,695,218 |
Loans and leases held-for-investment, net of deferred fees and costs | 4,063,116 | 3,695,402 |
Commercial and Industrial | ||
Allowance for loan and lease losses: | ||
Individually evaluated for impairment | 69 | 0 |
Collectively evaluated for impairment | 7,477 | 5,262 |
Total allowance for loan and lease losses | 7,546 | 5,262 |
Loans and leases held-for-investment: | ||
Individually evaluated for impairment | 459 | 0 |
Collectively evaluated for impairment | 1,152,421 | 1,085,709 |
Loans and leases held-for-investment, net of deferred fees and costs | 1,152,880 | 1,085,709 |
Commercial Real Estate | ||
Allowance for loan and lease losses: | ||
Individually evaluated for impairment | 947 | 0 |
Collectively evaluated for impairment | 12,632 | 6,873 |
Total allowance for loan and lease losses | 13,579 | 6,873 |
Loans and leases held-for-investment: | ||
Individually evaluated for impairment | 6,311 | 0 |
Collectively evaluated for impairment | 1,948,463 | 1,796,448 |
Loans and leases held-for-investment, net of deferred fees and costs | $ 1,954,774 | $ 1,796,448 |
Deposits - Schedule of Deposits
Deposits - Schedule of Deposits by Type (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Interest Rate Range Domestic Deposit Liabilities [Abstract] | ||
Interest-bearing checking accounts, interest rate minimum | 0.05% | |
Interest-bearing checking accounts, interest rate maximum | 1.70% | |
Money market deposit accounts, interest rate minimum | 0.10% | |
Money market deposit accounts, interest rate maximum | 3.25% | |
Certificates of deposit, interest rate minimum | 0.15% | |
Certificates of deposit, interest rate maximum | 3.25% | |
Weighted Average Interest Rate | ||
Interest-bearing checking accounts | 0.44% | 1.57% |
Money market deposit accounts | 0.71% | 1.84% |
Certificates of deposit | 1.51% | 2.24% |
Weighted average rate on interest-bearing accounts | 0.74% | 1.87% |
Demand and savings accounts: | ||
Noninterest-bearing checking accounts | $ 422,341 | $ 356,102 |
Interest-bearing checking accounts | 2,664,864 | 1,398,264 |
Money market deposit accounts | 3,547,518 | 3,426,745 |
Total demand and savings accounts | 6,634,723 | 5,181,111 |
Certificates of deposit | 1,196,748 | 1,453,502 |
Total deposits | $ 7,831,471 | $ 6,634,613 |
Deposits - Narrative (Details)
Deposits - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Deposits [Abstract] | ||
Brokered deposits | $ 812.1 | $ 766.6 |
Reciprocal non-brokered | 1,330 | 857.9 |
Certificates of deposit, $100,000 or more, excluding brokered and reciprocal | 516.2 | 551.5 |
Certificates of deposit, $250,000 or more, excluding brokered and reciprocal | $ 185.1 | $ 233.5 |
Deposits - Contractual Maturiti
Deposits - Contractual Maturities of Time Deposits (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Time Deposits, Rolling Year Maturity [Abstract] | ||
12 months or less | $ 1,083,693 | $ 1,244,838 |
12 months to 24 months | 96,517 | 168,437 |
24 months to 36 months | 16,538 | 40,227 |
Total | $ 1,196,748 | $ 1,453,502 |
Deposits - Interest Expense on
Deposits - Interest Expense on Deposits by Type (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Interest Expense, Deposits [Abstract] | ||||
Interest-bearing checking accounts | $ 2,719 | $ 4,965 | $ 7,933 | $ 9,508 |
Money market deposit accounts | 7,377 | 18,200 | 22,031 | 34,739 |
Certificates of deposit | 5,857 | 8,990 | 13,233 | 17,241 |
Total interest expense on deposits | $ 15,953 | $ 32,155 | $ 43,197 | $ 61,488 |
Borrowings - Schedule of Borrow
Borrowings - Schedule of Borrowings (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | May 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||
Total debt | $ 395,552 | $ 355,000 | |
Subordinated Notes Payable 5.75 Percent | Subordinated notes payable | |||
Debt Instrument [Line Items] | |||
Long term debt interest rate | 5.75% | 5.75% | |
Long-term debt | $ 95,552 | ||
Debt issuance costs | $ 1,948 | $ 0 | |
Federal Home Loan Bank advances | Federal Home Loan Bank Borrowings, Issued 4/08/2020, Maturity 7/08/2020 | |||
Debt Instrument [Line Items] | |||
Short term debt interest rate | 0.60% | ||
Short-term debt | $ 50,000 | ||
Federal Home Loan Bank advances | Federal Home Loan Bank Borrowings, Issued 6/01/2020, Maturity 9/1/2020 | |||
Debt Instrument [Line Items] | |||
Short term debt interest rate | 0.46% | ||
Short-term debt | $ 150,000 | ||
Federal Home Loan Bank advances | Federal Home Loan Bank Borrowings, Issued 6/02/2020, Maturity 9/2/2020 | |||
Debt Instrument [Line Items] | |||
Short term debt interest rate | 0.46% | ||
Short-term debt | $ 50,000 | ||
Federal Home Loan Bank advances | Federal Home Loan Bank Borrowings, Issued 6/22/2020, Maturity 9/21/2020 | |||
Debt Instrument [Line Items] | |||
Short term debt interest rate | 0.47% | ||
Short-term debt | $ 50,000 | ||
Federal Home Loan Bank advances | Federal Home Loan Bank Borrowings, Maturity 5/1/2020 | |||
Debt Instrument [Line Items] | |||
Short term debt interest rate | 1.81% | ||
Short-term debt | $ 55,000 | ||
Federal Home Loan Bank advances | Federal Home Loan Bank Borrowings, Issued 12/12/2019, Maturity 1/13/2020 | |||
Debt Instrument [Line Items] | |||
Short term debt interest rate | 1.85% | ||
Short-term debt | $ 100,000 | ||
Federal Home Loan Bank advances | Federal Home Loan Bank Borrowings, Issued 12/02/2019, Maturity 3/2/2020 | |||
Debt Instrument [Line Items] | |||
Short term debt interest rate | 1.91% | ||
Short-term debt | $ 150,000 | ||
Federal Home Loan Bank advances | Federal Home Loan Bank Borrowings, Issued 10/08/2019, Maturity 1/8/2020 | |||
Debt Instrument [Line Items] | |||
Short term debt interest rate | 2.00% | ||
Short-term debt | $ 50,000 |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) - USD ($) | 1 Months Ended | 6 Months Ended | ||
May 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Short-term Debt [Line Items] | ||||
Net proceeds from issuance of subordinated notes payable | $ 95,518,000 | $ 0 | ||
Line of credit borrowings | ||||
Short-term Debt [Line Items] | ||||
Short-term debt | 0 | $ 0 | ||
Federal Home Loan Bank | ||||
Short-term Debt [Line Items] | ||||
Pledged securities, for Federal Home Loan Bank | 2,600,000 | |||
Texas Capital Bank | Line of credit borrowings | ||||
Short-term Debt [Line Items] | ||||
Line of credit facility, current borrowing capacity | 75,000,000 | |||
Bank subsidiary | Federal Home Loan Bank advances | ||||
Short-term Debt [Line Items] | ||||
Short-term debt | 300,000,000 | 355,000,000 | ||
Bank subsidiary | Federal Home Loan Bank | ||||
Short-term Debt [Line Items] | ||||
Pledged securities, for Federal Home Loan Bank | 2,600,000 | |||
Pledged loans receivable, for Federal Home Loan Bank | 1,170,000,000 | |||
Bank subsidiary | Federal Home Loan Bank | Line of credit borrowings | ||||
Short-term Debt [Line Items] | ||||
Line of credit facility, current borrowing capacity | 837,500,000 | |||
Bank subsidiary | M&T Bank | Line of credit borrowings | ||||
Short-term Debt [Line Items] | ||||
Line of credit facility, current borrowing capacity | 10,000,000 | |||
Short-term debt | 0 | 0 | ||
Bank subsidiary | Texas Capital Bank | Line of credit borrowings | ||||
Short-term Debt [Line Items] | ||||
Line of credit facility, current borrowing capacity | 20,000,000 | |||
Short-term debt | 0 | $ 0 | ||
Bank subsidiary | PNC Bank | Financial Guarantee | ||||
Short-term Debt [Line Items] | ||||
Credit cards issued, notional amount | 3,200,000 | |||
Bank subsidiary | PNC Bank | Line of credit borrowings | ||||
Short-term Debt [Line Items] | ||||
Line of credit facility, current borrowing capacity | $ 8,000,000 | |||
Subordinated notes payable | Subordinated Notes Payable 5.75 Percent | ||||
Short-term Debt [Line Items] | ||||
Net proceeds from issuance of subordinated notes payable | $ 97,500,000 | |||
Debt term | 10 years | |||
Long term debt interest rate | 5.75% | 5.75% |
Borrowings - Interest Expense o
Borrowings - Interest Expense on Borrowings by Type (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Debt Instrument [Line Items] | ||||
Interest expense on borrowings | $ 2,224 | $ 2,881 | $ 4,260 | $ 6,078 |
Subordinated notes payable | ||||
Debt Instrument [Line Items] | ||||
Interest expense on borrowings | 680 | 537 | 680 | 1,090 |
FHLB borrowings | ||||
Debt Instrument [Line Items] | ||||
Interest expense on borrowings | 1,284 | 2,334 | 3,319 | 4,920 |
Line of credit borrowings | ||||
Debt Instrument [Line Items] | ||||
Interest expense on borrowings | $ 260 | $ 10 | $ 261 | $ 68 |
Stock Transactions - Narrative
Stock Transactions - Narrative (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
May 31, 2019USD ($)$ / sharesshares | Mar. 31, 2018USD ($)$ / sharesshares | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2019USD ($)$ / sharesshares | |
Class of Stock [Line Items] | ||||||
Net proceeds from issuance of preferred stock | $ 0 | $ 77,674 | ||||
Dividends paid | $ 3,924 | 1,829 | ||||
Shares repurchased (shares) | shares | 83,988 | |||||
Cost of shares repurchased | $ 155 | $ 311 | $ 2,734 | 744 | ||
Cost of shares repurchased in connection with exercise, net settlement or vesting of equity awards | $ 2,100 | |||||
Shares canceled in period (in shares) | shares | 212,447 | |||||
Treasury stock reissuance | 110 | $ 110 | ||||
Payments for cancellation of stock options | 2,484 | 0 | ||||
Series B depositary share | ||||||
Class of Stock [Line Items] | ||||||
Issuance of shares (in shares) | shares | 3,220,000 | |||||
Conversion from depository to preferred shares | 0.025 | |||||
Liquidation preference (usd per share) | $ / shares | $ 25 | |||||
Series B depositary share | Public offering | ||||||
Class of Stock [Line Items] | ||||||
Issuance of shares (in shares) | shares | 3,220,000 | |||||
Series B preferred stock | ||||||
Class of Stock [Line Items] | ||||||
Issuance of shares (in shares) | shares | 80,500 | |||||
Dividend rate | 6.375% | |||||
Liquidation preference (usd per share) | $ / shares | $ 1,000 | |||||
Net proceeds from issuance of preferred stock | $ 77,600 | |||||
Basis spread | 4.088% | |||||
Dividends paid | 2,600 | $ 471 | ||||
Series A depositary share | ||||||
Class of Stock [Line Items] | ||||||
Issuance of shares (in shares) | shares | 1,610,000 | |||||
Conversion from depository to preferred shares | 0.025 | |||||
Liquidation preference (usd per share) | $ / shares | $ 25 | |||||
Series A depositary share | Public offering | ||||||
Class of Stock [Line Items] | ||||||
Issuance of shares (in shares) | shares | 1,610,000 | |||||
Series A preferred stock | ||||||
Class of Stock [Line Items] | ||||||
Issuance of shares (in shares) | shares | 40,250 | |||||
Dividend rate | 6.75% | |||||
Liquidation preference (usd per share) | $ / shares | $ 1,000 | |||||
Net proceeds from issuance of preferred stock | $ 38,500 | |||||
Basis spread | 3.985% | 3.985% | ||||
Dividends paid | $ 1,400 | $ 1,400 | ||||
Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Shares repurchased (shares) | shares | 40,000 | 35,000 | ||||
Reissuance of treasury stock (in shares) | shares | (8,500) | |||||
Common Stock | Share Repurchase Program | ||||||
Class of Stock [Line Items] | ||||||
Stock repurchase program, remaining authorized repurchase amount | 9,800 | $ 9,800 | ||||
Shares repurchased (shares) | shares | 40,000 | 35,000 | ||||
Cost of shares repurchased | $ 670 | $ 744 | ||||
Average cost per share (usd per share) | $ / shares | $ 16.76 | $ 21.26 | ||||
Treasury Stock | ||||||
Class of Stock [Line Items] | ||||||
Shares repurchased (shares) | shares | (40,000) | (35,000) | ||||
Cost of shares repurchased | 155 | $ 311 | $ 2,734 | $ 744 | ||
Reissuance of treasury stock (in shares) | shares | 8,500 | |||||
Treasury stock reissuance | $ 135 | $ 135 |
Stock Transactions - Shares Out
Stock Transactions - Shares Outstanding Activity (Details) - shares | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Number of Shares Outstanding [Rollforward] | ||
Purchase of treasury stock through open market transactions | (83,988) | |
Treasury Stock | ||
Number of Shares Outstanding [Rollforward] | ||
Balance, beginning of period (shares) | 2,126,422 | 2,014,910 |
Purchase of treasury stock through open market transactions | 40,000 | 35,000 |
Increase in treasury stock related to equity awards | 83,988 | |
Reissuance of treasury stock | (8,500) | |
Balance, ending of period (shares) | 2,241,910 | 2,049,910 |
Preferred Shares | ||
Number of Shares Outstanding [Rollforward] | ||
Balance, beginning of period (shares) | 120,750 | 40,250 |
Issuance of preferred stock | 80,500 | |
Balance, ending of period (shares) | 120,750 | 120,750 |
Common Stock | ||
Number of Shares Outstanding [Rollforward] | ||
Balance, beginning of period (shares) | 29,355,986 | 28,878,674 |
Issuance of restricted common stock | 597,070 | 542,703 |
Forfeitures of restricted common stock | (11,018) | (69,605) |
Exercise of stock options | 25,000 | 22,380 |
Purchase of treasury stock through open market transactions | (40,000) | (35,000) |
Increase in treasury stock related to equity awards | (83,988) | |
Reissuance of treasury stock | 8,500 | |
Balance, ending of period (shares) | 29,851,550 | 29,339,152 |
Regulatory Capital - Narrative
Regulatory Capital - Narrative (Details) | 6 Months Ended |
Jun. 30, 2020 | |
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | |
Percentage conservation buffer required for capital adequacy to risk weighted assets, fully phased-in | 2.50% |
Regulatory Capital - Regulatory
Regulatory Capital - Regulatory Capital Requirements (Details) $ in Thousands | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Total risk-based capital (Amount) | ||
Total risk-based capital | $ 699,015 | $ 572,221 |
Total risk-based capital required for capital adequacy | $ 433,732 | $ 379,911 |
Total risk-based capital (Ratio) | ||
Total risk-based capital, ratio | 0.1289 | 0.1205 |
Total risk-based capital required for capital adequacy, ratio | 0.0800 | 0.0800 |
Tier 1 risk-based capital (Amount) | ||
Tier 1 risk-based capital | $ 579,146 | $ 558,068 |
Tier 1 risk-based capital required for capital adequacy | $ 325,299 | $ 284,933 |
Tier 1 risk-based capital (Ratio) | ||
Tier 1 risk-based capital, ratio | 0.1068 | 0.1175 |
Tier 1 risk-based capital required for capital adequacy, ratio | 0.0600 | 0.0600 |
Common Equity Tier One Risk Based Capital (Amount) | ||
Common equity tier 1 risk-based capital | $ 463,067 | $ 442,385 |
Common equity tier 1 risk-based capital required for capital adequacy | $ 243,975 | $ 213,700 |
Common Equity Tier One Risk Based Capital (Ratio) | ||
Common equity tier 1 risk-based capital, ratio | 0.0854 | 0.0932 |
Common equity tier 1 risk-based capital required for capital adequacy, ratio | 4.50% | 4.50% |
Tier 1 leverage (Amount) | ||
Tier 1 leverage capital | $ 579,146 | $ 558,068 |
Tier 1 leverage capital required for capital adequacy | $ 367,538 | $ 296,038 |
Tier 1 leverage (Ratio) | ||
Tier 1 leverage capital, ratio | 0.0630 | 0.0754 |
Tier 1 leverage capital required for capital adequacy, ratio | 0.0400 | 0.0400 |
Bank subsidiary | ||
Total risk-based capital (Amount) | ||
Total risk-based capital | $ 677,080 | $ 547,532 |
Total risk-based capital required for capital adequacy | 432,764 | 378,623 |
Total risk-based capital required to be well capitalized | $ 540,955 | $ 473,279 |
Total risk-based capital (Ratio) | ||
Total risk-based capital, ratio | 0.1252 | 0.1157 |
Total risk-based capital required for capital adequacy, ratio | 0.0800 | 0.0800 |
Total risk-based capital required to be well capitalized, ratio | 0.1000 | 0.1000 |
Tier 1 risk-based capital (Amount) | ||
Tier 1 risk-based capital | $ 652,763 | $ 532,779 |
Tier 1 risk-based capital required for capital adequacy | 324,573 | 283,967 |
Tier 1 risk-based capital required to be well capitalized | $ 432,764 | $ 378,623 |
Tier 1 risk-based capital (Ratio) | ||
Tier 1 risk-based capital, ratio | 0.1207 | 0.1126 |
Tier 1 risk-based capital required for capital adequacy, ratio | 0.0600 | 0.0600 |
Tier 1 risk-based capital required to be well capitalized, ratio | 0.0800 | 0.0800 |
Common Equity Tier One Risk Based Capital (Amount) | ||
Common equity tier 1 risk-based capital | $ 652,763 | $ 532,779 |
Common equity tier 1 risk-based capital required for capital adequacy | 243,430 | 212,975 |
Common equity tier 1 risk-based capital required to be well capitalized | $ 351,621 | $ 307,631 |
Common Equity Tier One Risk Based Capital (Ratio) | ||
Common equity tier 1 risk-based capital, ratio | 0.1207 | 0.1126 |
Common equity tier 1 risk-based capital required for capital adequacy, ratio | 4.50% | 4.50% |
Common equity tier 1 risk-based capital required to be well capitalized, ratio | 6.50% | 6.50% |
Tier 1 leverage (Amount) | ||
Tier 1 leverage capital | $ 652,763 | $ 532,779 |
Tier 1 leverage capital required for capital adequacy | 367,000 | 295,277 |
Tier 1 leverage capital required to be well capitalized | $ 458,750 | $ 369,097 |
Tier 1 leverage (Ratio) | ||
Tier 1 leverage capital, ratio | 0.0711 | 0.0722 |
Tier 1 leverage capital required for capital adequacy, ratio | 0.0400 | 0.0400 |
Tier 1 leverage capital required to be well capitalized, ratio | 0.0500 | 0.0500 |
Earnings Per Common Share - Com
Earnings Per Common Share - Computation of Basic and Diluted Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Net income available to common shareholders | $ 8,439 | $ 13,541 | $ 19,372 | $ 27,426 |
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | ||||
Basic weighted average common shares outstanding (shares) | 28,223,085 | 27,887,599 | 28,201,837 | 27,860,370 |
Restricted stock - dilutive (shares) | 221,456 | 562,226 | 324,498 | 550,903 |
Stock options - dilutive (shares) | 83,420 | 340,848 | 161,469 | 336,445 |
Diluted weighted average common shares outstanding (shares) | 28,527,961 | 28,790,673 | 28,687,804 | 28,747,718 |
Earnings per common share: | ||||
Earnings per common share, basic (in usd per share) | $ 0.30 | $ 0.49 | $ 0.69 | $ 0.98 |
Earnings per common share, diluted (in usd per share) | $ 0.30 | $ 0.47 | $ 0.68 | $ 0.95 |
Anti-dilutive shares (shares) | 869,746 | 6,000 | 566,498 | 13,000 |
Derivatives and Hedging Activ_3
Derivatives and Hedging Activity - Financial Position, Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Derivatives, Fair Value [Line Items] | ||
Asset derivatives, fair value | $ 171,967 | $ 55,241 |
Liability derivatives, fair value | 183,252 | 57,473 |
Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Asset derivatives, fair value | 171,967 | 55,241 |
Other liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Liability derivatives, fair value | 183,252 | 57,473 |
Designated as hedging instrument | Other assets | Interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Asset derivatives, fair value | 0 | 0 |
Designated as hedging instrument | Other liabilities | Interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Liability derivatives, fair value | 11,161 | 2,184 |
Not designated as hedging instrument | Other assets | Interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Asset derivatives, fair value | 171,967 | 55,241 |
Not designated as hedging instrument | Other liabilities | Interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Liability derivatives, fair value | $ 172,091 | $ 55,289 |
Derivatives and Hedging Activ_4
Derivatives and Hedging Activity - Offsetting of Derivative Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Gross Amounts of Recognized Assets | $ 171,967 | $ 55,241 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Assets presented in the Statement of Financial Position | 171,967 | 55,241 |
Financial Instruments | 0 | (850) |
Cash Collateral Received | 0 | 0 |
Net Amount | $ 171,967 | $ 54,391 |
Derivatives and Hedging Activ_5
Derivatives and Hedging Activity - Offsetting of Derivative Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Gross Amounts of Recognized Liabilities | $ 183,252 | $ 57,473 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities presented in the Statement of Financial Position | 183,252 | 57,473 |
Financial Instruments | 0 | (850) |
Cash Collateral Posted | (183,227) | (55,753) |
Net Amount | $ 25 | $ 870 |
Derivatives and Hedging Activ_6
Derivatives and Hedging Activity - Interest Rate Derivative Transactions (Details) - Cash flow hedging - Interest rate swaps - Designated as hedging instrument $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Derivative [Line Items] | |
Notional Amount | $ 300,000 |
Estimated Increase/ (Decrease) to Interest Expense in the Next Twelve Months | 3,738 |
Issued 1/8/2018, Maturity 1/8/2021 | |
Derivative [Line Items] | |
Notional Amount | $ 50,000 |
Effective Rate | 2.21% |
Estimated Increase/ (Decrease) to Interest Expense in the Next Twelve Months | $ 501 |
Remaining Term (in Months) | 6 months |
Issued 5/30/2019, Maturity 6/1/2022 | |
Derivative [Line Items] | |
Notional Amount | $ 50,000 |
Effective Rate | 2.05% |
Estimated Increase/ (Decrease) to Interest Expense in the Next Twelve Months | $ 903 |
Remaining Term (in Months) | 23 months |
Issued 5/30/2019, Maturity 6/1/2023 | |
Derivative [Line Items] | |
Notional Amount | $ 50,000 |
Effective Rate | 2.03% |
Estimated Increase/ (Decrease) to Interest Expense in the Next Twelve Months | $ 895 |
Remaining Term (in Months) | 35 months |
Issued 5/30/2019, Maturity 6/1/2024 | |
Derivative [Line Items] | |
Notional Amount | $ 50,000 |
Effective Rate | 2.04% |
Estimated Increase/ (Decrease) to Interest Expense in the Next Twelve Months | $ 901 |
Remaining Term (in Months) | 47 months |
Issued 3/2/2020, Maturity 3/2/2025 | |
Derivative [Line Items] | |
Notional Amount | $ 50,000 |
Effective Rate | 0.98% |
Estimated Increase/ (Decrease) to Interest Expense in the Next Twelve Months | $ 364 |
Remaining Term (in Months) | 56 months |
Issued 3/20/2020, Maturity 3/20/2025 | |
Derivative [Line Items] | |
Notional Amount | $ 50,000 |
Effective Rate | 0.60% |
Estimated Increase/ (Decrease) to Interest Expense in the Next Twelve Months | $ 174 |
Remaining Term (in Months) | 57 months |
Derivatives and Hedging Activ_7
Derivatives and Hedging Activity - Gain (Loss) in Statement of Financial Performance (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Not designated as hedging instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income on Derivatives | $ (4) | $ (99) | $ (66) | $ (119) |
Interest rate swaps | Not designated as hedging instrument | Non-interest income | ||||
Derivatives, Fair Value [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income on Derivatives | (4) | (22) | (66) | (42) |
Equity swap | Not designated as hedging instrument | Non-interest income | ||||
Derivatives, Fair Value [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income on Derivatives | 0 | (77) | 0 | (77) |
Cash flow hedging | Interest rate swaps | Designated as hedging instrument | Interest expense | ||||
Derivatives, Fair Value [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income on Derivatives | (460) | 560 | (619) | 1,121 |
Unrealized Gain (Loss) Recognized in Accumulated Other Comprehensive Income on Derivatives | $ (1,578) | $ (2,118) | $ (9,290) | $ (2,325) |
Derivatives and Hedging Activ_8
Derivatives and Hedging Activity - Narrative (Details) - Interest rate swaps $ in Millions | Jun. 30, 2020USD ($) |
Derivatives, Fair Value [Line Items] | |
Termination value of derivatives, including accrued interest, in a net liability position | $ 183.3 |
Collateral already posted amount | 184.9 |
Not designated as hedging instrument | |
Derivatives, Fair Value [Line Items] | |
Derivative, aggregate notional amount | $ 3,290 |
Disclosures About Fair Value _3
Disclosures About Fair Value of Financial Instruments - Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Financial assets: | ||
Debt securities available-for-sale | $ 563,777 | $ 248,782 |
Level 2 | ||
Financial assets: | ||
Debt securities available-for-sale | 563,777 | 248,782 |
Fair value, measurements, recurring | ||
Financial assets: | ||
Total financial assets | 735,744 | 304,023 |
Financial liabilities: | ||
Total financial liabilities | 183,252 | 57,473 |
Fair value, measurements, recurring | Level 1 | ||
Financial assets: | ||
Total financial assets | 0 | 0 |
Financial liabilities: | ||
Total financial liabilities | 0 | 0 |
Fair value, measurements, recurring | Level 2 | ||
Financial assets: | ||
Total financial assets | 735,744 | 304,023 |
Financial liabilities: | ||
Total financial liabilities | 183,252 | 57,473 |
Fair value, measurements, recurring | Level 3 | ||
Financial assets: | ||
Total financial assets | 0 | 0 |
Financial liabilities: | ||
Total financial liabilities | 0 | 0 |
Fair value, measurements, recurring | Interest rate swaps | ||
Financial assets: | ||
Interest rate swaps | 171,967 | 55,241 |
Financial liabilities: | ||
Interest rate swaps | 183,252 | 57,473 |
Fair value, measurements, recurring | Interest rate swaps | Level 1 | ||
Financial assets: | ||
Interest rate swaps | 0 | 0 |
Financial liabilities: | ||
Interest rate swaps | 0 | 0 |
Fair value, measurements, recurring | Interest rate swaps | Level 2 | ||
Financial assets: | ||
Interest rate swaps | 171,967 | 55,241 |
Financial liabilities: | ||
Interest rate swaps | 183,252 | 57,473 |
Fair value, measurements, recurring | Interest rate swaps | Level 3 | ||
Financial assets: | ||
Interest rate swaps | 0 | 0 |
Financial liabilities: | ||
Interest rate swaps | 0 | 0 |
Fair value, measurements, recurring | Corporate bonds | ||
Financial assets: | ||
Debt securities available-for-sale | 236,685 | 175,418 |
Fair value, measurements, recurring | Corporate bonds | Level 1 | ||
Financial assets: | ||
Debt securities available-for-sale | 0 | 0 |
Fair value, measurements, recurring | Corporate bonds | Level 2 | ||
Financial assets: | ||
Debt securities available-for-sale | 236,685 | 175,418 |
Fair value, measurements, recurring | Corporate bonds | Level 3 | ||
Financial assets: | ||
Debt securities available-for-sale | 0 | 0 |
Fair value, measurements, recurring | Trust preferred securities | ||
Financial assets: | ||
Debt securities available-for-sale | 16,645 | 18,260 |
Fair value, measurements, recurring | Trust preferred securities | Level 1 | ||
Financial assets: | ||
Debt securities available-for-sale | 0 | 0 |
Fair value, measurements, recurring | Trust preferred securities | Level 2 | ||
Financial assets: | ||
Debt securities available-for-sale | 16,645 | 18,260 |
Fair value, measurements, recurring | Trust preferred securities | Level 3 | ||
Financial assets: | ||
Debt securities available-for-sale | 0 | 0 |
Fair value, measurements, recurring | Agency collateralized mortgage obligations | ||
Financial assets: | ||
Debt securities available-for-sale | 23,760 | 27,193 |
Fair value, measurements, recurring | Agency collateralized mortgage obligations | Level 1 | ||
Financial assets: | ||
Debt securities available-for-sale | 0 | 0 |
Fair value, measurements, recurring | Agency collateralized mortgage obligations | Level 2 | ||
Financial assets: | ||
Debt securities available-for-sale | 23,760 | 27,193 |
Fair value, measurements, recurring | Agency collateralized mortgage obligations | Level 3 | ||
Financial assets: | ||
Debt securities available-for-sale | 0 | 0 |
Fair value, measurements, recurring | Agency mortgage-backed securities | ||
Financial assets: | ||
Debt securities available-for-sale | 277,445 | 18,509 |
Fair value, measurements, recurring | Agency mortgage-backed securities | Level 1 | ||
Financial assets: | ||
Debt securities available-for-sale | 0 | 0 |
Fair value, measurements, recurring | Agency mortgage-backed securities | Level 2 | ||
Financial assets: | ||
Debt securities available-for-sale | 277,445 | 18,509 |
Fair value, measurements, recurring | Agency mortgage-backed securities | Level 3 | ||
Financial assets: | ||
Debt securities available-for-sale | 0 | 0 |
Fair value, measurements, recurring | Agency debentures | ||
Financial assets: | ||
Debt securities available-for-sale | 9,242 | 9,402 |
Fair value, measurements, recurring | Agency debentures | Level 1 | ||
Financial assets: | ||
Debt securities available-for-sale | 0 | 0 |
Fair value, measurements, recurring | Agency debentures | Level 2 | ||
Financial assets: | ||
Debt securities available-for-sale | 9,242 | 9,402 |
Fair value, measurements, recurring | Agency debentures | Level 3 | ||
Financial assets: | ||
Debt securities available-for-sale | $ 0 | $ 0 |
Disclosures About Fair Value _4
Disclosures About Fair Value of Financial Instruments - Fair Value Measurements, Nonrecurring (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Level 3 | ||
Financial assets: | ||
Other real estate owned | $ 2,724 | $ 4,250 |
Fair value, measurements, nonrecurring | ||
Financial assets: | ||
Loans measured for impairment, net | 5,764 | 13 |
Other real estate owned | 2,724 | 4,250 |
Total assets | 8,488 | 4,263 |
Fair value, measurements, nonrecurring | Level 1 | ||
Financial assets: | ||
Loans measured for impairment, net | 0 | 0 |
Other real estate owned | 0 | 0 |
Total assets | 0 | 0 |
Fair value, measurements, nonrecurring | Level 2 | ||
Financial assets: | ||
Loans measured for impairment, net | 0 | 0 |
Other real estate owned | 0 | 0 |
Total assets | 0 | 0 |
Fair value, measurements, nonrecurring | Level 3 | ||
Financial assets: | ||
Loans measured for impairment, net | 5,764 | 13 |
Other real estate owned | 2,724 | 4,250 |
Total assets | $ 8,488 | $ 4,263 |
Disclosures About Fair Value _5
Disclosures About Fair Value of Financial Instruments - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value Disclosures [Abstract] | ||
Specific allowance for loan losses | $ 1,016 | $ 171 |
Disclosures About Fair Value _6
Disclosures About Fair Value of Financial Instruments - Fair Value Inputs, Assets, Quantitative Information (Details) - Collateral - Level 3 $ in Thousands | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Loans measured for impairment, net | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value | $ 5,764 | $ 13 |
Loans measured for impairment, net | Appraisal value and discount due to salability conditions | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans measured for impairment, net | 0.27 | 0 |
Other real estate owned | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value | $ 2,724 | $ 4,250 |
Other real estate owned | Appraisal value and discount due to salability conditions | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Other real estate owned | 0.20 | 0.17 |
Disclosures About Fair Value _7
Disclosures About Fair Value of Financial Instruments - Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Financial assets: | ||
Debt securities available-for-sale | $ 563,777 | $ 248,782 |
Debt securities held-to-maturity | 237,671 | 196,755 |
Investment management fees receivable, net | 6,907 | 7,560 |
Interest rate swaps | 171,967 | 55,241 |
Financial liabilities: | ||
Derivative liability | 183,252 | 57,473 |
Level 1 | ||
Financial assets: | ||
Cash and cash equivalents | 724,942 | 403,855 |
Level 2 | ||
Financial assets: | ||
Debt securities available-for-sale | 563,777 | 248,782 |
Debt securities held-to-maturity | 237,671 | 196,755 |
Federal Home Loan Bank stock | 13,280 | 24,324 |
Accrued interest receivable | 18,534 | 22,326 |
Investment management fees receivable, net | 6,907 | 7,560 |
Bank owned life insurance | 70,901 | 70,044 |
Financial liabilities: | ||
Deposits | 7,861,737 | 6,648,546 |
Borrowings, net | 397,608 | 355,003 |
Level 2 | Interest rate swaps | ||
Financial assets: | ||
Interest rate swaps | 171,967 | 55,241 |
Financial liabilities: | ||
Derivative liability | 183,252 | 57,473 |
Level 3 | ||
Financial assets: | ||
Loans and leases held-for-investment, net | 7,198,597 | 6,548,432 |
Other real estate owned | 2,724 | 4,250 |
Carrying amount | Level 1 | ||
Financial assets: | ||
Cash and cash equivalents | 724,942 | 403,855 |
Carrying amount | Level 2 | ||
Financial assets: | ||
Debt securities available-for-sale | 563,777 | 248,782 |
Debt securities held-to-maturity | 235,083 | 196,044 |
Federal Home Loan Bank stock | 13,280 | 24,324 |
Accrued interest receivable | 18,534 | 22,326 |
Investment management fees receivable, net | 6,907 | 7,560 |
Bank owned life insurance | 70,901 | 70,044 |
Financial liabilities: | ||
Deposits | 7,831,471 | 6,634,613 |
Borrowings, net | 395,552 | 355,000 |
Carrying amount | Level 2 | Interest rate swaps | ||
Financial assets: | ||
Interest rate swaps | 171,967 | 55,241 |
Financial liabilities: | ||
Derivative liability | 183,252 | 57,473 |
Carrying amount | Level 3 | ||
Financial assets: | ||
Loans and leases held-for-investment, net | 7,147,494 | 6,563,451 |
Other real estate owned | $ 2,724 | $ 4,250 |
Changes in Accumulated Other _3
Changes in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Accumulated Other Comprehensive Income [Roll Forward] | ||||
Beginning balance | $ 614,380 | $ 496,557 | $ 621,281 | $ 479,354 |
Change in unrealized holding gains (losses) | 7,175 | (353) | (8,115) | 1,920 |
Losses (gains) reclassified from other comprehensive income | 344 | (509) | 453 | (949) |
Net other comprehensive income (loss) | 7,519 | (862) | (7,662) | 971 |
Ending balance | 632,831 | 588,981 | 632,831 | 588,981 |
Debt Securities | ||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||
Beginning balance | (6,678) | 54 | 2,756 | (2,363) |
Change in unrealized holding gains (losses) | 8,375 | 1,259 | (1,048) | 3,689 |
Losses (gains) reclassified from other comprehensive income | (5) | (83) | (16) | (96) |
Net other comprehensive income (loss) | 8,370 | 1,176 | (1,064) | 3,593 |
Ending balance | 1,692 | 1,230 | 1,692 | 1,230 |
Derivatives | ||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||
Beginning balance | (7,371) | 448 | (1,624) | 1,032 |
Change in unrealized holding gains (losses) | (1,200) | (1,612) | (7,067) | (1,769) |
Losses (gains) reclassified from other comprehensive income | 349 | (426) | 469 | (853) |
Net other comprehensive income (loss) | (851) | (2,038) | (6,598) | (2,622) |
Ending balance | (8,222) | (1,590) | (8,222) | (1,590) |
Total | ||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||
Beginning balance | (14,049) | 502 | 1,132 | (1,331) |
Net other comprehensive income (loss) | 7,519 | (862) | (7,662) | 971 |
Ending balance | $ (6,530) | $ (360) | $ (6,530) | $ (360) |
Segments - Schedule of Segment
Segments - Schedule of Segment Reporting Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)segment | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | segment | 2 | ||||
Assets | $ 9,129,841 | $ 9,129,841 | $ 7,765,810 | ||
Income statement data: | |||||
Interest income | 51,661 | $ 66,339 | 115,863 | $ 129,241 | |
Interest expense | 18,177 | 35,036 | 47,457 | 67,566 | |
Net interest income | 33,484 | 31,303 | 68,406 | 61,675 | |
Provision (credit) for loan and lease losses | 6,005 | (712) | 8,998 | (1,089) | |
Net interest income after provision for loan and lease losses | 27,479 | 32,015 | 59,408 | 62,764 | |
Non-interest income: | |||||
Net gain on the sale and call of debt securities | 14 | 112 | 71 | 140 | |
Other non-interest income | 5,245 | 2,613 | 10,866 | 6,230 | |
Total non-interest income | 12,997 | 11,979 | 26,313 | 25,048 | |
Non-interest expense: | |||||
Intangible amortization expense | 486 | 502 | 988 | 1,004 | |
Other non-interest expense | 27,610 | 27,083 | 56,252 | 53,253 | |
Total non-interest expense | 28,096 | 27,585 | 57,240 | 54,257 | |
Income before tax | 12,380 | 16,409 | 28,481 | 33,555 | |
Income tax expense (benefit) | 1,979 | 1,718 | 5,185 | 4,300 | |
Net income | 10,401 | 14,691 | 23,296 | 29,255 | |
Investment management fees | |||||
Non-interest income: | |||||
Total non-interest income | 7,738 | 9,254 | 15,376 | 18,678 | |
Parent and other | |||||
Segment Reporting Information [Line Items] | |||||
Assets | (10,601) | (10,601) | (4,466) | ||
Income statement data: | |||||
Interest income | 0 | 28 | 0 | 99 | |
Interest expense | 926 | 519 | 910 | 1,130 | |
Net interest income | (926) | (491) | (910) | (1,031) | |
Provision (credit) for loan and lease losses | 0 | 0 | 0 | 0 | |
Net interest income after provision for loan and lease losses | (926) | (491) | (910) | (1,031) | |
Non-interest income: | |||||
Net gain on the sale and call of debt securities | 0 | 0 | 0 | 0 | |
Other non-interest income | 0 | 131 | 0 | 850 | |
Total non-interest income | (159) | 21 | (286) | 632 | |
Non-interest expense: | |||||
Intangible amortization expense | 0 | 0 | 0 | 0 | |
Other non-interest expense | 640 | 250 | 1,622 | 343 | |
Total non-interest expense | 640 | 250 | 1,622 | 343 | |
Income before tax | (1,725) | (720) | (2,818) | (742) | |
Income tax expense (benefit) | (296) | (204) | (466) | (210) | |
Net income | (1,429) | (516) | (2,352) | (532) | |
Parent and other | Investment management fees | |||||
Non-interest income: | |||||
Total non-interest income | (159) | (110) | (286) | (218) | |
Bank | Operating segments | |||||
Segment Reporting Information [Line Items] | |||||
Assets | 9,057,476 | 9,057,476 | 7,686,981 | ||
Income statement data: | |||||
Interest income | 51,661 | 66,311 | 115,863 | 129,142 | |
Interest expense | 17,251 | 34,517 | 46,547 | 66,436 | |
Net interest income | 34,410 | 31,794 | 69,316 | 62,706 | |
Provision (credit) for loan and lease losses | 6,005 | (712) | 8,998 | (1,089) | |
Net interest income after provision for loan and lease losses | 28,405 | 32,506 | 60,318 | 63,795 | |
Non-interest income: | |||||
Net gain on the sale and call of debt securities | 14 | 112 | 71 | 140 | |
Other non-interest income | 5,215 | 2,478 | 10,866 | 5,355 | |
Total non-interest income | 5,229 | 2,590 | 10,937 | 5,495 | |
Non-interest expense: | |||||
Intangible amortization expense | 0 | 0 | 0 | 0 | |
Other non-interest expense | 19,967 | 18,903 | 41,000 | 37,923 | |
Total non-interest expense | 19,967 | 18,903 | 41,000 | 37,923 | |
Income before tax | 13,667 | 16,193 | 30,255 | 31,367 | |
Income tax expense (benefit) | 2,173 | 1,658 | 5,521 | 3,683 | |
Net income | 11,494 | 14,535 | 24,734 | 27,684 | |
Bank | Operating segments | Investment management fees | |||||
Non-interest income: | |||||
Total non-interest income | 0 | 0 | 0 | 0 | |
Investment management | Operating segments | |||||
Segment Reporting Information [Line Items] | |||||
Assets | 82,966 | 82,966 | $ 83,295 | ||
Income statement data: | |||||
Interest income | 0 | 0 | 0 | 0 | |
Interest expense | 0 | 0 | 0 | 0 | |
Net interest income | 0 | 0 | 0 | 0 | |
Provision (credit) for loan and lease losses | 0 | 0 | 0 | 0 | |
Net interest income after provision for loan and lease losses | 0 | 0 | 0 | 0 | |
Non-interest income: | |||||
Net gain on the sale and call of debt securities | 0 | 0 | 0 | 0 | |
Other non-interest income | 30 | 4 | 0 | 25 | |
Total non-interest income | 7,927 | 9,368 | 15,662 | 18,921 | |
Non-interest expense: | |||||
Intangible amortization expense | 486 | 502 | 988 | 1,004 | |
Other non-interest expense | 7,003 | 7,930 | 13,630 | 14,987 | |
Total non-interest expense | 7,489 | 8,432 | 14,618 | 15,991 | |
Income before tax | 438 | 936 | 1,044 | 2,930 | |
Income tax expense (benefit) | 102 | 264 | 130 | 827 | |
Net income | 336 | 672 | 914 | 2,103 | |
Investment management | Operating segments | Investment management fees | |||||
Non-interest income: | |||||
Total non-interest income | $ 7,897 | $ 9,364 | $ 15,662 | $ 18,896 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event $ / shares in Units, $ in Thousands | Jul. 13, 2020USD ($)$ / shares |
Series A preferred stock | |
Subsequent Event [Line Items] | |
Dividend payable | $ | $ 679 |
Series A depositary share | |
Subsequent Event [Line Items] | |
Dividends payable (usd per share) | $ / shares | $ 0.42 |
Series B preferred stock | |
Subsequent Event [Line Items] | |
Dividend payable | $ | $ 1,300 |
Series B depositary share | |
Subsequent Event [Line Items] | |
Dividends payable (usd per share) | $ / shares | $ 0.40 |