Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 31, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | Midland States Bancorp, Inc. | |
Entity Central Index Key | 1,466,026 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 15,415,747 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Assets | ||
Cash and due from banks | $ 227,496 | $ 211,976 |
Federal funds sold | 534 | 499 |
Cash and cash equivalents | 228,030 | 212,475 |
Investment securities available for sale, at fair value ($72,093 and $75,979 covered by a FDIC loss-share agreement at September 30, 2016 and December 31, 2015, respectively) | 252,212 | 236,627 |
Investment securities held to maturity, at amortized cost (fair value of $88,590 and $92,816 at September 30, 2016 and December 31, 2015, respectively) | 82,941 | 87,521 |
Loans | 2,312,778 | 1,995,589 |
Allowance for loan losses | (15,559) | (15,988) |
Total loans, net | 2,297,219 | 1,979,601 |
Loans held for sale, at fair value | 61,363 | 54,413 |
Premises and equipment, net | 70,727 | 73,133 |
Other real estate owned | 4,828 | 5,472 |
Nonmarketable equity securities | 18,810 | 15,472 |
Accrued interest receivable | 8,811 | 7,697 |
Mortgage servicing rights at lower of cost or market | 64,689 | 66,651 |
Intangible assets | 5,391 | 7,004 |
Goodwill | 46,519 | 46,519 |
Cash surrender value of life insurance policies | 74,276 | 52,729 |
Accrued income taxes receivable | 1,450 | 8,754 |
Deferred tax assets, net | 1,496 | |
Other assets | 30,461 | 29,260 |
Total assets | 3,247,727 | 2,884,824 |
Deposits: | ||
Noninterest-bearing | 629,113 | 543,401 |
Interest- bearing | 1,790,919 | 1,824,247 |
Total deposits | 2,420,032 | 2,367,648 |
Short-term borrowings | 138,289 | 107,538 |
FHLB advances and other borrowings | 237,543 | 40,178 |
Subordinated debt | 54,484 | 61,859 |
Trust preferred debentures | 37,316 | 37,057 |
Accrued interest payable | 1,875 | 979 |
Deferred tax liabilities, net | 3,216 | |
Other liabilities | 33,182 | 36,509 |
Total liabilities | 2,925,937 | 2,651,768 |
Shareholders’ Equity: | ||
Common stock, $0.01 par value; 40,000,000 shares authorized; 15,404,423 and 11,797,404 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively | 154 | 118 |
Capital surplus | 208,452 | 135,822 |
Retained earnings | 103,813 | 90,911 |
Accumulated other comprehensive income | 9,330 | 6,029 |
Total Midland States Bancorp, Inc. shareholders’ equity | 321,749 | 232,880 |
Noncontrolling interest in subsidiaries | 41 | 176 |
Total shareholders’ equity | 321,790 | 233,056 |
Total liabilities and shareholders’ equity | $ 3,247,727 | $ 2,884,824 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
CONSOLIDATED BALANCE SHEETS | ||
Available for sale, covered by FDIC loss-share | $ 72,093 | $ 75,979 |
Investment securities held to maturity | $ 88,590 | $ 92,816 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 40,000,000 | 40,000,000 |
Common stock, shares issued | 15,404,423 | 11,797,404 |
Common stock, shares outstanding | 0 | 11,797,404 |
CONSOLIDATED STATEMENT OF INCOM
CONSOLIDATED STATEMENT OF INCOME - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Loans: | ||||
Taxable | $ 26,905,000 | $ 24,807,000 | $ 78,142,000 | $ 74,821,000 |
Tax exempt | 254,000 | 309,000 | 899,000 | 852,000 |
Investment securities: | ||||
Taxable | 2,940,000 | 2,784,000 | 8,726,000 | 8,589,000 |
Tax exempt | 892,000 | 967,000 | 2,739,000 | 2,972,000 |
Federal funds sold and cash investments | 195,000 | 82,000 | 762,000 | 262,000 |
Total interest income | 31,186,000 | 28,949,000 | 91,268,000 | 87,496,000 |
Interest expense: | ||||
Deposits | 2,189,000 | 1,921,000 | 6,701,000 | 5,320,000 |
Short-term borrowings | 81,000 | 56,000 | 217,000 | 176,000 |
FHLB advances and other borrowings | 306,000 | 111,000 | 698,000 | 634,000 |
Subordinated debt | 873,000 | 1,054,000 | 2,985,000 | 1,671,000 |
Trust preferred debentures | 472,000 | 370,000 | 1,373,000 | 1,240,000 |
Total interest expense | 3,921,000 | 3,512,000 | 11,974,000 | 9,041,000 |
Net interest income | 27,265,000 | 25,437,000 | 79,294,000 | 78,455,000 |
Provision for loan losses | 1,392,000 | 6,699,000 | 3,146,000 | 10,075,000 |
Net interest income after provision for loan losses | 25,873,000 | 18,738,000 | 76,148,000 | 68,380,000 |
Noninterest income: | ||||
Commercial FHA revenue | 3,260,000 | 5,914,000 | 18,360,000 | 17,130,000 |
Residential mortgage banking revenue | 4,990,000 | 3,490,000 | 7,148,000 | 14,305,000 |
Wealth management revenue | 1,941,000 | 1,808,000 | 5,596,000 | 5,461,000 |
Merchant services revenue | 427,000 | 419,000 | 1,287,000 | 1,097,000 |
Service charges on deposit accounts | 1,044,000 | 1,022,000 | 2,916,000 | 2,990,000 |
Interchange revenue | 920,000 | 895,000 | 2,829,000 | 2,703,000 |
FDIC loss-sharing expense | (57,000) | (1,661,000) | (354,000) | |
Gain on sales of investment securities, net | 39,000 | 1,000 | 315,000 | 160,000 |
Other-than-temporary impairment on investment securities | (299,000) | (824,000) | (461,000) | |
Gain on sales of other real estate owned | 33,000 | 92,000 | 112,000 | 417,000 |
Other income | 2,283,000 | 1,179,000 | 5,494,000 | 3,235,000 |
Total noninterest income | 14,937,000 | 14,464,000 | 41,572,000 | 46,683,000 |
Noninterest expense: | ||||
Salaries and employee benefits | 16,568,000 | 14,932,000 | 48,967,000 | 49,588,000 |
Occupancy and equipment | 3,271,000 | 3,114,000 | 9,815,000 | 9,727,000 |
Data processing | 2,586,000 | 2,541,000 | 7,830,000 | 7,651,000 |
FDIC insurance | 388,000 | 371,000 | 1,350,000 | 1,514,000 |
Professional | 1,877,000 | 2,075,000 | 5,151,000 | 6,608,000 |
Marketing | 717,000 | 855,000 | 2,009,000 | 2,247,000 |
Communications | 546,000 | 506,000 | 1,609,000 | 1,791,000 |
Loan expense | 314,000 | 789,000 | 1,351,000 | 2,349,000 |
Other real estate owned | 179,000 | 203,000 | 748,000 | 660,000 |
Amortization of intangible assets | 514,000 | 597,000 | 1,613,000 | 1,863,000 |
Other | 1,703,000 | 1,840,000 | 6,762,000 | 6,073,000 |
Total noninterest expense | 28,663,000 | 27,823,000 | 87,205,000 | 90,071,000 |
Income before income taxes | 12,147,000 | 5,379,000 | 30,515,000 | 24,992,000 |
Income taxes | 4,102,000 | 1,928,000 | 10,562,000 | 8,281,000 |
Net income | 8,045,000 | 3,451,000 | 19,953,000 | 16,711,000 |
Less: net (loss) income attributable to noncontrolling interest in subsidiaries | (6,000) | 6,000 | (6,000) | 82,000 |
Net income attributable to Midland States Bancorp, Inc. | $ 8,051,000 | $ 3,445,000 | $ 19,959,000 | $ 16,629,000 |
Per common share data: | ||||
Basic earnings per common share | $ 0.51 | $ 0.29 | $ 1.46 | $ 1.39 |
Diluted earnings per common share | $ 0.51 | $ 0.28 | $ 1.43 | $ 1.36 |
Weighted average common shares outstanding | 15,578,703 | 11,911,414 | 13,637,997 | 11,895,337 |
Weighted average diluted common shares outstanding | 15,858,273 | 12,130,529 | 13,902,664 | 12,111,695 |
CONSOLIDATED STATEMENT OF COMPR
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income | $ 8,045 | $ 3,451 | $ 19,953 | $ 16,711 |
Investment securities available for sale: | ||||
Unrealized (losses) gains that occurred during the period | (233) | 2,136 | 5,789 | 222 |
Reclassification adjustment for realized net gains on sales of investment securities included in net income | (39) | (1) | (315) | (160) |
Income tax effect | 110 | (859) | (2,203) | (25) |
Change in investment securities available for sale, net of tax | (162) | 1,276 | 3,271 | 37 |
Investment securities held to maturity: | ||||
Amortization of unrealized gain on investment securities transferred from available-for-sale | (3) | (49) | (42) | (187) |
Income tax effect | 1 | 20 | 17 | 103 |
Change in investment securities held to maturity, net of tax | (2) | (29) | (25) | (84) |
Cash flow hedges: | ||||
Change in fair value of interest rate swap | 32 | 21 | 93 | 56 |
Income tax effect | (13) | (13) | (38) | (25) |
Change in cash flow hedges, net of tax | 19 | 8 | 55 | 31 |
Other comprehensive (loss) income, net of tax | (145) | 1,255 | 3,301 | (16) |
Total comprehensive income | 7,900 | 4,706 | 23,254 | 16,695 |
Less: net (loss) income attributable to noncontrolling interest in subsidiaries | (6) | 6 | (6) | 82 |
Total comprehensive income attributable to Midland States Bancorp, Inc. | $ 7,906 | $ 4,700 | $ 23,260 | $ 16,613 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY - USD ($) $ in Thousands | Midland States Bancorp, Inc.'s Shareholders' EquityIPO | Midland States Bancorp, Inc.'s Shareholders' Equity | Common stockIPO | Common stock | Capital surplusIPO | Capital surplus | Retained earnings | Accumulated other comprehensive income | Noncontrolling interests in subsidiaries | IPO | Total |
Balance at the beginning of the period at Dec. 31, 2014 | $ 219,456 | $ 117 | $ 134,423 | $ 74,279 | $ 10,637 | $ 473 | $ 219,929 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income | 16,629 | 16,629 | 82 | 16,711 | |||||||
Cash distributions to noncontrolling interests | (345) | (345) | |||||||||
Compensation expense for stock option grants | 287 | 287 | 287 | ||||||||
Amortization of restricted stock awards | 389 | 389 | 389 | ||||||||
Common dividends declared | (5,680) | (5,680) | (5,680) | ||||||||
Issuance of common stock under employee benefits plans | 350 | 1 | 349 | 350 | |||||||
Other comprehensive income (loss) | (16) | (16) | (16) | ||||||||
Balance at the end of the period at Sep. 30, 2015 | 231,415 | 118 | 135,448 | 85,228 | 10,621 | 210 | 231,625 | ||||
Balance at the beginning of the period at Dec. 31, 2015 | 232,880 | 118 | 135,822 | 90,911 | 6,029 | 176 | 233,056 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income | 19,959 | 19,959 | (6) | 19,953 | |||||||
Cash distributions to noncontrolling interests | (129) | (129) | |||||||||
Compensation expense for stock option grants | 315 | 315 | 315 | ||||||||
Amortization of restricted stock awards | 387 | 387 | 387 | ||||||||
Common dividends declared | (7,057) | (7,057) | (7,057) | ||||||||
Initial public offering of 3,590,065 shares of common stock, net of issuance costs | $ 71,475 | $ 36 | $ 71,439 | $ 71,475 | |||||||
Issuance of common stock under employee benefits plans | 489 | 489 | 489 | ||||||||
Other comprehensive income (loss) | 3,301 | 3,301 | 3,301 | ||||||||
Balance at the end of the period at Sep. 30, 2016 | $ 321,749 | $ 154 | $ 208,452 | $ 103,813 | $ 9,330 | $ 41 | $ 321,790 |
CONSOLIDATED STATEMENTS OF SHA7
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Parenthetical) | 9 Months Ended |
Sep. 30, 2016shares | |
IPO | |
Common stock shares | 3,590,065 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities: | ||
Net income | $ 19,953,000 | $ 16,711,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for loan losses | 3,146,000 | 10,075,000 |
Depreciation on premises and equipment | 3,816,000 | 3,791,000 |
Amortization of intangible assets | 1,613,000 | 1,863,000 |
FDIC loss-sharing expense | 1,661,000 | 354,000 |
Amortization of restricted stock awards | 387,000 | 389,000 |
Compensation expense for stock option grants | 315,000 | 287,000 |
Increase in cash surrender value of life insurance | (1,547,000) | (1,016,000) |
Investment securities amortization, net | 840,000 | 905,000 |
Other-than-temporary impairment on investment securities | 824,000 | 461,000 |
Gain on sales of investment securities, net | (315,000) | (160,000) |
Gain on sales of other real estate owned | (112,000) | (417,000) |
Write-down of other real estate owned | 219,000 | 49,000 |
Origination of loans held for sale | (894,445,000) | (779,821,000) |
Proceeds from sales of loans held for sale | 907,306,000 | 836,133,000 |
Gain on loans sold and held for sale | (28,827,000) | (29,557,000) |
Amortization of mortgage servicing rights | 4,410,000 | 3,739,000 |
Impairment on mortgage servicing rights | 6,093,000 | 676,000 |
Net change in operating assets and liabilities: | ||
Accrued interest receivable | (1,114,000) | (150,000) |
Accrued interest payable | 896,000 | 823,000 |
Accrued income taxes receivable | 7,304,000 | (2,193,000) |
Other assets | 460,000 | 2,776,000 |
Other liabilities | (2,485,000) | 5,945,000 |
Net cash provided by operating activities | 30,398,000 | 71,663,000 |
Investment securities available for sale: | ||
Purchases | (64,396,000) | (43,244,000) |
Sales | 31,191,000 | 61,629,000 |
Maturities and payments | 22,038,000 | 23,306,000 |
Investment securities held to maturity: | ||
Purchases | (2,401,000) | (603,000) |
Maturities | 6,646,000 | 9,818,000 |
Net increase in loans | (325,009,000) | (184,955,000) |
Purchases of premises and equipment | (1,410,000) | (4,875,000) |
Purchase of bank-owned life insurance | (20,000,000) | (20,000,000) |
Purchases of nonmarketable equity securities | (3,428,000) | (5,311,000) |
Sales of nonmarketable equity securities | 90,000 | 1,918,000 |
Proceeds from sales of other real estate owned | 4,423,000 | 4,886,000 |
Net cash paid in acquisitions | (20,053,000) | |
Net cash used in investing activities | (352,256,000) | (177,484,000) |
Cash flows from financing activities: | ||
Net increase in deposits | 52,384,000 | 147,953,000 |
Net increase (decrease) in short-term borrowings | 30,751,000 | (20,891,000) |
Proceeds from FHLB borrowings | 850,000,000 | 47,500,000 |
Payments made on FHLB borrowings | (652,500,000) | (57,500,000) |
Payments made on other borrowings | (14,130,000) | |
Proceeds from issuance of subordinated debt, net of issuance costs | 55,325,000 | |
Payments made on subordinated debt | (8,000,000) | |
Cash dividends paid on common stock | (7,057,000) | (5,680,000) |
Proceeds from issuance of common stock in initial public offering, net of issuance costs | 71,475,000 | |
Proceeds from issuance of common stock under employee benefit plans | 489,000 | 350,000 |
Cash distributions to noncontrolling interests | (129,000) | (345,000) |
Net cash provided by financing activities | 337,413,000 | 152,582,000 |
Net increase (decrease) in cash and cash equivalents | 15,555,000 | 46,761,000 |
Cash and cash equivalents: | ||
Beginning of year | 212,475,000 | 159,903,000 |
End of year | 228,030,000 | 206,664,000 |
Cash payments for: | ||
Interest paid on deposits and borrowed funds | 11,078,000 | 8,218,000 |
Income tax paid | 157,000 | 10,091,000 |
Supplemental disclosures of noncash investing and financing activities: | ||
Transfer of loans to other real estate owned | $ 4,245,000 | $ 2,908,000 |
BUSINESS DESCRIPTION
BUSINESS DESCRIPTION | 9 Months Ended |
Sep. 30, 2016 | |
BUSINESS DESCRIPTION | |
BUSINESS DESCRIPTION | Note 1 – Business Description Midland States Bancorp, Inc. (“the Company,” “we,” “our,” or “us”) is a diversified financial holding company headquartered in Effingham, Illinois. Our 135-year old banking subsidiary, Midland States Bank (the “Bank”), has branches across Illinois and in Missouri and Colorado, and provides traditional community banking and other complementary financial services, including lending, residential mortgage origination, wealth management, merchant services and prime consumer lending. We also originate and service government sponsored mortgages for multifamily and healthcare facilities and operate a commercial equipment leasing business on a nationwide basis. Since late 2007, we have grown organically and through a series of nine acquisitions. Most recently, we acquired Love Savings Holding Company (“LSHC”) in December 2014, which greatly expanded our commercial and retail banking services in the St. Louis metropolitan area, added a branch and three mortgage offices in Colorado, and provided us the opportunity to enter complementary lending and leasing business lines. Our principal business activity has been lending to and accepting deposits from individuals, businesses, municipalities and other entities. We have derived income principally from interest charged on loans and, to a lesser extent, from interest and dividends earned on investment securities. We have also derived income from noninterest sources, such as: fees received in connection with various lending and deposit services; wealth management services; residential mortgage loan originations, sales and servicing; merchant services; and, from time to time, gains on sales of assets. With the acquisition of LSHC, we expanded our income sources to include a greater emphasis on residential mortgage loan origination and servicing, Love Funding Corporation’s (“Love Funding”) commercial Federal Housing Administration (“FHA”) loan origination and servicing, and Heartland Business Credit Corporation’s (“Business Credit”) interest income on indirect financing leases. Our principal expenses include interest expense on deposits and borrowings, operating expenses, such as salaries and employee benefits, occupancy and equipment expenses, data processing costs, professional fees and other noninterest expenses, provisions for loan losses and income tax expense. Initial Public Offering On May 24, 2016, we completed our initial public offering and received gross proceeds of $67.0 million for the 3,044,252 shares of common stock sold by us in the offering. On June 6, 2016, we received additional gross proceeds of $12.0 million for the 545,813 shares of common stock sold when the underwriters fully exercised their option to purchase additional shares of common stock. After deducting underwriting discounts and offering expenses, we received total net proceeds of $71.5 million from the initial public offering. |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2016 | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Note 2 – Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). These interim financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto as of and for the years ended December 31, 2015, 2014 and 2013, included in our registration statement on Form S-1 filed with the Securities and Exchange Commission (“SEC”) on May 23, 2016. Principles of Consolidation The consolidated financial statements include the accounts of the parent company and its subsidiaries, giving effect to the noncontrolling interest in subsidiaries, as more fully described below. All significant intercompany accounts and transactions have been eliminated. Assets held for customers in a fiduciary or agency capacity, other than trust cash on deposit with the Bank, are not assets of the Company and, accordingly, are not included in the accompanying unaudited consolidated financial statements. The Company operates through its wholly owned subsidiary bank, Midland States Bank, headquartered in Effingham, Illinois. The Bank operates through its branch banking offices and subsidiaries: Love Funding, Business Credit, and Heartland Premier LLC (“Premier”). All of the subsidiaries are wholly owned by the Bank as of September 30, 2016, except for Premier, which was formed as a joint venture mortgage origination operation, of which the Bank owns 51% and acts as a manager. Heartland Preferred Mortgage Company LLC (“Preferred”), formerly a subsidiary of the Bank, was a joint venture mortgage origination operation, of which the Bank owned 51% and acted as a manager. Preferred was dissolved on May 27, 2016. Premier and Preferred are included in the consolidated financial statements and the noncontrolling ownership interest is reported as a component of shareholders’ equity in the consolidated balance sheets as “noncontrolling interest in subsidiaries” and the earnings or loss attributable to the noncontrolling ownership interest is reported as “net (loss) income attributable to noncontrolling interest in subsidiaries” in the consolidated statements of income. Use of Estimates In preparing the consolidated financial statements, we are required to make estimates and assumptions, which significantly affect the amounts reported in the consolidated financial statements. Significant estimates that are particularly susceptible to change include the fair value of investment securities, the determination of the allowance for loan losses, estimated fair values of purchased loans, valuation of real estate and other properties acquired in connection with foreclosures or in satisfaction of amounts due from borrowers on loans, and the carrying value of mortgage servicing rights. While management uses its best judgment, actual results may differ from those estimates. Current economic and market conditions significantly affect the judgments. Summary of Significant Accounting Policies The accompanying consolidated financial statements were compiled in accordance with the accounting policies set forth in Note 1 – Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements in our consolidated financial statements as of and for the periods ended December 31, 2015, 2014 and 2013, included in our registration statement on Form S-1 filed with the SEC on May 23, 2016. The accompanying consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments that, in the opinion of management, are necessary to reflect a fair statement of our consolidated financial condition, results of operations and cash flows. The results of operations for acquired companies are included from the dates of acquisition. Operating results for the three and nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. Impact of New Financial Accounting Standards FASB ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” – In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “ Revenue from Contracts with Customers (Topic 606).” The ASU supersedes revenue recognition requirements in Topic 605, Revenue Recognition , including most industry-specific revenue recognition guidance in the FASB Accounting Standards Codification (“ASC”). The ASU requires an entity to recognize revenue that depicts the transfer of promised goods or services to customers in an amount reflecting the consideration the entity expects to receive in exchange for those goods or services. The ASU identifies specific steps that entities should apply to achieve this principle. The new guidance was originally effective for fiscal years (including interim periods within those fiscal years) beginning after December 15, 2016 for public companies. In August 2015, the FASB issued ASU 2015-14, which defers the effective date of this guidance to annual reporting periods beginning after December 15, 2017 for public companies, and permits early adoption on a limited basis. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements. Entities have the option of using either a full retrospective or modified approach to adopt ASU 2014-09. FASB ASU 2016-02, “Leases (Topic 842)” - In February 2016, the FASB issued ASU No. 2016-02, “ Leases (Topic 842) .” This update revises the model to assess how a lease should be classified and provides guidance for lessees and lessors, when presenting right-of-use assets and lease liabilities on the balance sheet. The update is effective for the Company for the year ending December 31, 2019, although the Company may elect to adopt guidance earlier. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements. FASB ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” – In March 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). ” The amendments relate to when another party, along with the entity, is involved in providing a good or service to a customer. The ASU requires an entity to determine whether the nature of its promise is to provide that good or service to the customer (that is, the entity is a principal) or to arrange for the good or service to be provided to the customer by the other party (that is, the entity is an agent). This determination is based upon whether the entity controls the good or the service before it is transferred to the customer. Topic 606 includes indicators to assist in this evaluation. The amendments in this update affect the guidance in ASU No. 2014-09 above, which is not yet effective. The effective date will be the same as the effective date of ASU No. 2014-09. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements . FASB ASU 2016-09, “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” - In March 2016, the FASB issued ASU No. 2016-09, “ Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting .” This update includes multiple provisions intended to simplify various aspects of the accounting for share-based payments. While aimed at reducing the cost and complexity of the accounting for share-based payments, the amendments are expected to significantly impact net income, earnings per share, and the statement of cash flows. Implementation and administration may present challenges for companies with significant share-based payment activities. For public companies, the amendments in this update are effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early application is permitted for any organization in any interim period or fiscal year. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements. FASB ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” – In April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing.” The amendments clarify the following two aspects of Topic 606: identifying performance obligations, and the licensing implementation guidance. Before an entity can identify its performance obligations in a contract with a customer, the entity first identifies the promised goods or services in the contract. The amendments in this update are expected to reduce the cost and complexity of applying the guidance on identifying promised goods or services. To identify performance obligations in a contract, an entity evaluates whether promised goods and services are distinct. Topic 606 includes two criteria for assessing whether promises to transfer goods or services are distinct. One of those criteria is that the promises are separately identifiable. This update will improve the guidance on assessing that criterion. Topic 606 also includes implementation guidance on determining whether as entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property, which is satisfied at a point in time, or a right to access the entity’s intellectual property, which is satisfied over time. The amendments in this update are intended to improve the operability and understandability of the licensing implementation guidance. The amendments in this update affect the guidance in ASU No. 2014-09 above, which is not yet effective. The effective date will be the same as the effective date of ASU No. 2014-09. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements . FASB ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” – In June 2016, the FASB issued ASU No. 2016-13, “ Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The objective of this update is to improve financial reporting by providing timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The ASU requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better understand their credit loss estimates. For public companies that are SEC filers, this update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application is permitted for any organization for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements. FASB ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” – In August 2016, the FASB issued ASU No. 2016-15, “ Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which amends ASC 230 to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows. For public business entities, this update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early application is permitted for any organization in any interim period or fiscal year. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements. |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Sep. 30, 2016 | |
ACQUISITIONS | |
ACQUISITIONS | Note 3 – Acquisitions On December 31, 2014, the Company completed its acquisition of LSHC. At closing, LSHC primarily consisted of Heartland Bank, its wholly owned subsidiaries Love Funding and Business Credit, and $40.0 million of trust preferred debentures. Heartland Bank provided commercial and retail banking services in the St. Louis metropolitan area, its primary market, through the operation of 10 full-service banking offices, a full-service cyber office, three limited service loan production offices, and a retirement center office in Missouri, and one branch office in Colorado. Love Funding is an approved FHA insured lender and Government National Mortgage Association issuer engaged in commercial mortgage origination and servicing, and Business Credit provides custom leasing and financing programs to equipment and software vendors. The Company acquired LSHC for $67.3 million, which consisted of 2,224,091 shares of common stock, $20.1 million in cash and an accrual in other liabilities of $530,000 for the fair value of additional consideration based on the earnings of Love Funding over a two year period after acquisition date. The additional consideration is defined as the amount, if any, by which 50% of Love Funding’s adjusted net income (for the two year period ending December 31, 2016) exceeds $9.1 million, multiplied by an earn-out multiple. The contingent consideration amount is capped at $12.0 million and any payment will be made through issuance of the Company’s common stock. The acquired identifiable assets included the establishment of a $3.4 million core deposit intangible, which is being amortized on an accelerated basis over 10 years. The Company also recognized $0.5 million for the fair value of noncontrolling interests associated with two mortgage origination joint ventures owned 51% by Heartland Bank. Pending Acquisition at September 30, 2016 On February 23, 2016, the Bank and Sterling National Bank of Yonkers, New York (“Sterling”) entered into a Trust Company Agreement and Plan of Merger (“Merger Agreement”), pursuant to which the Bank will acquire approximately $400.0 million in wealth management assets from Sterling. Under the terms of the Merger Agreement, the Bank will pay Sterling approximately $4.8 million in cash, with an expected closing date in the fourth quarter of 2016. The transaction is subject to regulatory approval and other customary closing conditions. |
INVESTMENT SECURITIES AVAILABLE
INVESTMENT SECURITIES AVAILABLE FOR SALE | 9 Months Ended |
Sep. 30, 2016 | |
INVESTMENT SECURITIES AVAILABLE FOR SALE | |
INVESTMENT SECURITIES AVAILABLE FOR SALE | Note 4 – Investment Securities Available for Sale Investment securities classified as available for sale as of September 30, 2016 and December 31, 2015 are as follows (in thousands): September 30, 2016 Gross Gross Amortized unrealized unrealized Fair cost gains losses value U.S. Treasury securities $ $ $ $ Government sponsored entity debt securities — Agency mortgage-backed securities Non-agency mortgage-backed securities — — Covered non-agency mortgage-backed securities (1) State and municipal securities Corporate securities Total $ $ $ $ (1) All covered non‑agency mortgage‑backed securities were covered under the loss‑sharing agreement we entered into with the Federal Deposit Insurance Corporation (the “FDIC”) in connection with a 2009 acquisition. This agreement had a seven year term that expired on July 1, 2016 with respect to losses. On October 3, 2016, the Company entered into an agreement with the FDIC to terminate its existing loss share agreements as more fully described in Note 21 to the Consolidated Financial Statements. None of our other investment securities were covered under a loss‑sharing agreement with the FDIC. December 31, 2015 Gross Gross Amortized unrealized unrealized Fair cost gains losses value U.S. Treasury securities $ $ $ $ Government sponsored entity debt securities Agency mortgage-backed securities Non-agency mortgage-backed securities — — Covered non-agency mortgage-backed securities (1) State and municipal securities Corporate securities Total $ $ $ $ (1) All covered non‑agency mortgage‑backed securities were covered under the loss‑sharing agreement we entered into with the FDIC in connection with a 2009 acquisition. This agreement had a seven year term that expired on July 1, 2016 with respect to losses. On October 3, 2016, the Company entered into an agreement with the FDIC to terminate its existing loss share agreements as more fully described in Note 21 to the Consolidated Financial Statements. None of our other investment securities were covered under a loss‑sharing agreement with the FDIC. Market valuations for our investment securities classified as available for sale are provided by independent third parties. The fair values are determined using several sources for valuing fixed income securities. Their techniques include pricing models that vary based on the type of asset being valued and incorporate available trade, bid and other market information. The market valuation sources include observable market inputs for the majority of our securities and are therefore considered Level 2 inputs for the purpose of determining fair values. The fair values for U.S. Treasury securities are determined using quoted market prices and are considered Level 1. Unrealized losses and fair values for investment securities available for sale as of September 30, 2016 and December 31, 2015, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are summarized as follows (in thousands): September 30, 2016 Less than 12 Months 12 Months or more Total Fair Unrealized Fair Unrealized Fair Unrealized value loss value loss value loss U.S. Treasury securities $ $ $ — $ — $ $ Government sponsored entity debt securities — — — — — — Agency mortgage-backed securities — — Covered non-agency mortgage-backed securities State and municipal securities — — Corporate securities Total $ $ $ $ $ $ December 31, 2015 Less than 12 Months 12 Months or more Total Fair Unrealized Fair Unrealized Fair Unrealized value loss value loss value loss U.S. Treasury securities $ $ $ — $ — $ $ Government sponsored entity debt securities — — Agency mortgage-backed securities Covered non-agency mortgage-backed securities State and municipal securities Corporate securities Total $ $ $ $ $ $ For all of the above investment securities, the unrealized losses are generally due to changes in interest rates and continued financial market stress, and unrealized losses are considered to be temporary. We evaluate securities for other-than-temporary impairment (“OTTI”) on a quarterly basis, at a minimum, and more frequently when economic or market concerns warrant such evaluation. In estimating OTTI losses, we consider the severity and duration of the impairment; the financial condition and near-term prospects of the issuer, which for debt securities considers external credit ratings and recent downgrades; projected cash flows on non-agency mortgage-backed securities; and the intent and ability of the Company to hold the security for a period of time sufficient for a recovery in value. At September 30, 2016 and December 31, 2015, 30 and 54 available-for-sale securities, respectively, had unrealized losses with aggregate depreciation of 2.35% and 1.86%, respectively, from their amortized cost basis. The unrealized losses relate principally to the fluctuations in the current interest rate environment. In analyzing an issuer’s financial condition, we consider whether the securities are issued by the federal government or its agencies and whether downgrades by bond rating agencies have occurred. As we have the intent and ability to hold debt securities for a period of time sufficient for a recovery in value, no declines are deemed to be other-than-temporary. During the three months ended September 30, 2016, there was no OTTI recognized. During the nine months ended September 30, 2016, the Company determined that three covered non-agency mortgage-backed securities had OTTI of $824,000, primarily resulting from changes in expected cash flows. These amounts were recognized as losses in the consolidated statements of income. During the three months ended September 30, 2015, the Company determined that two covered non-agency mortgage-backed securities had OTTI of $299,000, primarily resulting from changes in expected cash flows. During the nine months ended September 30, 2015, the Company determined that three covered non-agency mortgage-backed securities had OTTI of $461,000, primarily resulting from changes in expected cash flows. These amounts were recognized as losses in the consolidated statements of income. The following is a summary of the amortized cost and fair value of available-for-sale investment securities, by maturity, at September 30, 2016 (in thousands). The maturities of agency, non-agency and covered non-agency mortgage-backed securities are based on expected maturities. Expected maturities may differ from contractual maturities in mortgage‑backed securities because the mortgages underlying the securities may be prepaid without any penalties. The maturities of all other available-for-sale investment securities are based on final contractual maturity. Amortized Fair cost value Within one year $ $ After one year through five years After five years through ten years After ten years Total $ $ Gross realized gains from the sale of securities available for sale were $39,000 and $315,000 for the three and nine months ended September 30, 2016, respectively. There were no gross realized losses for the three or nine months ended September 30, 2016. Gross realized gains from the sale of securities available for sale were $1,000 and $335,000 for the three and nine months ended September 30, 2015, respectively. Gross realized losses were $175,000 for the nine months ended September 30, 2015. There were no gross realized losses for the three months ended September 30, 2015. |
INVESTMENT SECURITIES HELD TO M
INVESTMENT SECURITIES HELD TO MATURITY | 9 Months Ended |
Sep. 30, 2016 | |
INVESTMENT SECURITIES HELD TO MATURITY | |
INVESTMENT SECURITIES HELD TO MATURITY | Note 5 – Investment Securities Held to Maturity Investment securities classified as held to maturity as of September 30, 2016 and December 31, 2015 are as follows (in thousands): September 30, 2016 Gross Gross Amortized unrealized unrealized Fair cost gains losses value State and municipal securities $ $ $ $ December 31, 2015 Gross Gross Amortized unrealized unrealized Fair cost gains losses value State and municipal securities $ $ $ $ Market valuations for our investment securities held to maturity are provided by independent third parties. The fair values are determined using several sources for valuing fixed income securities. Their techniques include pricing models that vary based on the type of asset being valued and incorporate available trade, bid and other market information. The market valuation sources provide the significant observable market inputs for these securities and are therefore considered Level 2 inputs for the purpose of determining fair values. Unrealized losses and fair value for investment securities held to maturity as of September 30, 2016 and December 31, 2015, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are summarized as follows (in thousands): September 30, 2016 Less than 12 Months 12 Months or more Total Fair Unrealized Fair Unrealized Fair Unrealized value loss value loss value loss State and municipal securities $ $ $ $ $ $ December 31, 2015 Less than 12 Months 12 Months or more Total Fair Unrealized Fair Unrealized Fair Unrealized value loss value loss value loss State and municipal securities $ $ $ $ $ $ For all of the above investment securities, the unrealized losses are generally due to changes in interest rates and continued financial market stress and unrealized losses are considered to be temporary. We evaluate securities for OTTI on a quarterly basis, at a minimum, and more frequently when economic or market concerns warrant such evaluation. In estimating OTTI losses, we consider the severity and duration of the impairment; the financial condition and near-term prospects of the issuer, which for debt securities considers external credit ratings and recent downgrades; and the intent and ability of the Company to hold the security for a period of time sufficient for a recovery in value. At September 30, 2016 and December 31, 2015, 17 and 25 held-to-maturity securities, respectively, had unrealized losses with aggregate depreciation of 1.88% and 1.08%, respectively, from their amortized cost basis. The unrealized losses relate principally to the fluctuations in the current interest rate environment. In analyzing an issuer’s financial condition, we consider who issued the securities and whether downgrades by bond rating agencies have occurred. As we have the intent and ability to hold debt securities for the foreseeable future, no declines are deemed to be other-than-temporary. The amortized cost and fair value of held-to-maturity securities as of September 30, 2016, by contractual maturity, are as follows (in thousands): Amortized Fair cost value Within one year $ $ After one year through five years After five years through ten years After ten years Total $ $ |
LOANS
LOANS | 9 Months Ended |
Sep. 30, 2016 | |
LOANS | |
LOANS | Note 6 – Loans The following table presents total loans outstanding by portfolio, which includes Purchased Credit-Impaired (“PCI”) loans, as of September 30, 2016 and December 31, 2015 (in thousands): September 30, December 31, 2016 2015 Loans: Commercial $ $ Commercial real estate Construction and land development Total commercial loans Residential real estate Consumer Lease financing Total loans $ $ Total loans include net deferred loan fees of $3.5 million and $5.8 million at September 30, 2016 and December 31, 2015, respectively, and unearned discounts of $19.7 million and $15.7 million within the lease financing portfolio at September 30, 2016 and December 31, 2015, respectively. At September 30, 2016 and December 31, 2015, the Company had commercial and residential loans held for sale totaling $61.4 million and $54.4 million, respectively. During the three and nine months ended September 30, 2016, the Company sold commercial and residential real estate loans with proceeds totaling $450.9 million and $907.3 million, respectively, and sold commercial and residential real estate loans with proceeds totaling $299.7 million and $836.1 million for the comparable periods in 2015, respectively. The Company monitors and assesses the credit risk of its loan portfolio using the classes set forth below. These classes also represent the segments by which the Company monitors the performance of its loan portfolio and estimates its allowance for loan losses. Commercial —Loans to varying types of businesses, including municipalities, school districts and nonprofit organizations, for the purpose of supporting working capital, operational needs and term financing of equipment. Repayment of such loans is generally provided through operating cash flows of the business. Commercial loans are predominately secured by equipment, inventory, accounts receivable, and other sources of repayment, although the Company may also secure commercial loans with real estate. Commercial real estate —Loans secured by real estate occupied by the borrower for ongoing operations, including loans to borrowers engaged in agricultural production, and non-owner occupied real estate leased to one or more tenants, including commercial office, industrial, special purpose, retail and multi-family residential real estate loans. Construction and land development —Secured loans for the construction of business properties. Real estate construction loans often convert to a real estate commercial loan at the completion of the construction period. Secured development loans are made to borrowers for the purpose of infrastructure improvements to vacant land to create finished marketable residential and commercial lots/land. Most land development loans are originated with the intention that the loans will be paid through the sale of developed lots/land by the developers within twelve months of the completion date. Interest reserves are generally established on real estate construction loans. Residential real estate —Loans secured by residential properties that in general do not qualify for secondary market sale; however, the risk to return and/or overall relationship are considered acceptable to the Company. This category also includes loans whereby consumers utilize equity in their personal residence, generally through a second mortgage, as collateral to secure the loan. Consumer —Loans to consumers primarily for the purpose of home improvements, acquiring automobiles, recreational vehicles and boats. These loans consist of relatively small amounts that are spread across many individual borrowers. Lease financing —Indirect financing leases to varying types of businesses for purchases of business equipment. All indirect financing leases require monthly payments, and the weighted average maturity of our leases is less than four years. Commercial, commercial real estate, construction and land development loans are collectively referred to as the Company’s commercial loan portfolio, while residential real estate and consumer loans and lease financing receivables are collectively referred to as the Company’s other loan portfolio. We have extended loans to certain of our directors, executive officers, principal shareholders and their affiliates. These loans were made in the ordinary course of business upon normal terms, including collateralization and interest rates prevailing at the time, and did not involve more than the normal risk of repayment by the borrower. The aggregate loans outstanding to the directors, executive officers, principal shareholders and their affiliates totaled $21.5 million and $39.2 million at September 30, 2016 and December 31, 2015, respectively. During the three and nine months ended September 30, 2016, there were $468,000 and $10.6 million, respectively, of new loans and other additions, while repayments and other reductions totaled $2.2 million and $28.5 million, respectively. Credit Quality Monitoring The Company maintains loan policies and credit underwriting standards as part of the process of managing credit risk. These standards include making loans generally within the Company’s four main regions, which include eastern, northern and southern Illinois and the St. Louis metropolitan area. Our equipment leasing business, based in Denver, provides financing to business customers across the country. The Company has a loan approval process involving underwriting and individual and group loan approval authorities to consider credit quality and loss exposure at loan origination. The loans in the Company’s commercial loan portfolio are risk rated at origination based on the grading system set forth below. All loan authority is based on the aggregate credit to a borrower and its related entities. The Company’s consumer loan portfolio is primarily comprised of both secured and unsecured loans that are relatively small and are evaluated at origination on a centralized basis against standardized underwriting criteria. The ongoing measurement of credit quality of the consumer loan portfolio is largely done on an exception basis. If payments are made on schedule, as agreed, then no further monitoring is performed. However, if delinquency occurs, the delinquent loans are turned over to the Company’s Consumer Collections Group for resolution. Credit quality for the entire consumer loan portfolio is measured by the periodic delinquency rate, nonaccrual amounts and actual losses incurred. Loans in the commercial loan portfolio tend to be larger and more complex than those in the consumer loan portfolio, and therefore, are subject to more intensive monitoring. All loans in the commercial loan portfolio have an assigned relationship manager, and most borrowers provide periodic financial and operating information that allows the relationship managers to stay abreast of credit quality during the life of the loans. The risk ratings of loans in the commercial loan portfolio are reassessed at least annually, with loans below an acceptable risk rating reassessed more frequently and reviewed by various individuals within the Company at least quarterly. The Company maintains a centralized independent loan review function that monitors the approval process and ongoing asset quality of the loan portfolio, including the accuracy of loan grades. The Company also maintains an independent appraisal review function that participates in the review of all appraisals obtained by the Company. Credit Quality Indicators The Company uses a ten grade risk rating system to monitor the ongoing credit quality of its commercial loan portfolio. These loan grades rank the credit quality of a borrower by measuring liquidity, debt capacity, and coverage and payment behavior as shown in the borrower’s financial statements. The risk grades also measure the quality of the borrower’s management and the repayment support offered by any guarantors. The Company considers all loans with Risk Grades of 1 – 6 as acceptable credit risks and structures and manages such relationships accordingly. Periodic financial and operating data combined with regular loan officer interactions are deemed adequate to monitor borrower performance. Loans with Risk Grades of 7 are considered “watch credits” and the frequency of loan officer contact and receipt of financial data is increased to stay abreast of borrower performance. Loans with Risk Grades of 8 – 10 are considered problematic and require special care. Further, loans with Risk Grades of 7 – 10 are managed and monitored regularly through a number of processes, procedures and committees, including oversight by a loan administration committee comprised of executive and senior management of the Company, which includes highly structured reporting of financial and operating data, intensive loan officer intervention and strategies to exit, as well as potential management by the Company’s special assets group. Loans not graded are small loans that are monitored by aging status and payment activity. The following table presents the recorded investment of commercial loans (excluding PCI loans) by risk category as of September 30, 2016 (in thousands): Commercial Construction and Commercial Real Estate Land Development Total Acceptable credit quality $ $ $ $ Special mention — Substandard Substandard – nonaccrual — Doubtful — — — — Not graded Total (excluding PCI) $ $ $ $ The Company evaluates the credit quality of its other loans based primarily on the aging status of the loan and payment activity. Accordingly, loans on nonaccrual status, any loan past due 90 days or more and still accruing interest, and loans modified under troubled debt restructurings are considered to be impaired for purposes of credit quality evaluation. The following table presents the recorded investment of our other loans (excluding PCI loans) based on the credit risk profile of loans that are performing and loans that are impaired as of September 30, 2016 (in thousands): Residential Lease Real Estate Consumer Financing Total Performing $ $ $ $ Impaired Total (excluding PCI) $ $ $ $ The following table presents the recorded investment of commercial loans (excluding PCI loans) by risk category as of December 31, 2015 (in thousands): Commercial Construction and Commercial Real Estate Land Development Total Acceptable credit quality $ $ $ $ Special mention Substandard — Substandard-nonaccrual — Doubtful — — — — Not graded Total (excluding PCI) $ $ $ $ The following table presents the recorded investment of our other loans (excluding PCI loans) based on the credit risk profile of loans that are performing and loans that are impaired as of December 31, 2015 (in thousands): Residential Lease Real Estate Consumer Financing Total Performing $ $ $ $ Impaired Total (excluding PCI) $ $ $ $ Impaired Loans Impaired loans include loans on nonaccrual status, any loan past due 90 days or more and still accruing interest and loans modified under troubled debt restructurings. Impaired loans at September 30, 2016 and December 31, 2015 do not include $29.4 million and $38.5 million, respectively, of PCI loans. The risk of credit loss on acquired loans was recognized as part of the fair value adjustment at the acquisition date. A summary of impaired loans (excluding PCI loans) as of September 30, 2016 and December 31, 2015 is as follows (in thousands): September 30, December 31, 2016 2015 Nonaccrual loans: Commercial $ $ Commercial real estate Construction and land development — — Residential real estate Consumer Lease financing Total nonaccrual loans Accruing loans contractually past due 90 days or more as to interest or principal payments: Commercial Commercial real estate — — Construction and land development — — Residential real estate — Consumer Lease financing — — Total accruing loans contractually past due 90 days or more as to interest or principal payments Loans modified under troubled debt restructurings: Commercial Commercial real estate Construction and land development — Residential real estate Consumer — — Lease financing — — Total loans modified under troubled debt restructurings Total impaired loans (excluding PCI) $ $ There was no interest income recognized on nonaccrual loans during the three and nine months ended September 30, 2016 and 2015 while the loans were in nonaccrual status. Additional interest income that would have been recorded on nonaccrual loans had they been current in accordance with their original terms was $243,000 and $484,000 for the three and nine months ended September 30, 2016, respectively, and $172,000 and $741,000 for the comparable periods in 2015, respectively. The Company recognized interest income on loans modified under troubled debt restructurings‑commercial and commercial real estate of $90,000 and $196,000 for the three and nine months ended September 30, 2016, respectively, and $104,000 and $316,000 for the comparable periods in 2015, respectively. The following table presents impaired loans (excluding PCI loans) by portfolio which are individually evaluated as of September 30, 2016 and December 31, 2015, respectively (in thousands): September 30, 2016 December 31, 2015 Unpaid Related Unpaid Related Recorded Principal Valuation Recorded Principal Valuation Investment Balance Allowance Investment Balance Allowance Impaired loans with a valuation allowance: Commercial $ $ $ $ $ $ Commercial real estate Construction and land development — — Residential real estate Consumer Lease financing Total impaired loans with a valuation allowance Impaired loans with no related valuation allowance: Commercial — — Commercial real estate — — Construction and land development — — — — — — Residential real estate — — Consumer — — — — — Lease financing — — — — — — Total impaired loans with no related valuation allowance — — Total impaired loans: Commercial Commercial real estate Construction and land development — — Residential real estate Consumer Lease financing Total impaired loans (excluding PCI) $ $ $ $ $ $ The difference between a loan’s recorded investment and the unpaid principal balance represents: (1) a partial charge-off resulting from a confirmed loss due to the value of the collateral securing the loan being below the loan’s principal balance and management’s assessment that the full collection of the loan balance is not likely and/or (2) payments received on nonaccrual loans that are fully applied to principal on the loan’s recorded investment as compared to being applied to principal and interest on the unpaid customer principal and interest balance. The difference between the recorded investment and the unpaid principal balance was $4.6 million and $5.2 million at September 30, 2016 and December 31, 2015, respectively. The average balance of impaired loans (excluding PCI loans) and interest income recognized on impaired loans during the three months ended September 30, 2016 and 2015 are included in the table below (in thousands): Three Months Ended September 30, 2016 2015 Interest Income Interest Income Average Recognized Average Recognized Recorded While on Recorded While on Investment Impaired Status Investment Impaired Status Impaired loans with a valuation allowance: Commercial $ $ $ $ Commercial real estate Construction and land development — Residential real estate Consumer — — Lease financing — — Total impaired loans with a valuation allowance Impaired loans with no related valuation allowance: Commercial — Commercial real estate — — Construction and land development — — — — Residential real estate Consumer — — Lease financing — — — — Total impaired loans with no related valuation allowance Total impaired loans: Commercial Commercial real estate Construction and land development — Residential real estate Consumer — — Lease financing — — Total impaired loans (excluding PCI) $ $ $ $ The average balance of impaired loans (excluding PCI loans) and interest income recognized on impaired loans during the nine months ended September 30, 2016 and 2015 are included in the table below (in thousands): Nine Months Ended September 30, 2016 2015 Interest Income Interest Income Average Recognized Average Recognized Recorded While on Recorded While on Investment Impaired Status Investment Impaired Status Impaired loans with a valuation allowance: Commercial $ $ $ $ Commercial real estate Construction and land development — Residential real estate Consumer — — Lease financing — — Total impaired loans with a valuation allowance Impaired loans with no related valuation allowance: Commercial — Commercial real estate Construction and land development — — — Residential real estate Consumer — Lease financing — — — — Total impaired loans with no related valuation allowance Total impaired loans: Commercial Commercial real estate Construction and land development — Residential real estate Consumer — Lease financing — — Total impaired loans (excluding PCI) $ $ $ $ The following table presents the aging status of the recorded investment in loans by portfolio (excluding PCI loans) as of September 30, 2016 (in thousands): Accruing Loans 31-59 60-89 Past Due Days Days 90 Days Nonaccrual Total Total Past Due Past Due or More Loans Past Due Current Loans Commercial $ $ $ $ $ $ $ Commercial real estate — Construction and land development — — — Residential real estate — Consumer Lease financing — — Total (excluding PCI) $ $ $ $ $ $ $ The following table presents the aging status of the recorded investment in loans by portfolio (excluding PCI loans) as of December 31, 2015 (in thousands): Accruing Loans 31-59 60-89 Past Due Days Days 90 Days Nonaccrual Total Total Past Due Past Due or More Loans Past Due Current Loans Commercial $ $ $ $ $ $ $ Commercial real estate — Construction and land development — — — Residential real estate Consumer Lease financing — — Total (excluding PCI) $ $ $ $ $ $ $ Troubled Debt Restructurings A loan is categorized as a troubled debt restructuring (“TDR”) if a concession is granted to provide for a reduction of either interest or principal due to deterioration in the financial condition of the borrower. TDRs can take the form of a reduction of the stated interest rate, splitting a loan into separate loans with market terms on one loan and concessionary terms on the other loans, receipts of assets from a debtor in partial or full satisfaction of a loan, the extension of the maturity date or dates at a stated interest rate lower than the current market rate for new debt with similar risk, the reduction of the face amount or maturity of the debt as stated in the instrument or other agreement, the reduction of accrued interest or any other concessionary type of renegotiated debt. Loans are not classified as TDRs when the modification is short-term or results in only an insignificant delay or shortfall in the payments to be received. Loans modified as TDRs for commercial and commercial real estate loans generally consist of allowing commercial borrowers to defer scheduled principal payments and make interest only payments for a specified period of time at the stated interest rate of the original loan agreement or lower payments due to a modification of the loans’ contractual terms. TDRs that continue to accrue interest and are greater than $50,000 are individually evaluated for impairment, on a quarterly basis, and transferred to nonaccrual status when it is probable that any remaining principal and interest payments due on the loan will not be collected in accordance with the contractual terms of the loan. TDRs that subsequently default are individually evaluated for impairment at the time of default. The allowance for loan losses on TDRs totaled $191,000 and $109,000 as of September 30, 2016 and December 31, 2015, respectively. The Company had $164,000 of unfunded commitments in connection with TDRs at September 30, 2016. The Company had no unfunded commitments in connection with TDRs at December 31, 2015. The Company’s TDRs are identified on a case-by-case basis in connection with the ongoing loan collection processes. The following table presents TDRs by loan portfolio (excluding PCI loans) as of September 30, 2016 and December 31, 2015 (in thousands): September 30, 2016 December 31, 2015 Accruing (1) Non-accrual (2) Total Accruing (1) Non-accrual (2) Total Commercial $ $ $ $ $ $ Commercial real estate Construction and land development — — — — Residential real estate Consumer — — — — — — Lease financing — — — — — — Total loans (excluding PCI) $ $ $ $ $ $ (1) These loans are still accruing interest. (2) These loans are included in non-accrual loans in the preceding tables. The following table presents a summary of loans by portfolio that were restructured during the three and nine months ended September 30, 2016 and the loans by portfolio that were modified as TDRs within the previous twelve months that subsequently defaulted during the three and nine months ended September 30, 2016 (in thousands): Commercial Loan Portfolio Other Loan Portfolio Commercial Construction Residential Real and Land Real Lease Commercial Estate Development Estate Consumer Financing Total For the three months ended September 30, 2016: Troubled debt restructurings: Number of loans — — — — — Pre-modification outstanding balance $ — $ $ — $ — $ — $ — $ Post-modification outstanding balance — — — — — Troubled debt restructurings that subsequently defaulted Number of loans — — — — — — — Recorded balance $ — $ — $ — $ — $ — $ — $ — For the nine months ended September 30, 2016: Troubled debt restructurings: Number of loans — — — — Pre-modification outstanding balance $ $ $ — $ — $ — $ — $ Post-modification outstanding balance — — — — Troubled debt restructurings that subsequently defaulted Number of loans — — — — — — — Recorded balance $ — $ — $ — $ — $ — $ — $ — The following table presents a summary of loans by portfolio that were restructured during the three and nine months ended September 30, 2015 and the loans by portfolio that were modified as TDRs within the previous twelve months that subsequently defaulted during the three and nine months ended September 30, 2015 (in thousands): Commercial Loan Portfolio Other Loan Portfolio Commercial Construction Residential Real and Land Real Lease Commercial Estate Development Estate Consumer Financing Total For the three months ended September 30, 2015: Troubled debt restructurings: Number of loans — — — — — Pre-modification outstanding balance $ $ — $ — $ — $ — $ — $ Post-modification outstanding balance — — — — — Troubled debt restructurings that subsequently defaulted Number of loans — — — — — — — Recorded balance $ — $ — $ — $ — $ — $ — $ — For the nine months ended September 30, 2015: Troubled debt restructurings: Number of loans — — — — — Pre-modification outstanding balance $ $ — $ — $ — $ — $ — $ Post-modification outstanding balance — — — — — Troubled debt restructurings that subsequently defaulted Number of loans — — — — — Recorded balance $ — $ $ — $ — $ — $ — $ Allowance for Loan Losses The Company’s loan portfolio is principally comprised of commercial, commercial real estate, construction and land development, residential real estate and consumer loans and lease financing receivables. The principal risks to each category of loans are as follows: Commercial – The principal risk of commercial loans is that these loans are primarily made based on the identified cash flow of the borrower and secondarily on the collateral underlying the loans. Most often, this collateral consists of accounts receivable, inventory and equipment. Inventory and equipment may depreciate over time, may be difficult to appraise and may fluctuate in value based on the success of the business. If the cash flow from business operations is reduced, the borrower’s ability to repay the loan may be impaired. As such, repayment of such loans is often more sensitive than other types of loans to adverse conditions in the general economy. Commercial Real Estate – As with commercial loans, repayment of commercial real estate loans is often dependent on the borrowers’ ability to make repayment from the cash flow of the commercial venture. While commercial real estate loans are collateralized by the borrower’s underlying real estate, foreclosure on such assets may be more difficult than with other types of collateralized loans because of the possible effect the foreclosure would have on the borrower’s business, and property values may tend to be partially based upon the value of the business situated on the property. Construction and Land Development – Construction and land development lending involves additional risks not generally present in other types of lending because funds are advanced upon the estimated future value of the project, which is uncertain prior to its completion and at the time the loan is made, and costs may exceed realizable values in declining real estate markets. Moreover, if the estimate of the value of the completed project proves to be overstated or market values or rental rates decline, the collateral may prove to be inadequate security for the repayment of the loan. Additional funds may also be required to complete the project, and the project may have to be held for an unspecified period of time before a disposition can occur. Residential Real Estate – The principal risk to residential real estate lending is associated with residential loans not sold into the secondary market. In such cases, given the present state of the residential real estate market, the value of the underlying property may have deteriorated, perhaps rapidly, and the borrower may have little incentive to repay the loan or continue living in the property. Additionally, in areas with high vacancy rates, reselling the property without substantial loss may be difficult. Consumer – The repayment of consumer loans is typically dependent on the borrower remaining employed through the life of the loan, as well as the possibility that the collateral underlying the loan may not be adequately maintained by the borrower. Lease Financing Receivables – Our indirect financing leases are primarily for business equipment leased to varying types of small businesses. If the cash flow from business operations is reduced, the businesses ability to repay may become impaired. Changes in the allowance for loan losses for the three months ended September 30, 2016 and 2015 are as follows (in thousands): Three Months Ended September 30, 2016 2015 Non-PCI PCI Non-PCI PCI Loans Loans Total Loans Loans Total Balance at beginning of period $ $ $ $ $ $ Provision for loan losses Loan charge-offs Loan recoveries Net loan charge-offs Balance at end of period $ $ $ $ $ $ Changes in the allowance for loan losses for the nine months ended September 30, 2016 and 2015 are as follows (in thousands): Nine Months Ended September 30, 2016 2015 Non-PCI PCI Non-PCI PCI Loans Loans Total Loans Loans Total Balance at beginning of period $ $ $ $ $ $ Provision for loan losses Loan charge-offs Loan recoveries Net loan charge-offs Balance at end of period $ $ $ $ $ $ During the three and nine months ended September 30, 2016, the Company recorded $806,000 and $4.2 million, respectively, of non-PCI loan charge-offs. The nine month period amounts included a $1.6 million charge-off on a nonperforming commercial loan to one borrower and a $530,000 charge-off on nonperforming commercial loans related to a single credit relationship as a result of the deterioration in the borrower’s collateral position on the respective loans during the first quarter of 2016. The following table represents, by loan portfolio, a summary of changes in the allowance for loan losses for the three and nine months ended September 30, 2016 and 2015 (in thousands): Commercial Loan Portfolio Other Loan Portfolio Commercial Construction Residential Real and Land Real Lease Commercial Estate Development Estate Consumer Financing Total Changes in allowance for loan losses for the three months ended September 30, 2016: Beginning balance $ $ $ $ $ $ $ Provision for loan losses Charge-offs Recoveries Ending balance $ $ $ $ $ $ $ Changes in allowance for loan losses for the three months ended September 30, 2015: Beginning balance $ $ $ $ $ $ $ Provision for loan losses Charge-offs — Recoveries Ending balance $ $ $ $ $ $ $ Changes in allowance for loan losses for the nine months ended September 30, 2016: Beginning balance $ $ $ $ $ $ $ Provision for loan losses Charge-offs Recoveries Ending balance $ $ $ $ $ $ $ Changes in allowance for loan losses for the nine months ended September 30, 2015: Beginning balance $ $ $ $ $ $ — $ Provision for loan losses Charge-offs Recoveries Ending balance $ $ $ $ $ $ $ The following table represents, by loan portfolio, details regarding the balance in the allowance for loan losses and the recorded investment in loans as of September 30, 2016 and December 31, 2015 by impairment evaluation method (in thousands): Commercial Loan Portfolio Other Loan Portfolio Commercial Construction Residential Real and Land Real Lease Commercial Estate Development Estate Consumer Financing Total September 30, 2016: Allowance for loan losses: Loans individually evaluated for impairment $ $ $ $ $ $ $ Loans collectively evaluated for impairment — Non-impaired loans collectively evaluated for impairment Loans acquired with deteriorated credit quality (1) — — Total allowance for loan losses $ $ $ $ $ $ $ Recorded investment (loan balance): Impaired loans individually evaluated for impairment $ $ $ $ $ $ $ Impaired loans collectively evaluated for impairment — Non-impaired loans collectively evaluated for impairment Loans acquired with deteriorated credit quality (1) — Total recorded investment (loan balance) $ $ $ $ $ $ $ December 31, 2015: Allowance for loan losses: Loans individually evaluated for impairment $ $ $ — $ $ — $ — $ Loans collectively evaluated for impairment — Non-impaired loans collectively evaluated for impairment Loans acquired with deteriorated credit quality (1) — Total allowance for loan losses $ $ $ $ $ $ $ Recorded investment (loan balance): Impaired loans individually evaluated for impairment $ $ $ — $ $ — $ — $ Impaired loans collectively evaluated for impairment — Non-impaired loans collectively evaluated for impairment Loans acquired with deteriorated credit quality (1) — Total recorded investment (loan balance) $ $ $ $ $ $ $ (1) Loans acquired with deteriorated credit quality were originally recorded at fair value at the acquisition date and the risk of credit loss was recognized at that date based on estimates of expected cash flows. Purchased Credit Impaired Loans Purchased loans acquired in a business combination, including loans purchased in our FDIC-assisted transactions, are recorded at estimated fair value on their purchase date without a carryover of the related allowance for loan losses. PCI loans are loans that have evidence of credit deterioration since origination, and it is probable at the date of acquisition that the Company will not collect all contractually required principal and interest payments. Evidence of credit quality deterioration as of the purchase date may include factors such as past due and nonaccrual status. The difference between contractually required principal and interest at acquisition and the cash flows expected to be collected at acquisition is referred to as the non-accretable difference. Subsequent decreases to the expected cash flows will generally result in impairment, which is recorded as provision for loan losses in the consolidated statements of income. Subsequent increases in cash flows result in a reversal of the provision for loan losses to the extent of prior charges or a reclassification of the difference from non-accretable to accretable with a positive impact on interest income. Further, any excess cash flows expected at acquisition over the estimated fair value is referred to as the accretable yield and is recognized into interest income over the remaining life of the loan when there is a reasonable expectation about the amount and timing of such cash flows. Changes in the accretable yield for PCI loans were as follows for the three and nine months ended September 30, 2016 and 2015 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Balance at beginning of period $ $ $ $ Accretion Other adjustments (including maturities, charge-offs and impact of changes in timing of expected cash flows) — Reclassification from non-accretable Balance at end of period $ $ $ $ The fair value of PCI loans, on the acquisition date, was determined based on assigned risk ratings, expected cash flows and the fair value of loan collateral. The carrying amount of covered loa |
MORTGAGE SERVICING RIGHTS
MORTGAGE SERVICING RIGHTS | 9 Months Ended |
Sep. 30, 2016 | |
MORTGAGE SERVICING RIGHTS | |
MORTGAGE SERVICING RIGHTS | Note 7 – Mortgage Servicing Rights At September 30, 2016 and December 31, 2015, the Company serviced mortgage loans for others totaling $5.63 billion and $5.48 billion, respectively. A summary of mortgage loans serviced for others as of September 30, 2016 and December 31, 2015 is as follows (in thousands): September 30, December 31, 2016 2015 Commercial FHA mortgage loans $ $ Residential mortgage loans Total loans serviced for others $ $ Changes in our mortgage servicing rights were as follows for the three and nine months ended September 30, 2016 and 2015 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Mortgage servicing rights: Balance at beginning of period $ $ $ $ Servicing rights capitalized – commercial FHA mortgage loans Servicing rights capitalized – residential mortgage loans Amortization – commercial FHA mortgage loans Amortization – residential mortgage loans Balance at end of period Valuation allowances: Balance at beginning of period — Additions Reductions — — Balance at end of period Mortgage servicing rights, net $ $ $ $ Fair value: At beginning of period $ $ $ $ At end of period $ $ $ $ The following table is a summary of key assumptions, representing both general economic and other published information and the weighted average characteristics of the commercial and residential portfolios, used in the valuation of servicing rights at September 30, 2016 and December 31, 2015. Assumptions used in the prepayment rate consider many factors as appropriate, including lockouts, balloons, prepayment penalties, interest rate ranges, delinquencies and geographic location. The discount rate is based on an average pre‑tax internal rate of return utilized by market participants in pricing the servicing portfolios. Significant increases or decreases in any one of these assumptions would result in a significantly lower or higher fair value measurement. Remaining Servicing Interest Years to Prepayment Servicing Discount Fee Rate Maturity Rate Cost Rate September 30, 2016: Commercial FHA mortgage loans % % 30.3 % $ 1,000 10 - 13 % Residential mortgage loans % % 24.2 % $ 73.46 9 - 11 % December 31, 2015: Commercial FHA mortgage loans % % 30.6 % $ 1,000 10 - 13 % Residential mortgage loans % % 24.4 % $ 73.66 9 - 11 % We recognize revenue from servicing commercial FHA and residential mortgages as earned based on the specific contractual terms. This revenue, along with amortization of and changes in impairment on servicing rights, is reported in commercial FHA revenue and residential mortgage banking revenue in the consolidated statements of income. Mortgage servicing rights do not trade in an active market with readily observable prices. The fair value of mortgage servicing rights and their sensitivity to changes in interest rates is influenced by the mix of the servicing portfolio and characteristics of each segment of the portfolio. The Company’s servicing portfolio consists of the distinct portfolios of government-insured residential and commercial mortgages and conventional residential mortgages. T he fair value of our servicing rights is estimated by using a cash flow valuation model which calculates the present value of estimated future net servicing cash flows, taking into consideration expected mortgage loan prepayment rates, discount rates, cost to service, contractual servicing fee income, ancillary income, late fees , replacement reserves and other economic factors that are determined based on current market conditions. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2016 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL AND INTANGIBLE ASSETS | Note 8 – Intangible Assets The Company’s intangible assets, consisting of core deposit and trust relationship intangibles, as of September 30 , 2016 and December 31, 2015 are summarized as follows (in thousands): September 30, 2016 December 31, 2015 Gross Gross Carrying Accumulated Carrying Accumulated Amount Amortization Total Amount Amortization Total Core deposit intangibles $ $ $ $ $ $ Customer relationship intangibles Total intangible assets $ $ $ $ $ $ Amortization of intangible assets was $514,000 and $1.6 million for the three and nine months ended September 30 , 2016, respectively, and $597,000 and $1.9 million for the comparable periods in 2015, respectively. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 9 Months Ended |
Sep. 30, 2016 | |
DERIVATIVE INSTRUMENTS | |
DERIVATIVE INSTRUMENTS | Note 9 – Derivative Instruments As part of the Company’s overall management of interest rate sensitivity, the Company utilizes derivative instruments to minimize significant, unanticipated earnings fluctuations caused by interest rate volatility, including interest rate lock commitments, forward commitments to sell mortgage-backed securities and interest rate swap agreements. Interest Rate Lock Commitments / Forward Commitments to Sell Mortgage-Backed Securities Derivative instruments issued by the Company consist of interest rate lock commitments to originate fixed-rate loans to be sold. Commitments to originate fixed-rate loans consist of commercial and residential real estate loans. The interest rate lock commitments and loans held for sale are hedged with forward contracts to sell mortgage-backed securities. The fair value of the interest rate lock commitments and forward contracts to sell mortgage-backed securities are included in other assets or other liabilities in the consolidated balance sheets. Changes in the fair value of derivative financial instruments are recognized in commercial FHA revenue and residential mortgage banking revenue in the consolidated statements of income. The following table summarizes the interest rate lock commitments and forward commitments to sell mortgage-backed securities held by the Company, their notional amount, estimated fair values and the location in which the derivative instruments are reported in the consolidated balances sheets at September 30 , 2016 and December 31, 2015 (in thousands): Notional Amount Fair Value Gain September 30, December 31, September 30, December 31, 2016 2015 2016 2015 Derivative Instruments (included in Other Assets): Interest rate lock commitments $ $ $ $ Notional Amount Fair Value Loss September 30, December 31, September 30, December 31, 2016 2015 2016 2015 Derivative Instruments (included in Other Liabilities): Forward commitments to sell mortgage-backed securities $ $ $ $ Net losses recognized on derivative instruments were $5.2 million for the three months ended September 30, 2016 and net gains recognized on derivative instruments were $527,000 for the nine months ended September 30 , 2016. Net gains of $272,000 and $6.3 million were recognized on derivative instruments for the three and nine months ended September 30, 2015, respectively. Net gains and losses on derivative instruments were recognized in commercial FHA revenue and residential mortgage banking revenue in the consolidated statements of income. Interest Rate Swap Agreements In August 2011, the Company entered into an interest rate swap agreement to convert its variable rate trust preferred debentures to a fixed rate. The agreement commenced on August 15, 2012 at a notional amount of $10.0 million and matured on October 15, 2016. Under the agreement, the Company received interest at a variable rate equal to 2.75% over the three-month LIBOR and paid interest at a fixed rate of 4.66%. As of September 30 , 2016 and December 31, 2015, the fair value of the agreement reflected losses of $32,000 and $126,000, respectively, which were included in other liabilities in the consolidated balance sheets. |
DEPOSITS
DEPOSITS | 9 Months Ended |
Sep. 30, 2016 | |
Deposits [Abstract] | |
DEPOSITS | Note 10 – Deposits The following table summarizes the classification of deposits as of September 30 , 2016 and December 31, 2015 (in thousands): September 30, December 31, 2016 2015 Noninterest-bearing demand $ $ Interest-bearing: NOW Money market Savings Time Total deposits $ $ |
SHORT-TERM BORROWINGS
SHORT-TERM BORROWINGS | 9 Months Ended |
Sep. 30, 2016 | |
SHORT-TERM BORROWINGS | |
SHORT-TERM BORROWINGS | Note 11 – Short-Term Borrowings The following table presents the distribution of short-term borrowings and related weighted average interest rates as of and for the nine months ended September 30 , 2016 and as of and for the year ended December 31, 2015 (in thousands): Repurchase Agreements September 30, December 31, 2016 2015 Outstanding at period-end $ $ Average amount outstanding Maximum amount outstanding at any month end Weighted average interest rate: During period % % End of period % % At September 30 , 2016, the Bank had federal funds lines of credit totaling $68.0 million. These lines of credit were unused at September 30 , 2016. Securities sold under agreements to repurchase, which are classified as secured borrowings, generally mature within one to four days from the transaction date. Securities sold under agreements to repurchase are reflected at the amount of cash received in connection with the transaction, which represents the amount of the Bank’s obligation. The Bank may be required to provide additional collateral based on the fair value of the underlying securities. Investment securities with a carrying amount of $145.7 million and $113.4 million at September 30 , 2016 and December 31, 2015, respectively, were pledged for securities sold under agreements to repurchase. The Bank had lines of credit of $39.6 million and $62.1 million at September 30 , 2016 and December 31, 2015, respectively, from the Federal Reserve Discount Window. The lines are collateralized by a collateral agreement with respect to a pool of commercial real estate loans totaling $47.6 million and $76.7 million at September 30 , 2016 and December 31, 2015, respectively. There were no outstanding advances at September 30 , 2016 and December 31, 2015. |
FHLB ADVANCES AND OTHER BORROWI
FHLB ADVANCES AND OTHER BORROWINGS | 9 Months Ended |
Sep. 30, 2016 | |
FHLB ADVANCES AND OTHER BORROWINGS | |
FHLB ADVANCES AND OTHER BORROWINGS | Note 12 – FHLB Advances and Other Borrowings The following table summarizes our Federal Home Loan Bank (“FHLB”) advances and other borrowings as of September 30 , 2016 and December 31, 2015 (in thousands): September 30, December 31, 2016 2015 FHLB advances – fixed rate, fixed term, at rates averaging 0.66% and 0.93%, respectively, at September 30, 2016 and December 31, 2015 – maturing through May 2023 $ $ Obligations under capital leases – implicit interest rate of 1.70% – maturing through July 2018 Total FHLB advances and other borrowings $ $ The Company’s advances from the FHLB are collateralized by a blanket collateral agreement of qualifying mortgage and home equity line of credit loans and certain commercial loans totaling approximately $1.15 billion and $987.4 million at September 30 , 2016 and December 31, 2015, respectively. |
SUBORDINATED DEBT
SUBORDINATED DEBT | 9 Months Ended |
Sep. 30, 2016 | |
SUBORDINATED DEBT | |
SUBORDINATED DEBT | Note 13 – Subordinated Debt The following table summarizes the Company’s subordinated debt as of September 30 , 2016 and December 31, 2015 (in thousands): September 30, December 31, 2016 2015 Subordinated debt issued June 2013 – fixed interest rate of 8.25%, $8,000 maturing June 28, 2021 $ — $ Subordinated debt issued June 2015 – fixed interest rate of 6.00% for the first five years through June 2020 and a variable interest rate equivalent to three month LIBOR plus 4.35% thereafter, $40,325 maturing June 18, 2025 Subordinated debt issued June 2015 – fixed interest rate of 6.50%, $15,000 maturing June 18, 2025 Total subordinated debt $ $ In June 2015, the Company issued $55.3 million of subordinated debt in a private placement. The transaction was structured in two tranches: (1) $40.3 million, maturing on June 18, 2025 with a redemption option on or after June 18, 2020, with a fixed rate of interest of 6.00% for the first five years, payable semiannually in arrears beginning December 18, 2015, and a floating rate of interest equivalent to the three-month LIBOR plus 435 basis points thereafter, payable quarterly beginning on September 18, 2020; and (2) $15.0 million, maturing on June 18, 2025, with a fixed rate of interest of 6.50%, payable semiannually in arrears beginning December 18, 2015. The value of the subordinated debentures was reduced by $0.9 million with the recording of debt issuance costs associated with the issuance of the subordinated debentures, which are being amortized on a straight line basis through maturity of the subordinated notes. On January 2, 2013, a third party committed to invest a total of $10.0 million in the Company in the form of $8.0 million of subordinated notes and $2.0 million of common stock. On March 26, 2013, we issued 125,000 shares of common stock pursuant to the terms of the commitment. In addition, 8.25% subordinated notes totaling $8.0 million were issued on June 28, 2013 with a maturity date of June 28, 2021. An 8-year detachable warrant for the purchase of 125,000 shares at $16.00 per share of common stock of the Company was issued concurrently with the funding of the notes. The detachable warrants became exercisable one year after issuance. The detachable warrants were valued at $0.6 million and recorded on a relative value basis separately in shareholders’ equity. Correspondingly, the value of the subordinated notes was reduced by $0.6 million with the recording of a discount that the Company was amortizing using the interest method over the life of the subordinated notes. On June 28, 2016, the Company repaid the $8.0 million subordinated debt issued in June 2013 and recognized the remaining discount of $0.5 million in other noninterest expense in the consolidated statements of income. The subordinated debentures may be included in Tier 1 capital (with certain limitations applicable) under current regulatory guidelines and interpretations. |
TRUST PREFERRED DEBENTURES
TRUST PREFERRED DEBENTURES | 9 Months Ended |
Sep. 30, 2016 | |
TRUST PREFERRED DEBENTURES. | |
TRUST PREFERRED DEBENTURES | Note 14 – Trust Preferred Debentures The following table summarizes the Company’s trust preferred debentures as of September 30 , 2016 and December 31, 2015 (in thousands): September 30, December 31, 2016 2015 Grant Park Statutory Trust I – variable interest rate equal to LIBOR plus 2.85%, which was 3.61% and 3.17%, at September 30, 2016 and December 31, 2015, respectively – $3,000 maturing January 23, 2034 $ $ Midland States Preferred Securities Trust – variable interest rate equal to LIBOR plus 2.75%, which was 3.46% and 3.07% at September 30, 2016 and December 31, 2015, respectively – $10,000 maturing April 23, 2034 LSHC Capital Trust III – variable interest rate equal to LIBOR plus 1.75%, which was 2.60% and 2.26% at September 30, 2016 and December 31, 2015, respectively – $20,000 maturing December 31, 2036 LSHC Capital Trust IV – variable interest rate equal to LIBOR plus 1.47%, which was 2.31% and 1.92% at September 30, 2016 and December 31, 2015, respectively – $20,000 maturing September 6, 2037 Total trust preferred debentures $ $ |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2016 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | Note 15 – Earnings Per Share Earnings per share are calculated utilizing the two‑class method. Basic earnings per share are calculated by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of common shares outstanding. Diluted earnings per share are calculated by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of shares adjusted for the dilutive effect of common stock awards using the treasury stock method (outstanding stock options and unvested restricted stock), convertible preferred stock and convertible subordinated debt. Presented below are the calculations for basic and diluted earnings per common share for the three and nine months ended September 30, 2016 and 2015 (in thousands, except for share and per share data): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Net income $ $ $ $ Common shareholder dividends Unvested restricted stock award dividends Undistributed earnings to unvested restricted stock awards Undistributed earnings to common shareholders $ $ $ $ Basic Distributed earnings to common shareholders $ $ $ $ Undistributed earnings to common shareholders Total common shareholders earnings, basic $ $ $ $ Diluted Distributed earnings to common shareholders $ $ $ $ Undistributed earnings to common shareholders Total common shareholders earnings Add back: Undistributed earnings reallocated from unvested restricted stock awards — — Total common shareholders earnings, diluted $ $ $ $ Weighted average common shares outstanding, basic Options and warrants Weighted average common shares outstanding, diluted Basic earnings per common share $ $ $ $ Diluted earnings per common share |
CAPITAL REQUIREMENTS
CAPITAL REQUIREMENTS | 9 Months Ended |
Sep. 30, 2016 | |
CAPITAL REQUIREMENTS | |
CAPITAL REQUIREMENTS | Note 16 – Capital Requirements Our primary source of cash is dividends received from the Bank. The Bank is restricted by Illinois law and regulations of the Illinois Department of Financial and Professional Regulation and the FDIC as to the maximum amount of dividends the Bank can pay to us. As a practical matter, the Bank restricts dividends to a lesser amount because of the need to maintain an adequate capital structure. We are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and additional discretionary actions by regulators that, if undertaken, could have a direct material effect on our consolidated financial statements. The regulators require the Company to meet specific capital adequacy guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance‑sheet items as calculated under regulatory accounting practices. Our capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios of Total capital, Tier 1 capital and common equity Tier 1 capital to risk-weighted assets (as defined in the regulations), and of Tier 1 capital to average assets (as defined in the regulations). In July 2013, the federal bank regulators approved final rules implementing the Basel Committee on Banking Supervision’s capital adequacy guidelines (the “Basel III Rules”), as well as certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), which were effective January 1, 2015. Under the Basel III Rules, minimum requirements increased for both the quantity and quality of capital held by the Company. The rules included a new common equity Tier 1 capital to risk-weighted assets minimum ratio of 4.5%, raised the minimum ratio of Tier 1 capital to risk-weighted assets from 4.0% to 6.0%, require a minimum ratio of Total capital to risk-weighted assets of 8.0%, and require a minimum Tier 1 leverage ratio of 4.0%. The Basel III Rules also established a new capital conservation buffer, comprised of common equity Tier 1 capital, which is 0.625% beginning January 1, 2016 and will increase by 0.625% each subsequent year until it reaches its final level of 2.5% on January 1, 2019. The minimum required ratios under the Basel III Rules for well-capitalized banks (under prompt corrective action provisions) are 6.5% for Tier 1 common equity, 8.0% for Tier 1 capital, 10.0% for Total capital and 5.0% for Tier 1 leverage capital. These thresholds were effective January 1, 2015. As of September 30, 2016 , the Company and the Bank met all capital adequacy requirements to which they are subject, and the Bank’s capital position exceeded the regulatory definition of well-capitalized. At September 30, 2016 and December 31, 2015, the Company’s and the Bank’s actual and required capital ratios were as follows (in thousands, except for ratios): September 30, 2016 Required to be Minimum Required Well Capitalized Under For Capital Prompt Corrective Actual Adequacy Purposes Action Requirements Amount Ratio Amount Ratio Amount Ratio Total capital (to risk-weighted assets): Midland States Bancorp, Inc. $ % $ % N/A N/A Midland States Bank $ % Tier 1 capital (to risk-weighted assets): Midland States Bancorp, Inc. % % N/A N/A Midland States Bank % Common equity Tier 1 capital (to risk-weighted assets): Midland States Bancorp, Inc. % % N/A N/A Midland States Bank % Tier 1 leverage (to average assets): Midland States Bancorp, Inc. % % N/A N/A Midland States Bank % December 31, 2015 Required to be Minimum Required Well Capitalized Under For Capital Prompt Corrective Actual Adequacy Purposes Action Requirements Amount Ratio Amount Ratio Amount Ratio Total capital (to risk-weighted assets): Midland States Bancorp, Inc. $ % $ % N/A N/A Midland States Bank $ % Tier 1 capital (to risk-weighted assets): Midland States Bancorp, Inc. % % N/A N/A Midland States Bank % Common equity Tier 1 capital (to risk-weighted assets): Midland States Bancorp, Inc. % % N/A N/A Midland States Bank % Tier 1 leverage (to average assets): Midland States Bancorp, Inc. % % N/A N/A Midland States Bank % |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2016 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | Note 17 – Fair Value of Financial Instruments ASC 820, Fair Value Measurements, defines fair value, establishes a framework for measuring fair value including a three‑level valuation hierarchy, and expands disclosures about fair value measurements. Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date reflecting assumptions that a market participant would use when pricing an asset or liability. The hierarchy uses three levels of inputs to measure the fair value of assets and liabilities as follows: · Level 1: Unadjusted quoted prices for identical assets or liabilities traded in active markets. · Level 2: Observable inputs other than Level 1, including quoted prices for similar assets and liabilities in active markets, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data, either directly or indirectly, for substantially the full term of the financial instrument. · Level 3: Inputs to a valuation methodology that are unobservable, supported by little or no market activity, and significant to the fair value measurement. These valuation methodologies generally include pricing models, discounted cash flow models, or a determination of fair value that requires significant management judgment or estimation. This category also includes observable inputs from a pricing service not corroborated by observable market data, such as pricing non-agency mortgage backed securities. Fair value is used on a recurring basis to account for securities available for sale and derivative instruments, and for financial assets for which the Company has elected the fair value option. For assets and liabilities measured at the lower of cost or fair value, the fair value measurement criteria may or may not be met during a reporting period and such measurements are therefore considered “nonrecurring” for purposes of disclosing our fair value measurements. Fair value is used on a nonrecurring basis to adjust carrying values for impaired loans and other real estate owned and also to record impairment on certain assets, such as goodwill, core deposit intangibles and other long-lived assets. Assets and liabilities measured and recorded at fair value, including financial assets for which the Company has elected the fair value option, on a recurring and nonrecurring basis as of September 30 , 2016 and December 31, 2015, are summarized below (in thousands): September 30, 2016 Quoted prices in active Significant markets other Significant for identical observable unobservable assets inputs inputs Total (Level 1) (Level 2) (Level 3) Assets and liabilities measured at fair value on a recurring basis: Assets Securities available for sale: U.S. Treasury securities $ $ $ — $ — Government sponsored entity debt securities — — Agency mortgage-backed securities — — Non-agency mortgage-backed securities — — Covered non-agency mortgage-backed securities — — State and municipal securities — — Corporate securities — Loans held for sale — — Interest rate lock commitments — — Total $ $ $ $ Liabilities Interest rate swap agreement $ $ — $ $ — Forward commitments to sell mortgage-backed securities — — Total $ $ — $ $ — Assets measured at fair value on a non-recurring basis: Impaired loans $ $ — $ $ Other real estate owned — — December 31, 2015 Quoted prices in active Significant markets other Significant for identical observable unobservable assets inputs inputs Total (Level 1) (Level 2) (Level 3) Assets and liabilities measured at fair value on a recurring basis: Assets Securities available for sale: U.S. Treasury securities $ $ $ — $ — Government sponsored entity debt securities — — Agency mortgage-backed securities — — Non-agency mortgage-backed securities — — Covered non-agency mortgage-backed securities — — State and municipal securities — — Corporate securities — — Loans held for sale — — Interest rate lock commitments — — Total $ $ $ $ — Liabilities Interest rate swap agreement $ $ — $ $ — Forward commitments to sell mortgage-backed securities — — Contingent consideration — — Total $ $ — $ $ Assets measured at fair value on a non-recurring basis: Impaired loans $ $ — $ $ Other real estate owned — — The following table presents losses recognized on assets measured on a non‑recurring basis for the three and nine months ended September 30, 2016 and 2015 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Impaired loans $ $ $ $ Other real estate owned — Total loss on assets measured on a nonrecurring basis $ $ $ $ The following table presents activity for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2016 (in thousands): Non-Agency Corporate Mortgage-Backed Securities Securities Three Months Nine Months Three Months Nine Months Ended Ended Ended Ended September 30, September 30, September 30, September 30, 2016 2016 Balance, beginning of period $ $ — $ $ — Transferred from Level 2 — — Transferred to Level 2 — — Purchases of investment securities recognized as Level 3 — — — Total realized in earnings (1) — — Total unrealized in other comprehensive income — — Net settlements (principal and interest) Balance, end of period $ $ $ $ (1) Amounts included in interest income from investment securities taxable in the consolidated statements of income. The following table presents activity for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the nine months ended September 30, 2015 (in thousands). There was no activity for the three months ended September 30, 2015. Covered Non-Agency Mortgage-Backed Securities Balance, beginning of period $ Total realized in earnings (1) Transferred to Level 2 Net settlements (principal and interest) Balance, end of period $ — (1) Amounts included in interest income from investment securities taxable in the consolidated statements of income. ASC Topic 825, Financial Instruments , requires disclosure of the estimated fair value of certain financial instruments and the methods and significant assumptions used to estimate such fair values. Additionally, certain financial instruments and all nonfinancial instruments are excluded from the applicable disclosure requirements. The following tables are a summary of the carrying values and fair value estimates of certain financial instruments as of September 30, 2016 and December 31, 2015 (in thousands): September 30, 2016 Quoted prices in active Significant markets other Significant for identical observable unobservable assets inputs inputs Carrying Amount Fair Value (Level 1) (Level 2) (Level 3) Assets Cash and due from banks $ $ $ $ — $ — Federal funds sold — — Investment securities available for sale Investment securities held to maturity — — Nonmarketable equity securities — — Loans, net — — Loans held for sale — — Accrued interest receivable — — Interest rate lock commitments — — Liabilities Deposits $ $ $ — $ $ — Short-term borrowings — — FHLB and other borrowings — — Subordinated debt — — Trust preferred debentures — — Accrued interest payable — — Interest rate swap agreement — — Forward commitments to sell mortgage-backed securities — — December 31, 2015 Quoted prices in active Significant markets other Significant for identical observable unobservable assets inputs inputs Carrying Amount Fair Value (Level 1) (Level 2) (Level 3) Assets Cash and due from banks $ $ $ $ — $ — Federal funds sold — — Investment securities available for sale — Investment securities held to maturity — — Nonmarketable equity securities — — Loans, net — — Loans held for sale — — Accrued interest receivable — — Interest rate lock commitments — — Liabilities Deposits $ $ $ — $ $ — Short-term borrowings — — FHLB and other borrowings — — Subordinated debt — — Trust preferred debentures — — Accrued interest payable — — Interest rate swap agreement — — Forward commitments to sell mortgage-backed securities — — The following is a description of the valuation methodologies used to measure our assets recorded at fair value (under ASC Topic 820) and for estimating fair value for financial instruments not recorded at fair value (under ASC Topic 825): Cash and due from banks and federal funds sold. The carrying amounts are assumed to be the fair value because of the liquidity of these instruments. Investment securities available for sale. Securities available for sale are measured and carried at fair value on a recurring basis. Unrealized gains and losses on available-for-sale securities are reported as a component of accumulated other comprehensive income in the consolidated balance sheets. For securities available for sale where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2). In determining the fair value of available-for-sale securities categorized as Level 2, we obtain a report from a nationally recognized broker‑dealer detailing the fair value of each investment security we hold as of each reporting date. The broker‑dealer uses observable market information to value our fixed income securities, with the primary source being a nationally recognized pricing service. The fair value of the municipal securities is based on a proprietary model maintained by the broker‑dealer. We review all of the broker‑dealer supplied quotes on the securities we own as of the reporting date for reasonableness based on our understanding of the marketplace and we consider any credit issues related to the bonds. As we have not made any adjustments to the market quotes provided to us and they are based on observable market data, they have been categorized as Level 2 within the fair value hierarchy. For securities available for sale where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). During the nine months ended September 30, 2016, $6.7 million of corporate securities and $2,000 of non-agency mortgage backed securities were transferred from Level 2 to Level 3 because observable market inputs were not available and the securities were not actively traded; therefore, the fair value was determined through consensus pricing and discounted cash flow models. Corporate securities classified as Level 3 are not actively traded, and as a result, fair value is determined utilizing third-party valuation services through consensus pricing. The significant unobservable input used in the fair value measurement of Level 3 corporate securities is net market price (range of -2.5% to 2.5%; weighted average of 1.5%.) Significant changes in any of the inputs in isolation would result in a significant change to the fair value measurement. Net market price generally increases when market interest rates decline and declines when market interest rates increase. During both the three and nine months ended September 30, 2016, $2.0 million of corporate securities were transferred from Level 3 to Level 2 because a more liquid market for these securities had developed and prices supported by observable market inputs had become available. The fair value of non-agency mortgage backed securities classified as Level 3 is determined utilizing a discounted cash flow model. Significant unobservable inputs include discount rate (range of 4.0% - 14.0%; weighted average of 6.5%), cumulative prepayment rate (range of 0.0% - 100.0%; weighted average of 14.0%), cumulative default (range of 1.5% - 100%; weighted average of 11.0%), and loss given default (range of 85% - 100%; weighted average of 96.5%). In general, prepayment rates increase when market rates decline and decrease as market rates rise. Typically, higher prepayment rates result in lower fair values. Credit loss estimates are driven by the borrower’s ability to pay their loans and the value of underlying collateral. These metrics typically increase when macroeconomic conditions worsen. Generally, discount rates increase with market interest rates and credit and liquidity risks increase. Higher discount rates and credit spreads typically result in lower fair market values. During the nine months ended September 30, 2015, $55.9 million of covered non-agency mortgage-backed securities were transferred from Level 3 to Level 2 because a more liquid market for these securities had developed and prices supported by observable market inputs had become available. During the three months ended September 30, 2016, there was no OTTI recognized on investment securities available for sale. During the three months ended September 30, 2015, we recorded $299,000 of OTTI, net of applicable loss-share reimbursements, on non-agency mortgage-backed securities covered by FDIC loss-sharing agreements. During the nine months ended September 30, 2016 and 2015, we recorded $824,000 and $461,000, respectively, of OTTI, net of applicable loss-share reimbursements, on non-agency mortgage‑backed securities covered by FDIC loss-sharing agreements. Investment securities held to maturity. Held-to-maturity securities are those debt instruments which the Company has the positive intent and ability to hold until maturity. Securities held to maturity are recorded at cost, adjusted for the amortization of premiums or accretion of discounts. For securities held to maturity where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2). In determining the fair value of held-to-maturity securities categorized as Level 2, we obtain a report from a nationally recognized broker‑dealer detailing the fair value of each investment security we hold as of each reporting date. The fair value of the municipal securities is based on a proprietary model maintained by the broker‑dealer. We review all of the broker‑dealer supplied quotes on the securities we own as of the reporting date for reasonableness based on our understanding of the marketplace, and we consider any credit issues related to the bonds. As we have not made any adjustments to the market quotes provided to us and they are based on observable market data, they have been categorized as Level 2 within the fair value hierarchy. Nonmarketable equity securities. The carrying amounts approximate their fair values. Loans (excluding covered loans). Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type and further segmented into fixed and adjustable rate interest terms and by credit risk categories. The fair value estimates do not take into consideration the value of the loan portfolio in the event the loans have to be sold outside the parameters of normal operating activities. The fair value of performing fixed rate loans is estimated by discounting scheduled cash flows through the estimated maturity using estimated market prepayment speeds and estimated market discount rates that reflect the credit and interest rate risk inherent in the loans. The estimated market discount rates used for performing fixed rate loans are the Company’s current offering rates for comparable instruments with similar terms. The fair value of performing adjustable rate loans is estimated by discounting scheduled cash flows through the next repricing date. As these loans reprice frequently at market rates and the credit risk is not considered to be greater than normal, the market value is typically close to the carrying amount of these loans. The method of estimating fair value does not incorporate the exit‑price concept of fair value prescribed by ASC Topic 820. Non-covered impaired loans. Non-covered impaired loans are measured and recorded at fair value on a non-recurring basis. All of our non-covered nonaccrual loans and restructured loans are considered impaired and are reviewed individually for the amount of impairment, if any. Most of our loans are collateral dependent and, accordingly, we measure impaired loans based on the estimated fair value of such collateral. The fair value of each loan’s collateral is generally based on estimated market prices from an independently prepared appraisal, which is then adjusted for the cost related to liquidating such collateral; such valuation inputs result in a nonrecurring fair value measurement that is categorized as a Level 2 measurement. When adjustments are made to an appraised value to reflect various factors such as the age of the appraisal or known changes in the market or the collateral, such valuation inputs are considered unobservable and the fair value measurement is categorized as a Level 3 measurement. The impaired loans categorized as Level 3 also include unsecured loans and other secured loans whose fair values are based significantly on unobservable inputs such as the strength of a guarantor, cash flows discounted at the effective loan rate, and management’s judgment. The loan balances shown in the above tables represent nonaccrual and restructured loans for which impairment was recognized during the three and nine months ended September 30, 2016 and 2015. The amounts shown as losses represent, for the loan balances shown, the impairment recognized during those same years. Covered loans. Covered loans were measured at estimated fair value on the date of acquisition. Thereafter, the fair value of covered loans is measured using the same methodology as that for non-covered loans. The above discussion for non-covered loans and non-covered impaired loans is applicable to covered loans following their acquisition date. Loans held for sale. Loans held for sale are carried at either fair value, if elected, or the lower of cost or fair value on an individual loan basis. Fair value measurements on loans held for sale are based on quoted market prices for similar loans in the secondary market. At September 30, 2016 and December 31, 2015, loans held for sale were carried at fair value. Other real estate owned. The fair value of foreclosed real estate, both non-covered and covered, is generally based on estimated market prices from independently prepared current appraisals or negotiated sales prices with potential buyers; such valuation inputs result in a fair value measurement that is categorized as a Level 2 measurement on a nonrecurring basis. When a current appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value as a result of known changes in the market or the collateral and there is no observable market price, such valuation inputs result in a fair value measurement that is categorized as a Level 3 measurement. To the extent a negotiated sales price or reduced listing price represents a significant discount to an observable market price, such valuation input would result in a fair value measurement that is also considered a Level 3 measurement. Accrued interest receivable. The carrying amounts approximate their fair values. Deposits. Deposits are carried at historical cost. The fair value of deposits with no stated maturity, such as noninterest‑bearing demand deposits, money market, savings and checking accounts, is equal to the amount payable on demand as of the balance sheet date. The fair value of time deposits is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities. Short-term borrowings. Short-term borrowings consist of repurchase agreements. These borrowings typically have terms of less than 30 days, and therefore, their carrying amounts are a reasonable estimate of fair value. FHLB advances and other borrowings and subordinated debt. Borrowings are carried at amortized cost. The fair value of fixed rate borrowings is calculated by discounting scheduled cash flows through the estimated maturity or call dates using estimated market discount rates that reflect rates offered at that time for borrowings with similar remaining maturities and other characteristics. Trust preferred debentures. Debentures are carried at amortized cost. The fair value of variable rate debentures is calculated by discounting scheduled cash flows through the estimated maturity or call dates using estimated market discount rates that reflect spreads offered at that time for borrowings with similar remaining maturities and other characteristics. Accrued interest payable. The carrying amounts approximate their fair values. Derivative financial instruments. The Company enters into interest rate lock commitments which are agreements to originate mortgage loans whereby the interest rate on the loan is determined prior to funding and the customers have locked into that interest rate. These commitments are carried at fair value in other assets on the consolidated balance sheet with changes in fair value reflected in commercial FHA revenue and residential mortgage banking revenue in the consolidated statements of income. The Company also has forward loan sales commitments related to its interest rate lock commitments and its loans held for sale. These commitments are carried at fair value in other assets or other liabilities on the consolidated balance sheet with changes in fair value reflected in commercial FHA revenue and residential mortgage banking revenue in the consolidated statements of income. The interest rate swap is carried at fair value on a recurring basis based upon the amounts required to settle the contracts. |
COMMITMENTS, CONTINGENCIES AND
COMMITMENTS, CONTINGENCIES AND CREDIT RISK | 9 Months Ended |
Sep. 30, 2016 | |
COMMITMENTS, CONTINGENCIES AND CREDIT RISK | |
COMMITMENTS, CONTINGENCIES AND CREDIT RISK | Note 18 – Commitments, Contingencies and Credit Risk In the normal course of business, there are outstanding various contingent liabilities such as claims and legal actions, which are not reflected in the consolidated financial statements. No material losses are anticipated as a result of these actions or claims. We are a party to financial instruments with off-balance‑sheet risk in the normal course of business to meet the financing needs of our customers. These financial instruments include commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the balance sheet. The contract amounts of those instruments reflect the extent of involvement we have in particular classes of financial instruments. Our exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. The Bank used the same credit policies in making commitments and conditional obligations as it does for on-balance‑sheet instruments. The commitments are principally tied to variable rates. Loan commitments as of September 30, 2016 and December 31, 2015 are as follows (in thousands): September 30, December 31, 2016 2015 Commitments to extend credit $ $ Financial guarantees – standby letters of credit The Company sells residential mortgage loans to investors in the normal course of business. Residential mortgage loans sold to others are predominantly conventional residential first lien mortgages originated under our usual underwriting procedures, and are sold on a nonrecourse basis, primarily to government-sponsored enterprises (“GSEs”). The Company’s agreements to sell residential mortgage loans in the normal course of business usually require certain representations and warranties on the underlying loans sold, related to credit information, loan documentation, collateral, and insurability. Subsequent to being sold, if a material underwriting deficiency or documentation defect is discovered, the Company may be obligated to repurchase the loan or reimburse the GSEs for losses incurred. The make-whole requests and any related risk of loss under the representations and warranties are largely driven by borrower performance. The Company establishes a mortgage repurchase liability related to these events that reflect management’s estimate of losses on loans for which the Company could have a repurchase obligation based on a combination of factors. Such factors incorporate the volume of loans sold in 2016 and years prior, borrower default expectations, historical investor repurchase demand and appeals success rates, and estimated loss severity. Loans repurchased from investors are initially recorded at fair value, which becomes the Company’s new accounting basis. Any difference between the loan’s fair value and the outstanding principal amount is charged or credited to the mortgage repurchase liability, as appropriate. Subsequent to repurchase, such loans are carried in loans receivable. As a result of make-whole requests and loan repurchases, the Company incurred losses totaling $83,000 for the nine months ended September 30, 2016, and $12,000 and $65,000 for the three and nine months ended September 30, 2015, respectively. There were no losses incurred for the three months ended September 30, 2016. The liability for unresolved repurchase demands totaled $340,000 and $378,000 at September 30, 2016 and December 31, 2015, respectively. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2016 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | Note 19 – Segment Information Our business segments are defined as Banking, Commercial FHA Origination and Servicing, and Other. The reportable business segments are consistent with the internal reporting and evaluation of the principle lines of business of the Company. The banking segment provides a wide range of financial products and services to consumers and businesses, including commercial, commercial real estate, mortgage and other consumer loan products; commercial equipment leasing; mortgage loan sales and servicing; letters of credit; various types of deposit products, including checking, savings and time deposit accounts; merchant services; and corporate treasury management services. The commercial FHA origination and servicing segment provides for the origination and servicing of government sponsored mortgages for multifamily and healthcare facilities. The other segment includes the operating results of the parent company, our wealth management business unit, and the elimination of intercompany transactions. Wealth management activities consist of trust and fiduciary services, brokerage and retirement planning services. Selected business segment financial information as of and for the three and nine months ended September 30, 2016 and 2015 were as follows (in thousands): Commercial FHA Origination and Banking Servicing Other Total Three Months Ended September 30, 2016 Net interest income (expense) $ $ $ $ Provision for loan losses — — Noninterest income Noninterest expense Income (loss) before income taxes (benefit) Income taxes (benefit) Net income (loss) $ $ $ $ Total assets $ $ $ $ Three Months Ended September 30, 2015 Net interest income (expense) $ $ $ $ Provision for loan losses — — Noninterest income Noninterest expense Income (loss) before income taxes (benefit) Income taxes (benefit) Net income (loss) $ $ $ $ Total assets $ $ $ $ Commercial FHA Origination and Banking Servicing Other Total Nine Months Ended September 30, 2016 Net interest income (expense) $ $ $ $ Provision for loan losses — — Noninterest income Noninterest expense Income (loss) before income taxes (benefit) Income taxes (benefit) Net income (loss) $ $ $ $ Total assets $ $ $ $ Nine Months Ended September 30, 2015 Net interest income (expense) $ $ $ $ Provision for loan losses — — Noninterest income Noninterest expense Income (loss) before income taxes (benefit) Income taxes (benefit) Net income (loss) $ $ $ $ Total assets $ $ $ $ |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2016 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | Note 20 – Related Party Transactions The Company utilizes the services of a company to act as a general manager for the construction of new branch facilities. A member of our board of directors is a substantial shareholder of this company and currently serves as its Chairman. During the three months ended September 30, 2015, the Company paid $738,000 for work on various projects. There were no payments made during the three months ended September 30, 2016. During the nine months ended September 30, 2016 and 2015, the Company paid $159,000 and $1.6 million, respectively, for work on various projects. A member of our board of directors has an ownership interest in the office building located in Clayton, Missouri and three of the Bank’s full-service branch facilities. During the three and nine months ended September 30, 2016, the Company paid rent of $165,000 and $540,000, respectively, and $166,000 and $527,000 for the comparable periods in 2015, respectively. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2016 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | Note 21 – Subsequent Events On October 3, 2016, the Company entered into an agreement with the FDIC to terminate its existing loss share agreements. The loss share agreements were related to certain assets the Bank acquired from the FDIC as part of the two FDIC-assisted bank acquisitions it had completed, one in 2009 and one in 2010. Under the terms of this agreement, the Company paid the FDIC $565,000 as consideration for the early termination. This charge was partially offset by the reversal of $214,000 of accrued loss-share liabilities that will not be paid, resulting in a one-time after tax charge of $225,000. All future gains, recoveries, charge-offs, losses and expenses related to the formerly covered assets will now be recognized by the Company with no offset due to or from the FDIC. On October 4, 2016, the Company sold previously covered non-agency mortgage-backed securities which had a carrying value of $72.1 million. As a result of the sale, the Company realized a gain totaling $14.3 million in the fourth quarter of 2016. |
BASIS OF PRESENTATION AND SUM30
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). These interim financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto as of and for the years ended December 31, 2015, 2014 and 2013, included in our registration statement on Form S-1 filed with the Securities and Exchange Commission (“SEC”) on May 23, 2016. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the parent company and its subsidiaries, giving effect to the noncontrolling interest in subsidiaries, as more fully described below. All significant intercompany accounts and transactions have been eliminated. Assets held for customers in a fiduciary or agency capacity, other than trust cash on deposit with the Bank, are not assets of the Company and, accordingly, are not included in the accompanying unaudited consolidated financial statements. The Company operates through its wholly owned subsidiary bank, Midland States Bank, headquartered in Effingham, Illinois. The Bank operates through its branch banking offices and subsidiaries: Love Funding, Business Credit, and Heartland Premier LLC (“Premier”). All of the subsidiaries are wholly owned by the Bank as of September 30, 2016, except for Premier, which was formed as a joint venture mortgage origination operation, of which the Bank owns 51% and acts as a manager. Heartland Preferred Mortgage Company LLC (“Preferred”), formerly a subsidiary of the Bank, was a joint venture mortgage origination operation, of which the Bank owned 51% and acted as a manager. Preferred was dissolved on May 27, 2016. Premier and Preferred are included in the consolidated financial statements and the noncontrolling ownership interest is reported as a component of shareholders’ equity in the consolidated balance sheets as “noncontrolling interest in subsidiaries” and the earnings or loss attributable to the noncontrolling ownership interest is reported as “net (loss) income attributable to noncontrolling interest in subsidiaries” in the consolidated statements of income. |
Use of Estimates | Use of Estimates In preparing the consolidated financial statements, we are required to make estimates and assumptions, which significantly affect the amounts reported in the consolidated financial statements. Significant estimates that are particularly susceptible to change include the fair value of investment securities, the determination of the allowance for loan losses, estimated fair values of purchased loans, valuation of real estate and other properties acquired in connection with foreclosures or in satisfaction of amounts due from borrowers on loans, and the carrying value of mortgage servicing rights. While management uses its best judgment, actual results may differ from those estimates. Current economic and market conditions significantly affect the judgments. |
Impact of New Financial Accounting Standards | Impact of New Financial Accounting Standards FASB ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” – In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “ Revenue from Contracts with Customers (Topic 606).” The ASU supersedes revenue recognition requirements in Topic 605, Revenue Recognition , including most industry-specific revenue recognition guidance in the FASB Accounting Standards Codification (“ASC”). The ASU requires an entity to recognize revenue that depicts the transfer of promised goods or services to customers in an amount reflecting the consideration the entity expects to receive in exchange for those goods or services. The ASU identifies specific steps that entities should apply to achieve this principle. The new guidance was originally effective for fiscal years (including interim periods within those fiscal years) beginning after December 15, 2016 for public companies. In August 2015, the FASB issued ASU 2015-14, which defers the effective date of this guidance to annual reporting periods beginning after December 15, 2017 for public companies, and permits early adoption on a limited basis. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements. Entities have the option of using either a full retrospective or modified approach to adopt ASU 2014-09. FASB ASU 2016-02, “Leases (Topic 842)” - In February 2016, the FASB issued ASU No. 2016-02, “ Leases (Topic 842) .” This update revises the model to assess how a lease should be classified and provides guidance for lessees and lessors, when presenting right-of-use assets and lease liabilities on the balance sheet. The update is effective for the Company for the year ending December 31, 2019, although the Company may elect to adopt guidance earlier. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements. FASB ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” – In March 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). ” The amendments relate to when another party, along with the entity, is involved in providing a good or service to a customer. The ASU requires an entity to determine whether the nature of its promise is to provide that good or service to the customer (that is, the entity is a principal) or to arrange for the good or service to be provided to the customer by the other party (that is, the entity is an agent). This determination is based upon whether the entity controls the good or the service before it is transferred to the customer. Topic 606 includes indicators to assist in this evaluation. The amendments in this update affect the guidance in ASU No. 2014-09 above, which is not yet effective. The effective date will be the same as the effective date of ASU No. 2014-09. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements . FASB ASU 2016-09, “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” - In March 2016, the FASB issued ASU No. 2016-09, “ Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting .” This update includes multiple provisions intended to simplify various aspects of the accounting for share-based payments. While aimed at reducing the cost and complexity of the accounting for share-based payments, the amendments are expected to significantly impact net income, earnings per share, and the statement of cash flows. Implementation and administration may present challenges for companies with significant share-based payment activities. For public companies, the amendments in this update are effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early application is permitted for any organization in any interim period or fiscal year. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements. FASB ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” – In April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing.” The amendments clarify the following two aspects of Topic 606: identifying performance obligations, and the licensing implementation guidance. Before an entity can identify its performance obligations in a contract with a customer, the entity first identifies the promised goods or services in the contract. The amendments in this update are expected to reduce the cost and complexity of applying the guidance on identifying promised goods or services. To identify performance obligations in a contract, an entity evaluates whether promised goods and services are distinct. Topic 606 includes two criteria for assessing whether promises to transfer goods or services are distinct. One of those criteria is that the promises are separately identifiable. This update will improve the guidance on assessing that criterion. Topic 606 also includes implementation guidance on determining whether as entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property, which is satisfied at a point in time, or a right to access the entity’s intellectual property, which is satisfied over time. The amendments in this update are intended to improve the operability and understandability of the licensing implementation guidance. The amendments in this update affect the guidance in ASU No. 2014-09 above, which is not yet effective. The effective date will be the same as the effective date of ASU No. 2014-09. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements . FASB ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” – In June 2016, the FASB issued ASU No. 2016-13, “ Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The objective of this update is to improve financial reporting by providing timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The ASU requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better understand their credit loss estimates. For public companies that are SEC filers, this update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application is permitted for any organization for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements. FASB ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” – In August 2016, the FASB issued ASU No. 2016-15, “ Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which amends ASC 230 to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows. For public business entities, this update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early application is permitted for any organization in any interim period or fiscal year. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements. |
INVESTMENT SECURITIES AVAILAB31
INVESTMENT SECURITIES AVAILABLE FOR SALE (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Schedule of investment securities classified as available for sale | Investment securities classified as available for sale as of September 30, 2016 and December 31, 2015 are as follows (in thousands): September 30, 2016 Gross Gross Amortized unrealized unrealized Fair cost gains losses value U.S. Treasury securities $ $ $ $ Government sponsored entity debt securities — Agency mortgage-backed securities Non-agency mortgage-backed securities — — Covered non-agency mortgage-backed securities (1) State and municipal securities Corporate securities Total $ $ $ $ (1) All covered non‑agency mortgage‑backed securities were covered under the loss‑sharing agreement we entered into with the Federal Deposit Insurance Corporation (the “FDIC”) in connection with a 2009 acquisition. This agreement had a seven year term that expired on July 1, 2016 with respect to losses. On October 3, 2016, the Company entered into an agreement with the FDIC to terminate its existing loss share agreements as more fully described in Note 21 to the Consolidated Financial Statements. None of our other investment securities were covered under a loss‑sharing agreement with the FDIC. December 31, 2015 Gross Gross Amortized unrealized unrealized Fair cost gains losses value U.S. Treasury securities $ $ $ $ Government sponsored entity debt securities Agency mortgage-backed securities Non-agency mortgage-backed securities — — Covered non-agency mortgage-backed securities (1) State and municipal securities Corporate securities Total $ $ $ $ (1) All covered non‑agency mortgage‑backed securities were covered under the loss‑sharing agreement we entered into with the FDIC in connection with a 2009 acquisition. This agreement had a seven year term that expired on July 1, 2016 with respect to losses. On October 3, 2016, the Company entered into an agreement with the FDIC to terminate its existing loss share agreements as more fully described in Note 21 to the Consolidated Financial Statements. None of our other investment securities were covered under a loss‑sharing agreement with the FDIC. |
Available for sale | |
Schedule of unrealized losses and fair values for investment securities | Unrealized losses and fair values for investment securities available for sale as of September 30, 2016 and December 31, 2015, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are summarized as follows (in thousands): September 30, 2016 Less than 12 Months 12 Months or more Total Fair Unrealized Fair Unrealized Fair Unrealized value loss value loss value loss U.S. Treasury securities $ $ $ — $ — $ $ Government sponsored entity debt securities — — — — — — Agency mortgage-backed securities — — Covered non-agency mortgage-backed securities State and municipal securities — — Corporate securities Total $ $ $ $ $ $ December 31, 2015 Less than 12 Months 12 Months or more Total Fair Unrealized Fair Unrealized Fair Unrealized value loss value loss value loss U.S. Treasury securities $ $ $ — $ — $ $ Government sponsored entity debt securities — — Agency mortgage-backed securities Covered non-agency mortgage-backed securities State and municipal securities Corporate securities Total $ $ $ $ $ $ |
Contractual maturity of amortized cost and fair value | The maturities of all other available-for-sale investment securities are based on final contractual maturity. Amortized Fair cost value Within one year $ $ After one year through five years After five years through ten years After ten years Total $ $ |
INVESTMENT SECURITIES HELD TO32
INVESTMENT SECURITIES HELD TO MATURITY (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Schedule of investment securities classified as held to maturity | Investment securities classified as held to maturity as of September 30, 2016 and December 31, 2015 are as follows (in thousands): September 30, 2016 Gross Gross Amortized unrealized unrealized Fair cost gains losses value State and municipal securities $ $ $ $ December 31, 2015 Gross Gross Amortized unrealized unrealized Fair cost gains losses value State and municipal securities $ $ $ $ |
Held to maturity | |
Schedule of unrealized losses and fair values for investment securities | Unrealized losses and fair value for investment securities held to maturity as of September 30, 2016 and December 31, 2015, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are summarized as follows (in thousands): September 30, 2016 Less than 12 Months 12 Months or more Total Fair Unrealized Fair Unrealized Fair Unrealized value loss value loss value loss State and municipal securities $ $ $ $ $ $ December 31, 2015 Less than 12 Months 12 Months or more Total Fair Unrealized Fair Unrealized Fair Unrealized value loss value loss value loss State and municipal securities $ $ $ $ $ $ |
Contractual maturity of amortized cost and fair value | The amortized cost and fair value of held-to-maturity securities as of September 30, 2016, by contractual maturity, are as follows (in thousands): Amortized Fair cost value Within one year $ $ After one year through five years After five years through ten years After ten years Total $ $ |
LOANS (Tables)
LOANS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
LOANS | |
Summary of loans | The following table presents total loans outstanding by portfolio, which includes Purchased Credit-Impaired (“PCI”) loans, as of September 30, 2016 and December 31, 2015 (in thousands): September 30, December 31, 2016 2015 Loans: Commercial $ $ Commercial real estate Construction and land development Total commercial loans Residential real estate Consumer Lease financing Total loans $ $ |
Summary of recorded investment (excluding PCI loans) by risk category | The following table presents the recorded investment of commercial loans (excluding PCI loans) by risk category as of September 30, 2016 (in thousands): Commercial Construction and Commercial Real Estate Land Development Total Acceptable credit quality $ $ $ $ Special mention — Substandard Substandard – nonaccrual — Doubtful — — — — Not graded Total (excluding PCI) $ $ $ $ The Company evaluates the credit quality of its other loans based primarily on the aging status of the loan and payment activity. Accordingly, loans on nonaccrual status, any loan past due 90 days or more and still accruing interest, and loans modified under troubled debt restructurings are considered to be impaired for purposes of credit quality evaluation. The following table presents the recorded investment of our other loans (excluding PCI loans) based on the credit risk profile of loans that are performing and loans that are impaired as of September 30, 2016 (in thousands): Residential Lease Real Estate Consumer Financing Total Performing $ $ $ $ Impaired Total (excluding PCI) $ $ $ $ The following table presents the recorded investment of commercial loans (excluding PCI loans) by risk category as of December 31, 2015 (in thousands): Commercial Construction and Commercial Real Estate Land Development Total Acceptable credit quality $ $ $ $ Special mention Substandard — Substandard-nonaccrual — Doubtful — — — — Not graded Total (excluding PCI) $ $ $ $ The following table presents the recorded investment of our other loans (excluding PCI loans) based on the credit risk profile of loans that are performing and loans that are impaired as of December 31, 2015 (in thousands): Residential Lease Real Estate Consumer Financing Total Performing $ $ $ $ Impaired Total (excluding PCI) $ $ $ $ |
Summary of impaired loans (excluding PCI loans) | A summary of impaired loans (excluding PCI loans) as of September 30, 2016 and December 31, 2015 is as follows (in thousands): September 30, December 31, 2016 2015 Nonaccrual loans: Commercial $ $ Commercial real estate Construction and land development — — Residential real estate Consumer Lease financing Total nonaccrual loans Accruing loans contractually past due 90 days or more as to interest or principal payments: Commercial Commercial real estate — — Construction and land development — — Residential real estate — Consumer Lease financing — — Total accruing loans contractually past due 90 days or more as to interest or principal payments Loans modified under troubled debt restructurings: Commercial Commercial real estate Construction and land development — Residential real estate Consumer — — Lease financing — — Total loans modified under troubled debt restructurings Total impaired loans (excluding PCI) $ $ |
Summary of impaired loans (excluding PCI loans) by portfolio | The following table presents impaired loans (excluding PCI loans) by portfolio which are individually evaluated as of September 30, 2016 and December 31, 2015, respectively (in thousands): September 30, 2016 December 31, 2015 Unpaid Related Unpaid Related Recorded Principal Valuation Recorded Principal Valuation Investment Balance Allowance Investment Balance Allowance Impaired loans with a valuation allowance: Commercial $ $ $ $ $ $ Commercial real estate Construction and land development — — Residential real estate Consumer Lease financing Total impaired loans with a valuation allowance Impaired loans with no related valuation allowance: Commercial — — Commercial real estate — — Construction and land development — — — — — — Residential real estate — — Consumer — — — — — Lease financing — — — — — — Total impaired loans with no related valuation allowance — — Total impaired loans: Commercial Commercial real estate Construction and land development — — Residential real estate Consumer Lease financing Total impaired loans (excluding PCI) $ $ $ $ $ $ |
Summary of average balance of impaired loans (excluding PCI loans) and interest income recognized on impaired loans | The average balance of impaired loans (excluding PCI loans) and interest income recognized on impaired loans during the three months ended September 30, 2016 and 2015 are included in the table below (in thousands): Three Months Ended September 30, 2016 2015 Interest Income Interest Income Average Recognized Average Recognized Recorded While on Recorded While on Investment Impaired Status Investment Impaired Status Impaired loans with a valuation allowance: Commercial $ $ $ $ Commercial real estate Construction and land development — Residential real estate Consumer — — Lease financing — — Total impaired loans with a valuation allowance Impaired loans with no related valuation allowance: Commercial — Commercial real estate — — Construction and land development — — — — Residential real estate Consumer — — Lease financing — — — — Total impaired loans with no related valuation allowance Total impaired loans: Commercial Commercial real estate Construction and land development — Residential real estate Consumer — — Lease financing — — Total impaired loans (excluding PCI) $ $ $ $ The average balance of impaired loans (excluding PCI loans) and interest income recognized on impaired loans during the nine months ended September 30, 2016 and 2015 are included in the table below (in thousands): Nine Months Ended September 30, 2016 2015 Interest Income Interest Income Average Recognized Average Recognized Recorded While on Recorded While on Investment Impaired Status Investment Impaired Status Impaired loans with a valuation allowance: Commercial $ $ $ $ Commercial real estate Construction and land development — Residential real estate Consumer — — Lease financing — — Total impaired loans with a valuation allowance Impaired loans with no related valuation allowance: Commercial — Commercial real estate Construction and land development — — — Residential real estate Consumer — Lease financing — — — — Total impaired loans with no related valuation allowance Total impaired loans: Commercial Commercial real estate Construction and land development — Residential real estate Consumer — Lease financing — — Total impaired loans (excluding PCI) $ $ $ $ |
Summary of aging status of recorded investments in loans by portfolio (excluding PCI loans) | Nine Months Ended September 30, 2016 2015 Interest Income Interest Income Average Recognized Average Recognized Recorded While on Recorded While on Investment Impaired Status Investment Impaired Status Impaired loans with a valuation allowance: Commercial $ $ $ $ Commercial real estate Construction and land development — Residential real estate Consumer — — Lease financing — — Total impaired loans with a valuation allowance Impaired loans with no related valuation allowance: Commercial — Commercial real estate Construction and land development — — — Residential real estate Consumer — Lease financing — — — — Total impaired loans with no related valuation allowance Total impaired loans: Commercial Commercial real estate Construction and land development — Residential real estate Consumer — Lease financing — — Total impaired loans (excluding PCI) $ $ $ $ The following table presents the aging status of the recorded investment in loans by portfolio (excluding PCI loans) as of September 30, 2016 (in thousands): Accruing Loans 31-59 60-89 Past Due Days Days 90 Days Nonaccrual Total Total Past Due Past Due or More Loans Past Due Current Loans Commercial $ $ $ $ $ $ $ Commercial real estate — Construction and land development — — — Residential real estate — Consumer Lease financing — — Total (excluding PCI) $ $ $ $ $ $ $ The following table presents the aging status of the recorded investment in loans by portfolio (excluding PCI loans) as of December 31, 2015 (in thousands): Accruing Loans 31-59 60-89 Past Due Days Days 90 Days Nonaccrual Total Total Past Due Past Due or More Loans Past Due Current Loans Commercial $ $ $ $ $ $ $ Commercial real estate — Construction and land development — — — Residential real estate Consumer Lease financing — — Total (excluding PCI) $ $ $ $ $ $ $ |
Summary of TDRs by loan portfolio (excluding PCI loans) | The Company’s TDRs are identified on a case-by-case basis in connection with the ongoing loan collection processes. The following table presents TDRs by loan portfolio (excluding PCI loans) as of September 30, 2016 and December 31, 2015 (in thousands): September 30, 2016 December 31, 2015 Accruing (1) Non-accrual (2) Total Accruing (1) Non-accrual (2) Total Commercial $ $ $ $ $ $ Commercial real estate Construction and land development — — — — Residential real estate Consumer — — — — — — Lease financing — — — — — — Total loans (excluding PCI) $ $ $ $ $ $ (1) These loans are still accruing interest. (2) These loans are included in non-accrual loans in the preceding tables. |
Summary of TDRs loans by portfolio restructured and occurred within previous twelve months that subsequently defaulted | The following table presents a summary of loans by portfolio that were restructured during the three and nine months ended September 30, 2016 and the loans by portfolio that were modified as TDRs within the previous twelve months that subsequently defaulted during the three and nine months ended September 30, 2016 (in thousands): Commercial Loan Portfolio Other Loan Portfolio Commercial Construction Residential Real and Land Real Lease Commercial Estate Development Estate Consumer Financing Total For the three months ended September 30, 2016: Troubled debt restructurings: Number of loans — — — — — Pre-modification outstanding balance $ — $ $ — $ — $ — $ — $ Post-modification outstanding balance — — — — — Troubled debt restructurings that subsequently defaulted Number of loans — — — — — — — Recorded balance $ — $ — $ — $ — $ — $ — $ — For the nine months ended September 30, 2016: Troubled debt restructurings: Number of loans — — — — Pre-modification outstanding balance $ $ $ — $ — $ — $ — $ Post-modification outstanding balance — — — — Troubled debt restructurings that subsequently defaulted Number of loans — — — — — — — Recorded balance $ — $ — $ — $ — $ — $ — $ — The following table presents a summary of loans by portfolio that were restructured during the three and nine months ended September 30, 2015 and the loans by portfolio that were modified as TDRs within the previous twelve months that subsequently defaulted during the three and nine months ended September 30, 2015 (in thousands): Commercial Loan Portfolio Other Loan Portfolio Commercial Construction Residential Real and Land Real Lease Commercial Estate Development Estate Consumer Financing Total For the three months ended September 30, 2015: Troubled debt restructurings: Number of loans — — — — — Pre-modification outstanding balance $ $ — $ — $ — $ — $ — $ Post-modification outstanding balance — — — — — Troubled debt restructurings that subsequently defaulted Number of loans — — — — — — — Recorded balance $ — $ — $ — $ — $ — $ — $ — For the nine months ended September 30, 2015: Troubled debt restructurings: Number of loans — — — — — Pre-modification outstanding balance $ $ — $ — $ — $ — $ — $ Post-modification outstanding balance — — — — — Troubled debt restructurings that subsequently defaulted Number of loans — — — — — Recorded balance $ — $ $ — $ — $ — $ — $ |
Summary of changes in allowance for loan losses | Changes in the allowance for loan losses for the three months ended September 30, 2016 and 2015 are as follows (in thousands): Three Months Ended September 30, 2016 2015 Non-PCI PCI Non-PCI PCI Loans Loans Total Loans Loans Total Balance at beginning of period $ $ $ $ $ $ Provision for loan losses Loan charge-offs Loan recoveries Net loan charge-offs Balance at end of period $ $ $ $ $ $ Changes in the allowance for loan losses for the nine months ended September 30, 2016 and 2015 are as follows (in thousands): Nine Months Ended September 30, 2016 2015 Non-PCI PCI Non-PCI PCI Loans Loans Total Loans Loans Total Balance at beginning of period $ $ $ $ $ $ Provision for loan losses Loan charge-offs Loan recoveries Net loan charge-offs Balance at end of period $ $ $ $ $ $ |
Summary of changes in allowance for loan losses, by loan portfolio | The following table represents, by loan portfolio, a summary of changes in the allowance for loan losses for the three and nine months ended September 30, 2016 and 2015 (in thousands): Commercial Loan Portfolio Other Loan Portfolio Commercial Construction Residential Real and Land Real Lease Commercial Estate Development Estate Consumer Financing Total Changes in allowance for loan losses for the three months ended September 30, 2016: Beginning balance $ $ $ $ $ $ $ Provision for loan losses Charge-offs Recoveries Ending balance $ $ $ $ $ $ $ Changes in allowance for loan losses for the three months ended September 30, 2015: Beginning balance $ $ $ $ $ $ $ Provision for loan losses Charge-offs — Recoveries Ending balance $ $ $ $ $ $ $ Changes in allowance for loan losses for the nine months ended September 30, 2016: Beginning balance $ $ $ $ $ $ $ Provision for loan losses Charge-offs Recoveries Ending balance $ $ $ $ $ $ $ Changes in allowance for loan losses for the nine months ended September 30, 2015: Beginning balance $ $ $ $ $ $ — $ Provision for loan losses Charge-offs Recoveries Ending balance $ $ $ $ $ $ $ The following table represents, by loan portfolio, details regarding the balance in the allowance for loan losses and the recorded investment in loans as of September 30, 2016 and December 31, 2015 by impairment evaluation method (in thousands): Commercial Loan Portfolio Other Loan Portfolio Commercial Construction Residential Real and Land Real Lease Commercial Estate Development Estate Consumer Financing Total September 30, 2016: Allowance for loan losses: Loans individually evaluated for impairment $ $ $ $ $ $ $ Loans collectively evaluated for impairment — Non-impaired loans collectively evaluated for impairment Loans acquired with deteriorated credit quality (1) — — Total allowance for loan losses $ $ $ $ $ $ $ Recorded investment (loan balance): Impaired loans individually evaluated for impairment $ $ $ $ $ $ $ Impaired loans collectively evaluated for impairment — Non-impaired loans collectively evaluated for impairment Loans acquired with deteriorated credit quality (1) — Total recorded investment (loan balance) $ $ $ $ $ $ $ December 31, 2015: Allowance for loan losses: Loans individually evaluated for impairment $ $ $ — $ $ — $ — $ Loans collectively evaluated for impairment — Non-impaired loans collectively evaluated for impairment Loans acquired with deteriorated credit quality (1) — Total allowance for loan losses $ $ $ $ $ $ $ Recorded investment (loan balance): Impaired loans individually evaluated for impairment $ $ $ — $ $ — $ — $ Impaired loans collectively evaluated for impairment — Non-impaired loans collectively evaluated for impairment Loans acquired with deteriorated credit quality (1) — Total recorded investment (loan balance) $ $ $ $ $ $ $ (1) Loans acquired with deteriorated credit quality were originally recorded at fair value at the acquisition date and the risk of credit loss was recognized at that date based on estimates of expected cash flows. |
Summary of changes in accretable yield for PCI loans | Changes in the accretable yield for PCI loans were as follows for the three and nine months ended September 30, 2016 and 2015 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Balance at beginning of period $ $ $ $ Accretion Other adjustments (including maturities, charge-offs and impact of changes in timing of expected cash flows) — Reclassification from non-accretable Balance at end of period $ $ $ $ |
Summary of carrying amount of covered loans and non-covered loans consisted of purchased credit-impaired loans and non-purchased credit-impaired loans | The carrying amount of covered loans and non-covered loans as of September 30, 2016 and December 31, 2015 consisted of PCI loans and non-PCI loans as shown in the following table (in thousands): September 30, 2016 December 31, 2015 Non-PCI PCI Non-PCI PCI Loans Loans Total Loans Loans Total Covered loans: (1) Commercial $ — $ — $ — $ $ $ Commercial real estate — — — Construction and land development — — — — — — Residential real estate Consumer — — — — — — Lease financing — — — — — — Total covered loans Non-covered loans: Commercial Commercial real estate Construction and land development Residential real estate Consumer Lease financing — — Total non-covered loans Total loans $ $ $ $ $ $ (1) Covered loans include loans from our 2010 acquisition. On October 3, 2016, the Company entered into an agreement with the FDIC to terminate its existing loss share agreements as more fully described in Note 21 to the Consolidated Financial Statements. |
MORTGAGE SERVICING RIGHTS (Tabl
MORTGAGE SERVICING RIGHTS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
MORTGAGE SERVICING RIGHTS | |
Schedule of other mortgage notes serviced and chages in our mortgage servicing rights | A summary of mortgage loans serviced for others as of September 30, 2016 and December 31, 2015 is as follows (in thousands): September 30, December 31, 2016 2015 Commercial FHA mortgage loans $ $ Residential mortgage loans Total loans serviced for others $ $ Changes in our mortgage servicing rights were as follows for the three and nine months ended September 30, 2016 and 2015 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Mortgage servicing rights: Balance at beginning of period $ $ $ $ Servicing rights capitalized – commercial FHA mortgage loans Servicing rights capitalized – residential mortgage loans Amortization – commercial FHA mortgage loans Amortization – residential mortgage loans Balance at end of period Valuation allowances: Balance at beginning of period — Additions Reductions — — Balance at end of period Mortgage servicing rights, net $ $ $ $ Fair value: At beginning of period $ $ $ $ At end of period $ $ $ $ |
Schedule of summary of key assumptions | Remaining Servicing Interest Years to Prepayment Servicing Discount Fee Rate Maturity Rate Cost Rate September 30, 2016: Commercial FHA mortgage loans % % 30.3 % $ 1,000 10 - 13 % Residential mortgage loans % % 24.2 % $ 73.46 9 - 11 % December 31, 2015: Commercial FHA mortgage loans % % 30.6 % $ 1,000 10 - 13 % Residential mortgage loans % % 24.4 % $ 73.66 9 - 11 % |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of intangible assets | The Company’s intangible assets, consisting of core deposit and trust relationship intangibles, as of September 30 , 2016 and December 31, 2015 are summarized as follows (in thousands): September 30, 2016 December 31, 2015 Gross Gross Carrying Accumulated Carrying Accumulated Amount Amortization Total Amount Amortization Total Core deposit intangibles $ $ $ $ $ $ Customer relationship intangibles Total intangible assets $ $ $ $ $ $ |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
DERIVATIVE INSTRUMENTS | |
Schedule of derivative instruments, fair valule and notional amounts | The following table summarizes the interest rate lock commitments and forward commitments to sell mortgage-backed securities held by the Company, their notional amount, estimated fair values and the location in which the derivative instruments are reported in the consolidated balances sheets at September 30 , 2016 and December 31, 2015 (in thousands): Notional Amount Fair Value Gain September 30, December 31, September 30, December 31, 2016 2015 2016 2015 Derivative Instruments (included in Other Assets): Interest rate lock commitments $ $ $ $ Notional Amount Fair Value Loss September 30, December 31, September 30, December 31, 2016 2015 2016 2015 Derivative Instruments (included in Other Liabilities): Forward commitments to sell mortgage-backed securities $ $ $ $ |
DEPOSITS (Tables)
DEPOSITS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Deposits [Abstract] | |
Schedule Of interest and non interest bearing deposits | The following table summarizes the classification of deposits as of September 30 , 2016 and December 31, 2015 (in thousands): September 30, December 31, 2016 2015 Noninterest-bearing demand $ $ Interest-bearing: NOW Money market Savings Time Total deposits $ $ |
SHORT-TERM BORROWINGS (Tables)
SHORT-TERM BORROWINGS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
SHORT-TERM BORROWINGS | |
Schedule of short term borrowings | The following table presents the distribution of short-term borrowings and related weighted average interest rates as of and for the nine months ended September 30 , 2016 and as of and for the year ended December 31, 2015 (in thousands): Repurchase Agreements September 30, December 31, 2016 2015 Outstanding at period-end $ $ Average amount outstanding Maximum amount outstanding at any month end Weighted average interest rate: During period % % End of period % % |
FHLB ADVANCES AND OTHER BORRO39
FHLB ADVANCES AND OTHER BORROWINGS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
FHLB ADVANCES AND OTHER BORROWINGS | |
Schedule of Federal Home Loan Bank (FHLB) advances | The following table summarizes our Federal Home Loan Bank (“FHLB”) advances and other borrowings as of September 30 , 2016 and December 31, 2015 (in thousands): September 30, December 31, 2016 2015 FHLB advances – fixed rate, fixed term, at rates averaging 0.66% and 0.93%, respectively, at September 30, 2016 and December 31, 2015 – maturing through May 2023 $ $ Obligations under capital leases – implicit interest rate of 1.70% – maturing through July 2018 Total FHLB advances and other borrowings $ $ |
SUBORDINATED DEBT (Tables)
SUBORDINATED DEBT (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
SUBORDINATED DEBT | |
Schedule of summary of company's subordinated debt | The following table summarizes the Company’s subordinated debt as of September 30 , 2016 and December 31, 2015 (in thousands): September 30, December 31, 2016 2015 Subordinated debt issued June 2013 – fixed interest rate of 8.25%, $8,000 maturing June 28, 2021 $ — $ Subordinated debt issued June 2015 – fixed interest rate of 6.00% for the first five years through June 2020 and a variable interest rate equivalent to three month LIBOR plus 4.35% thereafter, $40,325 maturing June 18, 2025 Subordinated debt issued June 2015 – fixed interest rate of 6.50%, $15,000 maturing June 18, 2025 Total subordinated debt $ $ |
TRUST PREFERRED DEBENTURES (Tab
TRUST PREFERRED DEBENTURES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
TRUST PREFERRED DEBENTURES. | |
Summary of trust preferred debentures | The following table summarizes the Company’s trust preferred debentures as of September 30 , 2016 and December 31, 2015 (in thousands): September 30, December 31, 2016 2015 Grant Park Statutory Trust I – variable interest rate equal to LIBOR plus 2.85%, which was 3.61% and 3.17%, at September 30, 2016 and December 31, 2015, respectively – $3,000 maturing January 23, 2034 $ $ Midland States Preferred Securities Trust – variable interest rate equal to LIBOR plus 2.75%, which was 3.46% and 3.07% at September 30, 2016 and December 31, 2015, respectively – $10,000 maturing April 23, 2034 LSHC Capital Trust III – variable interest rate equal to LIBOR plus 1.75%, which was 2.60% and 2.26% at September 30, 2016 and December 31, 2015, respectively – $20,000 maturing December 31, 2036 LSHC Capital Trust IV – variable interest rate equal to LIBOR plus 1.47%, which was 2.31% and 1.92% at September 30, 2016 and December 31, 2015, respectively – $20,000 maturing September 6, 2037 Total trust preferred debentures $ $ |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
EARNINGS PER SHARE | |
Schedule of basic and diluted earnings per common share | Presented below are the calculations for basic and diluted earnings per common share for the three and nine months ended September 30, 2016 and 2015 (in thousands, except for share and per share data): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Net income $ $ $ $ Common shareholder dividends Unvested restricted stock award dividends Undistributed earnings to unvested restricted stock awards Undistributed earnings to common shareholders $ $ $ $ Basic Distributed earnings to common shareholders $ $ $ $ Undistributed earnings to common shareholders Total common shareholders earnings, basic $ $ $ $ Diluted Distributed earnings to common shareholders $ $ $ $ Undistributed earnings to common shareholders Total common shareholders earnings Add back: Undistributed earnings reallocated from unvested restricted stock awards — — Total common shareholders earnings, diluted $ $ $ $ Weighted average common shares outstanding, basic Options and warrants Weighted average common shares outstanding, diluted Basic earnings per common share $ $ $ $ Diluted earnings per common share |
CAPITAL REQUIREMENTS (Tables)
CAPITAL REQUIREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
CAPITAL REQUIREMENTS | |
Schedule of actual and required capital amounts and ratios | At September 30, 2016 and December 31, 2015, the Company’s and the Bank’s actual and required capital ratios were as follows (in thousands, except for ratios): September 30, 2016 Required to be Minimum Required Well Capitalized Under For Capital Prompt Corrective Actual Adequacy Purposes Action Requirements Amount Ratio Amount Ratio Amount Ratio Total capital (to risk-weighted assets): Midland States Bancorp, Inc. $ % $ % N/A N/A Midland States Bank $ % Tier 1 capital (to risk-weighted assets): Midland States Bancorp, Inc. % % N/A N/A Midland States Bank % Common equity Tier 1 capital (to risk-weighted assets): Midland States Bancorp, Inc. % % N/A N/A Midland States Bank % Tier 1 leverage (to average assets): Midland States Bancorp, Inc. % % N/A N/A Midland States Bank % December 31, 2015 Required to be Minimum Required Well Capitalized Under For Capital Prompt Corrective Actual Adequacy Purposes Action Requirements Amount Ratio Amount Ratio Amount Ratio Total capital (to risk-weighted assets): Midland States Bancorp, Inc. $ % $ % N/A N/A Midland States Bank $ % Tier 1 capital (to risk-weighted assets): Midland States Bancorp, Inc. % % N/A N/A Midland States Bank % Common equity Tier 1 capital (to risk-weighted assets): Midland States Bancorp, Inc. % % N/A N/A Midland States Bank % Tier 1 leverage (to average assets): Midland States Bancorp, Inc. % % N/A N/A Midland States Bank % |
FAIR VALUE OF FINANCIAL INSTR44
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Schedule of assets and liabilities measured and recorded at fair value | Assets and liabilities measured and recorded at fair value, including financial assets for which the Company has elected the fair value option, on a recurring and nonrecurring basis as of September 30 , 2016 and December 31, 2015, are summarized below (in thousands): September 30, 2016 Quoted prices in active Significant markets other Significant for identical observable unobservable assets inputs inputs Total (Level 1) (Level 2) (Level 3) Assets and liabilities measured at fair value on a recurring basis: Assets Securities available for sale: U.S. Treasury securities $ $ $ — $ — Government sponsored entity debt securities — — Agency mortgage-backed securities — — Non-agency mortgage-backed securities — — Covered non-agency mortgage-backed securities — — State and municipal securities — — Corporate securities — Loans held for sale — — Interest rate lock commitments — — Total $ $ $ $ Liabilities Interest rate swap agreement $ $ — $ $ — Forward commitments to sell mortgage-backed securities — — Total $ $ — $ $ — Assets measured at fair value on a non-recurring basis: Impaired loans $ $ — $ $ Other real estate owned — — December 31, 2015 Quoted prices in active Significant markets other Significant for identical observable unobservable assets inputs inputs Total (Level 1) (Level 2) (Level 3) Assets and liabilities measured at fair value on a recurring basis: Assets Securities available for sale: U.S. Treasury securities $ $ $ — $ — Government sponsored entity debt securities — — Agency mortgage-backed securities — — Non-agency mortgage-backed securities — — Covered non-agency mortgage-backed securities — — State and municipal securities — — Corporate securities — — Loans held for sale — — Interest rate lock commitments — — Total $ $ $ $ — Liabilities Interest rate swap agreement $ $ — $ $ — Forward commitments to sell mortgage-backed securities — — Contingent consideration — — Total $ $ — $ $ Assets measured at fair value on a non-recurring basis: Impaired loans $ $ — $ $ Other real estate owned — — |
Schedule of losses recognized on assets measured on a non-recurring basis | The following table presents losses recognized on assets measured on a non‑recurring basis for the three and nine months ended September 30, 2016 and 2015 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Impaired loans $ $ $ $ Other real estate owned — Total loss on assets measured on a nonrecurring basis $ $ $ $ |
Schedule presenting activity for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) | The following table presents activity for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2016 (in thousands): Non-Agency Corporate Mortgage-Backed Securities Securities Three Months Nine Months Three Months Nine Months Ended Ended Ended Ended September 30, September 30, September 30, September 30, 2016 2016 Balance, beginning of period $ $ — $ $ — Transferred from Level 2 — — Transferred to Level 2 — — Purchases of investment securities recognized as Level 3 — — — Total realized in earnings (1) — — Total unrealized in other comprehensive income — — Net settlements (principal and interest) Balance, end of period $ $ $ $ (1) Amounts included in interest income from investment securities taxable in the consolidated statements of income. The following table presents activity for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the nine months ended September 30, 2015 (in thousands). There was no activity for the three months ended September 30, 2015. Covered Non-Agency Mortgage-Backed Securities Balance, beginning of period $ Total realized in earnings (1) Transferred to Level 2 Net settlements (principal and interest) Balance, end of period $ — (1) Amounts included in interest income from investment securities taxable in the consolidated statements of income. |
Tabular presentation of summary of the carrying values and fair value estimates of certain financial instruments | The following tables are a summary of the carrying values and fair value estimates of certain financial instruments as of September 30, 2016 and December 31, 2015 (in thousands): September 30, 2016 Quoted prices in active Significant markets other Significant for identical observable unobservable assets inputs inputs Carrying Amount Fair Value (Level 1) (Level 2) (Level 3) Assets Cash and due from banks $ $ $ $ — $ — Federal funds sold — — Investment securities available for sale Investment securities held to maturity — — Nonmarketable equity securities — — Loans, net — — Loans held for sale — — Accrued interest receivable — — Interest rate lock commitments — — Liabilities Deposits $ $ $ — $ $ — Short-term borrowings — — FHLB and other borrowings — — Subordinated debt — — Trust preferred debentures — — Accrued interest payable — — Interest rate swap agreement — — Forward commitments to sell mortgage-backed securities — — December 31, 2015 Quoted prices in active Significant markets other Significant for identical observable unobservable assets inputs inputs Carrying Amount Fair Value (Level 1) (Level 2) (Level 3) Assets Cash and due from banks $ $ $ $ — $ — Federal funds sold — — Investment securities available for sale — Investment securities held to maturity — — Nonmarketable equity securities — — Loans, net — — Loans held for sale — — Accrued interest receivable — — Interest rate lock commitments — — Liabilities Deposits $ $ $ — $ $ — Short-term borrowings — — FHLB and other borrowings — — Subordinated debt — — Trust preferred debentures — — Accrued interest payable — — Interest rate swap agreement — — Forward commitments to sell mortgage-backed securities — — |
COMMITMENTS, CONTINGENCIES AN45
COMMITMENTS, CONTINGENCIES AND CREDIT RISK (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
COMMITMENTS, CONTINGENCIES AND CREDIT RISK | |
Schedule of Loan Commitments | Loan commitments as of September 30, 2016 and December 31, 2015 are as follows (in thousands): September 30, December 31, 2016 2015 Commitments to extend credit $ $ Financial guarantees – standby letters of credit |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
SEGMENT INFORMATION | |
Schedule of segment financial information | Selected business segment financial information as of and for the three and nine months ended September 30, 2016 and 2015 were as follows (in thousands): Commercial FHA Origination and Banking Servicing Other Total Three Months Ended September 30, 2016 Net interest income (expense) $ $ $ $ Provision for loan losses — — Noninterest income Noninterest expense Income (loss) before income taxes (benefit) Income taxes (benefit) Net income (loss) $ $ $ $ Total assets $ $ $ $ Three Months Ended September 30, 2015 Net interest income (expense) $ $ $ $ Provision for loan losses — — Noninterest income Noninterest expense Income (loss) before income taxes (benefit) Income taxes (benefit) Net income (loss) $ $ $ $ Total assets $ $ $ $ Commercial FHA Origination and Banking Servicing Other Total Nine Months Ended September 30, 2016 Net interest income (expense) $ $ $ $ Provision for loan losses — — Noninterest income Noninterest expense Income (loss) before income taxes (benefit) Income taxes (benefit) Net income (loss) $ $ $ $ Total assets $ $ $ $ Nine Months Ended September 30, 2015 Net interest income (expense) $ $ $ $ Provision for loan losses — — Noninterest income Noninterest expense Income (loss) before income taxes (benefit) Income taxes (benefit) Net income (loss) $ $ $ $ Total assets $ $ $ $ |
BUSINESS DESCRIPTION (Details)
BUSINESS DESCRIPTION (Details) $ in Millions | Jun. 06, 2016USD ($)shares | Jun. 06, 2016USD ($)shares | May 24, 2016USD ($)shares | Sep. 30, 2016itemshares | Dec. 31, 2015shares |
Number of acquisitions | item | 9 | ||||
Number of mortgage offices | item | 3 | ||||
Common Stock, Shares, Issued | 15,404,423 | 11,797,404 | |||
Proceeds from the IPO | $ | $ 71.5 | ||||
IPO | |||||
Shares issued | 3,590,065 | ||||
Common Stock, Shares, Issued | 3,044,252 | ||||
Proceeds from the IPO | $ | $ 67 | ||||
Over-Allotment Option [Member] | |||||
Common Stock, Shares, Issued | 545,813 | 545,813 | |||
Proceeds from the IPO | $ | $ 12 |
BASIS OF PRESENTATION AND SUM48
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | Sep. 30, 2016 |
Premier | |
Ownership interest (as a percentage) | 51.00% |
Preferred | |
Ownership interest (as a percentage) | 51.00% |
ACQUISITIONS (Details)
ACQUISITIONS (Details) | Sep. 30, 2016USD ($) | Dec. 31, 2014USD ($)itemshares |
Scenario, Forecast [Member] | Sterling | Merger agreement | ||
Business Acquisition [Line Items] | ||
Total Purchase consideration | $ 400,000,000 | |
Consideration paid in cash | $ 4,800,000 | |
Heartland | LSHC | ||
Business Acquisition [Line Items] | ||
Amount of trust preferred debentures | $ 40,000,000 | |
Amortization period | 10 years | |
Fair value of the noncontrolling interest | $ 500,000 | |
Number of mortgage origination joint ventures | item | 2 | |
Ownership interest (as a percentage) | 51.00% | |
Heartland | LSHC | Core deposits | ||
Business Acquisition [Line Items] | ||
Intangibles | $ 3,400,000 | |
Heartland | LSHC | Banking | ||
Business Acquisition [Line Items] | ||
Number of locations of operations | item | 10 | |
Heartland | LSHC | Loan Production | ||
Business Acquisition [Line Items] | ||
Number of locations of operations | item | 3 | |
Heartland | LSHC | Branch | ||
Business Acquisition [Line Items] | ||
Number of locations of operations | item | 1 | |
LFC | LSHC | ||
Business Acquisition [Line Items] | ||
Total Purchase consideration | $ 67,300,000 | |
Number of common stock shares issued | shares | 2,224,091 | |
Consideration paid in cash | $ 20,100,000 | |
Accrual of other liabilities fair value | $ 530,000 | |
Number of years of earnings | 2 years | |
Adjusted net income (as a percentage) | 50.00% | |
Minimum earnings | $ 9,100,000 | |
Contingent consideration | $ 12,000,000 |
INVESTMENT SECURITIES AVAILAB50
INVESTMENT SECURITIES AVAILABLE FOR SALE - Classified (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Investment securities classified as available for sale | ||
Amortized cost | $ 236,777 | $ 226,665 |
Gross unrealized gains | 16,532 | 11,885 |
Gross unrealized losses | 1,097 | 1,923 |
Fair value | 252,212 | 236,627 |
U.S. Treasury securities | ||
Investment securities classified as available for sale | ||
Amortized cost | 35,499 | 48,483 |
Gross unrealized gains | 13 | 1 |
Gross unrealized losses | 6 | 182 |
Fair value | 35,506 | 48,302 |
Government sponsored entity debt securities | ||
Investment securities classified as available for sale | ||
Amortized cost | 8,788 | 9,404 |
Gross unrealized gains | 202 | 58 |
Gross unrealized losses | 8 | |
Fair value | 8,990 | 9,454 |
Agency mortgage-backed securities | ||
Investment securities classified as available for sale | ||
Amortized cost | 67,536 | 66,902 |
Gross unrealized gains | 1,134 | 835 |
Gross unrealized losses | 14 | 210 |
Fair value | 68,656 | 67,527 |
Non-agency mortgage-backed securities | ||
Investment securities classified as available for sale | ||
Amortized cost | 1 | 2 |
Fair value | 1 | 2 |
Covered non-agency mortgage-backed securities | ||
Investment securities classified as available for sale | ||
Amortized cost | 58,376 | 66,397 |
Gross unrealized gains | 14,386 | 10,886 |
Gross unrealized losses | 669 | 1,304 |
Fair value | 72,093 | 75,979 |
State and municipal securities | ||
Investment securities classified as available for sale | ||
Amortized cost | 21,724 | 15,441 |
Gross unrealized gains | 271 | 77 |
Gross unrealized losses | 15 | 24 |
Fair value | 21,980 | 15,494 |
Corporate securities | ||
Investment securities classified as available for sale | ||
Amortized cost | 44,853 | 20,036 |
Gross unrealized gains | 526 | 28 |
Gross unrealized losses | 393 | 195 |
Fair value | $ 44,986 | $ 19,869 |
INVESTMENT SECURITIES AVAILAB51
INVESTMENT SECURITIES AVAILABLE FOR SALE - Continuous unrealized loss position (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016USD ($)item | Sep. 30, 2015USD ($)item | Sep. 30, 2016USD ($)item | Sep. 30, 2015USD ($)item | Dec. 31, 2015USD ($)item | |
Securities available for sale: | |||||
Less than 12 Months, Fair value | $ 37,802,000 | $ 37,802,000 | $ 96,287,000 | ||
Less than 12 Months, Unrealized loss | 448,000 | 1,663,000 | |||
12 Months or more, Fair value | 7,879,000 | 7,879,000 | 4,988,000 | ||
12 Months or more, Unrealized loss | 649,000 | 260,000 | |||
Total, Fair value | $ 45,681,000 | 45,681,000 | 101,275,000 | ||
Total, Unrealized loss | $ 1,097,000 | $ 1,923,000 | |||
Unrealized loss | |||||
Number of securities, unrealized losses | item | 30 | 30 | 54 | ||
Aggregate depreciation | 2.35% | 2.35% | 1.86% | ||
Other than temporary impairment: | |||||
Number of other than temporary impairment securities | item | 2 | ||||
Other than temporary impairment, recognized as losses | $ 0 | $ 299,000 | |||
U.S. Treasury securities | |||||
Securities available for sale: | |||||
Less than 12 Months, Fair value | 17,994,000 | $ 17,994,000 | |||
Less than 12 Months, Unrealized loss | 6,000 | ||||
Total, Fair value | 17,994,000 | 17,994,000 | |||
Total, Unrealized loss | 6,000 | ||||
Government sponsored entity debt securities | |||||
Securities available for sale: | |||||
Less than 12 Months, Fair value | $ 42,301,000 | ||||
Less than 12 Months, Unrealized loss | 182,000 | ||||
Total, Fair value | 42,301,000 | ||||
Total, Unrealized loss | 182,000 | ||||
Agency mortgage-backed securities | |||||
Securities available for sale: | |||||
Less than 12 Months, Fair value | 5,066,000 | 5,066,000 | 4,229,000 | ||
Less than 12 Months, Unrealized loss | 14,000 | 8,000 | |||
Total, Fair value | 5,066,000 | 5,066,000 | 4,229,000 | ||
Total, Unrealized loss | $ 14,000 | 8,000 | |||
Non-agency mortgage-backed securities | |||||
Securities available for sale: | |||||
Less than 12 Months, Fair value | 19,404,000 | ||||
Less than 12 Months, Unrealized loss | 167,000 | ||||
12 Months or more, Fair value | 1,932,000 | ||||
12 Months or more, Unrealized loss | 43,000 | ||||
Total, Fair value | 21,336,000 | ||||
Total, Unrealized loss | 210,000 | ||||
Other than temporary impairment: | |||||
Number of other than temporary impairment securities | item | 3 | ||||
Other than temporary impairment, recognized as losses | $ 824,000 | ||||
Covered non-agency mortgage-backed securities | |||||
Securities available for sale: | |||||
Less than 12 Months, Fair value | 429,000 | 429,000 | 14,149,000 | ||
Less than 12 Months, Unrealized loss | 27,000 | 1,114,000 | |||
12 Months or more, Fair value | 4,895,000 | 4,895,000 | 1,431,000 | ||
12 Months or more, Unrealized loss | 642,000 | 190,000 | |||
Total, Fair value | 5,324,000 | 5,324,000 | 15,580,000 | ||
Total, Unrealized loss | 669,000 | 1,304,000 | |||
Other than temporary impairment: | |||||
Number of other than temporary impairment securities | item | 3 | ||||
Other than temporary impairment, recognized as losses | $ 461,000 | ||||
State and municipal securities | |||||
Securities available for sale: | |||||
Less than 12 Months, Fair value | 3,417,000 | 3,417,000 | 4,959,000 | ||
Less than 12 Months, Unrealized loss | 15,000 | 20,000 | |||
12 Months or more, Fair value | 812,000 | ||||
12 Months or more, Unrealized loss | 4,000 | ||||
Total, Fair value | 3,417,000 | 3,417,000 | 5,771,000 | ||
Total, Unrealized loss | 15,000 | 24,000 | |||
Corporate securities | |||||
Securities available for sale: | |||||
Less than 12 Months, Fair value | 10,896,000 | 10,896,000 | 11,245,000 | ||
Less than 12 Months, Unrealized loss | 386,000 | 172,000 | |||
12 Months or more, Fair value | 2,984,000 | 2,984,000 | 813,000 | ||
12 Months or more, Unrealized loss | 7,000 | 23,000 | |||
Total, Fair value | $ 13,880,000 | 13,880,000 | 12,058,000 | ||
Total, Unrealized loss | $ 393,000 | $ 195,000 |
INVESTMENT SECURITIES AVAILAB52
INVESTMENT SECURITIES AVAILABLE FOR SALE - Amortized cost and fair value (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Amortized cost of available-for-sale securities, by contractual maturity | |||||
Within one year | $ 46,521,000 | $ 46,521,000 | |||
One to five years | 109,963,000 | 109,963,000 | |||
Five to ten years | 64,747,000 | 64,747,000 | |||
After ten years | 15,546,000 | 15,546,000 | |||
Total, single maturity date | 236,777,000 | 236,777,000 | |||
Amortized cost | 236,777,000 | 236,777,000 | $ 226,665,000 | ||
Fair Value of available-for-sale securities, by contractual maturity | |||||
Within one year | 46,450,000 | 46,450,000 | |||
One to five years | 120,369,000 | 120,369,000 | |||
Five to ten years | 68,130,000 | 68,130,000 | |||
After ten years | 17,263,000 | 17,263,000 | |||
Total, single maturity date | 252,212,000 | 252,212,000 | |||
Fair value | 252,212,000 | 252,212,000 | 236,627,000 | ||
Gross realized gains/losses | |||||
Gross realized gains | 39,000 | $ 1,000 | 315,000 | $ 335,000 | |
Gross realized losses | $ 0 | $ 175,000 | |||
Agency mortgage-backed securities | |||||
Amortized cost of available-for-sale securities, by contractual maturity | |||||
Amortized cost | 67,536,000 | 67,536,000 | 66,902,000 | ||
Fair Value of available-for-sale securities, by contractual maturity | |||||
Fair value | 68,656,000 | 68,656,000 | 67,527,000 | ||
Non-agency mortgage-backed securities | |||||
Amortized cost of available-for-sale securities, by contractual maturity | |||||
Amortized cost | 1,000 | 1,000 | 2,000 | ||
Fair Value of available-for-sale securities, by contractual maturity | |||||
Fair value | 1,000 | 1,000 | 2,000 | ||
Covered non-agency mortgage-backed securities | |||||
Amortized cost of available-for-sale securities, by contractual maturity | |||||
Amortized cost | 58,376,000 | 58,376,000 | 66,397,000 | ||
Fair Value of available-for-sale securities, by contractual maturity | |||||
Fair value | $ 72,093,000 | $ 72,093,000 | $ 75,979,000 |
INVESTMENT SECURITIES HELD TO53
INVESTMENT SECURITIES HELD TO MATURITY - Classified (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Investment securities classified as held to maturity | ||
Amortized cost | $ 82,941 | $ 87,521 |
Fair value | 88,590 | 92,816 |
State and municipal securities | ||
Investment securities classified as held to maturity | ||
Amortized cost | 82,941 | 87,521 |
Gross unrealized gains | 5,724 | 5,364 |
Gross unrealized losses | 75 | 69 |
Fair value | $ 88,590 | $ 92,816 |
INVESTMENT SECURITIES HELD TO54
INVESTMENT SECURITIES HELD TO MATURITY - Continuous unrealized loss position (Details) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016USD ($)item | Dec. 31, 2015USD ($)item | |
Unrealized loss | ||
Number of securities, unrealized losses | item | 17 | 25 |
Aggregate depreciation | 1.88% | 1.08% |
State and municipal securities | ||
Securities held to maturity: | ||
Less than 12 Months, Fair value | $ 605 | $ 3,573 |
Less than 12 Months, Unrealized loss | 2 | 24 |
12 Months or more, Fair value | 3,306 | 2,743 |
12 Months or more, Unrealized loss | 73 | 45 |
Total, Fair value | 3,911 | 6,316 |
Total, Unrealized loss | $ 75 | $ 69 |
INVESTMENT SECURITIES HELD TO55
INVESTMENT SECURITIES HELD TO MATURITY - Amortized cost and fair value (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Amortized cost of held-to-maturity securities, by contractual maturity | ||
Within one year | $ 1,734 | |
One to five years | 17,166 | |
Five to ten years | 43,234 | |
After ten years | 20,807 | |
Amortized cost | 82,941 | $ 87,521 |
Fair Value of held-to-maturity securities, by contractual maturity | ||
Within one year | 1,738 | |
One to five years | 17,834 | |
Five to ten years | 47,114 | |
After ten years | 21,904 | |
Fair value | $ 88,590 | $ 92,816 |
LOANS - Summary of loans (Detai
LOANS - Summary of loans (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Summary of loans | |||||
Total loans | $ 2,312,778,000 | $ 2,312,778,000 | $ 1,995,589,000 | ||
Loans, additional information | |||||
Net deferred loan fees | 3,500,000 | 3,500,000 | 5,800,000 | ||
Unearned discounts | 19,700,000 | 19,700,000 | 15,700,000 | ||
Loans held for sale | 61,363,000 | 61,363,000 | 54,413,000 | ||
Proceeds from sales of loans held for sale | 907,306,000 | $ 836,133,000 | |||
Directors, executive officers, principal shareholders and affiliates | |||||
Loans to certain directors, executive officers, principal shareholders and their affiliates: | |||||
Loans outstanding to related parties | 21,500,000 | 21,500,000 | 39,200,000 | ||
New loans to related parties and other additions | 468,000 | 10,600,000 | |||
Repayments from related parties and other reductions | 2,200,000 | 28,500,000 | |||
Commercial loan portfolio | |||||
Summary of loans | |||||
Total loans | 1,665,267,000 | 1,665,267,000 | 1,526,623,000 | ||
Commercial loan portfolio | Commercial | |||||
Summary of loans | |||||
Total loans | 545,069,000 | 545,069,000 | 499,573,000 | ||
Commercial loan portfolio | Commercial real estate | |||||
Summary of loans | |||||
Total loans | 956,298,000 | 956,298,000 | 876,784,000 | ||
Commercial loan portfolio | Construction and land development | |||||
Summary of loans | |||||
Total loans | 163,900,000 | $ 163,900,000 | 150,266,000 | ||
Other loan portfolio | Maximum | |||||
Loans, additional information | |||||
Term of lease | 4 years | ||||
Other loan portfolio | Residential real estate | |||||
Summary of loans | |||||
Total loans | 216,935,000 | $ 216,935,000 | 163,224,000 | ||
Other loan portfolio | Consumer | |||||
Summary of loans | |||||
Total loans | 248,131,000 | 248,131,000 | 161,512,000 | ||
Other loan portfolio | Lease financing | |||||
Summary of loans | |||||
Total loans | 182,445,000 | 182,445,000 | 144,230,000 | ||
Commercial and Residential Loan | |||||
Loans, additional information | |||||
Loans held for sale | 61,400,000 | 61,400,000 | $ 54,400,000 | ||
Proceeds from sales of loans held for sale | $ 450,900,000 | $ 299,700,000 | $ 907,300,000 | $ 836,100,000 |
LOANS - Risk category (Details)
LOANS - Risk category (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016USD ($)region | Dec. 31, 2015USD ($) | |
Risk category | ||
Number of main regions | region | 4 | |
Total loans | $ 2,312,778 | $ 1,995,589 |
Commercial loan portfolio | ||
Risk category | ||
Total loans | 1,665,267 | 1,526,623 |
Non-PCI loans | ||
Risk category | ||
Total loans | 2,283,354 | 1,957,112 |
Non-PCI loans | Commercial loan portfolio | ||
Risk category | ||
Total loans | 1,642,706 | 1,496,396 |
Non-PCI loans | Commercial loan portfolio | Acceptable credit quality | ||
Risk category | ||
Total loans | 1,576,189 | 1,424,957 |
Non-PCI loans | Commercial loan portfolio | Special mention | ||
Risk category | ||
Total loans | 14,704 | 40,866 |
Non-PCI loans | Commercial loan portfolio | Substandard | ||
Risk category | ||
Total loans | 33,038 | 11,551 |
Non-PCI loans | Commercial loan portfolio | Substandard - nonaccrual | ||
Risk category | ||
Total loans | 12,071 | 14,546 |
Non-PCI loans | Commercial loan portfolio | Not graded | ||
Risk category | ||
Total loans | 6,704 | 4,476 |
Non-PCI loans | Other loan portfolio | ||
Risk category | ||
Total loans | 640,648 | 460,716 |
Non-PCI loans | Other loan portfolio | Performing | ||
Risk category | ||
Total loans | 635,253 | 456,112 |
Non-PCI loans | Other loan portfolio | Impaired | ||
Risk category | ||
Total loans | 5,395 | 4,604 |
Commercial | Commercial loan portfolio | ||
Risk category | ||
Total loans | 545,069 | 499,573 |
Commercial | Non-PCI loans | Commercial loan portfolio | ||
Risk category | ||
Total loans | 541,452 | 493,445 |
Commercial | Non-PCI loans | Commercial loan portfolio | Acceptable credit quality | ||
Risk category | ||
Total loans | 518,512 | 467,355 |
Commercial | Non-PCI loans | Commercial loan portfolio | Special mention | ||
Risk category | ||
Total loans | 5,293 | 16,589 |
Commercial | Non-PCI loans | Commercial loan portfolio | Substandard | ||
Risk category | ||
Total loans | 11,516 | 3,448 |
Commercial | Non-PCI loans | Commercial loan portfolio | Substandard - nonaccrual | ||
Risk category | ||
Total loans | 5,520 | 5,702 |
Commercial | Non-PCI loans | Commercial loan portfolio | Not graded | ||
Risk category | ||
Total loans | 611 | 351 |
Commercial real estate | Commercial loan portfolio | ||
Risk category | ||
Total loans | 956,298 | 876,784 |
Commercial real estate | Non-PCI loans | Commercial loan portfolio | ||
Risk category | ||
Total loans | 948,831 | 862,744 |
Commercial real estate | Non-PCI loans | Commercial loan portfolio | Acceptable credit quality | ||
Risk category | ||
Total loans | 910,187 | 821,314 |
Commercial real estate | Non-PCI loans | Commercial loan portfolio | Special mention | ||
Risk category | ||
Total loans | 9,411 | 23,737 |
Commercial real estate | Non-PCI loans | Commercial loan portfolio | Substandard | ||
Risk category | ||
Total loans | 21,072 | 8,103 |
Commercial real estate | Non-PCI loans | Commercial loan portfolio | Substandard - nonaccrual | ||
Risk category | ||
Total loans | 6,551 | 8,844 |
Commercial real estate | Non-PCI loans | Commercial loan portfolio | Not graded | ||
Risk category | ||
Total loans | 1,610 | 746 |
Construction and land development | Commercial loan portfolio | ||
Risk category | ||
Total loans | 163,900 | 150,266 |
Construction and land development | Non-PCI loans | Commercial loan portfolio | ||
Risk category | ||
Total loans | 152,423 | 140,207 |
Construction and land development | Non-PCI loans | Commercial loan portfolio | Acceptable credit quality | ||
Risk category | ||
Total loans | 147,490 | 136,288 |
Construction and land development | Non-PCI loans | Commercial loan portfolio | Special mention | ||
Risk category | ||
Total loans | 540 | |
Construction and land development | Non-PCI loans | Commercial loan portfolio | Substandard | ||
Risk category | ||
Total loans | 450 | |
Construction and land development | Non-PCI loans | Commercial loan portfolio | Not graded | ||
Risk category | ||
Total loans | 4,483 | 3,379 |
Residential real estate | Other loan portfolio | ||
Risk category | ||
Total loans | 216,935 | 163,224 |
Residential real estate | Non-PCI loans | Other loan portfolio | ||
Risk category | ||
Total loans | 210,367 | 155,266 |
Residential real estate | Non-PCI loans | Other loan portfolio | Performing | ||
Risk category | ||
Total loans | 205,901 | 151,111 |
Residential real estate | Non-PCI loans | Other loan portfolio | Impaired | ||
Risk category | ||
Total loans | 4,466 | 4,155 |
Consumer | Other loan portfolio | ||
Risk category | ||
Total loans | 248,131 | 161,512 |
Consumer | Non-PCI loans | Other loan portfolio | ||
Risk category | ||
Total loans | 247,836 | 161,220 |
Consumer | Non-PCI loans | Other loan portfolio | Performing | ||
Risk category | ||
Total loans | 247,634 | 161,169 |
Consumer | Non-PCI loans | Other loan portfolio | Impaired | ||
Risk category | ||
Total loans | 202 | 51 |
Lease financing | Other loan portfolio | ||
Risk category | ||
Total loans | 182,445 | 144,230 |
Lease financing | Non-PCI loans | Other loan portfolio | ||
Risk category | ||
Total loans | 182,445 | 144,230 |
Lease financing | Non-PCI loans | Other loan portfolio | Performing | ||
Risk category | ||
Total loans | 181,718 | 143,832 |
Lease financing | Non-PCI loans | Other loan portfolio | Impaired | ||
Risk category | ||
Total loans | $ 727 | $ 398 |
LOANS - Impaired Loans (Details
LOANS - Impaired Loans (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Interest income : | |||||
Interest income recognized on nonaccrual loans | $ 0 | $ 0 | $ 0 | $ 0 | |
Additional interest income that would have been recorded had they been current | 243,000 | 172,000 | 484,000 | 741,000 | |
Recognized interest income on loans modified under troubled debt restructurings | 90,000 | $ 104,000 | 196,000 | $ 316,000 | |
Non-PCI loans | |||||
Summay of impaired loans | |||||
Nonaccrual loans | 16,958,000 | 16,958,000 | $ 18,462,000 | ||
Loans modified under troubled debt restructuring | 17,983,000 | 17,983,000 | 11,042,000 | ||
Non-PCI loans | Impaired | |||||
Summay of impaired loans | |||||
Nonaccrual loans | 16,958,000 | 16,958,000 | 18,462,000 | ||
Accruing loans contractually past due 90 days or more as to interest or principal payments | 456,000 | 456,000 | 1,142,000 | ||
Loans modified under troubled debt restructuring | 12,512,000 | 12,512,000 | 5,287,000 | ||
Total impaired loans | 29,926,000 | 29,926,000 | 24,891,000 | ||
PCI loans | |||||
Summay of impaired loans | |||||
Total impaired loans | 29,400,000 | 29,400,000 | 38,500,000 | ||
Commercial | Commercial loan portfolio | Non-PCI loans | |||||
Summay of impaired loans | |||||
Nonaccrual loans | 5,520,000 | 5,520,000 | 5,702,000 | ||
Loans modified under troubled debt restructuring | 682,000 | 682,000 | 43,000 | ||
Commercial | Commercial loan portfolio | Non-PCI loans | Impaired | |||||
Summay of impaired loans | |||||
Nonaccrual loans | 5,520,000 | 5,520,000 | 5,702,000 | ||
Accruing loans contractually past due 90 days or more as to interest or principal payments | 351,000 | 351,000 | 865,000 | ||
Loans modified under troubled debt restructuring | 648,000 | 648,000 | 3,000 | ||
Total impaired loans | 6,519,000 | 6,519,000 | 6,570,000 | ||
Commercial real estate | Commercial loan portfolio | Non-PCI loans | |||||
Summay of impaired loans | |||||
Nonaccrual loans | 6,551,000 | 6,551,000 | 8,844,000 | ||
Loans modified under troubled debt restructuring | 16,499,000 | 16,499,000 | 10,205,000 | ||
Commercial real estate | Commercial loan portfolio | Non-PCI loans | Impaired | |||||
Summay of impaired loans | |||||
Nonaccrual loans | 6,551,000 | 6,551,000 | 8,844,000 | ||
Loans modified under troubled debt restructuring | 11,397,000 | 11,397,000 | 4,873,000 | ||
Total impaired loans | 17,948,000 | 17,948,000 | 13,717,000 | ||
Construction and land development | Commercial loan portfolio | Non-PCI loans | |||||
Summay of impaired loans | |||||
Loans modified under troubled debt restructuring | 64,000 | 64,000 | |||
Construction and land development | Commercial loan portfolio | Non-PCI loans | Impaired | |||||
Summay of impaired loans | |||||
Loans modified under troubled debt restructuring | 64,000 | 64,000 | |||
Total impaired loans | 64,000 | 64,000 | |||
Residential real estate | Other loan portfolio | Non-PCI loans | |||||
Summay of impaired loans | |||||
Nonaccrual loans | 4,063,000 | 4,063,000 | 3,516,000 | ||
Loans modified under troubled debt restructuring | 738,000 | 738,000 | 794,000 | ||
Residential real estate | Other loan portfolio | Non-PCI loans | Impaired | |||||
Summay of impaired loans | |||||
Nonaccrual loans | 4,063,000 | 4,063,000 | 3,516,000 | ||
Accruing loans contractually past due 90 days or more as to interest or principal payments | 228,000 | ||||
Loans modified under troubled debt restructuring | 403,000 | 403,000 | 411,000 | ||
Total impaired loans | 4,466,000 | 4,466,000 | 4,155,000 | ||
Consumer | Other loan portfolio | Non-PCI loans | |||||
Summay of impaired loans | |||||
Nonaccrual loans | 97,000 | 97,000 | 2,000 | ||
Consumer | Other loan portfolio | Non-PCI loans | Impaired | |||||
Summay of impaired loans | |||||
Nonaccrual loans | 97,000 | 97,000 | 2,000 | ||
Accruing loans contractually past due 90 days or more as to interest or principal payments | 105,000 | 105,000 | 49,000 | ||
Total impaired loans | 202,000 | 202,000 | 51,000 | ||
Lease financing | Other loan portfolio | Non-PCI loans | |||||
Summay of impaired loans | |||||
Nonaccrual loans | 727,000 | 727,000 | 398,000 | ||
Lease financing | Other loan portfolio | Non-PCI loans | Impaired | |||||
Summay of impaired loans | |||||
Nonaccrual loans | 727,000 | 727,000 | 398,000 | ||
Total impaired loans | $ 727,000 | $ 727,000 | $ 398,000 |
LOANS - Impaired Loans Individu
LOANS - Impaired Loans Individually Evaluated (excluding PCI loans) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Impaired loans (excluding PCI loans) by portfolio | |||||
Difference between the recorded investment and unpaid principal balance | $ 4,600 | $ 4,600 | $ 5,200 | ||
Impaired | Non-PCI loans | |||||
Impaired loans (excluding PCI loans) by portfolio | |||||
With a valuation allowance, Recorded Investment | 12,316 | 12,316 | 18,641 | ||
With a valuation allowance, Unpaid Principal Balance | 16,358 | 16,358 | 22,523 | ||
With a valuation allowance, Average Annual Recorded Investment | 12,660 | $ 23,254 | 14,533 | $ 25,214 | |
With a related valuation allowance, Interest Income Recognized while on Impaired Status | 104 | 116 | 169 | 265 | |
With no related valuation allowance, Recorded Investment | 17,610 | 17,610 | 6,250 | ||
With no related valuation allowance, Unpaid Principal Balance | 18,136 | 18,136 | 7,610 | ||
With no related valuation allowance, Average Annual Recorded Investment | 17,481 | 6,390 | 17,510 | 7,334 | |
With no related valuation allowance, Interest Income Recognized while on Impaired Status | 3 | 3 | 60 | 90 | |
Total impaired loans | 29,926 | 29,926 | 24,891 | ||
Total, Unpaid Principal Balance | 34,494 | 34,494 | 30,133 | ||
Total, Related Valuation Allowance | 2,786 | 2,786 | 2,994 | ||
Total, Average Annual Recorded Investment | 30,141 | 29,644 | 32,043 | 32,548 | |
Total, Interest Income Recognized While on Impaired Status | 107 | 119 | 229 | 355 | |
Commercial | Impaired | Commercial loan portfolio | Non-PCI loans | |||||
Impaired loans (excluding PCI loans) by portfolio | |||||
With a valuation allowance, Recorded Investment | 6,119 | 6,119 | 5,789 | ||
With a valuation allowance, Unpaid Principal Balance | 9,448 | 9,448 | 8,760 | ||
With a valuation allowance, Average Annual Recorded Investment | 6,426 | 10,972 | 8,115 | 12,435 | |
With a related valuation allowance, Interest Income Recognized while on Impaired Status | 23 | 3 | 24 | 6 | |
With no related valuation allowance, Recorded Investment | 400 | 400 | 781 | ||
With no related valuation allowance, Unpaid Principal Balance | 445 | 445 | 781 | ||
With no related valuation allowance, Average Annual Recorded Investment | 439 | 383 | 313 | 663 | |
With no related valuation allowance, Interest Income Recognized while on Impaired Status | 2 | 1 | |||
Total impaired loans | 6,519 | 6,519 | 6,570 | ||
Total, Unpaid Principal Balance | 9,893 | 9,893 | 9,541 | ||
Total, Related Valuation Allowance | 1,962 | 1,962 | 1,797 | ||
Total, Average Annual Recorded Investment | 6,865 | 11,355 | 8,428 | 13,098 | |
Total, Interest Income Recognized While on Impaired Status | 25 | 3 | 25 | 6 | |
Commercial real estate | Impaired | Commercial loan portfolio | Non-PCI loans | |||||
Impaired loans (excluding PCI loans) by portfolio | |||||
With a valuation allowance, Recorded Investment | 2,067 | 2,067 | 9,197 | ||
With a valuation allowance, Unpaid Principal Balance | 2,256 | 2,256 | 9,489 | ||
With a valuation allowance, Average Annual Recorded Investment | 2,170 | 9,475 | 2,273 | 9,897 | |
With a related valuation allowance, Interest Income Recognized while on Impaired Status | 65 | 101 | 115 | 234 | |
With no related valuation allowance, Recorded Investment | 15,881 | 15,881 | 4,520 | ||
With no related valuation allowance, Unpaid Principal Balance | 16,107 | 16,107 | 5,840 | ||
With no related valuation allowance, Average Annual Recorded Investment | 15,610 | 4,632 | 15,742 | 4,970 | |
With no related valuation allowance, Interest Income Recognized while on Impaired Status | 56 | 76 | |||
Total impaired loans | 17,948 | 17,948 | 13,717 | ||
Total, Unpaid Principal Balance | 18,363 | 18,363 | 15,329 | ||
Total, Related Valuation Allowance | 145 | 145 | 514 | ||
Total, Average Annual Recorded Investment | 17,780 | 14,107 | 18,015 | 14,867 | |
Total, Interest Income Recognized While on Impaired Status | 65 | 101 | 171 | 310 | |
Construction and land development | Impaired | Commercial loan portfolio | Non-PCI loans | |||||
Impaired loans (excluding PCI loans) by portfolio | |||||
With a valuation allowance, Recorded Investment | 64 | 64 | |||
With a valuation allowance, Unpaid Principal Balance | 64 | 64 | 26 | ||
With a valuation allowance, Average Annual Recorded Investment | 65 | 9 | 66 | 35 | |
With a related valuation allowance, Interest Income Recognized while on Impaired Status | 3 | 6 | |||
With no related valuation allowance, Average Annual Recorded Investment | 18 | ||||
Total impaired loans | 64 | 64 | |||
Total, Unpaid Principal Balance | 64 | 64 | 26 | ||
Total, Related Valuation Allowance | 6 | 6 | |||
Total, Average Annual Recorded Investment | 65 | 9 | 66 | 53 | |
Total, Interest Income Recognized While on Impaired Status | 3 | 6 | |||
Residential real estate | Impaired | Other loan portfolio | Non-PCI loans | |||||
Impaired loans (excluding PCI loans) by portfolio | |||||
With a valuation allowance, Recorded Investment | 3,137 | 3,137 | 3,206 | ||
With a valuation allowance, Unpaid Principal Balance | 3,750 | 3,750 | 3,798 | ||
With a valuation allowance, Average Annual Recorded Investment | 3,157 | 2,114 | 3,234 | 2,163 | |
With a related valuation allowance, Interest Income Recognized while on Impaired Status | 13 | 12 | 24 | 25 | |
With no related valuation allowance, Recorded Investment | 1,329 | 1,329 | 949 | ||
With no related valuation allowance, Unpaid Principal Balance | 1,493 | 1,493 | 989 | ||
With no related valuation allowance, Average Annual Recorded Investment | 1,341 | 1,364 | 1,364 | 1,641 | |
With no related valuation allowance, Interest Income Recognized while on Impaired Status | 1 | 3 | 3 | 6 | |
Total impaired loans | 4,466 | 4,466 | 4,155 | ||
Total, Unpaid Principal Balance | 5,243 | 5,243 | 4,787 | ||
Total, Related Valuation Allowance | 567 | 567 | 626 | ||
Total, Average Annual Recorded Investment | 4,498 | 3,478 | 4,598 | 3,804 | |
Total, Interest Income Recognized While on Impaired Status | 14 | 15 | 27 | 31 | |
Consumer | Impaired | Other loan portfolio | Non-PCI loans | |||||
Impaired loans (excluding PCI loans) by portfolio | |||||
With a valuation allowance, Recorded Investment | 202 | 202 | 51 | ||
With a valuation allowance, Unpaid Principal Balance | 113 | 113 | 52 | ||
With a valuation allowance, Average Annual Recorded Investment | 115 | 35 | 118 | 35 | |
With no related valuation allowance, Unpaid Principal Balance | 91 | 91 | |||
With no related valuation allowance, Average Annual Recorded Investment | 91 | 11 | 91 | 42 | |
With no related valuation allowance, Interest Income Recognized while on Impaired Status | 8 | ||||
Total impaired loans | 202 | 202 | 51 | ||
Total, Unpaid Principal Balance | 204 | 204 | 52 | ||
Total, Related Valuation Allowance | 37 | 37 | 7 | ||
Total, Average Annual Recorded Investment | 206 | 46 | 209 | 77 | |
Total, Interest Income Recognized While on Impaired Status | 8 | ||||
Lease financing | Impaired | Other loan portfolio | Non-PCI loans | |||||
Impaired loans (excluding PCI loans) by portfolio | |||||
With a valuation allowance, Recorded Investment | 727 | 727 | 398 | ||
With a valuation allowance, Unpaid Principal Balance | 727 | 727 | 398 | ||
With a valuation allowance, Average Annual Recorded Investment | 727 | 649 | 727 | 649 | |
Total impaired loans | 727 | 727 | 398 | ||
Total, Unpaid Principal Balance | 727 | 727 | 398 | ||
Total, Related Valuation Allowance | 69 | 69 | $ 50 | ||
Total, Average Annual Recorded Investment | $ 727 | $ 649 | $ 727 | $ 649 |
LOANS - Aging Status of recorde
LOANS - Aging Status of recorded investment (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Aging Status of recorded investment | ||
Total loans | $ 2,312,778 | $ 1,995,589 |
Non-PCI loans | ||
Aging Status of recorded investment | ||
Nonaccrual Loans | 16,958 | 18,462 |
Total Past Due | 27,732 | 29,724 |
Current | 2,255,622 | 1,927,388 |
Total loans | 2,283,354 | 1,957,112 |
Non-PCI loans | 31-59 Days Past Due | ||
Aging Status of recorded investment | ||
Past Due | 5,498 | 5,124 |
Non-PCI loans | 60-89 Daya Past Due | ||
Aging Status of recorded investment | ||
Past Due | 4,820 | 4,996 |
Non-PCI loans | Accruing Loans past Due 90 Days or More | ||
Aging Status of recorded investment | ||
Past Due | 456 | 1,142 |
Commercial loan portfolio | ||
Aging Status of recorded investment | ||
Total loans | 1,665,267 | 1,526,623 |
Commercial loan portfolio | Non-PCI loans | ||
Aging Status of recorded investment | ||
Total loans | 1,642,706 | 1,496,396 |
Other loan portfolio | Non-PCI loans | ||
Aging Status of recorded investment | ||
Total loans | 640,648 | 460,716 |
Commercial | Commercial loan portfolio | ||
Aging Status of recorded investment | ||
Total loans | 545,069 | 499,573 |
Commercial | Commercial loan portfolio | Non-PCI loans | ||
Aging Status of recorded investment | ||
Nonaccrual Loans | 5,520 | 5,702 |
Total Past Due | 11,824 | 10,774 |
Current | 529,628 | 482,671 |
Total loans | 541,452 | 493,445 |
Commercial | Commercial loan portfolio | Non-PCI loans | 31-59 Days Past Due | ||
Aging Status of recorded investment | ||
Past Due | 2,974 | 1,911 |
Commercial | Commercial loan portfolio | Non-PCI loans | 60-89 Daya Past Due | ||
Aging Status of recorded investment | ||
Past Due | 2,979 | 2,296 |
Commercial | Commercial loan portfolio | Non-PCI loans | Accruing Loans past Due 90 Days or More | ||
Aging Status of recorded investment | ||
Past Due | 351 | 865 |
Commercial real estate | Commercial loan portfolio | ||
Aging Status of recorded investment | ||
Total loans | 956,298 | 876,784 |
Commercial real estate | Commercial loan portfolio | Non-PCI loans | ||
Aging Status of recorded investment | ||
Nonaccrual Loans | 6,551 | 8,844 |
Total Past Due | 7,822 | 11,121 |
Current | 941,009 | 851,623 |
Total loans | 948,831 | 862,744 |
Commercial real estate | Commercial loan portfolio | Non-PCI loans | 31-59 Days Past Due | ||
Aging Status of recorded investment | ||
Past Due | 768 | 288 |
Commercial real estate | Commercial loan portfolio | Non-PCI loans | 60-89 Daya Past Due | ||
Aging Status of recorded investment | ||
Past Due | 503 | 1,989 |
Construction and land development | Commercial loan portfolio | ||
Aging Status of recorded investment | ||
Total loans | 163,900 | 150,266 |
Construction and land development | Commercial loan portfolio | Non-PCI loans | ||
Aging Status of recorded investment | ||
Total Past Due | 22 | 340 |
Current | 152,401 | 139,867 |
Total loans | 152,423 | 140,207 |
Construction and land development | Commercial loan portfolio | Non-PCI loans | 31-59 Days Past Due | ||
Aging Status of recorded investment | ||
Past Due | 340 | |
Construction and land development | Commercial loan portfolio | Non-PCI loans | 60-89 Daya Past Due | ||
Aging Status of recorded investment | ||
Past Due | 22 | |
Residential real estate | Other loan portfolio | ||
Aging Status of recorded investment | ||
Total loans | 216,935 | 163,224 |
Residential real estate | Other loan portfolio | Non-PCI loans | ||
Aging Status of recorded investment | ||
Nonaccrual Loans | 4,063 | 3,516 |
Total Past Due | 5,747 | 6,165 |
Current | 204,620 | 149,101 |
Total loans | 210,367 | 155,266 |
Residential real estate | Other loan portfolio | Non-PCI loans | 31-59 Days Past Due | ||
Aging Status of recorded investment | ||
Past Due | 782 | 1,983 |
Residential real estate | Other loan portfolio | Non-PCI loans | 60-89 Daya Past Due | ||
Aging Status of recorded investment | ||
Past Due | 902 | 438 |
Residential real estate | Other loan portfolio | Non-PCI loans | Accruing Loans past Due 90 Days or More | ||
Aging Status of recorded investment | ||
Past Due | 228 | |
Consumer | Other loan portfolio | ||
Aging Status of recorded investment | ||
Total loans | 248,131 | 161,512 |
Consumer | Other loan portfolio | Non-PCI loans | ||
Aging Status of recorded investment | ||
Nonaccrual Loans | 97 | 2 |
Total Past Due | 1,568 | 889 |
Current | 246,268 | 160,331 |
Total loans | 247,836 | 161,220 |
Consumer | Other loan portfolio | Non-PCI loans | 31-59 Days Past Due | ||
Aging Status of recorded investment | ||
Past Due | 952 | 565 |
Consumer | Other loan portfolio | Non-PCI loans | 60-89 Daya Past Due | ||
Aging Status of recorded investment | ||
Past Due | 414 | 273 |
Consumer | Other loan portfolio | Non-PCI loans | Accruing Loans past Due 90 Days or More | ||
Aging Status of recorded investment | ||
Past Due | 105 | 49 |
Lease financing | Other loan portfolio | ||
Aging Status of recorded investment | ||
Total loans | 182,445 | 144,230 |
Lease financing | Other loan portfolio | Non-PCI loans | ||
Aging Status of recorded investment | ||
Nonaccrual Loans | 727 | 398 |
Total Past Due | 749 | 435 |
Current | 181,696 | 143,795 |
Total loans | 182,445 | 144,230 |
Lease financing | Other loan portfolio | Non-PCI loans | 31-59 Days Past Due | ||
Aging Status of recorded investment | ||
Past Due | $ 22 | $ 37 |
LOANS - TDRs by portfolio (Deta
LOANS - TDRs by portfolio (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
TDRs by portfolio | ||
TDRs, individually impaired for impairment | $ 27,179,000 | $ 22,528,000 |
Allowance for loan losses on TDRs | 191,000 | 109,000 |
Unfunded commitments | 164,000 | |
Minimum | Performing | ||
TDRs by portfolio | ||
TDRs, individually impaired for impairment | 50,000 | |
Non-PCI loans | ||
TDRs by portfolio | ||
TDR's Accruing | 12,512,000 | 5,287,000 |
TDR's Nonaccrual | 5,471,000 | 5,755,000 |
Total | 17,983,000 | 11,042,000 |
Commercial | Commercial loan portfolio | ||
TDRs by portfolio | ||
TDRs, individually impaired for impairment | 6,423,000 | 6,316,000 |
Commercial | Commercial loan portfolio | Non-PCI loans | ||
TDRs by portfolio | ||
TDR's Accruing | 648,000 | 3,000 |
TDR's Nonaccrual | 34,000 | 40,000 |
Total | 682,000 | 43,000 |
Commercial real estate | Commercial loan portfolio | ||
TDRs by portfolio | ||
TDRs, individually impaired for impairment | 17,728,000 | 13,434,000 |
Commercial real estate | Commercial loan portfolio | Non-PCI loans | ||
TDRs by portfolio | ||
TDR's Accruing | 11,397,000 | 4,873,000 |
TDR's Nonaccrual | 5,102,000 | 5,332,000 |
Total | 16,499,000 | 10,205,000 |
Construction and land development | Commercial loan portfolio | ||
TDRs by portfolio | ||
TDRs, individually impaired for impairment | 64,000 | |
Construction and land development | Commercial loan portfolio | Non-PCI loans | ||
TDRs by portfolio | ||
TDR's Accruing | 64,000 | |
Total | 64,000 | |
Residential real estate | Other loan portfolio | ||
TDRs by portfolio | ||
TDRs, individually impaired for impairment | 2,752,000 | 2,778,000 |
Residential real estate | Other loan portfolio | Non-PCI loans | ||
TDRs by portfolio | ||
TDR's Accruing | 403,000 | 411,000 |
TDR's Nonaccrual | 335,000 | 383,000 |
Total | 738,000 | $ 794,000 |
Consumer | Other loan portfolio | ||
TDRs by portfolio | ||
TDRs, individually impaired for impairment | 14,000 | |
Lease financing | Other loan portfolio | ||
TDRs by portfolio | ||
TDRs, individually impaired for impairment | $ 198,000 |
LOANS - TDRs by portfolio - res
LOANS - TDRs by portfolio - restructured and subsequently defaulted (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016USD ($) | Jun. 30, 2016loan | Sep. 30, 2015USD ($) | Jun. 30, 2015loan | Sep. 30, 2016USD ($)loan | Sep. 30, 2015USD ($)loan | |
Troubled debt restructurings: | ||||||
Number of loans | loan | 2 | 1 | 5 | 1 | ||
Pre-modification outstanding balance | $ 10,207 | $ 42 | $ 10,892 | $ 42 | ||
Post-modification outstanding balance | 10,207 | 42 | $ 10,854 | $ 42 | ||
Troubled debt restructurings that subsequently defaulted | ||||||
Number of loans | loan | 1 | |||||
Recorded balance | $ 71 | |||||
Commercial | Commercial loan portfolio | ||||||
Troubled debt restructurings: | ||||||
Number of loans | loan | 1 | 3 | 1 | |||
Pre-modification outstanding balance | 42 | $ 685 | $ 42 | |||
Post-modification outstanding balance | $ 42 | $ 647 | $ 42 | |||
Commercial real estate | Commercial loan portfolio | ||||||
Troubled debt restructurings: | ||||||
Number of loans | loan | 2 | 2 | ||||
Pre-modification outstanding balance | 10,207 | $ 10,207 | ||||
Post-modification outstanding balance | $ 10,207 | $ 10,207 | ||||
Troubled debt restructurings that subsequently defaulted | ||||||
Number of loans | loan | 1 | |||||
Recorded balance | $ 71 |
LOANS - Allowance for loan loss
LOANS - Allowance for loan losses and recorded investment (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Changes in allowance for loan losses : | ||||
Beginning balance | $ 14,752,000 | $ 16,206,000 | $ 15,988,000 | $ 12,300,000 |
Provision for loan losses | 1,392,000 | 6,699,000 | 3,146,000 | 10,075,000 |
Charge-offs | (864,000) | (7,949,000) | (4,286,000) | (8,945,000) |
Recoveries | 279,000 | 201,000 | 711,000 | 1,727,000 |
Net loan charge-offs | (585,000) | (7,748,000) | (3,575,000) | (7,218,000) |
Ending balance | 15,559,000 | 15,157,000 | 15,559,000 | 15,157,000 |
Non-PCI loans | ||||
Changes in allowance for loan losses : | ||||
Beginning balance | 13,629,000 | 14,464,000 | 14,093,000 | 10,504,000 |
Provision for loan losses | 1,156,000 | 6,681,000 | 3,752,000 | 10,163,000 |
Charge-offs | (806,000) | (7,930,000) | (4,228,000) | (8,914,000) |
Recoveries | 250,000 | 172,000 | 612,000 | 1,634,000 |
Net loan charge-offs | (556,000) | (7,758,000) | (3,616,000) | (7,280,000) |
Ending balance | 14,229,000 | 13,387,000 | 14,229,000 | 13,387,000 |
Non-PCI loans | Nonpeforming, one borrower | ||||
Changes in allowance for loan losses : | ||||
Charge-offs | (1,600,000) | |||
Non-PCI loans | Nonpeforming, single credit relationship borrower | ||||
Changes in allowance for loan losses : | ||||
Charge-offs | (530,000) | |||
PCI loans | ||||
Changes in allowance for loan losses : | ||||
Beginning balance | 1,123,000 | 1,742,000 | 1,895,000 | 1,796,000 |
Provision for loan losses | 236,000 | 18,000 | (606,000) | (88,000) |
Charge-offs | (58,000) | (19,000) | (58,000) | (31,000) |
Recoveries | 29,000 | 29,000 | 99,000 | 93,000 |
Net loan charge-offs | (29,000) | 10,000 | 41,000 | 62,000 |
Ending balance | $ 1,330,000 | $ 1,770,000 | $ 1,330,000 | $ 1,770,000 |
LOANS - Allowance for loan lo64
LOANS - Allowance for loan losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Dec. 31, 2015 | |
Changes in allowance for loan losses : | ||||||
Beginning balance | $ 14,752 | $ 16,206 | $ 15,988 | $ 12,300 | ||
Provision for loan losses | 1,392 | 6,699 | 3,146 | 10,075 | ||
Charge-offs | (864) | (7,949) | (4,286) | (8,945) | ||
Recoveries | 279 | 201 | 711 | 1,727 | ||
Ending balance | 15,559 | 15,157 | 15,559 | 15,157 | ||
Allowance for loan losses balance at December 31, 2014 attributable to: | ||||||
Loans individually evaluated for impairment | $ 2,452 | $ 2,696 | ||||
Loans collectively evaluated for impairment | 334 | 298 | ||||
Non-impaired loans collectively evaluated for impairment | 11,443 | 11,099 | ||||
Total | 14,752 | 16,206 | 15,988 | 12,300 | 15,559 | 15,988 |
Recorded investment (loan balance) at December 31, 2014: | ||||||
Impaired loans individually evaluated for impairment | 27,179 | 22,528 | ||||
Impaired loans collectively evaluated for impairment | 2,747 | 2,363 | ||||
Non-impaired loans collectively evaluated for impairment | 2,253,428 | 1,932,221 | ||||
Total loans | 2,312,778 | 1,995,589 | ||||
Commercial loan portfolio | ||||||
Recorded investment (loan balance) at December 31, 2014: | ||||||
Total loans | 1,665,267 | 1,526,623 | ||||
Commercial | Commercial loan portfolio | ||||||
Changes in allowance for loan losses : | ||||||
Beginning balance | 6,186 | 5,488 | 6,917 | 2,284 | ||
Provision for loan losses | 1,216 | 7,294 | 2,619 | 9,514 | ||
Charge-offs | (251) | (7,486) | (2,513) | (7,587) | ||
Recoveries | 36 | 56 | 164 | 1,141 | ||
Ending balance | 7,187 | 5,352 | 7,187 | 5,352 | ||
Allowance for loan losses balance at December 31, 2014 attributable to: | ||||||
Loans individually evaluated for impairment | 1,950 | 1,765 | ||||
Loans collectively evaluated for impairment | 12 | 32 | ||||
Non-impaired loans collectively evaluated for impairment | 4,569 | 4,745 | ||||
Total | 6,186 | 5,488 | 6,917 | 2,284 | 7,187 | 6,917 |
Recorded investment (loan balance) at December 31, 2014: | ||||||
Impaired loans individually evaluated for impairment | 6,423 | 6,316 | ||||
Impaired loans collectively evaluated for impairment | 96 | 254 | ||||
Non-impaired loans collectively evaluated for impairment | 534,933 | 486,875 | ||||
Total loans | 545,069 | 499,573 | ||||
Commercial real estate | Commercial loan portfolio | ||||||
Changes in allowance for loan losses : | ||||||
Beginning balance | 3,511 | 7,657 | 5,179 | 6,925 | ||
Provision for loan losses | (12) | (2,097) | (1,520) | (1,316) | ||
Charge-offs | (214) | (12) | (461) | (307) | ||
Recoveries | 129 | 57 | 216 | 303 | ||
Ending balance | 3,414 | 5,605 | 3,414 | 5,605 | ||
Allowance for loan losses balance at December 31, 2014 attributable to: | ||||||
Loans individually evaluated for impairment | 118 | 479 | ||||
Loans collectively evaluated for impairment | 27 | 35 | ||||
Non-impaired loans collectively evaluated for impairment | 3,041 | 3,662 | ||||
Total | 3,511 | 7,657 | 5,179 | 6,925 | 3,414 | 5,179 |
Recorded investment (loan balance) at December 31, 2014: | ||||||
Impaired loans individually evaluated for impairment | 17,728 | 13,434 | ||||
Impaired loans collectively evaluated for impairment | 220 | 283 | ||||
Non-impaired loans collectively evaluated for impairment | 930,883 | 849,027 | ||||
Total loans | 956,298 | 876,784 | ||||
Construction and land development | Commercial loan portfolio | ||||||
Changes in allowance for loan losses : | ||||||
Beginning balance | 569 | 435 | 435 | 486 | ||
Provision for loan losses | (271) | 48 | (154) | (4) | ||
Charge-offs | (1) | (23) | (1) | (39) | ||
Recoveries | 13 | 8 | 30 | 25 | ||
Ending balance | 310 | 468 | 310 | 468 | ||
Allowance for loan losses balance at December 31, 2014 attributable to: | ||||||
Loans individually evaluated for impairment | 6 | |||||
Non-impaired loans collectively evaluated for impairment | 304 | 419 | ||||
Total | 569 | 435 | 435 | 486 | 310 | 435 |
Recorded investment (loan balance) at December 31, 2014: | ||||||
Impaired loans individually evaluated for impairment | 64 | |||||
Non-impaired loans collectively evaluated for impairment | 152,359 | 140,207 | ||||
Total loans | 163,900 | 150,266 | ||||
Residential real estate | Other loan portfolio | ||||||
Changes in allowance for loan losses : | ||||||
Beginning balance | 2,584 | 1,883 | 2,120 | 2,038 | ||
Provision for loan losses | 220 | 799 | 886 | 922 | ||
Charge-offs | (153) | (318) | (454) | (665) | ||
Recoveries | 32 | 52 | 131 | 121 | ||
Ending balance | 2,683 | 2,416 | 2,683 | 2,416 | ||
Allowance for loan losses balance at December 31, 2014 attributable to: | ||||||
Loans individually evaluated for impairment | 359 | 452 | ||||
Loans collectively evaluated for impairment | 207 | 174 | ||||
Non-impaired loans collectively evaluated for impairment | 1,694 | 1,000 | ||||
Total | 2,584 | 1,883 | 2,120 | 2,038 | 2,683 | 2,120 |
Recorded investment (loan balance) at December 31, 2014: | ||||||
Impaired loans individually evaluated for impairment | 2,752 | 2,778 | ||||
Impaired loans collectively evaluated for impairment | 1,714 | 1,377 | ||||
Non-impaired loans collectively evaluated for impairment | 205,901 | 151,111 | ||||
Total loans | 216,935 | 163,224 | ||||
Consumer | Other loan portfolio | ||||||
Changes in allowance for loan losses : | ||||||
Beginning balance | 827 | 611 | 749 | 567 | ||
Provision for loan losses | 326 | 282 | 479 | 386 | ||
Charge-offs | (91) | (110) | (225) | (237) | ||
Recoveries | 20 | 25 | 79 | 92 | ||
Ending balance | 1,082 | 808 | 1,082 | 808 | ||
Allowance for loan losses balance at December 31, 2014 attributable to: | ||||||
Loans individually evaluated for impairment | 14 | |||||
Loans collectively evaluated for impairment | 23 | 7 | ||||
Non-impaired loans collectively evaluated for impairment | 1,022 | 735 | ||||
Total | 827 | 611 | 749 | 567 | 1,082 | 749 |
Recorded investment (loan balance) at December 31, 2014: | ||||||
Impaired loans individually evaluated for impairment | 14 | |||||
Impaired loans collectively evaluated for impairment | 188 | 51 | ||||
Non-impaired loans collectively evaluated for impairment | 247,634 | 161,169 | ||||
Total loans | 248,131 | 161,512 | ||||
Lease financing | Other loan portfolio | ||||||
Changes in allowance for loan losses : | ||||||
Beginning balance | 1,075 | 132 | 588 | |||
Provision for loan losses | (87) | 373 | 836 | 573 | ||
Charge-offs | (154) | (632) | (110) | |||
Recoveries | 49 | 3 | 91 | 45 | ||
Ending balance | 883 | 508 | 883 | 508 | ||
Allowance for loan losses balance at December 31, 2014 attributable to: | ||||||
Loans individually evaluated for impairment | 5 | |||||
Loans collectively evaluated for impairment | 65 | 50 | ||||
Non-impaired loans collectively evaluated for impairment | 813 | 538 | ||||
Total | 1,075 | 132 | 588 | 508 | 883 | 588 |
Recorded investment (loan balance) at December 31, 2014: | ||||||
Impaired loans individually evaluated for impairment | 198 | |||||
Impaired loans collectively evaluated for impairment | 529 | 398 | ||||
Non-impaired loans collectively evaluated for impairment | 181,718 | 143,832 | ||||
Total loans | 182,445 | 144,230 | ||||
PCI loans | ||||||
Changes in allowance for loan losses : | ||||||
Beginning balance | 1,123 | 1,742 | 1,895 | 1,796 | ||
Provision for loan losses | 236 | 18 | (606) | (88) | ||
Charge-offs | (58) | (19) | (58) | (31) | ||
Recoveries | 29 | 29 | 99 | 93 | ||
Ending balance | 1,330 | 1,770 | 1,330 | 1,770 | ||
Allowance for loan losses balance at December 31, 2014 attributable to: | ||||||
Total | 1,123 | $ 1,742 | 1,895 | $ 1,796 | 1,330 | 1,895 |
Recorded investment (loan balance) at December 31, 2014: | ||||||
Total loans | 29,424 | 38,477 | ||||
PCI loans | Commercial | Commercial loan portfolio | ||||||
Changes in allowance for loan losses : | ||||||
Beginning balance | 375 | |||||
Ending balance | 656 | 656 | ||||
Allowance for loan losses balance at December 31, 2014 attributable to: | ||||||
Total | 656 | 375 | 656 | 375 | ||
Recorded investment (loan balance) at December 31, 2014: | ||||||
Total loans | 3,617 | 6,128 | ||||
PCI loans | Commercial real estate | Commercial loan portfolio | ||||||
Changes in allowance for loan losses : | ||||||
Beginning balance | 1,003 | |||||
Ending balance | 228 | 228 | ||||
Allowance for loan losses balance at December 31, 2014 attributable to: | ||||||
Total | 228 | 1,003 | 228 | 1,003 | ||
Recorded investment (loan balance) at December 31, 2014: | ||||||
Total loans | 7,467 | 14,040 | ||||
PCI loans | Construction and land development | Commercial loan portfolio | ||||||
Changes in allowance for loan losses : | ||||||
Beginning balance | 16 | |||||
Allowance for loan losses balance at December 31, 2014 attributable to: | ||||||
Total | 16 | 16 | ||||
Recorded investment (loan balance) at December 31, 2014: | ||||||
Total loans | 11,477 | 10,059 | ||||
PCI loans | Residential real estate | Other loan portfolio | ||||||
Changes in allowance for loan losses : | ||||||
Beginning balance | 494 | |||||
Ending balance | 423 | 423 | ||||
Allowance for loan losses balance at December 31, 2014 attributable to: | ||||||
Total | 423 | 494 | 423 | 494 | ||
Recorded investment (loan balance) at December 31, 2014: | ||||||
Total loans | 6,568 | 7,958 | ||||
PCI loans | Consumer | Other loan portfolio | ||||||
Changes in allowance for loan losses : | ||||||
Beginning balance | 7 | |||||
Ending balance | 23 | 23 | ||||
Allowance for loan losses balance at December 31, 2014 attributable to: | ||||||
Total | $ 23 | $ 7 | 23 | 7 | ||
Recorded investment (loan balance) at December 31, 2014: | ||||||
Total loans | $ 295 | $ 292 |
LOANS - PCI Loans - Changes in
LOANS - PCI Loans - Changes in the accretable yield for PCI loans (Details) - PCI loans - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Changes in the accretable yield for PCI loans | ||||
Balance at beginning of period | $ 6,729 | $ 14,237 | $ 10,526 | $ 16,198 |
Accretion | (1,810) | (1,006) | (7,066) | (3,013) |
Other adjustments (including maturities, charge-offs and impact of changes in timing of expected cash flows) | 179 | (96) | 67 | |
Reclassification from (to) non-accretable | 2,568 | 325 | 4,302 | 304 |
Balance at end of period | $ 7,666 | $ 13,556 | $ 7,666 | $ 13,556 |
LOANS - Covered and noncovered
LOANS - Covered and noncovered loans (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Covered and noncovered loans | ||
Covered loans | $ 786 | $ 3,629 |
Non-covered loans | 2,311,992 | 1,991,960 |
Total loans | 2,312,778 | 1,995,589 |
Non-PCI loans | ||
Covered and noncovered loans | ||
Covered loans | 688 | 1,969 |
Non-covered loans | 2,282,666 | 1,955,143 |
Total loans | 2,283,354 | 1,957,112 |
PCI loans | ||
Covered and noncovered loans | ||
Covered loans | 98 | 1,660 |
Non-covered loans | 29,326 | 36,817 |
Total loans | 29,424 | 38,477 |
Customer outstanding balances | 37,100 | 44,500 |
Commercial loan portfolio | ||
Covered and noncovered loans | ||
Total loans | 1,665,267 | 1,526,623 |
Commercial loan portfolio | Non-PCI loans | ||
Covered and noncovered loans | ||
Total loans | 1,642,706 | 1,496,396 |
Other loan portfolio | Non-PCI loans | ||
Covered and noncovered loans | ||
Total loans | 640,648 | 460,716 |
Commercial | Commercial loan portfolio | ||
Covered and noncovered loans | ||
Covered loans | 1,445 | |
Non-covered loans | 545,069 | 498,128 |
Total loans | 545,069 | 499,573 |
Commercial | Commercial loan portfolio | Non-PCI loans | ||
Covered and noncovered loans | ||
Covered loans | 378 | |
Non-covered loans | 541,452 | 493,067 |
Total loans | 541,452 | 493,445 |
Commercial | Commercial loan portfolio | PCI loans | ||
Covered and noncovered loans | ||
Covered loans | 1,067 | |
Non-covered loans | 3,617 | 5,061 |
Total loans | 3,617 | 6,128 |
Commercial real estate | Commercial loan portfolio | ||
Covered and noncovered loans | ||
Covered loans | 1,194 | |
Non-covered loans | 956,298 | 875,590 |
Total loans | 956,298 | 876,784 |
Commercial real estate | Commercial loan portfolio | Non-PCI loans | ||
Covered and noncovered loans | ||
Covered loans | 876 | |
Non-covered loans | 948,831 | 861,868 |
Total loans | 948,831 | 862,744 |
Commercial real estate | Commercial loan portfolio | PCI loans | ||
Covered and noncovered loans | ||
Covered loans | 318 | |
Non-covered loans | 7,467 | 13,722 |
Total loans | 7,467 | 14,040 |
Construction and land development | Commercial loan portfolio | ||
Covered and noncovered loans | ||
Non-covered loans | 163,900 | 150,266 |
Total loans | 163,900 | 150,266 |
Construction and land development | Commercial loan portfolio | Non-PCI loans | ||
Covered and noncovered loans | ||
Non-covered loans | 152,423 | 140,207 |
Total loans | 152,423 | 140,207 |
Construction and land development | Commercial loan portfolio | PCI loans | ||
Covered and noncovered loans | ||
Non-covered loans | 11,477 | 10,059 |
Total loans | 11,477 | 10,059 |
Residential real estate | Other loan portfolio | ||
Covered and noncovered loans | ||
Covered loans | 786 | 990 |
Non-covered loans | 216,149 | 162,234 |
Total loans | 216,935 | 163,224 |
Residential real estate | Other loan portfolio | Non-PCI loans | ||
Covered and noncovered loans | ||
Covered loans | 688 | 715 |
Non-covered loans | 209,679 | 154,551 |
Total loans | 210,367 | 155,266 |
Residential real estate | Other loan portfolio | PCI loans | ||
Covered and noncovered loans | ||
Covered loans | 98 | 275 |
Non-covered loans | 6,470 | 7,683 |
Total loans | 6,568 | 7,958 |
Consumer | Other loan portfolio | ||
Covered and noncovered loans | ||
Non-covered loans | 248,131 | 161,512 |
Total loans | 248,131 | 161,512 |
Consumer | Other loan portfolio | Non-PCI loans | ||
Covered and noncovered loans | ||
Non-covered loans | 247,836 | 161,220 |
Total loans | 247,836 | 161,220 |
Consumer | Other loan portfolio | PCI loans | ||
Covered and noncovered loans | ||
Non-covered loans | 295 | 292 |
Total loans | 295 | 292 |
Lease financing | Other loan portfolio | ||
Covered and noncovered loans | ||
Non-covered loans | 182,445 | 144,230 |
Total loans | 182,445 | 144,230 |
Lease financing | Other loan portfolio | Non-PCI loans | ||
Covered and noncovered loans | ||
Non-covered loans | 182,445 | 144,230 |
Total loans | $ 182,445 | $ 144,230 |
MORTGAGE SERVICING RIGHTS (Deta
MORTGAGE SERVICING RIGHTS (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Servicing Assets at Fair Value [Line Items] | ||
Loans serviced for others | $ 5,628,023 | $ 5,475,804 |
Commercial | ||
Servicing Assets at Fair Value [Line Items] | ||
Loans serviced for others | 3,806,872 | 3,649,524 |
Residential mortgage loans | ||
Servicing Assets at Fair Value [Line Items] | ||
Loans serviced for others | $ 1,821,151 | $ 1,826,280 |
MORTGAGE SERVICING RIGHTS - Cha
MORTGAGE SERVICING RIGHTS - Changes in MSR (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
Mortgage servicing rights: | ||||||||
Balance at beginning of period | $ 68,395 | $ 64,921 | $ 67,218 | $ 62,900 | ||||
Balance at end of period | 71,349 | 66,212 | 71,349 | 66,212 | ||||
Valuation allowances – residential mortgage loans: | ||||||||
Balance at beginning of period | 5,587 | 567 | 119 | |||||
Additions | 1,073 | 795 | 6,301 | 1,630 | ||||
Reductions | (208) | (954) | ||||||
Balance at end of period | 6,660 | 795 | 6,660 | 795 | ||||
Mortgage servicing rights, net | 64,689 | 65,417 | 64,689 | 65,417 | ||||
Fair Value | 64,689 | 66,074 | 64,689 | 66,074 | $ 62,960 | $ 66,700 | $ 66,442 | $ 62,781 |
Commercial | ||||||||
Mortgage servicing rights: | ||||||||
Servicing rights capitalized | 3,506 | 1,411 | 5,777 | 2,866 | ||||
Amortization | (592) | (552) | (1,741) | (1,708) | ||||
Residential mortgage loans | ||||||||
Mortgage servicing rights: | ||||||||
Servicing rights capitalized | 1,125 | 1,105 | 2,764 | 4,185 | ||||
Amortization | $ (1,085) | $ (673) | $ (2,669) | $ (2,031) |
MORTGAGE SERVICING RIGHTS - Sum
MORTGAGE SERVICING RIGHTS - Summary of key assumptions (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Commercial | ||
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value [Abstract] | ||
Servicing Fee | 0.13% | 0.12% |
Interest Rate | 3.75% | 3.85% |
Remaining Years to Maturity | 30 years 3 months 18 days | 30 years 7 months 6 days |
Prepayment Rate | 8.33% | 8.53% |
Servicing Cost | 1000.00% | 1000.00% |
Commercial | Maximum | ||
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value [Abstract] | ||
Discount Rate | 13.00% | 13.00% |
Commercial | Minimum | ||
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value [Abstract] | ||
Discount Rate | 10.00% | 10.00% |
Residential mortgage loans | ||
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value [Abstract] | ||
Servicing Fee | 0.27% | 0.27% |
Interest Rate | 3.93% | 3.96% |
Remaining Years to Maturity | 24 years 2 months 12 days | 24 years 4 months 24 days |
Prepayment Rate | 18.42% | 11.22% |
Servicing Cost | 73.46% | 73.66% |
Residential mortgage loans | Maximum | ||
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value [Abstract] | ||
Discount Rate | 11.00% | 11.00% |
Residential mortgage loans | Minimum | ||
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value [Abstract] | ||
Discount Rate | 9.00% | 9.00% |
GOODWILL AND INTANGIBLE ASSET70
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
GOODWILL AND INTANGIBLE ASSETS | ||
Goodwill | $ 46,519 | $ 46,519 |
GOODWILL AND INTANGIBLE ASSET71
GOODWILL AND INTANGIBLE ASSETS - Intangible assets (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Finite-lived intangible assets | |||||
Gross Carrying Amount | $ 23,683,000 | $ 23,683,000 | $ 23,683,000 | ||
Accumulated Amortization | (18,292,000) | (18,292,000) | (16,679,000) | ||
Total | 5,391,000 | 5,391,000 | 7,004,000 | ||
Amortization of intangible assets | 514,000 | $ 597,000 | 1,613,000 | $ 1,863,000 | |
Estimated amortization expense of intangible assets | |||||
Total | 5,391,000 | 5,391,000 | 7,004,000 | ||
Core deposits | |||||
Finite-lived intangible assets | |||||
Gross Carrying Amount | 20,542,000 | 20,542,000 | 20,542,000 | ||
Accumulated Amortization | (15,770,000) | (15,770,000) | (14,471,000) | ||
Total | 4,772,000 | 4,772,000 | 6,071,000 | ||
Estimated amortization expense of intangible assets | |||||
Total | 4,772,000 | 4,772,000 | 6,071,000 | ||
Customer relationship | |||||
Finite-lived intangible assets | |||||
Gross Carrying Amount | 3,141,000 | 3,141,000 | 3,141,000 | ||
Accumulated Amortization | (2,522,000) | (2,522,000) | (2,208,000) | ||
Total | 619,000 | 619,000 | 933,000 | ||
Estimated amortization expense of intangible assets | |||||
Total | $ 619,000 | $ 619,000 | $ 933,000 |
DERIVATIVE INSTRUMENTS (Details
DERIVATIVE INSTRUMENTS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Jun. 30, 2016 | Dec. 31, 2015 | |
Fair value of the Company's derivative financial instruments as well as their classification on the consolidated statements of condition | ||||||
Net gains recognized on derivative instruments | $ (5,200,000) | $ 272,000 | $ 527,000 | $ 6,300,000 | ||
Interest rate lock commitments | ||||||
Fair value of the Company's derivative financial instruments as well as their classification on the consolidated statements of condition | ||||||
Notional amount, asset derivatives | 294,010,000 | 294,010,000 | $ 257,023,000 | |||
Fair value of asset derivatives | $ 6,798,000 | $ 6,798,000 | 6,029,000 | |||
Forward commitments to sell mortgage-backed securities | ||||||
Fair value of the Company's derivative financial instruments as well as their classification on the consolidated statements of condition | ||||||
Notional amount, liability derivatives | $ 323,103,000 | 278,313,000 | ||||
Fair value of liability derivatives | $ 244,000 | $ 2,000 |
DERIVATIVE INSTRUMENTS - Intere
DERIVATIVE INSTRUMENTS - Interest Rate Swap Agreements (Details) - USD ($) | 1 Months Ended | 9 Months Ended | ||
Aug. 31, 2011 | Sep. 30, 2016 | Dec. 31, 2015 | Aug. 15, 2012 | |
Three-month LIBOR | ||||
Derivative disclosures | ||||
Variable interest rate (as a percent) | 4.35% | |||
Interest rate swap agreements | ||||
Derivative disclosures | ||||
Notional amount of interest rate swaps | $ 10,000,000 | |||
Fixed interest (as a percent) | 4.66% | |||
Fair value of interest rate swaps | $ 32,000 | $ 126,000 | ||
Interest rate swap agreements | Three-month LIBOR | ||||
Derivative disclosures | ||||
Variable interest rate (as a percent) | 2.75% |
DEPOSITS (Details)
DEPOSITS (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Classification of deposits | ||
Non-interest bearing demand | $ 629,113 | $ 543,401 |
Interest bearing: | ||
NOW | 658,021 | 621,925 |
Money market | 366,193 | 377,654 |
Savings | 162,742 | 155,778 |
Time | 603,963 | 668,890 |
Total deposits | $ 2,420,032 | $ 2,367,648 |
SHORT-TERM BORROWINGS (Details)
SHORT-TERM BORROWINGS (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Short-term borrowings | ||
Outstanding at period-end | $ 138,289 | $ 107,538 |
Average amount outstanding | 123,191 | 123,447 |
Maximum amount outstanding at any month end | $ 138,289 | $ 147,542 |
Weighted average interest rate: | ||
During period | 0.24% | 0.19% |
End of period | 0.23% | 0.21% |
Federal funds lines of credit | $ 68,000 | |
Investment securites pledged/collateralized for secured borrowings | 145,700 | $ 113,400 |
Line of credit | 39,600 | 62,100 |
Commercial real estate | ||
Weighted average interest rate: | ||
Investment securites pledged/collateralized for secured borrowings | $ 47,600 | $ 76,700 |
FHLB ADVANCES AND OTHER BORRO76
FHLB ADVANCES AND OTHER BORROWINGS (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Total FHLB advances and other borrowings | $ 237,543 | $ 40,178 |
Federal Hom Loan Bank Advances, Interest Rate Information | ||
FHLB advances, collateral for mortgage and home equity line of credit loans | 1,150,000 | 987,400 |
FHLB advances – fixed rate, fixed term, at rates averaging 0.96% and 0.93%, maturing through May 2023 | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Total FHLB advances and other borrowings | $ 237,500 | $ 40,000 |
Federal Hom Loan Bank Advances, Interest Rate Information | ||
Federal Home Loan Bank advances average interest rate | 0.66% | 0.93% |
Obligations under capital leases – implicit interest rate of 1.70% – maturing through July 2018 | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Total FHLB advances and other borrowings | $ 43 | $ 178 |
Federal Hom Loan Bank Advances, Interest Rate Information | ||
Federal Home Loan Bank advances, interest rate | 1.70% |
SUBORDINATED DEBT (Details)
SUBORDINATED DEBT (Details) $ / shares in Units, $ in Thousands | Jun. 28, 2016USD ($) | Mar. 26, 2013USD ($)$ / sharesshares | Jun. 30, 2015USD ($)tranche | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($) | Jan. 02, 2013USD ($) |
Subordinated Borrowing [Line Items] | |||||||
Carrying amount | $ 54,484 | $ 61,859 | |||||
Duration with fixed interest rate | 5 years | ||||||
Number of tranches | tranche | 2 | ||||||
Investment face amount | $ 10,000 | ||||||
Common stock | $ 154 | 118 | 2,000 | ||||
Term of warrant | 8 years | ||||||
Number of securities called by warrants | shares | 125,000 | ||||||
Exercise price | $ / shares | $ 16 | ||||||
Warrants outstanding | $ 600 | ||||||
Repayments of Subordinated Debt | $ 8,000 | ||||||
Other non interest expense | |||||||
Subordinated Borrowing [Line Items] | |||||||
Discount | $ 500 | ||||||
Three-month LIBOR | |||||||
Subordinated Borrowing [Line Items] | |||||||
Variable interest rate (as a percent) | 4.35% | ||||||
Subordinate debt | |||||||
Subordinated Borrowing [Line Items] | |||||||
Face amount | $ 8,000 | ||||||
Debt issuance cost | $ 900 | ||||||
Repayments of Subordinated Debt | $ 8,000 | ||||||
Discount | $ 600 | ||||||
Subordinate debt | Private Placement [Member] | |||||||
Subordinated Borrowing [Line Items] | |||||||
Face amount | $ 55,300 | ||||||
Subordinate debt, $8,000 maturing June 28, 2021 | |||||||
Subordinated Borrowing [Line Items] | |||||||
Fixed interest rate | 8.25% | ||||||
Face amount | $ 8,000 | ||||||
Carrying amount | 7,448 | ||||||
Subordinate debt, $40,325 maturing June 18, 2025 | |||||||
Subordinated Borrowing [Line Items] | |||||||
Fixed interest rate | 6.00% | ||||||
Face amount | $ 40,325 | $ 40,325 | |||||
Carrying amount | $ 39,712 | 39,659 | |||||
Subordinate debt, $15,000 maturing June 18, 2025 | |||||||
Subordinated Borrowing [Line Items] | |||||||
Fixed interest rate | 6.50% | ||||||
Face amount | $ 15,000 | ||||||
Carrying amount | $ 14,772 | $ 14,752 |
TRUST PREFERRED DEBNTURES (Deta
TRUST PREFERRED DEBNTURES (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
TRUST PREFERRED DEBENTURES | ||
Trust preferred debentures | $ 37,316 | $ 37,057 |
Trust preferred debentures maturing January 23, 2034 | ||
TRUST PREFERRED DEBENTURES | ||
Trust preferred debentures | $ 1,980 | $ 1,932 |
Trust preferred debentures maturing January 23, 2034 | Grant Park Trust | ||
TRUST PREFERRED DEBENTURES | ||
Variable interest rate (as a percent) | 2.85% | |
Interest rate (as a percent) | 3.61% | 3.17% |
Face amount | $ 3,000 | $ 3,000 |
Trust preferred debentures maturing April 23, 2034 | ||
TRUST PREFERRED DEBENTURES | ||
Trust preferred debentures | $ 9,956 | $ 9,954 |
Trust preferred debentures maturing April 23, 2034 | Midland Trust | ||
TRUST PREFERRED DEBENTURES | ||
Variable interest rate (as a percent) | 2.75% | |
Interest rate (as a percent) | 3.46% | 3.07% |
Face amount | $ 10,000 | $ 10,000 |
Trust preferred debentures maturing December 31, 2036 | ||
TRUST PREFERRED DEBENTURES | ||
Trust preferred debentures | $ 13,105 | $ 13,001 |
Trust preferred debentures maturing December 31, 2036 | LSHC Trust III | ||
TRUST PREFERRED DEBENTURES | ||
Variable interest rate (as a percent) | 1.75% | |
Interest rate (as a percent) | 2.60% | 2.26% |
Face amount | $ 20,000 | $ 20,000 |
Trust preferred debentures maturing September 6, 2037 | ||
TRUST PREFERRED DEBENTURES | ||
Trust preferred debentures | $ 12,275 | $ 12,170 |
Trust preferred debentures maturing September 6, 2037 | LSHC Trust IV | ||
TRUST PREFERRED DEBENTURES | ||
Variable interest rate (as a percent) | 1.47% | |
Interest rate (as a percent) | 2.31% | 1.92% |
Face amount | $ 20,000 | $ 20,000 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
EARNINGS PER SHARE | ||||
Net income | $ 8,051 | $ 3,445 | $ 19,959 | $ 16,629 |
Common shareholder dividends | (2,773) | (1,881) | (7,022) | (5,643) |
Unvested restricted stock award dividends | (12) | (12) | (35) | (37) |
Undistributed earnings to unvested restricted stock awards | (26) | (10) | (69) | (71) |
Undistributed earnings to common shareholders | 5,240 | 1,542 | 12,833 | 10,878 |
Basic | ||||
Distributed earnings to common shareholders | 2,773 | 1,881 | 7,022 | 5,643 |
Undistributed earnings to common shareholders | 5,240 | 1,542 | 12,833 | 10,878 |
Net income attributable to Midland States Bancorp, Inc. | 8,013 | 3,423 | 19,855 | 16,521 |
Diluted | ||||
Distributed earnings to common shareholders | 2,773 | 1,881 | 7,022 | 5,643 |
Undistributed earnings to common shareholders | 5,240 | 1,542 | 12,833 | 10,878 |
Net income attributable to Midland States Bancorp, Inc. | 8,013 | 3,423 | 19,855 | 16,521 |
Add back: | ||||
Undistributed earnings reallocated from unvested restricted stock awards | 1 | 1 | ||
Total common shareholders earnings, diluted | $ 8,013 | $ 3,423 | $ 19,856 | $ 16,522 |
Weighted average common shares outstanding, basic (In shares) | 15,578,703 | 11,911,414 | 13,637,997 | 11,895,337 |
Options and warrants | 279,570 | 219,115 | 264,667 | 216,358 |
Weighted average common shares outstanding, diluted (In shares) | 15,858,273 | 12,130,529 | 13,902,664 | 12,111,695 |
Basic earnings per common share (In dollars per share) | $ 0.51 | $ 0.29 | $ 1.46 | $ 1.39 |
Diluted earnings per common share (In dollars per share) | $ 0.51 | $ 0.28 | $ 1.43 | $ 1.36 |
CAPITAL REQUIREMENTS (Details)
CAPITAL REQUIREMENTS (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Capital requirements and restrictions on dividends | ||
Total Capital (to Risk Weighted Assets): Actual Amount | $ 366,333 | $ 288,958 |
Total Capital (to Risk Weighted Assets): Actual Ratio | 13.53% | 11.82% |
Total Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Amount | $ 216,588 | $ 195,550 |
Total Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Ratio | 8.00% | 8.00% |
Tier I Capital (to Risk Weighted Assets): Actual Amount | $ 296,148 | $ 210,614 |
Tier I Capital (to Risk Weighted Assets): Actual Ratio | 10.94% | 8.62% |
Tier I Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Amount | $ 162,441 | $ 146,662 |
Tier I Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Ratio | 6.00% | 6.00% |
Common equity Tier 1 capital (to risk-weighted assets): Actual Amount | $ 244,378 | $ 158,969 |
Common equity Tier 1 capital (to risk-weighted assets): Actual Ratio | 9.03% | 6.50% |
Common equity Tier 1 capital (to risk-weighted assets): Minimum Required for adequate capital Amount | $ 121,831 | $ 109,997 |
Common equity Tier 1 capital (to risk-weighted assets): Minimum Required for adequate capital Ratio | 4.50% | 4.50% |
Tier I Capital (to Average Assets): Actual Amount | $ 296,148 | $ 210,614 |
Tier I Capital (to Average Assets): Actual Ratio | 9.82% | 7.49% |
Tier I Capital (to Average Assets): Minimum Required For Adequate Capital Purposes Amount | $ 120,688 | $ 112,500 |
Tier I Capital (to Average Assets): Minimum Required For Adequate Capital Purposes Ratio | 4.00% | 4.00% |
Midland States Bank | ||
Capital requirements and restrictions on dividends | ||
Total Capital (to Risk Weighted Assets): Actual Amount | $ 317,823 | $ 270,436 |
Total Capital (to Risk Weighted Assets): Actual Ratio | 11.72% | 11.06% |
Total Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Amount | $ 216,957 | $ 195,702 |
Total Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Ratio | 8.00% | 8.00% |
Total Capital (to Risk Weighted Assets): Required to be Well Capitalized Amount Under Prompt Corrective Action Requirements | $ 271,196 | $ 244,628 |
Total Capital (to Risk Weighted Assets): Required to be Well Capitalized Ratio Under Prompt Corrective Action Requirements | 10.00% | 10.00% |
Tier I Capital (to Risk Weighted Assets): Actual Amount | $ 302,122 | $ 254,228 |
Tier I Capital (to Risk Weighted Assets): Actual Ratio | 11.14% | 10.39% |
Tier I Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Amount | $ 162,718 | $ 146,777 |
Tier I Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Ratio | 6.00% | 6.00% |
Tier I Capital (to Risk Weighted Assets): Required to be Well Capitalized Amount Under Prompt Corrective Action Requirements | $ 216,957 | $ 195,702 |
Tier I Capital (to Risk Weighted Assets): Required to be Well Capitalized Ratio Under Prompt Corrective Action Requirements | 8.00% | 8.00% |
Common equity Tier 1 capital (to risk-weighted assets): Actual Amount | $ 302,122 | $ 254,228 |
Common equity Tier 1 capital (to risk-weighted assets): Actual Ratio | 11.14% | 10.39% |
Common equity Tier 1 capital (to risk-weighted assets): Minimum Required for adequate capital Amount | $ 122,038 | $ 110,082 |
Common equity Tier 1 capital (to risk-weighted assets): Minimum Required for adequate capital Ratio | 4.50% | 4.50% |
Common equity Tier 1 capital (to risk-weighted assets): Required to be Well Capitalized Amount Under Prompt Corrective Action Requirements | $ 176,277 | $ 159,008 |
Common equity Tier 1 capital (to risk-weighted assets): Required to be Well Capitalized Ratio Under Prompt Corrective Action Requirements | 6.50% | 6.50% |
Tier I Capital (to Average Assets): Actual Amount | $ 302,122 | $ 254,228 |
Tier I Capital (to Average Assets): Actual Ratio | 10.00% | 9.01% |
Tier I Capital (to Average Assets): Minimum Required For Adequate Capital Purposes Amount | $ 120,794 | $ 112,827 |
Tier I Capital (to Average Assets): Minimum Required For Adequate Capital Purposes Ratio | 4.00% | 4.00% |
Tier I Capital (to Average Assets): Required to be Well Capitalized Amount Under Prompt Corrective Action Requirements | $ 150,993 | $ 141,034 |
Tier I Capital (to Average Assets): Required to be Well Capitalized Ratio Under Prompt Corrective Action Requirements | 5.00% | 5.00% |
FAIR VALUE OF FINANCIAL INSTR81
FAIR VALUE OF FINANCIAL INSTRUMENTS - Recurring and Nonrecurring basis (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Assets | |||||
Securities available for sale: | $ 252,212,000 | $ 252,212,000 | $ 236,627,000 | ||
Liabilities | |||||
Impaired loans | 144,000 | $ 1,755,000 | 310,000 | $ 1,755,000 | |
Other real estate owned | 4,000 | 219,000 | 49,000 | ||
Total loss on assets measured on a nonrecurring basis | 148,000 | 1,755,000 | 529,000 | 1,804,000 | |
Non-agency mortgage-backed securities | |||||
Assets | |||||
Securities available for sale: | 2,000 | 2,000 | |||
Covered non-agency mortgage-backed securities | |||||
Assets | |||||
Securities available for sale: | $ 55,900,000 | $ 55,900,000 | |||
Corporate securities | |||||
Assets | |||||
Securities available for sale: | 6,700,000 | 6,700,000 | |||
Level 1 | |||||
Assets | |||||
Securities available for sale: | 35,506,000 | 35,506,000 | 48,302,000 | ||
Level 2 | |||||
Assets | |||||
Securities available for sale: | 209,225,000 | 209,225,000 | 188,325,000 | ||
Loans held for sale | 61,363,000 | 61,363,000 | 54,413,000 | ||
Interest rate lock commitments | 6,798,000 | 6,798,000 | 6,029,000 | ||
Level 2 | Interest rate swap agreements | |||||
Liabilities | |||||
Derivative liability | 32,000 | 32,000 | 126,000 | ||
Level 2 | Forward commitments to sell mortgage-backed securities | |||||
Liabilities | |||||
Derivative liability | 244,000 | 244,000 | 2,000 | ||
Level 3 | |||||
Assets | |||||
Securities available for sale: | 7,481,000 | 7,481,000 | |||
Recurring member | |||||
Assets | |||||
Loans held for sale | 61,363,000 | 61,363,000 | 54,413,000 | ||
Total Assets | 320,373,000 | 320,373,000 | 297,069,000 | ||
Liabilities | |||||
Contingent consideration | 350,000 | ||||
Total | 276,000 | 276,000 | 478,000 | ||
Recurring member | Interest rate lock commitments | |||||
Assets | |||||
Interest rate lock commitments | 6,798,000 | 6,798,000 | 6,029,000 | ||
Recurring member | Interest rate swap agreements | |||||
Liabilities | |||||
Derivative liability | 32,000 | 32,000 | 126,000 | ||
Recurring member | Forward commitments to sell mortgage-backed securities | |||||
Liabilities | |||||
Derivative liability | 244,000 | 244,000 | 2,000 | ||
Recurring member | U.S. Treasury securities | |||||
Assets | |||||
Securities available for sale: | 35,506,000 | 35,506,000 | 48,302,000 | ||
Recurring member | Government sponsored entity debt securities | |||||
Assets | |||||
Securities available for sale: | 8,990,000 | 8,990,000 | 9,454,000 | ||
Recurring member | Agency mortgage-backed securities | |||||
Assets | |||||
Securities available for sale: | 68,656,000 | 68,656,000 | 67,527,000 | ||
Recurring member | Non-agency mortgage-backed securities | |||||
Assets | |||||
Securities available for sale: | 1,000 | 1,000 | 2,000 | ||
Recurring member | Covered non-agency mortgage-backed securities | |||||
Assets | |||||
Securities available for sale: | 72,093,000 | 72,093,000 | 75,979,000 | ||
Recurring member | State and municipal securities | |||||
Assets | |||||
Securities available for sale: | 21,980,000 | 21,980,000 | 15,494,000 | ||
Recurring member | Corporate securities | |||||
Assets | |||||
Securities available for sale: | 44,986,000 | 44,986,000 | 19,869,000 | ||
Recurring member | Level 1 | |||||
Assets | |||||
Total Assets | 35,506,000 | 35,506,000 | 48,302,000 | ||
Recurring member | Level 1 | U.S. Treasury securities | |||||
Assets | |||||
Securities available for sale: | 35,506,000 | 35,506,000 | 48,302,000 | ||
Recurring member | Level 2 | |||||
Assets | |||||
Loans held for sale | 61,363,000 | 61,363,000 | 54,413,000 | ||
Total Assets | 277,386,000 | 277,386,000 | 248,767,000 | ||
Liabilities | |||||
Total | 276,000 | 276,000 | 128,000 | ||
Recurring member | Level 2 | Interest rate lock commitments | |||||
Assets | |||||
Interest rate lock commitments | 6,798,000 | 6,798,000 | 6,029,000 | ||
Recurring member | Level 2 | Interest rate swap agreements | |||||
Liabilities | |||||
Derivative liability | 32,000 | 32,000 | 126,000 | ||
Recurring member | Level 2 | Forward commitments to sell mortgage-backed securities | |||||
Liabilities | |||||
Derivative liability | 244,000 | 244,000 | 2,000 | ||
Recurring member | Level 2 | Government sponsored entity debt securities | |||||
Assets | |||||
Securities available for sale: | 8,990,000 | 8,990,000 | 9,454,000 | ||
Recurring member | Level 2 | Agency mortgage-backed securities | |||||
Assets | |||||
Securities available for sale: | 68,656,000 | 68,656,000 | 67,527,000 | ||
Recurring member | Level 2 | Non-agency mortgage-backed securities | |||||
Assets | |||||
Securities available for sale: | 2,000 | ||||
Recurring member | Level 2 | Covered non-agency mortgage-backed securities | |||||
Assets | |||||
Securities available for sale: | 72,093,000 | 72,093,000 | 75,979,000 | ||
Recurring member | Level 2 | State and municipal securities | |||||
Assets | |||||
Securities available for sale: | 21,980,000 | 21,980,000 | 15,494,000 | ||
Recurring member | Level 2 | Corporate securities | |||||
Assets | |||||
Securities available for sale: | 37,506,000 | 37,506,000 | 19,869,000 | ||
Recurring member | Level 3 | |||||
Assets | |||||
Total Assets | 7,481,000 | 7,481,000 | |||
Liabilities | |||||
Contingent consideration | 350,000 | ||||
Total | 350,000 | ||||
Recurring member | Level 3 | Non-agency mortgage-backed securities | |||||
Assets | |||||
Securities available for sale: | 1,000 | 1,000 | |||
Recurring member | Level 3 | Corporate securities | |||||
Assets | |||||
Securities available for sale: | 7,480,000 | 7,480,000 | |||
Non recurring member | |||||
Liabilities | |||||
Impaired loans | 10,542,000 | 10,542,000 | 16,667,000 | ||
Other real estate owned | 915,000 | 915,000 | 535,000 | ||
Non recurring member | Level 2 | |||||
Liabilities | |||||
Impaired loans | 3,081,000 | 3,081,000 | 8,821,000 | ||
Other real estate owned | 915,000 | 915,000 | 535,000 | ||
Non recurring member | Level 3 | |||||
Liabilities | |||||
Impaired loans | $ 7,461,000 | $ 7,461,000 | $ 7,846,000 |
FAIR VALUE OF FINANCIAL INSTR82
FAIR VALUE OF FINANCIAL INSTRUMENTS- Unobservable inputs (Level 3) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | |
Corporate securities | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Balance, beginning of period | $ 9,765 | ||
Purchases of investment securities recognized as Level 3 | $ 3,000 | ||
Transferred from Level 2 | 6,749 | ||
Transferred to Level 2 | (2,000) | (2,000) | |
Total realized in earnings(1) | 93 | 251 | |
Total unrealized in other comprehensive income | (294) | (296) | |
Net settlements (principal and interest) | (84) | (224) | |
Balance, end of period | 7,480 | 7,480 | |
Non-agency mortgage-backed securities | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Balance, beginning of period | 2 | ||
Transferred from Level 2 | 2 | ||
Net settlements (principal and interest) | (1) | (1) | |
Balance, end of period | $ 1 | $ 1 | |
Covered non-agency mortgage-backed securities | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Balance, beginning of period | $ 56,437 | ||
Transferred to Level 2 | (55,910) | ||
Total realized in earnings(1) | 1,487 | ||
Net settlements (principal and interest) | $ (2,014) |
FAIR VALUE OF FINANCIAL INSTR83
FAIR VALUE OF FINANCIAL INSTRUMENTS- Carrying values and fair value (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | |
Assets | |||||
Securities available for sale: | $ 252,212,000 | $ 252,212,000 | $ 236,627,000 | ||
Investment securities held to maturity | 88,590,000 | 88,590,000 | 92,816,000 | ||
Accrued interest receivable | 8,811,000 | 8,811,000 | 7,697,000 | ||
Liabilities | |||||
Trust preferred debentures | 37,316,000 | 37,316,000 | 37,057,000 | ||
Accrued interest payable | 1,875,000 | 1,875,000 | 979,000 | ||
Other than temporary impairment, net of applicable loss-share reimbursements | $ 299,000 | 824,000 | $ 461,000 | ||
Level 1 | |||||
Assets | |||||
Cash and due from banks | 227,496,000 | 227,496,000 | 211,976,000 | ||
Federal funds sold | 534,000 | 534,000 | 499,000 | ||
Securities available for sale: | 35,506,000 | 35,506,000 | 48,302,000 | ||
Level 2 | |||||
Assets | |||||
Securities available for sale: | 209,225,000 | 209,225,000 | 188,325,000 | ||
Investment securities held to maturity | 88,590,000 | 88,590,000 | 92,816,000 | ||
Nonmarketable equity securities | 18,810,000 | 18,810,000 | 15,472,000 | ||
Loans held for sale | 61,363,000 | 61,363,000 | 54,413,000 | ||
Accrued interest receivable | 8,811,000 | 8,811,000 | 7,697,000 | ||
Interest rate lock commitments | 6,798,000 | 6,798,000 | 6,029,000 | ||
Liabilities | |||||
Deposits | 2,422,295,000 | 2,422,295,000 | 2,371,397,000 | ||
Short-term borrowings | 138,289,000 | 138,289,000 | 107,538,000 | ||
FHLB and other borrowings | 237,896,000 | 237,896,000 | 40,054,000 | ||
Subordinated debt | 50,260,000 | 50,260,000 | 58,198,000 | ||
Trust preferred debentures | 31,885,000 | 31,885,000 | 33,537,000 | ||
Accrued interest payable | 1,875,000 | 1,875,000 | 979,000 | ||
Level 3 | |||||
Assets | |||||
Securities available for sale: | 7,481,000 | 7,481,000 | |||
Loans, net | 2,316,066,000 | 2,316,066,000 | 1,992,745,000 | ||
Carrying value | |||||
Assets | |||||
Cash and due from banks | 227,496,000 | 227,496,000 | 211,976,000 | ||
Federal funds sold | 534,000 | 534,000 | 499,000 | ||
Securities available for sale: | 252,212,000 | 252,212,000 | 236,627,000 | ||
Investment securities held to maturity | 82,941,000 | 82,941,000 | 87,521,000 | ||
Nonmarketable equity securities | 18,810,000 | 18,810,000 | 15,472,000 | ||
Loans, net | 2,297,219,000 | 2,297,219,000 | 1,979,601,000 | ||
Loans held for sale | 61,363,000 | 61,363,000 | 54,413,000 | ||
Accrued interest receivable | 8,811,000 | 8,811,000 | 7,697,000 | ||
Interest rate lock commitments | 6,798,000 | 6,798,000 | 6,029,000 | ||
Liabilities | |||||
Deposits | 2,420,032,000 | 2,420,032,000 | 2,367,648,000 | ||
Short-term borrowings | 138,289,000 | 138,289,000 | 107,538,000 | ||
FHLB and other borrowings | 237,543,000 | 237,543,000 | 40,178,000 | ||
Subordinated debt | 54,484,000 | 54,484,000 | 61,859,000 | ||
Trust preferred debentures | 37,316,000 | 37,316,000 | 37,057,000 | ||
Accrued interest payable | 1,875,000 | 1,875,000 | 979,000 | ||
Fair value | |||||
Assets | |||||
Cash and due from banks | 227,496,000 | 227,496,000 | 211,976,000 | ||
Federal funds sold | 534,000 | 534,000 | 499,000 | ||
Securities available for sale: | 252,212,000 | 252,212,000 | 236,627,000 | ||
Investment securities held to maturity | 88,590,000 | 88,590,000 | 92,816,000 | ||
Nonmarketable equity securities | 18,810,000 | 18,810,000 | 15,472,000 | ||
Loans, net | 2,316,066,000 | 2,316,066,000 | 1,992,745,000 | ||
Loans held for sale | 61,363,000 | 61,363,000 | 54,413,000 | ||
Accrued interest receivable | 8,811,000 | 8,811,000 | 7,697,000 | ||
Interest rate lock commitments | 6,798,000 | 6,798,000 | 6,029,000 | ||
Liabilities | |||||
Deposits | 2,422,295,000 | 2,422,295,000 | 2,371,397,000 | ||
Short-term borrowings | 138,289,000 | 138,289,000 | 107,538,000 | ||
FHLB and other borrowings | 237,896,000 | 237,896,000 | 40,054,000 | ||
Subordinated debt | 50,260,000 | 50,260,000 | 58,198,000 | ||
Trust preferred debentures | 31,885,000 | 31,885,000 | 33,537,000 | ||
Accrued interest payable | 1,875,000 | 1,875,000 | 979,000 | ||
Forward commitments to sell mortgage-backed securities | Level 2 | |||||
Liabilities | |||||
Derivative Liability | 244,000 | 244,000 | 2,000 | ||
Forward commitments to sell mortgage-backed securities | Carrying value | |||||
Liabilities | |||||
Derivative Liability | 244,000 | 244,000 | 2,000 | ||
Forward commitments to sell mortgage-backed securities | Fair value | |||||
Liabilities | |||||
Derivative Liability | 244,000 | 244,000 | 2,000 | ||
Interest rate swap agreements | Level 2 | |||||
Liabilities | |||||
Derivative Liability | 32,000 | 32,000 | 126,000 | ||
Interest rate swap agreements | Carrying value | |||||
Liabilities | |||||
Derivative Liability | 32,000 | 32,000 | 126,000 | ||
Interest rate swap agreements | Fair value | |||||
Liabilities | |||||
Derivative Liability | 32,000 | 32,000 | $ 126,000 | ||
Corporate securities | |||||
Assets | |||||
Securities available for sale: | 6,700,000 | 6,700,000 | |||
Liabilities | |||||
Transferred to Level 2 | 2,000,000 | $ 2,000,000 | |||
Corporate securities | Minimum | |||||
Liabilities | |||||
Discount rate (negative) | (2.5) | ||||
Corporate securities | Maximum | |||||
Liabilities | |||||
Discount rate | 2.50% | ||||
Corporate securities | Weighted average | |||||
Liabilities | |||||
Discount rate | 1.50% | ||||
Non-agency mortgage-backed securities | |||||
Assets | |||||
Securities available for sale: | $ 2,000 | $ 2,000 | |||
Liabilities | |||||
Other than temporary impairment, net of applicable loss-share reimbursements | 299,000 | $ 824,000 | 461,000 | ||
Non-agency mortgage-backed securities | Minimum | |||||
Liabilities | |||||
Discount rate | 4.00% | ||||
Cumulative prepayment rate | 0.00% | ||||
Cumulative default | 1.50% | ||||
Loss given default | 85.00% | ||||
Non-agency mortgage-backed securities | Maximum | |||||
Liabilities | |||||
Discount rate | 14.00% | ||||
Cumulative prepayment rate | 100.00% | ||||
Cumulative default | 100.00% | ||||
Loss given default | 100.00% | ||||
Non-agency mortgage-backed securities | Weighted average | |||||
Liabilities | |||||
Discount rate | 6.50% | ||||
Cumulative prepayment rate | 14.00% | ||||
Cumulative default | 11.00% | ||||
Loss given default | 96.50% | ||||
Covered non-agency mortgage-backed securities | |||||
Assets | |||||
Securities available for sale: | $ 55,900,000 | 55,900,000 | |||
Liabilities | |||||
Transferred to Level 2 | $ 55,910,000 |
COMMITMENTS, CONTINGENCIES AN84
COMMITMENTS, CONTINGENCIES AND CREDIT RISK (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Anticipated material loss | $ 0 | $ 0 | |||
Losses as a result of make whole requests and loan repurchases | 0 | $ 12,000 | 83,000 | $ 65,000 | |
Liability for unresolved repurchase demands | 340,000 | 340,000 | $ 378,000 | ||
Commitments to extend credit | |||||
Loan commitments | 504,937,000 | 504,937,000 | 495,506,000 | ||
Financial guarantees – standby letters of credit | |||||
Loan commitments | $ 35,608,000 | $ 35,608,000 | $ 31,029,000 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||||
Net interest income (expense) | $ 27,265 | $ 25,437 | $ 79,294 | $ 78,455 | |
Provision for loan losses | 1,392 | 6,699 | 3,146 | 10,075 | |
Noninterest income | 14,937 | 14,464 | 41,572 | 46,683 | |
Noninterest expense | 28,663 | 27,823 | 87,205 | 90,071 | |
Income (loss) before income taxes (benefit) | 12,147 | 5,379 | 30,515 | 24,992 | |
Income taxes (benefit) | 4,102 | 1,928 | 10,562 | 8,281 | |
Net income (loss) | 8,045 | 3,451 | 19,953 | 16,711 | |
Total assets | 3,247,727 | 2,832,308 | 3,247,727 | 2,832,308 | $ 2,884,824 |
Banking | |||||
Segment Reporting Information [Line Items] | |||||
Net interest income (expense) | 28,394 | 26,513 | 82,939 | 80,406 | |
Provision for loan losses | 1,392 | 6,699 | 3,146 | 10,075 | |
Noninterest income | 9,714 | 8,284 | 21,347 | 28,427 | |
Noninterest expense | 23,646 | 22,848 | 69,790 | 74,005 | |
Income (loss) before income taxes (benefit) | 13,070 | 5,250 | 31,350 | 24,753 | |
Income taxes (benefit) | 4,573 | 1,326 | 9,348 | 6,936 | |
Net income (loss) | 8,497 | 3,924 | 22,002 | 17,817 | |
Total assets | 3,252,421 | 2,838,074 | 3,252,421 | 2,838,074 | |
Commercial FHA Origination and Servicing | |||||
Segment Reporting Information [Line Items] | |||||
Net interest income (expense) | 215 | 348 | 712 | 1,240 | |
Noninterest income | 3,557 | 6,124 | 19,212 | 16,916 | |
Noninterest expense | 3,511 | 3,783 | 12,203 | 11,675 | |
Income (loss) before income taxes (benefit) | 261 | 2,689 | 7,721 | 6,481 | |
Income taxes (benefit) | 104 | 1,097 | 3,088 | 2,614 | |
Net income (loss) | 157 | 1,592 | 4,633 | 3,867 | |
Total assets | 100,516 | 82,991 | 100,516 | 82,991 | |
Other | |||||
Segment Reporting Information [Line Items] | |||||
Net interest income (expense) | (1,344) | (1,424) | (4,357) | (3,191) | |
Noninterest income | 1,666 | 56 | 1,013 | 1,340 | |
Noninterest expense | 1,506 | 1,192 | 5,212 | 4,391 | |
Income (loss) before income taxes (benefit) | (1,184) | (2,560) | (8,556) | (6,242) | |
Income taxes (benefit) | (575) | (495) | (1,874) | (1,269) | |
Net income (loss) | (609) | (2,065) | (6,682) | (4,973) | |
Total assets | $ (105,210) | $ (88,757) | $ (105,210) | $ (88,757) |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Related Party Transaction [Line Items] | ||||
Rent paid | $ 165,000 | $ 166,000 | $ 540,000 | $ 527,000 |
Chairman | ||||
Related Party Transaction [Line Items] | ||||
Payment for work on various projects | $ 0 | $ 738,000 | $ 159,000 | $ 1,600,000 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | Oct. 03, 2016USD ($)item | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) |
Subsequent Event [Line Items] | ||||||
Reversal of accrued loss share liabilities, after tax | $ 225,000 | |||||
Available-for-sale Securities | $ 252,212,000 | $ 252,212,000 | $ 236,627,000 | |||
Available-for-sale Securities, Gross Realized Gains | $ 39,000 | $ 1,000 | $ 315,000 | $ 335,000 | ||
Covered non-agency mortgage-backed securities | ||||||
Subsequent Event [Line Items] | ||||||
Available-for-sale Securities | $ 55,900,000 | $ 55,900,000 | ||||
Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Number of FDIC Assisted Acquisitions | item | 2 | |||||
Early termination, consideration paid | $ 565,000 | |||||
Reversal of accrued loss share liabilities | 214,000 | |||||
Subsequent Event [Member] | Covered non-agency mortgage-backed securities | ||||||
Subsequent Event [Line Items] | ||||||
Available-for-sale Securities | 72,100,000 | |||||
Available-for-sale Securities, Gross Realized Gains | $ 14,300,000 |